Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue

By Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 450

You can't pour enough business into the top of the funnel to sustain real growth if customers are leaking out the bottom at a high rate. Yes, you can show glowing growth rates

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 453

new customer acquisition plus high retention rates plus positive upsell results (selling more to existing customers).

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 465

emotional loyalty and intellectual loyalty.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 477

Attitudinal loyalty is much harder to create and sustain because it's expensive. It's expensive to build products that customers love instead of products that they simply own. It's expensive to create an experience that delights instead of one that just tries to not annoy.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 487

There's just a certain quality to Apple's product, packaging, advertising, and presentation, and it creates not only a purchase but also an experience that somehow touches an emotional chord.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 524

“In traditional businesses, the customer relationship ends with the purchase. But in a subscription business, the customer relationship begins with the purchase.”

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 772

Growing your recurring revenue and reducing churn.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 816

At its essence, customer success is the organization that focuses on the customer experience with the goal of maximizing retention and LTV.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 837

Reduce/manage churn. Drive increased contract value for existing customers. Improve the customer experience and customer satisfaction.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 919

Gross renewals Net retention Adoption Customer health Churn Upsell Downsell Net Promoter Score (NPS) And then the activities that will drive those metrics: Health checks Quarterly Business Reviews (QBRs) Proactive outreach Education/training Health scoring Risk assessment Risk mitigation processes

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1026

A revenue driver—Managing

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1028

Customer success is an organization that drives revenue in two ways. 1. Renewals (or avoidance

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1036

Upsells—This

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1067

customer success is not a philosophy isolated to the organization by the same name. It must become an idea that permeates the entire company and culture. Perhaps

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1120

stockholders.” The problem is clear, right? These requests compete with each other. Both are good for the business; nevertheless, there's tension as a result. Tension is nothing new in a business.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1128

when you turn your focus as a company toward customer success, especially if you are a recurring revenue business, some of that power will move to the person who owns retention. Over time, as your installed base becomes far more valuable than new business bookings, the power shift will continue accordingly.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1138

new focus on marketing and selling only to customers who can be successful long-term with your product Less emphasis on maximizing the initial deal, especially if it's at the expense of LTV Overall awareness of renewals Improved expectation-setting with prospects Much more attention paid to knowledge-transfer and post-sales prep to ensure onboarding and ongoing success for the customer Incentives around renewals and/or LTV

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1162

Building return on investment (ROI) measurements into your product Making your product easier to implement Designing for ease of adoption, not just functionality Stickiness is more important than features Performance is more valuable than demo quality Creating modules that can be upsold rather than integrating all features into the base package Making customer self-sufficiency easier to attain

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1188

“Why does this customer need my help right now? What could we do or what should we have done differently upstream so I would not be needed for this task?”

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1196

the best customer experience is not to have someone who can help when needed but needing that help less and less frequently.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1270

Much of the daily job of the CSM in a SaaS company has to do with setting and resetting customer expectations, too.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1320

The high-touch model often consists of frequent interactions, some scheduled, some not, between the vendor and customer.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1340

The application of expensive resources in a high-touch model usually has a very simple retention goal—100.00 percent. Anything less is most likely a major failure. The customers who receive this high-touch treatment are also often those with great opportunity for expansion.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1435

because the customer base is relatively small, the customer success model can be a combination of low touch and tech touch.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1571

Law 1: Sell to the Right Customer

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1581

But if your customer isn't the right customer, the impact on your organization can be disastrous. The wrong customers can inhibit your organization and take you away from efforts that drive success, efficiency, and scale.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1591

The right customers hone your company's vision, your content, and your onboarding of employees, partners, and customers. And they help optimize your corporate direction. The wrong customers, even those who may come with great brands, the promise of large up-front or potential revenue, or referenceability, may take your valuable resources, mindshare, and company down a very dangerous rat hole.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1631

some customers have become our storybook customers even though they were not the right customer profile initially.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1680

Dave Kellogg, CEO at Host Analytics, recently said this to me: “Ninety percent of all churn happens at the time of sale.”

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1681

In other words, at least in his business, almost all churn happens because they've sold to the wrong customer.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1720

Give your vice president of customer success veto power over deals in the pipeline.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1728

Make sure your VP of sales (and all executives) is incented on retention, not just new business.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1737

Law 2: The Natural Tendency for Customers and Vendors Is to Drift Apart

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1749

Customer success organizations and practices intervene to push the customer and the vendor back together.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1779

Financial Return or Business Value Not Realized

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1789

Stalled or Prolonged Implementation

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1790

If customers can't get their products into production, they aren't seeing any value.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1796

Loss of Project Sponsor or Power User

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1800

customer goes dark.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1804

Low Rate of Product Adoption

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1813

Acquisition by a Company That Uses Another Solution

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1821

Lack of Product Features

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1831

New Leadership Driving Shift in Direction or Strategy

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1840

Customer Affected by Poor Product Quality or Performance Issues

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1852

Your Product Is Not the Right Solution

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1857

Educate the sales team on the use cases and customer parameters that create the ideal customer experience.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1862

The Human Factor Even the best customer

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1935

Law 3: Customers Expect You to Make Them Wildly Successful

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1942

They buy your solution (and buy into the relationship with you) because they want to achieve a business objective.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1953

How is your customer measuring success?

