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SaaS Customer Success: The Complete Guide [2023]

Learn how you can build a successful customer success program for your SaaS business with this comprehensive guide.
Written by
Duncan Elder
Last updated
October 23, 2023

You must have heard "It's less expensive to keep a current customer than to find a new one."

This statement has a profound impact on the bottom line of any business. According to the Harvard Business Review, acquiring new customers is anywhere from 5-25 times more expensive (depending on the industry) than retaining an existing one.

This is especially true in the world of SaaS (Software as a Service). SaaS businesses rely on recurring customers who are happy, loyal, and empowered to extract maximum value from a product. Hence, SaaS customer success is a critical element for sustained business growth.

Customers that are happy and loyal have the highest lifetime value and refer their peers to your business. This art and science of customer retention and creating advocates is known as customer success.

Read on to learn about customer success in great detail, and how to implement it for your SaaS company.

Customer-focused functions in B2B SaaS

You cannot define customer success without first differentiating it from its closely associated business functions: customer experience and customer support.

Customer support has some clear differences, mainly that it is reactive by nature, not proactive. Customers get assigned to support when they encounter problems, and the objective is to solve them as quickly as possible before sending them on their way.

In a way, customer support is all about putting out fires, while customer success is more concerned with replacing that old faulty wiring (and making sure that the fire extinguisher still works).

Customer experience is a bit tougher to differentiate. In a nutshell, it is about building a positive association with your brand in every interaction that the customer has.

This can include tasks like helping the product team with new features based on customer feedback data and referring customers to the right person when a problem arises.

If customer support is reactive then customer experience is best described as interactive. This team is involved in delivery, feedback, awareness, and other methods of communication throughout the customer lifecycle.

Customer success is somewhat similar to this, but the key difference is that it is focused on finding new ways for the customer to get the maximum possible value from the product.

In practice, a member of your customer success team will help a customer learn to use a new feature in a way that hasn't been done before. This can create an emotional response from the customer, which is later recorded and analyzed by the customer experience team.

These teams are all related, and a customer may end up meeting each of them. This varies a lot by industry and doesn't happen sequentially.Now we can take a deep dive into defining customer success.

Customer success in SaaS

Hubspot, a reliable source for business wisdom, describes customer success like this:

"Customer success is the process of anticipating customer challenges or questions and proactively providing solutions and answers to those issues before them arising."

This is a good place for us to start. The definition shows how important it is to predict where problems can arise during the customer journey. But it misses out on one important element.

Here's another definition from customer success consultant Lincoln Murphy.

"Customer Success is when your customer achieves their desired outcome through interactions with your company."

This definition really drives the point home. The desired outcome is a core concept, something that customer success managers need to understand better than anyone else.

Your customer has the desired outcome even if they don't realize it yet. Part of the process involves a deep understanding of what the customer needs your product for and the problems that they are encountering.

The goal is to help them accomplish this so that they are open to upselling opportunities and referrals.

Overall, they need to feel like they are using your product better than anybody else. This is what authentic customer loyalty looks like.

Why customer success is important

It shouldn't come as a surprise that Bettermode, a company that enables companies to build customer communities is emphasizing on customer success.

After all, this is a vital part of our industry and we care about it a lot.

But if you have any doubts about the importance of customer success, here's what other industry veterans have to say on the subject.

"Customer success is not a buzzword, but a business model."

- Aaron Levie, co-founder, and CEO of enterprise cloud company Box.

"Customer success is not an afterthought. It's not something you put off until you are big enough. That's wrong thinking. Customer success is an investment to start now."

- Aaron Ross, author, and marketing thought leader.

Customer success is vital enough to require valuable resources within your organization. It is relevant enough that it should be already have been implemented -- especially for SaaS companies.

And, it justifies its own existence through the insights that are gained from developing relationships with your customers.

Let's look at the Google search trends for the term "Customer Success" to assess the growing popularity:

An effective customer success strategy often drives the following benefits for SaaS companies:

  • Reduced churn rate as unsatisfied customers have their problems dealt with
  • Increased customer interaction, leading to more opportunities to upsell and cross-sell
  • Improved customer referral rates and decreased customer acquisition costs as your best customers become brand ambassadors, sharing their stories of success in their circle of influence

All of these factors have a profound impact on profits and revenues, but it all comes back to the wisdom from the beginning of this article: it is much cheaper to keep an existing customer than to get a new one.

Where customer success fits in your SaaS company

Customer success doesn't work well in a silo. It relies on close collaboration with a large chunk of your organizational chart.

Your marketing and sales teams are the first part of this. Their job is to make sure that the right customers are evaluating and subscribing to your product in the first place. If their desired outcome is impossible, then it's not worth the cost of onboarding them just to watch as they later leave unsatisfied.

The product team should rely on customer success (and customer experience) for valuable feedback that informs how they improve the product. The finance department needs to understand the investment that goes into customer satisfaction. Customer satisfaction metrics help businesses measure the performance of these programs, and strong reporting and dashboards that empower these departments in decision-making are key here.

