The Nine Laws of Customer Success
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Dan Steinman outlines nine semi-partially immutable laws of customer success. The laws state that a company's churn rate is within its control, the natural tendency of customers is towards churning, and not all customers are equal in value. Additionally, building loyalty through relationships requires more staff than is feasible, customer success should focus on the product and improving processes rather than making customers happy, and no business can expect a 100% retention rate.
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The Nine Laws of Customer Success
- 1. Dan’s Nine Semi Partially Mostly Immutable Laws of Customer Success Dan Steinman
- 3. Every law does not apply to every company “Churn” refers to only that which is in your control “Customer Success” refers to the organization or people responsible for retention
- 4. 1st Law – Your churn rate is your choice
- 5. 2nd Law – The natural tendency of your customers is towards churn
- 6. 3rd law – All customers are NOT created equal
- 7. 4th Law – You can’t staff enough to keep customers loyal through relationships
- 8. 5th law – It is not Customer Success’ job to make customers happy
- 9. 6th law – There’s a natural retention rate for your business that is not 100%
- 10. 7th law – Customer Success’ third priority is fixing and helping customers 10
- 11. 8th law – Customer Success’ second priority is improving upstream processes
- 12. 9th law – Customer Success’ first priority is product
- 13. Dan’s Nine Laws of Customer Success 1. Your churn rate is your choice 2. The natural tendency of customers is towards churn 3. All customers are not created equal 4. You can’t staff enough people to build relationshiployalty 5. It’s not customer success’ job to make customers happy 6. There’s a natural retention rate for you that is not 100% 7. Customer Success’ 3rd priority – fixing/assisting customers 8. Customer Success’ 2nd priority – upstream processes 9. Customer Success’ 1st priority - product
Editor's Notes
- in the long run, isn’t it as important as Salesit will send a message and empower your customer success teamDoes any company celebrate too much?
- Assumption – your product is very goodYou could staff enough to eliminate churnThe goal is to find the churn rate that maximizes your profitability
- Your product changesYour customer changesyour customers changeIncreased competition/pricing pressuredecreased friction for switching
- Stratification is requiredMultiple touch modelsfrequency of touches for every customer and headcount planning are driven by touch models
- Customer Success’ job is to make customers successfulcustomers have to be driven to do things they don’t want to dosometimes your best customers are the most demanding and seemingly least happya happy place is too often a not-enough-value place
- Just like topline sales growth – there’s a time when it flattenstoo expensive to move the needle furtherMeasure so you know when you get there and then focus on efficiency
- this is what they do all day so it feels like this is their primary jobThey are usually incented on retention and customer sat which reinforces that this is their primary job
- more than any other role in the enterprise, customer success must be a company-wide commitmentthe person responsible for retention must have access to a big stickthe ceo must empower customer success with equivalency to sales
- remember, loyalty is no longer built through relationshiployalty to the “cool company” is fleetingwhen the dust settles, loyalty is to your product onlycustomer success must drive positive product changes