4 Myths of Customer Success
When it comes to customer success, there are many ways for organizations to be successful. In past posts, we’ve explored different models of how to set up teams, what metrics to use when measuring retention and churn, how to align the department with other teams, and even how to onboard customers to a product. And for these aspects, there are no right or wrong answers, but rather each company needs to evaluate and decide how it will ensure success for its customers.
However, there are 4 myths of customer success that, if viewed independently, can be misleading to customer success leaders and executives who are gauging the overall health of their client bases. If viewed with no other context or data, these 4 areas can cause customer success leaders to believe that their customers are indeed rock solid, when there may in fact be issues that they aren’t aware of, potentially causing unexpected churn, stagnant growth, or negative brand perception.
Let’s take a look at these 4 myths of customer success:
1. Product Usage = Value
Any customer success leader knows that product usage is a key metric to consider when determining the overall health of a customer. And it’s easy to conclude that because individuals across the customer account are logging in to the product each day—maybe even multiple times each day—that they are truly engaged and satisfied with the product.
If an customers are logging in each day, then isn’t it safe to assume things are going well? Not so fast. Product usage alone doesn’t tell the whole story. CSMs must also consider: “Are my users satisfied? Why are they logging in every day? How are they using particular features? What value are they getting from our product?”
Some products play such an integral part in a company’s success that regardless of whether or not they’re satisfied with the product, they are forced to use it for the sake of meeting business objectives. Too many CSMs assume that just because their customers are using a product, that they are seeing true value.
Myth Buster Tip: Usage is important to track on an individual level, as well as a feature level. If there are certain parts of the product that aren’t used, those should be red flagged. In addition, CSMs need to remain proactive and should understand the entire scope of the relationship, not just the single metric of product usage.
2. The Overall Weighted Score is the Source Of Truth
The health score of a customer account is one of the most important metrics to consider. It brings together product usage, customer engagement, satisfaction, and overall likelihood to renew. Of course, the higher the overall health score, the better.
But the problem with the overall weighted health score is when it’s considered on its own as one singular metric that groups all individuals within a customer account, from decision maker to influencer to end user into a single metric, and then averages that metric. For CSMs, relying on this singular metric can be dangerous when it comes time for renewal—and even before.
As with any mathematical equation, a weighted average will take into account all individuals that make up the customer account, even if they are ‘outliers’, such as those that are either evangelists for the products as well as those that barely engage and are dissatisfied with specific functionality. When looking at a holistic number, you don’t see that the end user scored very low while the product evangelist decision maker scored very high. When looked at collectively, those two round out to make a nice comfortable number. But the details, upon closer examination, mean potential red flags.
If a CSM trusts the that the renewal will happen based on the overall weighted health score, then they could be risking the renewal.
Myth Buster Tip: Don’t just rely on the aggregate score, but rather dive into the individual scores and identify which individuals may have a lower score (or a higher score), which could skew the overall aggregate.
3. A High NPS Score Always Equals Retention
It’s true that the Net Promoter Score is a great indication of how likely a customer is to promote a company and product, and therefore is a very helpful guide as it pertains to customer retention and overall satisfaction. NPS is perhaps one of the most widely used metrics across customer success. But perhaps, it’s too widely trusted when used as a standalone indicator.
First of all, consider that not all customers will respond to the NPS survey. And those that do may either be incredibly happy or incredibly unhappy, equaling outliers in the data. When a CSM relies on a single NPS score to predict whether the customer will renew or not, they are relying only on a fraction of data.
It’s also important to keep in mind that the feedback provided from customers should transpire into action that is communicated back to customers. If a customer indicates they are happy with a product but would like to see improvements in several areas, but then no action transpires, that customer’s score may actually drop as time goes on. According to an Openview article, the NPS doesn’t answer the “Why”, it tosses out the middle pack, and it’s not measured often enough.
Myth Buster Tip: Net Promoter Scores should absolutely be used as an indicator of overall customer health, but shouldn’t be used as a standalone metric. CSMs should have frequent conversations with customers to identify the “Why”, as the Openview article suggests. Consider asking: “Well, why is it that you’re giving us a better score?” or “Why did you give me this score?
4. Automation Can Replace Human Authenticity
Automation is a crucial aspect of any customer success department. CSMs must be able to automate messages to their customers about product usage, new features, upcoming events, and even weekly reports. But CSMs should never rely solely on automation to do their job.
Automation’s goal is to ensure CSMs have the right communications with the right customers at the right time. And that’s a very effective strategy for impersonal messages that demonstrate a value-add. But just because an automation system is fully built out doesn’t mean that it will reflect authenticity, or will help build a strong relationship. It’s impossible for CSMs to automate their way to customer success.
There are some products that require low-touch onboarding and low-touch post-onboarding. Take for example a widely adopted consumer technology product like Evernote, which has millions of users worldwide. Evernote has to use an automated customer success approach in order to scale and remain effective. No amount of manual work could ever replace it’s automated reminders, reports, or notifications. However, what if a CSM reached out to an unsuspecting user to ‘check in’ and see what could be improved? That one singular interaction could mean the difference between a satisfied customer and an evangelist.
On the other side of the spectrum is a complex B2B SaaS solution, like an email automation platform, that requires much handholding and daily communication. Without automation as a key ingredient, the CSM would never have enough time freed up to build relationships and to help strategize and problem solve—which is a make or break for mid to enterprise accounts.
Myth Buster Tip: An effective automation strategy should be a hybrid approach. It should be automated enough so CSMs can add true value to the relationship in other ways.
Learn more about how ClientSuccess can help your company develop a strong customer success methodology and strategy with easy-to-use customer success software by requesting a 30-minute demo.
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