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The Simple Customer Success Formula

The Simple Customer Success Formula

Most SaaS companies think customer success is introducing a new customer to each and every product feature, “checking in” when their playbook tells them to do and everything turns out to be just fine.

But that’s not how it works. First, customer success starts much earlier in the customer lifecycle. More precisely, the first time someone visits your websites, sees your ad etc. Because the moment people get in touch certain expectations are triggered and expectations play a leading role in customer success.

And second, customer success is not the result of random tactics but from a company-wide strategy where everybody, independently of their official role, plays a role.  

Customer success is the result of what I call the “4Rs”

1. Right Customer Expectations

An often overlooked reason for churn is customers coming with the wrong expectations. If you can’t deliver what the customer wants churn is inevitable and when it’s the CSM who finds out you’ve wasted (a lot of) money on the acquisition. A very common practice among SaaS companies, unfortunately.

The first step to customer success is to define and communicate the outcomes customers can get from your product. So that customers immediately understand whether you offer what they want or not.

It’s the CEOs who is responsible for setting the customer success narrative to ensure it gets executed throughout the whole organization.

2. Right Product

Too many SaaS companies have no real product strategy. Their products are rather random collections of features that are common in the respective market space. But a great product is designed to transform your customer from “now” to “then” (your customer success narrative).

It contains a specific methodology that outlines how customers are supposed to use the product in order to achieve their goal. There is little worse than setting expectations high and having a product that is incapable of delivering.

3. Right Customer Fit

“Everybody needs our product” – this is the mindset responsible for high customer acquisition costs and churn rates. No, not everybody needs your product. And not everybody who needs your product actually possesses sufficient success potential.

If they don’t have enough resources, lack of fundamental knowledge, don’t have the right mindset, misfitting processes etc. they won’t become successful with your product. Getting bad-fit customers to sign-up creates a ton of opportunity costs.

Because you could have acquired great-fit customers instead and dedicated customer success teams could focus instead of fighting inevitable churn.

4. Right Customer Success Services

One-size does not fit all. Not at the onboarding, not beyond where customers look to grow their initial value. Even when you’ve merged your customers’ expectations towards a single outcome each one them starts from a different position.

They have different resources, prior experiences, skills and business processes. So taking your customers from “here” to “there” requires a unique mix of education, training and advisory services. That does not mean everything has to be done 1:1. Maybe you only need to customize 20% of your services but those are certainly the ones that move the needle.

The beautiful thing is that when you no longer acquire bad-fit customers and waste your CSMs time with fighting battles they can’t win they will actually have enough time grow your great-fit ones.