“I know it alarms a lot of bigger companies. Customer success is viewed as sort of customer support on steroids. It’s viewed as a cost center,” said Jason M. Lemkin, investor and founder champion at SaaStr Fund, at the 2015 Gainsight Pulse conference. Lemkin was previously the co-founder and CEO of EchoSign, and became the VP of Web Business Services at Adobe Systems, after the latter acquired EchoSign.
The reason it’s viewed as a cost center? Customer success usually requires a lot of investment up front, and a lot of patience to see results. You’ve got to allocate team members to nurture already-acquired clients, train your employees to collaborate with departments they only meet by the coffee machine, and transform company policies to create a holistic organization that puts long term client needs first.
But according to Lemkin, you should evangelize the prioritization of customer success in your company anyway to generate growth. “There’s only one thing that’s guaranteed to work – it’s customer success… because if you make your customers happy, you’ll get more customers,” he said.
Of course, to make customers truly happy, you need to make sure every department in your organization is committed to making every stage of your customer lifecycle an outstanding customer experience. Before we expand on that (and share some inspiring and funny videos to help you get the c-suite onboard), let’s talk about what you’ll get out of it.
How Adobe’s EchoSign Got 80% of its Growth Through Successful Account Management
Lemkin’s company started tracking lead sources early on. “Even as early as 4-5 million in revenue, it was clear that 80% of our growth all came from… word of mouth, upgrades, viral,” said Lemkin at the conference. He added that customer lifetime value (meaning, their first 3-5 years with your company) and product upgrades are not sufficient metrics.
“You actually have to count the second order revenue [like referrals]. And when you add in that, which could be another 100%… you realize that your customers are worth 6-8-10X the first year ACV… what you’ll realize [is that] … you’re grossly under-investing in customer success. You can’t get any higher ROI,” he said.
“Not only is a customer worth 8-10 times his first year ACV, if you help the organization understand this, you realize that customer success is 5 times more important than sales,” he added.
Watch Lemkin’s entire presentations, as well as others on the conference’s panel about driving growth with customer success metrics:
Source: Gainsight via YouTube
Why Successful Customer Account Management is an Organization-Wide Effort
According to Lincoln Murphy, principal owner and customer success driven growth strategist at Sixteen Ventures, “customer success is a customer lifecycle initiative.”
Therefore, we want you to see account management as a holistic approach. Here, we’ll take you through the various customer lifecycle stages and show you how your company will benefit if you encourage an interdepartmental collaboration.
Step 1: Lead Acquisition
Truly successful account management starts at the acquisition stage. While many salespeople still do their prospecting themselves, a growing amount of companies are transitioning into content marketing and account-based marketing.
Content marketing gives you the opportunity to nurture your leads without coming off as too salesy and turning them off. Content builds trust and emotional connections with your target audience, which leads to more satisfied customers who buy more from you down the line.
“Aberdeen conducted a study and found that companies that put their primary focus on content marketing increased their website conversion rates by more than 5x… Those who didn’t… saw only a meager conversion rate increase of 0.5%,” reports Neil Patel.
Developing content is usually owned by marketing. But a deep understanding of who your customer is and what they need to know in order to be ready to buy from you can only be achieved in collaboration with other departments.
For example, sales can bring up objections that keep customers from buying from you. Customer service and the on-site training team can identify the skills and tools clients are lacking in order to get the best results from your product. Account managers can know which clients are getting the best results, and convince them to participate in case studies.
As a result, marketing can develop accurate content that actually matters to your target audience, which will help position you as an authority in your field.
Doubting the importance of content in your account management and customer success efforts? Watch this documentary from Content Marketing Institute, called “The Story of Content: The Rise of the New Marketing”:
Step 2: Closing the Deal
If your company is like most companies, your sales and marketing collaboration looks something like this:
Source: Lattice Engines via YouTube
But according to a 2016 B2B Sales & Marketing Collaboration Study by the Marketing Advisory Network, “marketers at organizations that exceed revenue goals are 2x as likely to participate in customer and prospects meetings as those that miss revenue goals.”
That’s not surprising when you look at Nielsen’s 2015 Global Trust in Advertising study. “Owned (brand-managed) online channels are… among the most trusted advertising formats. In fact, branded websites are the second-most trusted format, with 70% of global respondents saying they completely or somewhat trust these sites. In addition, more than half of respondents (56%) trust emails they signed up for,” reports Nielsen.
In comparison, how much do you trust that the telemarketer who just called you has your best interest at heart?
According to the Guardian, research from Harvard Business School “reveals that when your brand has credibility, reliability, intimacy and low self-orientation – then you can expect an increase in satisfied customers and improved retention – loyal brand customers who come back for more and tell others about their experience.”
Customers who trust you when they make the purchase are less likely to cancel, and more likely to give your company a chance through possible deployment and onboarding challenges. Therefore, trust at the point of sale is critical to successful account management that retains customers long term.
Want to increase prospect trust even more?
As you move toward closing the deal, introduce prospects not only to marketing team members, but to their designated account manager as well. “For millennia… we trusted people first and the company second,” reports Forbes. Let prospects build trust not only through marketing materials, but by getting to know the person who will be their direct contact in your company.
