What Is Customer Success Management And Why Is It Important
I attended the Gainsight Pulse conference in San Francisco on May 14 which is a unique event for customer success managers to network, learn best practices, and understand the value of this role. You could feel the energy of the 900+ conference members, fueled by the fantastic 115 speaker roster featuring luminaries like Malcolm Gladwell, venture capital firms like Battery Ventures, Bain Capital Ventures, and Summit Partners, and companies like Salesforce, Marketo, LinkedIn, Zuora, Brainshark, Bazaarvoice, Evernote, Zendesk, Xactly, Box and many, many more. So, the question is what is customer success, why is it important, and why now?
The subscription economy – where products are purchased as services – has tipped. This is because monthly operational costs are often easier to rationalize than large capital expenditures. Industry segments like media and entertainment have moved to a subscription model. Other industries like publishing, computer storage are moving in this direction. This move to a subscription based delivery model is evident in B2B software, as highlighted in Liz Herbert’s TechRadar analysis of the SaaS market. Some software categories like SFA, eLearning, human capital management are almost exclusively sold via the SaaS delivery model. Others – like collaboration, customer service software and marketing automation software – are heading that way.
What is customer success management?
In a subscription economy, the barriers to churn are low. It becomes much more important to manage customer relationships to ensure that customers are realizing the economic value of their investments. Customer success managers actively manage customer relationships to: reduce churn, increase existing revenue and influence new sales.
Why is customer success management important?
Actively managing customer relationships to strengthen relationships and has a quantifiable return on investment as measured by (1) churn reduction; (2) increased revenue from cross-sells and upsells and (3) new bookings. The industry recognizes this. There are over 5500 jobs open for this role.
How do you embark on the customer success management journey?
Customer success management is not about technology, or about account management. It’s a disciplined approach of having (1) the right customer engagement strategy; (2) defining and following standardized engagement processes (3) hiring the right profile and operationally managing the team and (4) empowering customer success managers with customer, financial, feedback and other data so that they can have the right conversations with their customers.