The Essential Guide to

Choosing a Customer Success Solution

Customer Success is the key to reducing churn, improving retention, and driving revenue among all businesses. But to truly capitalize on the benefits of a Customer Success model, companies need to incorporate a technological solution into their organizations.

A “touch model” refers to the amount of attention a business can afford to pay to each and every customer. Broken into three tiers, touch models typically align with the value of an individual customer.

High Touch (more than $100K annual recurring revenue)

Companies with high customer lifetime values often take a “high touch” approach to Customer Success. In these environments, every Customer Success manager typically manages a relatively small number of accounts (e.g., 5-20), which means they know everything about their customers and communicate with them frequently. They use their Customer Success solution to be better prepared and more consultative in those interactions. Thanks to the software’s intelligence, they know the right times to communicate and what conversations to have. Finally, they can report on customer health internally in a repeatable, quantitative fashion.

Low Touch ($5,000–$100K annual recurring revenue)

Companies with mid-sized customer values often opt for a “low touch” Customer Success model. Customer Success managers manage 50–200 accounts, and their mission is to interact with customers “just in time” rather than all the time. Using their Customer Success solution, the managers will determine which customers to contact—and when—as well as what message to use or approach to take. For example, if a customer is coming up for renewal and isn’t using one of his or her purchased modules, the manager would receive an alert and recommended actions.

Low Touch ($100–$5,000 annual recurring revenue)

Finally, many companies have customers with more minimal recurring revenue. Therefore, human outreach may not always be practical or economical. Each Customer Success Manager could manage hundreds to thousands of accounts, or there could be so many accounts that none of them are assigned to specific managers. In these types of environments, companies use their Customer Success solutions to deliver automated and personalized communications to customers based upon data, similar to the manner in which marketing teams use marketing automation software to send “nurture” emails to prospects. For example, the Customer Success solution could trigger messages full of training materials to those customers who haven’t used a particular product. Within the no touch model, the Customer Success software typically integrates with the company’s underlying marketing automation system.

Learn more about how Digital Customer Success applies to all of the above strategies.

Once you’ve determined your company’s touch model, pinpoint your growth stage and how it’ll evolve over time.

Stage 1: Adoption ($1–$5 million in revenue)

When companies are starting out, they often don’t have a lot of renewals coming up, especially if they employ annual or multi-year contracts. As such, Customer Success at this point isn’t about retention or upselling. Instead, it’s about getting customers to use and get value from your product. In this stage, Customer Success solutions can identify and inform Customer Success managers as to which customers are successfully using products, which are struggling, and which are failing to adopt entirely.

Stage 2: Retention ($5–$20 million in revenue)

Once a business has a sizable base of customers coming up for renewal, the company must shift its focus to reducing churn, maximizing loyalty, and increasing lifetime value. Here, Customer Success solutions proactively identify renewal and retention risks and recommend the appropriate actions and timelines.

Stage 3: Expansion ($20–$100 million in revenue)

In an effort to accelerate growth, thereby better positioning themselves for an IPO or another exit event, companies start introducing multiple product lines or take a land-and-expand approach. As a result, Customer Success teams focus on identifying expansion opportunities, and they use their Customer Success solutions to:

Stage 4: Optimization ($100 million–$1 billion in revenue)

In this stage, mature businesses want to scale cost-effectively by automating processes and relying more heavily on the Customer Success solution in order to:

Stage 5: Transformation (more than $1 billion in revenue)

Most newer businesses are still working toward this stage. But that means there’s a huge opportunity for Customer Success to be a long-term initiative—a valuable strategy for the business and its customers. Salesforce is probably the best example of a B2B SaaS company in this stage; its customers view Salesforce as a true strategic partner—integral to their business. Outside of the SaaS world, though, most Fortune 500 and similar style corporations would fall into this stage. Whether your company is a B2B SaaS or a massive, brick-and-mortar corporation, Customer Success software at this stage can help the Customer Success team add value at every single phase of the customer lifecycle.

You’ve identified your company’s touch model and growth stage. Now it’s time to drill deeper and decide what your business specifically needs out of its Customer Success solution. To help determine just that, answer the following questions.

In the chart below, we list some of the most common Customer Success solution features for companies based on growth stage and touch model. Your answers to the previous section’s questions will help you determine if your company’s needs align with the suggestions in the chart or if you’ll need to combine features to create a more custom solution.

Your company is unique, and so are your customers. Plus, like most enterprise businesses and tech companies, you have an in-house IT or engineering department. So, you might be saying to yourself: I get that my company needs Customer Success software; why don’t we just build our own? Perhaps your developers will build it on top of your business intelligence platform or natively into your CRM. Stop right there. Custom-built is not the answer. Read on to learn why.

