The Economic Value of Customer Success for Enterprise SaaS Companies

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Guest presenter Kate Leggett, Principal Analyst from Forrester Research, shares The Economic Value of Customer Success. In this presentation she goes into the real economic and monetary impact that having a Customer Success focus brings to a Subscription business like Enterprise SaaS.

In fact, the most successful Enterprise SaaS companies know that growing revenue only through new customer acquisition is the less efficient way to scale. Rather, they understand that growing revenue within your existing customer base - through up-sells, cross-sells, and expanded use - is the most profitable way to scale.

Enterprise SaaS companies that grow revenue - and company valuation - by expanding revenue within their existing customer base also know the key to making this work is to focus on - and operationalize - Customer Success.

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The Economic Value of Customer Success for Enterprise SaaS Companies

  1. 1. The Economic Value of Customer Success June 2014 #customer success
  2. 2. 2014 Gainsight, Inc. All rights reserved. Housekeeping • Q&A panel on your right • Recording for colleagues who can’t make it • Attendees will receive slides and final Forrester report • Twitter hashtag #customersuccess
  3. 3. 2014 Gainsight, Inc. All rights reserved. Your Speakers Lincoln Murphy Customer Success Evangelist @lincolnmurphy Kate Leggett Principal Analyst @kateleggett
  4. 4. 2014 Gainsight, Inc. All rights reserved. What We’ll Cover 1. The State of Customer Success 2. The Economic Value of Customer Success 3. AKA CSM
  5. 5. 2014 Gainsight, Inc. All rights reserved.
  6. 6. 2014 Gainsight, Inc. All rights reserved. The Conversation PULSE2013
  7. 7. 2014 Gainsight, Inc. All rights reserved. The Roles 5500 companies hiring
  8. 8. 2014 Gainsight, Inc. All rights reserved. The Curriculum access.gainsight.com/csm-university Summer Session starts June 30
  9. 9. Making Leaders Successful Every Day
  10. 10. The Economic Value Of Customer Success Kate Leggett Principal Analyst, Forrester Research @kateleggett kleggett@forrester.com
  11. 11. We have entered the “age of the customer” Source: October 10, 2013, “Competitive Strategy In The Age Of The Customer” Forrester report 1900 1960 1990 2010 Age of Manufacturing Mass manufacturing makes industrial powerhouses successful Age of Distribution Global connections and transportation systems make distribution key Age of Information Connected PCs and supply chains mean those that control information flow dominate Age of the Customer Empowered buyers demand a new level of customer obsession Beyond • Ford • Boeing • GE • RCA • Wal-Mart • Toyota • P&G • UPS • Amazon • Google • Comcast • Capital One • Macy’s • Salesforce.com • USAA • Amazon
  12. 12. Our world is moving to a subscription economy Credit: www.zuora.com
  13. 13. Our world is moving to a subscription economy
  14. 14. And the business model for technology is moving to subscriptions 14% January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  15. 15. And the business model for technology is moving to subscriptions 21% January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  16. 16. And the business model for technology is moving to subscriptions 13% January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  17. 17. The subscription model has tipped for many B2B software categories January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  18. 18. The subscription model has tipped for many B2B software categories January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  19. 19. The subscription model has tipped for many B2B software categories January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
  20. 20. And because of this relationships are becoming more important Product Focused Relationship Focused www.zuora.com
  21. 21. Good relationships have business value March 2012 “The Business Impact Of Customer Experience, 2012”
  22. 22. Relationships improve business metrics April 2012 “Define the Right CRM Metrics”
  23. 23. Customer success managers actively manage customer relationships to reduce churn, increase existing revenue and influence new sales
  24. 24. CUSTOMER SUCCESS MANAGEMENT REDUCES CHURN
  25. 25. Companies follow a standard growth trajectory 25
  26. 26. Where are you in your growth? 26
  27. 27. Where are you in your growth? 27
  28. 28. Along the way, you tier your customers 28
  29. 29. As you grow, revenue from existing customers becomes a larger and larger part of your company’s economic value 29
  30. 30. Calculating the impact of customer churn 30
  31. 31. The negative impact of churn can be quantified 31 revenue time 95% retention rate - Acquired 600 customers - Lost 30 80% retention rate - Acquired 600 customers - Lost 120 $2M difference
  32. 32. Churn is dependent on deal size 32
  33. 33. CUSTOMER SUCCESS MANAGEMENT INCREASES NEW REVENUE
  34. 34. Data-driven conversations make cross-selling and upselling easy • Product utilization data. Can be used to have data-driven conversations on the economic benefit of the purchased solution • Active users exceed purchased users. Indicates a customer who is utilizing their purchased products beyond the negotiated terms of their contract. Customer success managers can use this data in customer conversations to showcase the value of their purchase, as well as drive upsells and upgrades. • Active features exceed purchased capabilities. Indicates a customer who has a greater need for product capabilities than what is purchased.
  35. 35. Find the white space
  36. 36. CUSTOMER SUCCESS MANAGEMENT INCREASES ADVOCACY
  37. 37. Brand advocates are more valuable than average customers
  38. 38. Happy champions will buy you again 38
  39. 39. CUSTOMER SUCCESS MANAGEMENT DRIVES TEAM PERFORMANCE
  40. 40. You can amplify the effects of each team member
  41. 41. Teams automate manual reporting and task management to deliver more value.
  42. 42. ENGAGEMENT STRATEGY ENGAGEMENT PROCESSES ENGAGERS ENGAGEMENT LEVERS Customer success management takes coordinated effort across four dimensions
  43. 43. ENGAGEMENT STRATEGY ENGAGEMENT PROCESSES ENGAGERS ENGAGEMENT LEVERS Customer success management takes coordinated effort across four dimensions
  44. 44. What data do you need? 44 Customer Goal Inactive users Provisioned users Contract Terms Renewal Realized economic value Audit records Feedback Advocacy Support feedback Customer feedback Active users Measures of success Features Alerts Calls and tickets Onboard ing
  45. 45. What do you do with data? Integration Validation Visualization Analytics Exploration Workflow Data Insights Action
  46. 46. The Advanced Playbook LOB Data Enterprise Insights Outside-in Action • Customer360 • Alerts • Surveys • Automated Email • Health Scorecards • Playbooks • Workflow • Embedded Apps • External Sponsor Alerts • Automated Customer Presentations • Mobile • Data Science
  47. 47. ENGAGEMENT STRATEGY ENGAGEMENT PROCESSES ENGAGERS ENGAGEMENT LEVERS Customer success management takes coordinated effort across four dimensions
  48. 48. Thank you Kate Leggett Principal Analyst kleggett@forrester.com @kateleggett Thank you
  49. 49. 2014 Gainsight, Inc. All rights reserved. Download Your Free Copy Now

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