The Future of Growth is Customer Success
I often meet leaders looking to build a second growth engine for their business. They want to see their businesses thriving for decades to come, and are acutely aware of the need to diversify and continue innovating.
Seeking the next big thing, these executives analyse areas where they have unique knowledge and competitive advantage. They hire external firms to help them understand future markets. That’s, of course, extremely important. What’s sometimes forgotten is the customer base and the team servicing it.
I don’t mean forgotten, as in, leaders don’t think of their current customers as potential future customers. What I mean is that they don’t always invest in nurturing and truly partnering with their customer base to co-create the future.
While many companies invest in customer success, a lot of them are still at “level 1”.
They are concerned with building transactional relationships. The customer buys the product, the firm delivers it and tries their best to enable the outcome.
This model is the one with the least skin in the game.
Whether the customer gets results or not, they are paying for the product and they are tied to a contract and will be required to pay. You won’t get future business if you don’t deliver, but that’s next year’s problem.
It doesn’t mean you always have a churn problem at this level. Companies can have very little churn and satisfied customers, but their customer base isn’t powering their growth. They are usually seen as vendors.
Some companies have reached “level 2” where the customer’s outcome is directly tied to the pricing model. As the customer achieve their objectives, the company captures more revenue. This model of customer success is one where the provider truly has skin in the game. Their contract might include a minimum fee, but it’s usage that generates the bulk of the revenue.
If you get this right, you have a really healthy revenue retention number and your current installbase is meaningfully contributing to the growth of your business. Because your growth is connected to your customer’s, they see you as a partner.
In both levels, your customer success team is of vital importance. When you invest in building a world class customer success program, you are multiplying the lifetime value of your customers. A healthy Revenue Retention will fuel growth exponentially.
So how do you get to “level 3”?
Firstly, you will need to stop thinking about success as a department and a team, and start thinking about it as part of your continuity strategy.
You might already have programmes that connect clients and the product teams. But those programmes focus on immediate development opportunities.
To move to the next tier, you will need to build more than feedback loops from the customer to your senior leadership team.
You will have to get into their minds and learn about the future of their industries, their niche challenges, how they might be disrupted, emerging technologies in their fields. Get them to tell you what’s keeping them up at night when they think about the future. Your customers will be able to tell you things that your team and consultants could never know.
Next you will have to leverage your visionaries. They are the people in your team closest to your customers. People who can connect dots and think creatively. Entrepreneurial spirits that given time and space, will have fantastic ideas on how your business can seize hidden opportunities. Not only from success, but from sales, product, engineering, marketing, finance etc.
Get those 2 groups together. Run hackaton-type events where those two groups get to mingle and to come up with their own challenges, opportunities and solutions.
Give your team time to work on those projects on paid company time. Let them get scrappy and test those ideas with real customers, in fact, the customers that were in that room and have helped those ideas come to life.
It can feel counterintuitive to take your team’s focus from driving today’s success. It can be scary to involve customers in actively building the future, because it might frustrate them if they don’t have today’s pieces of the puzzle sorted. But if you get it right, innovating from the frontlines can pay enormous dividends.
Not convinced? Gmail, Twitter, Buffer, Todoist, and Dwolla all started as a side projects. What was once something being built on spare time by a few people, while the “real work” was still being done, are main offerings generating great value for businesses and their customers.
The benefits to employee engagement and retention can be meaningful. Give people have a project they are passionate about, instead of just doing the mundane and following a process.
Customer Success CAN be your second growth engine, you just need to take it up a notch.