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1955

the customer achieving that value

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1964

We're not just paying for a product—we want expertise as well.”

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1980

Define an initial milestone and track that time to first value (shown in Figure 7.2 as “Phase 1 Value”).

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 1984

Early wins keep that momentum going.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2001

To Help Your Customers Become Wildly Successful, You Must First Understand What Success Means to Them

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2011

Even if your customers achieve their objectives using your technology, if their experience is painful and requires more effort than they believe is necessary, then you've significantly increased their cost (both tangible and intangible) of achieving success and their chances of churning.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2026

Get on a Cadence and Track Your Progress Use regular

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2041

Success Isn't a Destination; It's a Journey

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2049

A good tool to use to help drive customer direction beyond first value is an effectiveness model—demonstrating value and progress (http://blog.nellofranco.com/2013/07/09/demonstrating-value-and-progress-to-your-customers/)—that you can use to set objectives and timelines to help your customers better achieve their business objectives via your partnership.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2078

Customer feedback about your opportunities for improvement isn't always as obvious as an escalation or a challenge. In most cases, you need to be paying attention to the more subtle clues that there may be risk to your customers' success. Many times, those clues are in what

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2096

we do live in an entitlement world.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2101

One of those expectations is that the burden is on us (you), not on them, to make them successful.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2154

Law 4: Relentlessly Monitor and Manage Customer Health

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2213

Customer health works the same way. We can run a series of tests to determine overall health. Of course, that first requires a definition of healthy against which to compare the test scores. It's likely that you have a bunch of healthy customers. You know who they are, and you probably also know why you consider them healthy: they use your product almost every day, even some of the more advanced features.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2226

Good, healthy customers usually call or use support with some regularity. This is a good indicator of customer health.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2229

Marketing engagement:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2231

Community involvement:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2237

Self-sufficiency:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2239

Invoice history: Healthy, happy, and loyal customers pay their bills on time. Period.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2258

This is exactly what we mean when we say manage. Take action.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2274

Monitor

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2347

Law 5: You Can No Longer Build Loyalty through Personal Relationships

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2354

Most will need to address how to service the largest portion of their customer base in a technically friendly way while reducing the need for human capital–intensive ways of building relationships.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2356

This is not to say that you will eliminate the need for personal relationships with your customers; it just dictates a need to develop different programs that fit each segment of your customer base accordingly.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2361

However, customer experience must be a top company priority; it can't be delivered by individual relationships with your customers or even by a single department.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2394

Segment your customers by a particular metric that works for your business. Define a customer coverage model based on your segmentation. Create customer interaction categories based on your coverage model. Establish a cadence for interacting with customers. Help connect your customers by building a strong and loyal community. Create a customer feedback loop.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2468

This is going to happen with or without you, so you are better off making it easy for your customers to meet, to collaborate, and to share their experiences.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2471

embracing a customer community

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2552

Law 6: Product Is Your Only Scalable Differentiator

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2603

self-diagnostic tools

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2695

Look at Google and Facebook as perfect examples. Nobody is assigned to help you install and start using Facebook or to hold your hand while you do your first Google search.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2748

Law 7: Obsessively Improve Time-to-Value

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2761

A big part of any sales process is convincing prospects that they will get real value from your product or solution. In the world of SaaS or subscriptions, delivering that value quickly is key to retention and expansion.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2772

direct correlation between the length of onboarding and the likelihood of the first renewal. If you are in a pay-as-you-go business

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2775

Work with the customer to establish concrete success measures. Implement iteratively for early value, achieving the simplest measure first and focusing on the others later. Adjust in real time, springing into action the very moment you realize expected value is at risk.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2779

Establish Concrete Success Measures

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2806

If you do QBRs or some kind of regular reviews with your customers, you can revisit these metrics frequently

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2811

Implement Iteratively for Early Value

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2878

It's not time-to-implementation, it's time-to-value.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2932

Law 8: Deeply Understand Your Customer Metrics

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2953

To sustain a subscription-based company for the long term, your company must have a deep understanding of both churn and retention:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2995

For reference, unavoidable churn is often referred to as death and marriage.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 2996

churn caused when a customer goes out of business or gets acquired is generally accepted as unavoidable.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3011

This is a key metric that the company should measure. Ideally, all renewals are completed 30 to 60 days in advance of their subscription end date.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3020

For example, if your company determines that planning for a 10 percent churn rate is appropriate, then the original plan will model churn at 10 percent of expected CMRR at the beginning of your fiscal period and will be adjusted at the beginning of each new fiscal period to reflect 10 percent of the revised expected CMRR.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3072

Understanding churn and retention at a very granular level can help guide every facet of the company with regard to focus, priority, and investment to accelerate performance and growth.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3128

Law 9: Drive Customer Success through Hard Metrics

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3151

At Level 1 (initial), work gets done through the heroic actions of committed people without much

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3157

Level 2 (repeatable) occurs when the necessary process discipline is in place to repeat earlier successes.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3158

Level 3 maturity (defined) occurs when the process is documented, standardized, and integrated into a standard process for the organization.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3160

measurement (Level 4: managed) and consistent improvement (Level 5: optimizing).

