Customer success is a very hot topic (rightfully so). With the rise of the subscription economy, companies are more obligated than ever to make sure their customers are happy with their products and services. Companies from salesforce.com to Dollar Shave Club are adding “customer success’ departments (or the like), appointing chief customer officers and finally paying attention to what happens after the initial sale.
But what constitutes “customer success?” Regardless of your business, it’s a hard question to answer. For a company such as salesforce.com, one customer might be successful if they use the software to track and report on sales reps, but another might be successful if they can establish and enforce a sales process. For a company such as Dollar Shave Club, a customer might be successful if they get a close shave from the razor blades, while a different customer might be very happy as long as the blades are delivered on time.
Not My Definition of Customer Success
Here’s a personal story of how a large subscription economy company failed to understand customer success:
A few weeks ago, I was watching television one evening. The picture became pixilated and then disappeared, leaving me staring at a blank screen (Have you guessed that I’m going to pick on my favorite target: my cable television provider?). After ruling out all the other equipment in my home, I determined the CableCARD device that my cable company provides was malfunctioning (A CableCARD allows a third-party device to decode the encrypted signal sent by the cable company, meaning you don’t need extra boxes in your house…sometimes.).
When I called the cable company’s “customer success” line, they walked through it with me again and agreed with my conclusion: the problem was with the CableCARD. They said they would send a technician to install a new one in three days.
Three days (!) seemed a long time to wait just to be able to watch television again. When I challenged this, I was told:
“This is not a priority issue. We are successfully delivering a signal to your home, and a malfunctioning CableCARD is not important enough for us to send someone tonight or tomorrow.”
I reiterated that I felt they were leaving me without their service for three days, and that this is a failure to deliver the service promised. They reiterated:
“We are successfully delivering signal to your home, so we are successfully providing service.”
Our definitions of “success” did not match. Theirs was “signal on the cable wire,” while mine was “seeing a picture on my television” (I’ll spare you the rest of the argument; it didn’t go well from my perspective.). Maybe there are other customers who use their signal differently and who consider “signal on the wire” to be success, regardless of whether their TV is watchable. Not I.
As I reflected on this discussion, I thought about all the other companies that fail to make sure I am using their service successfully, and only focus on the limited set of issues they choose to define as success.
A recent study showed that 53% of Americans would choose to switch cable providers if they had the choice (cable television service is a monopoly in many parts of the country). If the monopoly is broken, it does not bode well for these providers. Not only does it mean customers will be looking to leave and take their recurring revenue elsewhere, but it opens the market for disruptive competitors who may be more than happy to meet the needs that the current providers are not meeting.
The important question for your business is this:
Do you know how your customers define “success”?
If you don’t know that, you can’t help your customers be successful. And their definition is the only one that matters (cable companies, be damned).
An Approach to Customer Success
One company that is making a good effort at answering this question is Contactually (a social CRM product I use in my own work). Susan Watkins, their newly appointed head of customer success, tells me that when a customer shows up, Contactually contacts the customer and offers to help them get started, including personal tutorials on how to do the things the customer hopes to do with the product.
In that process, they discover how the customer intends to use Contactually—and how the customer defines success. When renewal time comes, they can then contact the customer and, instead of just asking for a renewal, ask how they are doing against that definition of success and how Contactually can help them be more successful.
Their data is not in yet, but I’ve seen this approach reduce churn by 5% to 10% in other companies.
In the subscription economy, if you don’t help make your customers successful—by their definition—you won’t be in business for long.
Post a comment and tell us how you figure out how your customers define success.
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You make a good point, Jeff, we each bring different expectations and while sometimes those expectations don’t change how we use the product, other times they are deal-breakers. Sadly, with the cable providers we are stuck using poorly constructed products and getting even worse “service.” I like how Contactually has made it part of their on-boarding process to learn first-hand how the customer defines success. Most often companies are pushing solutions and forget to talk with the customers. We should keep this in mind as we set marketing strategy and developing the plan. It’s important to go back and look at what the customer expects before we set our objectives.
Marcie: Thanks! I appreciate your thoughts and insights. As business leaders we tend to believe that we have great solutions to our customers’ problems (and, generally, we do), but that leads to the cultural assumption that we know what problem we are solving before our customer tells us.
I agree that if we shift our thinking to a mindset of building relationships, it will lead to a better understanding of each and every customer and how we help that customer solve their unique problems.
With a current client, I keep returning to the basics by asking a question each time they jump to a tactic – how would this initiative meet the customer need? Generally, the conversation goes down a different path from where it started and it leads the group to the realization that the tactic won’t meet the customer need, but it may meet some other need. Then we discuss what needs to be done and when. While I feel we have the same conversation time and again I feel it moves the needle a bit each time! I keep nudging them toward change, while keeping them on track with their overall goals.
Great article Jeff!