5 Ways to Improve Customer Lifetime Value By Improving Loyalty
Growing customer accounts and increasing customer lifetime value (CLV) is one of the biggest challenges customer success managers (CSMs) face in today’s subscription economy. In fact, some sources even make the case that it is the number one responsibility of good CSMs since expanding the value of customer accounts over time can bring more value and revenue to a business than the lost revenue if customers churn. With such a huge responsibility on their shoulders, CSMs need to be prepared to approach customer accounts with this growth-focused mindset.
When it comes down to it, fostering customer loyalty and prioritizing valuable customer relationships is the best way to improve account value and increase retention/growth. Whether your team measures expansion by upsells, renewals, or new users, CSMs are the backbone of driving expansion and retention—true growth.
Here are 5 ways customer success managers can proactively work to improve the lifetime value of customer accounts by addressing and improving loyalty:
1. Start Out on the Right Foot
You never get a second chance to make a first impression, and this adage is even more important when it’s a customer relationship on the line. From the very first kick-off call (or if you’re introduced to a customer in the sales cycle) it’s game on. This is your chance to show your new customers that you have their best interests at heart and that you’re working with them towards success, not against them. Approach check-in conversations and onboarding from your customer’s point of view: don’t waste time, get straight to the value, and understand what this process is like from the inside. Making a great first impression and being a solid presence in your customers’ corners can go a long way toward building loyalty.
2. Always Be Available – and Be Prepared
Being available for customer calls and questions – especially early on in a customer relationship – shows customer accounts that you are dedicated to their success and that you respect their time and investment. While there need to be some ground rules (we’re not saying you should be on the phone with customers all weekend) having an open line of communication can make customers feel valued. Just remember, however, that when it comes time to actually answer customer questions to always be prepared and have some sort of answer on hand.
3. Know Exactly What the Customer is Trying to Achieve
One of the surest ways to lose a customer’s respect – and their long-term loyalty – is to not even know what their goals and mission are. It’s not enough to treat every customer account the same and just go through the motions. Customers want to see their goals and milestones achieved, especially if this is a solution they’ve invested serious time and resources in. By focusing on the customer’s goals, their interests, and their wants, CSMs have a better chance of increasing loyalty and creating a long-term, valuable customer relationship instead of one that will lead to attrition.
4. Make Sure Handoffs are Executed Seamlessly
Customer handoffs between teams are typically some of the most tricky times in a customer lifecycle, which is why, when done right, they can really help establish long-term loyalty that CSMs are looking for. CSMs and their counterparts on other teams should always have updated gameplans in place that map out exactly what a successful account handoff looks like, how it’s done well, and what to do if something slips through the cracks. Having this success plan in place will ensure that even if a mistake is made, it won’t happen again.
5. Have Long-Term Goals Ready Early in the Relationship
We get it: there are so many things CSMs have to keep track of on a day-to-day basis that it can be hard to look down the road early on. But, as a customer success function, understanding and realizing how upsells, renewals, and account expansions impact your organization’s bottom line is the first step in building this long-term game plan. This doesn’t mean you should bring up renewals in the first kick-off meeting (and it’s probably better if you don’t) but it does mean that an account renewal should always be at the back of your mind. Every step of the onboarding and training process should help bring both your team and your customer towards a mutually beneficial, customer-centric renewal agreement. All it takes to get there are some fundamental conversations, mutual respect, and long-term loyalty on both sides.
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