Mastering the Business of Customer Success
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This document discusses the growing importance and maturation of the customer success field. It emphasizes that customer success should be run like a business using portfolio management techniques. Customer relationships should be viewed through the lens of lifetime customer value and segmented into a portfolio of customers at different stages from new to at risk of churn. The optimal engagement model focuses on driving outcomes through programs tailored to each customer segment rather than taking a one-size-fits-all approach. Metrics should be used to track key drivers, results and risks to the customer portfolio. Ultimately, the goal is to manage customer relationships like tending a grove, not taking a hunting approach, to maximize long-term customer lifetime value and business success.
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Mastering the Business of Customer Success
- 1. Mastering the Business of Customer Success Guy Nirpaz Co-founder & CEOof Totango
- 2. In case of an emergency…
- 3. In case of an emergency…
- 4. Customer Success is growing fast! 100 80 60 40 20 0 2012 2013 2014 2015 Source: Google Trends
- 5. Guest Speakers from these notable companies : We can see it by any market parameters including summit interest 2013 2014 2015 2016 100 300 950 1500+
- 7. We’ve learned a lot and we’re here to share
- 8. Practical Handbook for Customer Success Leaders Available on Amazon / iBook and for Customer Success Summit 16 attendees http://www.farmdonthunt.com
- 9. The model is not Hunting
- 11. Young Sapling Needs close care to take root
- 12. Growing Tree Constant nurturing & care is needed to ensure a successful harvest season
- 13. And Harvest
- 15. GrowingNew The RECURRING nature of the lifecycle determines the operatingmodel z In Renew/Upsell Cancelled SAVING ACTIVITY
- 16. 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
- 17. Customer Success is a business and It’s NOT Customer Love X
- 18. 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
- 19. Lifetime Profit YEAR 1 (4.5K) NET PROFIT YEAR 2 $1.0K NET PROFIT
- 20. 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
- 23. Customer Success is NOT Customer Support X 1
- 24. Customer Success is NOT Project ManagementX 2
- 25. Customer Success is Not Pipeline Management X 3
- 26. The Challenges: Prioritizationand Focus 1. Which customers need your attention…and why? 2. Where to invest your limited resources for best outcomes?
- 27. Portfolio Management is The Model for Customer Success Management
- 28. Customer Portfolio At Risk In Harvest Growing New
- 29. 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 Model
- 30. 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
- 31. 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 -------------------- ActiveEscalations METRICS Time to Value -------------------- Satisfaction Results -------------------- Adoption -------------------- Utilization The Portfolio Scorecard
- 32. FarmDon’t Hunt and Manage your Grove Summary
- 33. FarmDon’t Hunt and Manage your Grove Summary Run CustomerSuccess like a Business
- 34. FarmDon’t Hunt and Manage your Grove Summary Portfolio Management is the OperatingMode Run CustomerSuccess like a Business
- 35. We’ve got a huge future ahead! Profitable Customer Success Model THANK YOU! guy@totango.com