Another thought exercise. I was trying to think of scenarios where Customer Success – i.e. genuinely worrying about whether your customers were using and getting value from your offering – wasn’t going to be a priority for a business in 2019. I could only think of two. But I think even these are slightly fatuous, I’d be surprised if I can find anyone to whom these apply.

Why such a strong statement? Because the nature of generating revenue has shifted away from “sell-and-forget” models towards business models that rely on customer satisfaction. And this isn’t just about the move of businesses towards services and subscriptions. The rise of review sites such as TripAdvisor, Which? or Trustpilot has meant that companies who could get away with shoddy services or offerings in the past, no longer can.

Still, I managed to think of two examples – do these apply to you!?

1. You’re a brand new startup, so your growth and targets are based on acquiring new customers only – you don’t have any existing customers on which you need to rely for revenue.
2. You’ve been around a while, but you’re selling some sort of perpetual or “one-off” product. Does it matter if the customers don’t come back or don’t like what they bought?

And I can see the logic in each of these. For the first – you need to prioritise. What’s the point worrying about customers “getting value from your offerings”, if you can’t land any customers anyway! Surely you can worry about that problem later?

For the second – if you’re a restaurant in a tourist town, you know customers are only going to come to you once. They’re not coming back anytime soon, so why worry if the pizza was burnt, or the risotto under-cooked?

The flaws in these arguments are pretty clear, but let me work through them anyway..

• New startups, particularly in tech, are now rarely, if ever, offering products on perpetual or “one-off” licenses. Why does this matter, when you’re just trying to acquire new revenue? If you sell your product as a one-off for £25,000 and the customer doesn’t use it then, hey-ho, that’s a shame. But you’ve pocketed your £25,000 so you and your investors are happy. But, what if you’re selling a subscription service at £1,000 per month, and the customer isn’t happy after 3 months (and therefore cancels)? Well you’ve only made £3,000 from that customer (who likely cost you a lot lot more to acquire). And worse, is unlikely to come back. So, in a world where services and subscriptions are dominant, you have no choice but to care about customers’ success.
• What about the situation where you are selling “one-off” products, perhaps as a more mature business? The main flaws in this strategy are that firstly, is it true that customers never come back? I’d suggest that’s actually pretty rare. The majority of revenue for established orgs comes from existing customers, from up-sells and cross-sells. Sometimes they want more of the same, sometimes something new. But you can be pretty sure if they weren’t happy with the first product, they’re not going to ask about the second. Oh, and customers do return to tourist restaurants and cafes – I’ve been to The Creamery in Minehead probably every year for the last 7-8 years on holiday. A classic “repeat customer” – and it’s great every time!
• Secondly, people do talk to each other about products! Either via review sites, word-of-mouth, at events and conferences, online forums, everywhere. You no longer can get away with a shoddy product, and hope “Nobody hears about it”. The advent of review sites, forums and so on, has made this all much much easier. 20 years ago, if a software vendor provided a poor product, then of course the people (suffering) in that customer organisation knew about it. But how would others find out? Perhaps there would be some word-of-mouth (WOM) through conferences or personal relationships – but not much. Now the word spreads like wildfire. I’ve hunted, and it’s actually pretty difficult to find an example of a low-quality product, where its poor reputation has spread across the Internet. Why – because the speed of the bad-PR mechanism would have killed that product years ago! You do see WOM spread quickly for great products (Slack, Trello, etc) – the sort of effect you want to see, based on a series of customers having a wonderful experience with your product.

I believe that, in the past, yes, it was possible for an org to get away without having Customer Success at the top of the their agenda – in the days where “Nobody would find out”, or where subscription-based services were still rare.

But times have changed. You need to be able to answer simple questions such as “How many customers got started with our product?”, “How many kept going?”, “How many get value out of it?”, “How much value – all that was possible, or just the ‘basic’ features?”, “How does this impact MRR?” and so on. These are key indicators for future growth, given that large amounts of that growth will be dependent on the success of your customers buying more, or buying other things from you; but also remember – people tell their friends…