Implementing industry-leading SaaS customer success

We know that customer success is important. Here's how to implement customer success management in your organization.

Establish a roadmap

Just like Aaron Ross said earlier in this article, customer success isn't a concept that should wait until your organization is "big enough". Ideally, it is part of your business plan from day one.

Any company looking to implement customer success will need a roadmap. Building this involves input from stakeholders at every level of your organizational chart, but your existing customers are really where key insights come from.

Build a customer journey map

This is a visual map of each customer interaction with your SaaS company. It must cover everything from the point a customer discovers your brand to the point they become advocates and eventually churn. This allows you to see how customers engage with your brand from the customer's point of view.

When you have clarity around how customers are interacting with your company at each touchpoint, you'd be better equipped to set the customer up for success. From the customer success standpoint, you'd be largely focused on the journey that customers take after signing up for your product.

Determine what your customers expect

Take note of the factors that made your most faithful customers stick around, and common pain points from those who didn't. Most importantly, define what your customer's ideal experience is like. Also, look into your competitors' customer success programs and identify if they are doing something better.

Allocate resources

Aside from finding a dedicated customer success manager (CSM), your team will need to find people who understand the product better than anyone to stand on the front lines as customer success professionals. Typically there will a VP of Customer Success, Director(s) of Customer Success, and Customer Success Managers. There are optional positions such as Customer Success Operations Manager and Customer Success Analyst.

Select your tech stack

Most customer success programs rely on a mix of manual and automated (software-based) execution. The customer success technology landscape is filled with an abundant number of software vendors. A solid starting point is to dissect the roles and responsibilities of the customer success team and map the tools for each segment.

Check out our article on the best customer success software to learn more about the tech stack.

Establish metrics for customer success

In a similar fashion to the wider world of business KPIs, it's easy to get lost in a maze of metrics when it comes to customer success. Before you implement your strategy, reach a consensus about what metrics matter the most, and realistic goals that are set with the customer in mind.

Key Performance Indicators (KPIs) in this space are customer-centric. As much as there are dollars on the line, this has a lot to do with human behavior and emotion. Here are two common KPIs in this space.

Net Revenue Retention
is the most financial metric on this list, but it's for a good reason. NRR captures the effects of churn, up and down-sells, and cross-selling with your current customers. An NRR over 100% signifies growth in your customer success efforts. This metric can easily be calculated using annual recurring revenue (ARR), another important customer success KPI.

Net Promoter Score (NPS) is a general health indicator or an effective way to measure how likely your customers are to recommend your brand to a friend or colleague. After surveying your customer base, respondents are broken into three categories: promoters, passives, and detractors. Your final score is the difference between the percentage of promoters and detractors. SaaS companies keep a close eye on this customer success metric, as it is a strong indicator of customer loyalty.

Track Customer Health Score

A typical customer that subscribes to a SaaS product goes through different stages. For instance, the journey starts from trial/demo, then moves to purchase, and finally customer success team onboards the customer. The next stages are about delivering value consistently to reduce churn and uncovering up-sell/cross-sell opportunities.

The goal here is to use various indicators associated with customers, categorize them, and assign scores for each category. That would give you the Customer Health Score and enable your team to identify ways to move customers in the lower spectrum to the upper one.

Given below are some of the common categories of indicators:

  • Revenue - Business growth over time and renewal frequency (annual/monthly)
  • Product usage - Number of seats, organizational adoption, features used, and retention trend
  • Satisfaction metrics - NPS, CSAT, and CES
  • Relationship - Customer interaction frequency, customer age, and quality of feedback
Customer Health Score Indicators
Customer Health Score Indicators

Map touchpoints for customer success

There are numerous touchpoints where customers can be set up for success in a typical SaaS company. Given below is a list of the most important

Customer support - Your customers would need some sort of support in troubleshooting issues across the customer journey. So, create a channel to enable customers to report issues, keep them updated on the status, and solve the issue. The three popular ways to handle this are live chat, ticketing system, and customer community.

Customer education - Learning management plays an important role here. You need to build comprehensive content resources on how to best use your product.

Customer community - Customer community touches your customers across the life cycle. You can allow customers to connect with each other so they can offer help, share knowledge, and best practices. You can also create certain spaces in your community to host resources for learning - documents, videos, webinars, etc. Apart from that, you can also collect feedback and get product ideas.

Customer Relationship Management(CRM) - CRM solutions contain valuable information associated with customer goals, use cases, existing obstacles, and customer value. This contextual information enables the customer success team to help customers from the very beginning.

Customer feedback - Collecting and evaluating customer feedback and closing the loop is a primary element of customer success. Allows you to observe customers and listen to their pain points so you can devise the right solutions.

Customer onboarding - Onboarding plays a pivotal role since it allows you to ensure that the value of the product is realized by the customer from the very beginning. We'll discuss more in the subsequent section.