Ready to shop for a Customer Success solution? Great. It’s imperative to understand, though, that selecting a solution is a commitment; it’s a business relationship, so finding the right one takes time and effort. Don’t go into your software selection lightly. Here’s the shopping process we recommend:

1. Determine Your Tier

CRM Buyer breaks down Customer Success solution requirements into three tiers based on business needs. Using your system requirements research and referencing your touch model and stage of growth, you can further hone in on the types of products and services you’ll need from your Customer Success solution.

• Tier 3
  Tier 3 is the lowest tier and is ideal for “No Touch” companies. It typically includes:
  • Self-service support
  • Self-guided training and tutorials
  • In-product guides
  • Automated engagement tactics, like one-to-many messaging
  • Usage and behavior tracking with an analytics dashboard
• Tier 2
  Mid-size businesses—or companies with “low touch” models—might benefit from a Tier 2 solution. At this level, the Customer Success solution includes everything from Tier 1 as well as:
  • Adoption Monitoring: the system tracks usage and trends to monitor adoption and make recommendations.
  • Survey Monitoring: the system distributes NPS surveys, tracks results, and makes recommendations based on the data.
  • Upsell and Renewal Monitoring: the system identifies opportunities for upselling and cross-selling, and tracks contracts and provides notifications regarding the right times to talk renewals.
• Tier 1
  Ideal for large, enterprise-level companies or those businesses with a “high touch” model, Tier 1 includes everything from Tiers 2 and 3 as well as:
  • Assigned or dedicated Customer Success manager or team
  • Quarterly business review, which is “an analysis and review of client’s goals, issues, etc.”
  • Best practice advice, which is essentially advice on how to better use the Customer Success software
  • Training

Once you have a strong idea of what you need out of your system, start searching online for Customer Success solutions. (We recommend checking out industry leader Gainsight first and foremost.) Scope out offerings and schedule demos or sales calls with those companies that best align with your business’s wants and needs.

2. Ask Lots of Questions

During the demonstrations or sales calls, be sure to ask the following questions:

Functionality

• Do you provide a dashboard that offers a 360-degree view of the customer across purchases, product usage and adoption, key milestones, support cases, payment history, reference activity, survey responses, and other factors?
• Do you allow users to define a customer health scoring model and apply automation?
• Can I easily track adoption by customer, by user, or by a group of customers based on certain metrics or KPIs?
• Can I benchmark customers across median customers and best-in-class customers on a variety of metrics?
• Can I filter all data and reports by all fields in my CRM system (e.g., renewal date, industry, etc.)?
• Can I integrate with third-party client satisfaction measurement systems and/or deliver surveys natively from the system?
• Does the system require a separate user login or does it integrate with my CRM system?
• Does the system require a separate user interface or can 100% of the functionality be completed from my CRM system?
• Can the system create tasks within my CRM system?
• Can I manage proactive and recurring touches (e.g., quarterly business reviews or monthly health checks) in the system?
• Can I get an early warning regarding at-risk customers and manage those customers through an easy-to-use workflow?
• Can I get alerts about upsell opportunities and manage these customers through an easy-to-use workflow?
• For each early warning or upsell trigger, can my Customer Success team get a standard set of recommended actions?
• Can I produce PDF reports to present to my customers about their adoption and success with my products and services?
• Can I produce customizable dashboards for various audiences to report on and trend the metrics in the CSM platform?

Security

• Do you integrate with my CRM system’s authentication model?
• Where is my data stored? Is it in a location I trust, like my CRM?
• What security controls are in place?

Experience

• What size are your typical customers? Do they match my company’s size?
• What level of Customer Success maturity are your typical customers? Do they match mine?
• What touch model do your typical customers use? Does that match my company’s touch model?

Extensibility

• Do you offer a published API to load data into, and extract data from, the system?
• Does your system automatically integrate with the custom objects and workflows I’ve built into my CRM system?
• Does your system offer flexible, customizable reporting?
• Does the system track usage data at a company, instance, and user level?

Integration

• Do you integrate with:
  • marketing automation systems like Marketo, Eloqua, Act-On, Pardot, and Hubspot?
  • analytics systems like Google Analytics?
  • support systems like Desk and Zendesk?
  • billing systems like Zuora and Aria?
  • community management platforms like Lithium and GetSatisfaction?
  • CRM systems like Salesforce, Netsuite, Microsoft, Oracle, and SAP?
• Can you access data in real time?
• Do you provide a data integration framework to automatically synchronize data with your internal databases and other custom systems?

