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Mastering the Business of Customer Success

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Customer Success is maturing. Customers are like trees in recurring revenue business. The Customer Success function should run as a business, and the operating model is of customer portfolio management to drive customer success

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Mastering the Business of Customer Success

  1. 1. Mastering the Business of Customer Success Guy Nirpaz Co-founder & CEO of Totango
  2. 2. Customer Success is growing fast! 100 80 60 40 20 0 2012 2013 2014 2015 Source: Google Trends
  3. 3. Customer Success is maturing
  4. 4. We’ve learned a lot and we’re here to share
  5. 5. Practical Handbook for Customer Success Leaders Available on Amazon / iBook and for Customer Success Summit 16 attendees http://www.farmdonthunt.com
  6. 6. The model is not Hunting
  7. 7. Customer Success is Farming!
  8. 8. Young Sapling Needs close care to take root
  9. 9. Growing Tree Constant nurturing & care is needed to ensure a successful harvest season
  10. 10. And Harvest
  11. 11. GrowingNew z In Renew/Upsell Cancelled SAVING ACTIVITY
  12. 12. GrowingNew The RECURRING nature of the lifecycle determines the operating model z In Renew/Upsell Cancelled SAVING ACTIVITY
  13. 13. Customer Value over Customer Management Source: The Customer Success Manifesto New ON BOARDING ACTIVITY Growing NURTURING ACTIVITY In Renew/Upsell HARVESTING ACTIVITY Cancelled SAVING ACTIVITY DRIVERS OUTCOMES
  14. 14. Customer Success is a business and It’s NOT Customer Love X
  15. 15. Customer Lifetime Value Calculation +$10,000 / year +$7,000 / year -$1,500 / year $5,500 / year -$3,000 / year Annual Contract Value Cost to Deliver Service Gross Margin Customer Retention Cost Annual Profit
  16. 16. Lifetime Profit YEAR 1 (4.5K) NET PROFIT YEAR 2 $1.0K NET PROFIT
  17. 17. Lifetime Profit 20% CHURN 14% CHURN 10% CHURN 5 YEAR LIFETIME $28.5K LIFETIME NET PROFIT $45.0K LIFETIME NET PROFIT $17.5K LIFETIME NET PROFIT 7 YEAR LIFETIME 10 YEAR LIFETIME
  18. 18. FALLACIES of CUSTOMER SUCCESS3
  19. 19. Customer Success is NOT Customer Support X 1
  20. 20. Customer Success is NOT Project Managemen X 2
  21. 21. Customer Success is Not Pipeline Management X 3
  22. 22. The Challenges: Prioritization and Focus 1. Which customers need your attention…and why? 2. Where to invest your limited resources for best outcomes?
  23. 23. Portfolio Management is The Model for Customer Success Management
  24. 24. Customer Portfolio At Risk In Harvest Growing New
  25. 25. Drivers Results Risks ONBOARDING QBR / NURTURING USAGE BASED CAMPAIGNS SAVING PROGRAMS ESCALATION Drivers PERIODIC EVENT-BASED SUCCESS PROGRAMS & PLAYS At Risk In Harvest Growing New The Engagement
  26. 26. Drivers Results Risks ONBOARDING PROGRAMS ESCALATION/ SAVING PLAYS Drivers RETENTION PROGRAMS PERIODIC EVENT-BASED SUCCESS PROGRAMS & PLAYS At Risk In Harvest Growing New Engagement Model of Young Customer Success Organization
  27. 27. Drivers Results Risks ONBOARDING PROGRAMS ONBOARDING PLAYS ON-GOING NURTURING USAGE BASED CAMPAIGNS SAVING PROGRAMS ESCALATION/ SAVING PLAYS PLAYS Drivers RETENTION PROGRAMS PERIODIC EVENT-BASED SUCCESS PROGRAMS & PLAYS At Risk In Harvest Growing New Churn -------------------- Retention -------------------- Upsell Save Rate -------------------- Active Escalations METRICS Time to Value -------------------- Satisfaction Results -------------------- Adoption -------------------- Utilization The Portfolio
  28. 28. Farm Don’t Hunt and Manage your Grove Summary
  29. 29. Farm Don’t Hunt and Manage your Grove Summary Run Customer Success like a Business
  30. 30. Farm Don’t Hunt and Manage your Grove Summary Portfolio Management is the Operating Mode Run Customer Success like a Business
  31. 31. We’ve got a huge future ahead! Profitable Customer Success Model THANK YOU!

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