Customer communication - Communicating and keeping customers informed is important. Certain communications are automated and some are manual in nature -- this is accomplished with a combination of channels such as email, business messaging apps (e.g., Slack), in-app messaging.

Product adoption - Whenever you are releasing new features, it is important to ensure that your customers are actually aware of the improvements and are empowered to use them. With the adoption of the product, the updates that a SaaS company releases would be futile.

Improve your onboarding experience

Targeting your onboarding process is a critical step in your customer success strategy.

This is because it has a high impact. According to HubSpot, you can lose up to 75% of your new users during their first week with the product.

Examine your existing onboarding strategy by looking critically at the following factors:

Level of automation

At what point of the process are automated welcome emails and check-ins used? How does this relate to when customers typically drop off?

Automation is key to ensuring your team isn't overwhelmed, but this shouldn't be at the expense of the customer.

Communication between teams

Does your customer success team speak to a prospect before a sale is made? If not, they should.

The handoff from the sales team to the success team should be gradual and collaborative. This shows trust and commitment and can give strong visibility into customer needs.

Providing value early

Your new users need to feel productive and comfortable with your product early in the onboarding process. This can be described as the "aha" moment, where they find themselves motivated and eager to adapt the product to their specific needs. Content resources and webinars play important roles in delivering the assets required to set up your SaaS product for success.

Set up Quarterly Business Reviews (QBRs)

QBRs are widely adopted for clients who are on higher pricing tiers and typically onboarded via a high-touch sales model. QBRs allow the customer success team to track the client's progress with time and provide guidance to ensure that clients' goals are met.

Also, this approach enables your team to identify potential problems from the customer's account activity and address them. Your customer success can use these review opportunities to keep the customers updated with new features and the product roadmap.The key here is to prepare a robust checklist document for QBRs that you can use to help clients in a personalized way.

Leverage customer self-service

Some of the most important metrics that your organization prioritizes can be influenced by something other than your customer success team. It's called customer self-service.

Even though this may seem like a cop-out, or a justification to cut back on spending ("can't the customer just help themselves with this problem?"), it is an important part of your overall strategy.

Effective customer self-service means giving reliable and easy-to-understand answers to the problems that your customer might experience. This can take many forms including:

  • Online communities that connect customers with peers and empower members to solve problems with minimal interference from the internal team. Bettermode Community Platform has been adopted by businesses for engaging customers and facilitating peer-to-peer connections.
  • Content in the form of a knowledge base or FAQ section. This needs to be consistently updated and easy for customers to navigate.
  • Multimedia content. How-to videos fit in here. Remember that customers will have unique learning styles, and some will prefer a tutorial video to a lengthy blog post.

The end result of good self-service is fewer tickets for your customer support team, decreased churn, and reliable data about which problems customers are having.Customer success self-service content also fits in nicely with content strategy and can boost your organic traffic and SEO accordingly.

Above all, think about this concept like a great retail shop, where knowledgeable and helpful employees know when to leave the customer alone - and let them explore at their own pace.

Listen to your customers

Listening to your customers doesn't sound like a complicated concept. To many companies, it is a box-ticking exercise. All you need to do is run some follow-up surveys and ask your top customers about any problems they are encountering, right?

Not quite. Effective listening is about connecting with them, and giving them space to connect with each other - not just answering their questions or asking "what's wrong?

"Part of this is training your customer success team on tactics they can use on their next success call. A company-wide culture of active listening and humanistic problem solving is essential for long-lasting customer relationships - so invest to make sure that this experience is consistent.

Build an online community for customer success

An online community that your customers engage with is one of your biggest assets.

This cuts down on the work hours and expenses that go into convincing your customers to speak to you, and instead, you can facilitate customer interaction - reaching in every now and then to steer the direction the right way while collecting valuable feedback all the while.

The reason why this works is simple: customers trust other customers more than anyone from your organization. They will talk with each other honestly on online forums because they feel a sense of belongingness - and because of the social proof that comes from groups of people acting candidly.

You will earn more trust from an online community than you can from branded content like a blog or other self-service resource that comes from your company. User-generated content is that powerful!

So how can you put this into action?

Our recent article covered 5 tactics you can use to drive customer success with an online community. Creating and executing the right community strategy for your company can be complex. Check out how we have helped some of the most popular SaaS companies launch successful online communities to find inspiration for your brand.

If you are looking to create your reach out to our team to learn how a community platform fits in your organization.

Robust customer success program = happy customers

Customer success (as we know it) is evolving quickly and SaaS companies are challenging each other to offer the best possible customer experience.

But even with all this change and momentum, the core principles are the same. Invest in retention as much as acquisition and listen to your customers with a keen ear.

All of this comes back to building a loyal customer community, which we covered in our most recent blog post.

Keep an eye out for more from the Bettermode blog to build loyal brand communities from the ground up.

Duncan Elder
Content writer

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