A CMO’s Secret: 5 Stages for Fast-tracking Customer Success
These days, the term “customer success” seems like the holy grail for determining a CMO's (and his or her team’s) contribution to a company — and for good reason. If a company can achieve true customer success, and continue improving the customer’s experience with its brand, there lies the key to long-term profitability and growth. So how do you find the pot of gold at the end of the rainbow, and quickly? Orchestration.
Orchestration is the ability to use applications throughout a company to improve the customer journey. While this may sound simple, it means connecting all processes throughout the customer journey (not just marketing and sales, but product, support, services, etc.), making data available across all engagement channels, and notifying the right departments at the right time. Whether a company is just starting its customer success initiative or are several stages in, orchestration provides a fast-track to improving the customer journey and creating customer for life.
To understand the fast-track, let’s look at the typical stages of customer success within a company.
Stage 1: Interested
In the first stage, a company begins to believe that customer success is an important part of its business. The company starts undertaking a number of different efforts without making any major investments, attempting to get a handle on the current situation. A burst of uncoordinated activity happens with no real leadership over the customer success effort. While there are individual success stories, no real increase in customer retention or satisfaction has occurred, and no operational efficiencies have been achieved.
Stage 2: Invested
A company moves to the second stage after leadership recognizes that customer success requires investment in both capital and key personnel. So, the approach to customer success becomes more organized with an intensified focus on operationalizing the customer journey. The company formalizes a customer success department and creates processes for onboarding, adoption and retention. Improvements in retention rates begin to show, but core issues remain unresolved and fire-fighting is common.
Stage 3: Committed
By Stage 3, a company is embracing customer success because it understands the specific impact it has on profitability and valuation. The effort is no longer isolated to the customer success department as retention becomes a major transformational effort across the company.
Instead of just trying to fix problems, the focus turns to redesigning processes. Retention rates have improved, but there is a diminishing ROI in the current process optimizations to make more improvement.
Stage: 4 Engaged
At Stage 4, customer success is a critical to everything the company does. Instead of re-engineering processes, the focus turns to designing breakthroughs in product and processes as well as solidifying the culture. There’s significant emphasis on employee engagement and companies become much less dependent on one department for success and more on the operations as a whole. Retention rates become industry-leading and profitability of customer relationships substantially improve.
Stage 5: Embedded
It can take a company several years to achieve stage five where customer success is thoroughly ingrained throughout the organization. Just about every employee has a role, knows their role, and executes their responsibilities at just the right time. The executive team no longer focuses on retention but focuses on creating growth in customer lifetime value.
Acceleration from Stage 1 to Stage 4 or 5 is becoming critical to profitability and valuation. According to Bessemer Venture Partners, retention is the No. 2 factor to SaaS company valuations — so customer success is not just a nice to have, it is a strategic imperative. So how can you skip past Stages 1 through 3? The answer is to use orchestration as a foundation to customer success.
By Stage 4, orchestration is critical to ensuring each step in the customer journey meet the expectations of the customer.
- Sales is in sync with professional services.
- Professional services are in sync with account management.
- Account management is in sync with support.
In other words, the company works as a whole to deliver on a customer promise to deliver value. A recent post by Lincoln Murphy at Gainsight highlights the need for a change away from “hand-offs” to orchestration. A new concept of “customer success orchestration” allows Stage 4 and Stage 5 customer success initiatives to connect applications and teams of customer success management, sales, services, marketing and support to optimize the customer journey.
Today, there are new technologies and best practices that can fast-track your customer success to Stages 4 and 5. For example, solutions such as Gainsight give you an ability to quickly establish customer health-scoring and provide proven playbooks for customer success managers. Others provide workflows between applications to orchestrate processes in sales, marketing, support, and services based on the playbooks and health scores. From onboarding to adoption to retention to growth, orchestration connects your applications, automates business-critical workflows, and lets you take control of the customer journey.
Matt Shanahan is the CMO at Seattle, Wash.-based Azuqua. He has nearly 30 years of experience in the technology industry, ranging from Accenture to startups. He is a proven entrepreneur as the VP of product marketing and management for Documentum from startup through initial public offering and most recently as co-founder and SVP of strategy for Scout Analytics.