We all know the importance of customer success but it’s especially important in the SaaS industry. With the backbone of SaaS customer revenue resting on subscriptions, customer success directly relates to overall retention rate.
At the heart of the issue however, customer success is a general term at best. It is used to describe several different facets of your business that ultimately dictate the happiness of your customer and the use they get out of your product. As such, it’s difficult to give a specific metric or measurement to what customer success is. Rather, it might be better to think about what customer success is for your specific clients.
It’s with that mindset we hope to educate our readers, many of them burgeoning business owners themselves. Keep reading to learn more about the main goals of customer success and why it’s important in the SaaS industry.
What Is a Customer Success Team’s Main Goal
Whether or not you have a team dedicated to this or are simply working on your own, customer success programs all have a single goal in common: optimizing the consumer experience of your product.
There are several ways this can be done but the most effective is finding out your audience’s desired outcome of the product. Is it to optimize the workflow of an entire team? Utilize cloud services optimized specifically for their corporate structure? Get in your client’s shoes and ask the questions they are asking.
Through understanding your core customer base, how they use your product and where they find value will become ever more apparent over time. It’s important to then take this customer data and use it to drive company change that increases the product value for your existing user base
SaaS Customer Success Metrics
We have talked about metrics many times on this blog. Nevertheless, it’s alway a topic worth talking about.
While there are many different types of metrics, there are only a core handful that ultimately give you the necessary data to assess the efficacy of your customer retention. (Remember, in a world where monthly recurring revenue is the backbone of your business, retention equals success.)
As such, the following metrics are those we recommend all SaaS businesses keep a watchful eye on.
The Lifetime Value of a customer is a metric that serves two functions: it shows you who stayed onboard and it shows you whether or not they are utilizing a higher tier product than when they started.
LTV shows you which clients are most in need of your product and provides insightful information into the kinds of custom features they use. Your high LTV clients are also going to be your top spenders and be the most likely to recommend your product to others in a similar situation to their own.
This means that one customer success story leads to another, all requiring a minimum effort to acquire.
The second big player when it comes to customer success is churn. The antithesis of LTV, churn rates indicate that your produce, process, or something in the nature of your product didn’t meet client expectations.
Whenever you see churn rates rising, it’s an opportunity to take your strategy back to the drawing board and get input from clients on what didn’t work for them. In the long run, this can help you refine not only your product, but your custom services and customer support.
Refine Your Onboarding Process
Onboarding is something we have discussed on our very own blog and have mentioned in countless articles. There is good reason for this: your onboarding process has a massive impact on the early churn rate of your audience.
Unless you are in a very small niche, the likelihood of another SaaS company offering similar products or services to your own is quite high. If your onboarding process is sloppy, too involved, or too vague, there is a risk of churn after the tree trial or first month is over.
If this sounds like a matter of Goldilocks and the Three Bears, you’re correct. Fortunately, you have a little more control over how to change your process over time.
While it may not be clear at first, there are many ways you can gather information about the success of your onboarding process for both clients that churned and those that did not. These include online surveys and even reaching out individually through members of your support team to get client feedback on why they want to stay, and even more importantly, why they want to stay.
Focus on Upsell Opportunities
In SaaS and any other recurring revenue product, lowering churn is the main form of keeping a steady income into the company. To maintain this, you want to work smarter, not harder, at your customer success.
It’s easier and less resource intensive to maintain a current client than it is to acquire a new one. Similarly, it’s also far more profitable to upsell existing clients who already know how to use your product and use it as part of their daily workflow.
Maximizing the overall financial weight of your oldest customers is known as increasing a client’s “lifetime value.” This is the value that a single customer creates for your company over the entire duration of their subscription with you. The higher that number, the more money you make, thus absorbing any funding and time that went into acquiring the client in the first place.
This is yet another example of how having a well-oiled customer success machine can really benefit your business in the long run. Even though initially the investment is a little higher, you are paying into greater, more stable, future returns.
Customer Success is Business Success
This is where we talk about how RevTek Capital can help you on this incredible journey.
RevTek helps businesses grow. We do this by providing Capital in exchange for a percentage of your future revenue. In the world of SaaS where upfront costs can put a real strain on lead generation, that added financial help can be the difference between a small growth spurt and truly amazing results.
Can the added help get your business where you want it to go? Give us a call at 480.332.0399 to find out.