- Customer Value Led Growth
- The 3 Levels of Customer Success
The 3 Levels of Customer Success
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Hi, Markus here. Welcome to a free edition of the Customer-Value-Led-Growth Newsletter.
Every week, I share strategies, guides, and frameworks to help you create exceptional value for your customers and company.
If you are not a paid subscriber, here’s what you might have missed:
What is Customer Success? While there’s no shortage of interpretations, there’s no official definition as far as I know.
As a result, the work CSMs are doing is somewhat different from company to company.
But while the range of tasks and responsibilities is different, the approaches CS teams follow can be put into 3 categories.
(Please note that they are not mutually exclusive and hybrids exist.)
In today’s episode, I’m going to explore all of them to help you to
get clarity about each approach,
get the insights to run a self-assessment,
level up your “game”
Many CSMs feel insulted when their work is considered as glorified support. But the ugly truth is that it is exactly what 80-90% of what they do looks like.
Their work is almost entirely reactive and happens within their inbox. It consists of firefighting, band-aiding, and quick-fixing.
Because when customers reach out, things have often already escalated. They have failed over and over and become frustrated and angry.
Putting you under high pressure to fix the situation in the shortest amount of time is often futile.
There’s almost no space for doing strategic work. Acting as a trusted advisor to customers is lightyears away and relationships are non-existent.
1.1 The worst-case scenario
But that’s not even the worst part. Research clearly shows that most unhappy customers don’t bother to actively reach out. They simply disappear.
At this level, churn risks are not detected in time. When your customers have already canceled or informed you about their intention to cancel it’s game over. The odds of saving them last minute or a successful recovery are pretty low.
Following a reactive approach is not only unhealthy for your business but also for yourself. Spending years in such an environment is almost a guarantee of burnout.
The proactive approach is usually deemed as the nonplus ultra in CS but I disagree. Maybe it’s great by design but not the way it is executed in reality.
While the “proactive” CSM does not wait until bad news makes it to their inbox they are still only reacting. They are waiting for things to go south before taking action.
The most prominent triggers for activating their playbooks are drops in product usage or receiving low scores in NPS, CSAT, or Customer Health.
Don’t get me wrong - this is a massive improvement compared to the original reactive approach. Because you can spot potential escalations and churn risks way earlier and start countermeasures in time.
2.1 The blind spot
Forgive me for saying this but every i**** can identify a customer at risk that is no longer using the product. The same goes for low scores and health.
But the problem is that these metrics are not accurate. For starters, there’s no correlation between NPS and customer renewals.
And customers with high product usage churn all the time. Following this approach, you would never spot these in the first place.
And there’s another problem. When you reach out to customers, all you know is what happened from your point of view.
You don’t know what happened on the customers’ side and why. So when you reach out to customers as instructed by your playbooks you don’t have any context.
Consequently, you are essentially forced into reaching out to “check in” with the customer without an agenda or goal.
This is the opposite of “delivering value with every interaction” and few customers will respond to it.
That’s not the kind of communication that builds strong relationships with the customer.
Every CSM on the planet should aspire to become a leader for their customers. In the reactive and proactive approach, customer success is a possibility.
When you are taking the lead, customer success is engineered. It works accurately, repeatedly, and predictably.
A key part of the leadership approach is to follow up regularly. What’s the difference between checking in and following up? Great question, thanks for asking.
A follow-up does not happen randomly but is scheduled. It’s not a pulse check but has a specific agenda and goal.
3.1 Success controlling
A typical case could be to follow up with customers 2-4 weeks after they have completed a major part of your customer success program e.g. group training.
The follow-up is intended to determine whether customers have been able to successfully implement their learnings.
If they are not progressing as projected you are immediately aware of it. Leaving escalations little chance to emerge and deal with risks preemptively.
3.2 The power of intention
The leadership approach is built on creating services and content with a clear goal in mind. They are not meant to provide broader education.
Because your customers’ desired outcomes are the result of solving their problems and completing the required tasks.
Every single input you provide must address one of these. If there’s a clear goal for every piece of content and every service, you can measure their accuracy.
If they are not working accurately, they are improved or replaced with something better if the former is not possible or does not make sense.
Naturally, the higher number of interactions builds stronger customer relationships. You can easily prove that you care about their success.
As this approach has also the highest probability of success there’s also the highest growth potential.
4. How to grow into the leadership role
One of the best things about CS is that there’s nothing carved in stone.
At any given time, you can start your transformation from reactive to proactive and grow into a leadership role eventually.
4.1 Discover your customers’ needs
Many CSMs put themselves in a reactive position by relying on guessing and assuming. It’s like placing bets and your “strategy” is hope. Every time their bets don’t work out, they are put in a reactive position.
You need to clearly understand what stands between your customers' desired outcomes and their status quo. Because only then you can provide them with the right services and content.
4.2 Build subject expertise
Your job is not done by helping customers master the product. You need to help them build excellence on the job they need it for.
Your customers’ success is limited by their skills and knowledge. If they don’t know how to create high-quality inputs, e.g. running great demos or writing great cold E-Mails, they will fail.
You can only provide high-quality education and training content and services if you have mastered the subject yourself.
4.3 Create outcome-focused content and services
All the inputs you create must serve a specific purpose. Your tutorials are not meant to enlighten customers on the 34 customization options of every feature.
Your guides are not meant to show customers the 27 ways to do X. Start with an assessment of your current program. Does every piece of it have a specific goal?
4.4. Measure effectiveness
Creating your input with a specific goal in mind is not. You also need to meet quality expectations. Quality in terms of comprehensiveness and adaptability.
If only 50% of your customers can successfully implement their learnings your content or services are ineffective.
It also means that 50% of the time you are pushed back into a reactive mode where you need to fix the situation.
It does not matter how many people consume your content or service. What matters is the success rate.
4.5. Measure customer value
It does not matter how you feel customer value should be measured. All that matters is how your customers are doing it.
Because that’s how they will decide whether to renew, expand, upgrade, downgrade, or churn.
4.6. Gather meaningful customer feedback
The journey from reactive CSM to leader is not completed within a few weeks. It also does not happen on the first attempt.
It’s the result of continuous creating, validating, and adapting. If your inputs work only 50% of the time, you need to find out why it does not the other 50%.
Is it irrelevant to certain segments? Is there something missing? Written unclear? You need to talk to customers to get qualitative feedback to improve all your inputs.
Whenever you are ready, here’s how I can further help:
The CVLG Community: Study the unique CVLG framework. Deepen your knowledge in weekly events. Connect with peers, inspire and elevate each other, and unlock your full potential (*New Pricing)
The CS Creator Course: Identify, deliver, and demonstrate Customer Value. Build meaningful customer relationships. Improve your performance and grow your impact.
The Growth Program: Work with me 1:1 and turn Customer Success into your company’s most powerful growth engine (*New Pricing)
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