Why Care About Making Your Customers Successful?
What seems like a self-evident statement turns out to be, like so much else in life, more complicated than it appears. A successful customer is a happy customer, and a happy customer is good for your business in terms of loyalty, repeat sales and referrals to new business; it’s a lifecycle, not a straight, one way line across time. In many market segments however, the business culture is more like “find-sell-close-move on. Rinse. Repeat.” For these businesses, what happens to the customer over time isn’t important as long as there’s new revenue coming in. For a long time this model worked. But not anymore.
There are several reasons for this, but two I’ll talk about here: first, prospective purchasers of products ranging from eggs to ERP software just plain know more about what they’re buying than they used to. Search engines, review sites, peer input all empower a buyer with unprecedented knowledge long before they talk with a sales rep. When that interaction does take place, there’s more testing of the rep’s accuracy, the veracity of his and his company’s claims, than ever before. An educated buyer can sniff out the whiff of falsity with unprecedented accuracy.
Second, once a prospect becomes a customer, they are often more mobile than in previous times. While this obviously varies by product or service, let’s say a company buys some software but they soon determine it doesn’t meet their needs or they were led to believe certain capabilities were present which proves to be untrue. In an enterprise software world, there will have been a multi-month investment of time and money to install and implement the software and train the user base. There may be servers to consider, other infrastructure costs, etc., so basically, once the software is up and running, the buyer’s stuck with it, good or bad, for the foreseeable future.
However, in our new on-demand, Cloud-based software world, most of the baggage and cost to use goes away. Contract restrictions notwithstanding, an unhappy user community can just turn off one product and turn on and use another with minimal disruption. The model is more like a restaurant: don’t like the meal or the staff, go somewhere else where the food and service are better. This issue of customer churn is not just a customer satisfaction issue: it has a clear and measurable impact on a business’s bottom line; and new customer acquisition costs as much as 5-6 times as much as getting more business from an existing one.
As Forrester Research analyst Kate Leggett notes in her blog, keeping a customer happy and successful reduces churn, increases additional sales to that customer, and even helps new business growth. The whole notion of being invested in—and helping—your customers to be successful with your products is encapsulated in a concept called Customer Success Management. We’ll be talking a lot in the coming weeks and months about this concept, its value, and perhaps even more important, how to, well, successfully help your customers to be successful.