July 12, 2021

How to Take a “Bottom Line” Approach to Measuring Customer Success

Customer success teams have a variety of tasks that can fall onto their plates. They may be responsible for anything from onboarding to account management to upsells and cross-sells to customer support. 

But if you measure customer success teams solely on the efficacy of those individual areas, you’re missing an opportunity to analyze how those teams are contributing to your overall business.

“The actions customer success teams take occur in service of something, and none of them exist in isolation,” says Mike Redbord, SaaSWorks’ Head of Operations. “When you onboard a customer, you’re onboarding a customer so that they are successfully set up and can use your product and stay with you for a long time. When you do a health check-in, you’re making sure everything is continuing to go well so that the customer will stay with you for a long time. When you renew a customer, you are the mechanism that allows the customer to continue staying with you for a long time.”

Every tactic a customer success team is responsible for should ultimately lead to the retention and/or expansion of your customers because that is the purpose the customer success function serves within organizations. They don’t just exist to create a great customer experience, but rather to create a great customer experience that results in revenue for your company.

“Everything that you do needs to be measured against a lens of ‘Is this going to cause my customer to stay with me?’ and ‘Is this going to create the most lifetime value, not just for this one customer, but across all the customers I work with?’” Mike says.

Balancing Revenue with the Human Aspect of Customer Success

The emotional aspects of client relationships play an important role in the effectiveness of customer success. You can’t view your customers as just dollar signs and need to keep in mind that they are people — people who you’re helping achieve a goal.

So, when you’re tying back the measurement system for customer success to revenue, you also need to ensure that you preserve the more emotional, people-focused aspects.

“The best people who work with customers tend to be pretty empathetic and caring. One way you can avoid becoming too transactional is by hiring the right sort of people because they will just naturally not be fully transactional,” Mike says. “The second way is to understand that long-term customer value and retention and customer experience are intimately linked. Happy customers are going to be the ones who stick around. Customers who see value tend to be happy. There’s this relationship between the human-y, squishy part of customer experience and customer retention.”

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To see the best results from customer success, you need to orchestrate a positive experience made up of all the individual touchpoints a customer progresses through (like onboarding, check-ins and renewal) that results in long-term retention.

Finding that balance one choice at a time

“CSMs tend to have a number of customers and have a lot of choice about where they spend their time. That choice is one of the most important decisions you make as a CSM because that’s where on the margin you’re going to make a difference,” Mike says.

If you have 100 customers and you feel 20 need help, who do you call first

CMSs have to balance the human desire of “this person could really use my help” with the business desire of “my company needs me to focus on this playbook.” Sometimes those two overlap perfectly. Other times they won’t. 

“Typically when you can blend the emotional side with the capitalistic side, that’s where you make the best decisions. You run into trouble when you ignore either one,” Mike says. “When customer success teams ignore the capitalistic side, their leaders tend to get replaced because at some point if it doesn’t make dollars, it doesn’t make sense. When customer success teams ignore the emotional side, at some point those companies tend to get replaced because their NPS is really low and they’re not succeeding at creating an experience that people enjoy and want to talk about.”

The Takeaway

Customer success teams need to be able to have two mindsets at once: They need to both create good customer experiences and also retain and grow revenue

However, as you’re working toward those two goals, it’s also important to remember that customer success doesn’t exist in a vacuum.

“The success of your customers is the sum of many parts: your product, your sales, your contracts and more. So, customer success is downstream of product, sales and a lot of other stuff,” Mike says. “If you feel like you’re successfully onboarding everyone but nobody’s sticking around, you’re missing a piece of the puzzle. It’s important in that moment to not be like, ‘My team is missing something.’ but instead to think ‘My company needs to come together to solve this.’”

Just as the touchpoints customer success teams oversee ladder up to retention and expansion revenue, the touchpoints customers have with other areas of your business impact the experience they have.

If you’re seeing dissonance between the tactical results of your customer success team and your revenue results with no clear solutions at the team level, you need to step back and analyze what’s happening cross-functionally. 

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Quinn Kanner

Quinn is a writer and copyeditor whose work ranges from journalism to travel writing to inbound marketing content.


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