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3181

The behavior of your customer's users serves only as a proxy for the business value the customer is deriving.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3185

For example, if customers are using your file-sharing solution to eliminate FTP servers, you'll have to ask them whether they've actually done so; your product provides no visibility into this.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3211

Examples of business outcome metrics may include: Gross retention Net retention Expansion Logo retention Customer satisfaction NPS

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3262

I'll argue that the key metric to determine the quality of an individual CSM or the whole team is net retention.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3267

Much like a CRM system does for sales, a customer success management solution can do this for customer success.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3268

You can also track many of these manually if you don't have a CSM solution: Health score across book of business Health score trends Level of direct CSM engagement Number of triggered actions (low survey score, no product usage) Number of triggered actions completed Number of upsell opportunities identified Number of positive relationship activities (references, case studies,

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3285

In this environment, it becomes almost imperative to have a CSM solution,

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3320

Law 10: It's a Top-Down, Company-Wide Commitment

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3325

Customer success is not just a department or an organization. It's a philosophy that must pervade your entire company.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3331

Customer success. It sounds like a truism that says nothing new or interesting. After years of hearing CEOs say customers are king and watching them do the opposite, it's easy to be cynical about the new customer success movement.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3341

Literally, customer success involves shifting the orientation of your company from your product or your sales to your customers' success.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3355

Why Customer Success Is Inevitable

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3385

Define success: One of the biggest steps you can take to create a customer success–centric culture is to crystallize what success means for your customers.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3390

Align around success:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3395

Listen to the customer success team:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3400

Prioritize customer success:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3404

Empower the customer success team: In

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3405

Make sure the title for the customer success executive is on par with the sales leader.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3406

Keep your CSM in the loop when a customer escalates to the management team.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3407

Let the CSM be the hero with customers if possible

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3408

Make it clear to the rest of the organization that the CSM represents the client's views.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3409

Measure customer success: Customer success will never be taken seriously if there aren't agreed-upon metrics to apply.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3413

Report on customer success:

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3415

Incent toward customer success: Companies set compensation plans to drive behavior. So if you want to drive customer success, pay people for it. Consider adding customer success metrics (e.g., net retention, NPS, or health score) to your company bonus plan. Challenge

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3430

A real commitment to customer success begins before the first marketing foray is aimed at the first prospect, before the

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3446

One of the best examples I've seen came from a very successful, now public, SaaS company in which the executive bonus plan made it clear what the CEO's priorities were. Quarterly executive bonuses were paid based on only two criteria: (1) new business bookings and (2) renewal rate.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3456

willing to say “no” to an above-ASP deal in your pipeline because the chances of making the customer truly successful are too small?

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3457

Is he willing to delay a vital product release in order to address current customer challenges?

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3458

Is the head of customer success in his circle of trust?

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3566

very common inside sales because the sales VP is often the person,

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3567

very common is that customer success takes shape within the broader services organization because the initial focus and efforts of the customer success team tend to look a lot like some combination of consulting and support

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3572

consensus tends to form and some sort of best practice usually starts to emerge. For customer success, that trend is toward services.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3575

Customer success is rightly seen as a post-sales role, because the preponderance of effort and involvement happens after the prospect has become a customer.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3576

However, because we're on the subject, one of the many nuances in a subscription economy is that there's really no such thing as post-sales.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3579

back to the subject at hand, the phrase post-sales is not going away, and it's well understood that it means “after the original sale” and that's where customer success belongs.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3678

Customer Success Primary Measurement—Retention Customer success, as we've examined exhaustively, is a completely different organization from the others outlined previously.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3681

In some ways, it's the group that glues the other groups together. Customers have questions that go beyond what customer support can provide.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3683

Customers need some consulting expertise in order to justify renewing their contract but not enough to justify an engagement.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3684

Customers took training and went through onboarding but need just a little nudge here and a tweak there to reinforce those experiences.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3685

customer success, as the place where the buck stops (retention), pushes back on the other organizations to be better and faster at what they do.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3715

adding a sales function into the customer success organization

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3717

So CSMs can maintain their trusted adviser status uncompromised by negotiating sales deals of any kind.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3720

CSMs will be the best source of upsell leads for the sales rep and will help prep him for the opportunity.

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3770

Ownership of the function that blesses new product releases lies with the organization that will suffer the most pain if a bad release goes out. Not stupid. Not stupid at

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez

Location: 3824

Optimize CSM time

~ Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, Nick Mehta, Dan Steinman, Lincoln Murphy, and Maria Martinez