Most people in SaaS understand that Customer Success and Retention is crucial for the success of their business. But sometimes top management of certain companies don't fully buy-in to why it is crucial to re-organize the company to have a clear divide between new sales and customer success and the importance of investing in customer success tools. Sometimes the "Sales Director" owns all revenue generating activities in the business but spends the majority of his time with the business sales teams.
If you’re the advocate for Customer Success in your company, here are the top five tips and reasons for customer success if you're trying to convince your organization.
1. Retention is cheap(er) than acquiring new customers. By increasing the customer retention by 5%, Bain and Co claims that there is a 25-95% increase in a company’s profitability. Several studies are even claiming that it costs five times more to acquire a new client than keeping an existing client.
2. Grow existing customers. If you don’t upsell to your clients, and instead just focusing on new sales, you’re leaving money on the table. According to Gartner, 80% of your company’s future revenues will come from 20% of your existing clients. Selling to existing customers is easy – you already have a relationship with the decision makers and you're already a trusted vendor!
3. In SaaS, you need a customer health score. If you don’t do regular health checks on your clients, you fly blind and will be surprised when customers cancel their contracts. Most companies have an abundance of data these days, their data is often spread across several different systems and dashboards, forcing employees or entire departments to make sense of various excel files. By connecting your data to a customer success tool you get actionable insights that are triggered based on your customer's behavior. For more information about why you need a software to support your customer success team, check out: Why software for customer success?
4. Don’t treat every customer the same way. In order to have an efficient sales and success team, you need to know which clients to focus on, and which clients you should handle through automation. Customer Success Tools lets you segment and prioritize your daily tasks based on MRR, health score or "hot opportunities"
5. Ownership. As Nobel Prize-winning economist Milton Friedman put it: "When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition.” If no one in the company has “customer success” (or a version of it) in their job description, it’s almost certain that no one is actively working on it. This means that your company cannot work proactively and efficiently to ensure that the customer is happy with the service and will stay on to grow with your company.
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