Analytics

• Does your system provide customizable dashboards?
• Do you provide analytics for:
  • health scores?
  • churn, renewals, and revenue-increasing opportunities?
  • customer satisfaction and adoption?
  • Customer Success team operations?

Data Science

• Does the vendor offer a data science service to:
  • analyze your data and identify the early signs of churn?
  • analyze your data and identify upsell and cross-sell opportunities as well as the right times to deliver those messages?
  • help you define your health scoring model?
• Does the vendor augment your internal data with external data in its data science processes?

3. Determine Potential ROI

Nowadays, very few companies have incremental budgets for technology solutions—particular within the year. Therefore, you need to make sure you can demonstrate the impact of a Customer Success solution. You should break this impact down into three quantifiable benefits:

Reduce churn through early intervention.

Calculate the following:

• How many churned customers does your company have per month?
• What’s the dollar value of these customers?
• How many of these churn instances are controllable (e.g., the customer didn’t go out of  business)?
• Out of these controllable churns, how many could you have saved if you’d gotten to them earlier (30/60/90 days before)?
• What’s the annual impact of reduced churn?
• What’s the lifetime value (over multiple years) of this reduced churn?

Drive upsell.

Calculate the following:

• How many customers do you have today?
• What percentage of these would be ready to buy more products and services if you got to them at the right time?
• What would be the average value of these products and services?

Scale the team.

Calculate the following:

• How many account managers do you have currently?
• How many accounts does each person manage?
• How could that ratio increase through the use of Customer Success software?
• How many new hires can you defer thanks to implementing software?
• How much money would you save on those new hires?

4. Map Out the Implementation Plan

Like any technology solution, expectations management is critical in buying a Customer Success solution. To ensure you get buy-in across all departments (that’s the next step), you need to develop a realistic project plan that includes:

• Clear goals and measurements for the project (make sure these align with your prospective Customer Success solution)
• A regular process for evaluating those goals both internally and with your Customer Success system
• A project manager and IT contact on both your side and the prospective Customer Success vendor’s
• Executive sponsorship of the effort
• Timeline for how things might evolve (see below for an example)

Timeline Example

5. Get Buy-In

At this point, you’ve narrowed down your choices of Customer Success solutions to one to three companies. To ensure you make the best decision, you’ve got to get buy-in from key decision-makers. Remember, implementing a Customer Success solution requires a strategy and organization focused around Customer Success. So, as you pitch the solutions to your stakeholders, keep everything framed around how the Customer Success solution will 1.) benefit customers and 2.) specifically help the stakeholders and their departments. For example:

• Product teams will appreciate knowing which features customers love and what types of customers are using which products.
• Marketing will love the ability to find references, testimonials, and advocates.
• Sales will appreciate the ability to identify not only upsell and cross-sell opportunities, but also the precise time to connect with those customers.
• Training, onboarding, and implementation teams will love the ability to analyze and monitor the effectiveness of their efforts.
• Support will find the ability to immediately assess the “health” of customers when they call to be very helpful.

Here are a few other things to keep in mind for other stakeholders:

CEO and CFO

• No CEO or CFO will approve a solution that doesn’t help you achieve one of your core objectives for the year. Make sure your pitch is aligned with company goals and strategies.
• CEOs and CFOs are frustrated by countless technology projects that go nowhere. Talk about internal buy-in and the vendor’s commitment to your success
• Metrics are everything to CEOs and CFOs, so detail how you’ll measure the program’s success.
• Vendor pricing can be confusing, so come up with the bottom line (initial cost and ongoing cost as you grow and scale). Also, make sure you articulate your calculated potential ROI.

IT / Engineering / Operations

Be prepared to answer the following questions:

• How does this fit with our other systems? Does this become part of our CRM system or is it another tool?
• Does it integrate with our other technologies? Does it overlap with any of these?
• Do we have the data today? How much value will we get from this solution based on the data we currently collect?
• How much time will this take? (Remember, the long-term impact of implementing a Customer Success solution will result in lots of time saved and money generated.)

5. Negotiate pricing and contracts.

You’ve picked your Customer Success solution; now comes the fun—or least fun—part. This step will come down to your budget, growth stage, touch model, customization requirements, and the number of needed products. Remember, your Customer Success solution will be a true business partner, so be honest, upfront, and flexible during this final purchasing stage.

As with the product or service you sell, you likely will get out of this effort what you put into it. But if you take it seriously, the positive impact of investing in and implementing a Customer Success solution can be massive. Use this guide as your roadmap to getting there.