Step 3: Onboarding
As you know, closing the sale is only the beginning.
“About 60% dropped off after the first day of trial” and “a lot of customers churned after their first payment,” shared Asa Nystrom, director of customer success at Buffer, during the 2016 B2B Rocks event in Paris. But combined efforts from marketing, sales, product, growth customer support and free trial onboarding (also called Happiness) teams led them to understand which trial length and plan converted better. Moreover, thanks to this collaboration, they were able to double their prices and increase monthly recurring revenue by 50%.
Watch her presentation here:
Source: B2B Rocks via YouTube
Of course, the work starts before you start onboarding or deployment. Salespeople closing the deal need to explain to customers what deployment will look like in order to ensure expectations are realistic. They need to explain how long it will take, and what access to client team members will be needed.
Then, you need to train customers on how to make the most of your product. This can be done through on-site account managers, through a knowledge center, or through an e-course that marketing will drip to clients via email.
Either way, trainings will be most effective when account managers work together with product managers and engineers, to get the full grasp of the product’s features and capabilities – as well as with the sales and customer support teams. After all, salespeople know what these new customers’ greatest concerns about the product were before purchasing, and customer support reps get data every day on what’s keeping customers from making the most of your product.
If you work together with marketing, you’ll be able to position deployment-related content in phrases, terms and a tone of voice customers can relate to and trust.
Step 4: Retention
Now that your customers are happily deployed, your entire organization needs to come together to make sure every account is retained for as long as possible. As we previously reported, “increasing customer retention by 5% increases profits by 25-95%.”
As Lemkin told Gainsight CEO Nick Metha before the 2016 Gainsight Pulse conference, an increasing amount of companies are setting “quantitative KPIs [key performance indicators] for customer success that roll up into core goals and KPIs for the company.”
Watch Lemkin’s conversation – and singing – with Metha in the following video. You’ll also discover which Game of Thrones character Lemkin thinks would make the best SaaS CEO:
Source: Gainsight via YouTube
To set company KPIs and goals, you need the c-suite and business development team involved. Then, department heads can work backwards to figure out which actions each team needs to take to ensure account retention.
Account managers need to check in on customer product usage and progress, and talk to their contacts to see how they can help the customer get unstuck or get better results. At the 2015 Gainsight Pulse conference, Lemkin suggested account managers make 5 on-site visits a month, and encouraged CEOs to make on-site visits at key customers’ companies too. “We never lost a company that I as the CEO visited. Never,” he said.
Your product team needs to work with customer support to figure out which milestones or events will trigger which messages, which will help marketing create nurturing content that’s personalized to customer needs and segments.
Meanwhile, marketing will keep track on social media comments, review sites and media coverage, to make sure the necessary department has a chance to intervene with high-risk customers before they are lost.
And all departments can come together to create a cohesive brand personality that humanizes your company and makes it easier on customers to relate to you emotionally.
For Unbounce’s holiday video, that even meant involving the company dogs.
Step 5: Upsells, Cross-Sells & Referrals
If your organization adopts such a holistic approach to account management, customer experience throughout their lifecycle will undoubtedly improve. According to Clarabridge, “maximizing satisfaction with customer journeys” has a direct impact on your bottom line.
If you “increase customer satisfaction by 20%, [you] can lift revenue up by 15%, and lower the cost of serving customers by as much as 20%,” reports Clarabridge.
One of the ways you can lift revenue up this way is by upgrading and cross-selling to satisfied customers. As we previously reported, you have a 200-1,300% better chance to convert an existing customer over a new customer, and when you do that, you’ll likely generate 33% more from the sale.
Another way to lift revenue is to charge more for a better customer experience. Depending on which research you read, 55-86% of customers are willing to pay more for a better experience, according to Clarabridge.
But it’s not just about getting a bigger chunk of your current customers’ budgets. It’s also about inviting their friends to the party.
“If you talk to any… company that’s at scale… any of the big ones – Adobe, Intuit, Google, Facebook… Salesforce – you’re going to hear one metric that’s common to all of them, which is they get 80% of their customers from their old customers,” said Lemkin at the 2015 Gainsight Pulse.
But for this to be your reality too, you have to have all your departments working together – or you’ll find yourself waking up in cold sweat like this executive:
Source: IBM Watson Marketing via YouTube
Think about it – a referral program alone requires the collaboration of a referral program team with account managers, salespeople, customer support reps and marketing professionals.
So never forget…
The Term “Team Members” Has Never Been Truer than in Account Management
Clarabridge also reports that “89% of companies with the strongest omnichannel customer engagement strategies retain their customers, vs. 33% of companies with weak omnichannel strategies.” True omnichannel success requires an omni-department strategy across the customer lifecycle. If you want happier customers, that stay longer with your organization and tell their friends to do the same, get department heads together as soon as possible.
Together, figure out what each department needs from the others to succeed, and how everyone can work together to create holistic collaborations that give your customers a much better experience, and a much better chance at reaching their goals.
What interdepartmental collaborations have worked for your company? What challenges have you seen in creating holistic account management?