The Hidden Growth Area that Successful Companies Are Investing In

The Hidden Growth Area that Successful Companies Are Investing In

The Hidden Growth Area that Successful Companies Are Investing In | DeviceDaily.com

What would you guess is the world’s most in-demand field? Healthcare? Data science? Accounting?

Believe it or not, it’s customer success. According to LinkedIn data, the ratio of jobs to current workers is 32.5 percent for customer success managers. For perspective, that ratio is 31 percent for data scientists and barely 1 percent for mature fields like accounting.

That level of demand begs the question: Why has customer success flown under the radar? In a word, misunderstanding: Customer success sounds an awful lot like its predecessors, customer service and customer support. Customer success, however, does something neither of its older cousins ever could: It turns the function from a cost center to a revenue generator. Business leaders are buying into customer success because it delivers on three metrics every company cares about: customer churn, customer retention cost, and customer lifetime value.

How does customer success do it? Let’s dig in:

1. Highlights customer-product misalignment.
HubSpot may be a market leader now, but high customer churn plagued the B2B marketing provider in its early days. Back then, HubSpot’s product was focused on SEO. It came to realize, however, that its customers who churned had something in common: They’d finished search-optimizing their sites.

So how did HubSpot cut its customer churn? First, by means of a customer success team, which, according to a survey by customer success management company Gainsight, reduces customer churn by an average of 24 percent compared to companies without such teams. Second, by spotting at-risk customers earlier, which 77 percent told Gainsight is the most effective way to address customer churn.

As a result, HubSpot learned that its customers wanted a “stickier” product. It retooled its software to be a “daily driver,” added data storage capabilities, and became one of the industry’s most vocal advocates for customer success.

2. Empowers staff to provide 360-degree support.
By the time someone calls into customer support, it’s often too late. A Helpshift survey found that almost half of Americans would take their business elsewhere if they couldn’t contact customer support directly through the company’s website.

That’s why proactivity is the watchword of customer success. Consider how conversational marketing firm Drift’s customer success strategy goes above and beyond typical retention tactics. Not only does its customer success team hold weekly office hours when users can call in, but it also offers weekly online trainings, hosts a “conversational marketing university” educational program, and even facilitates collaboration between its customers via an online community.

Those programs might sound pricey, but consider that call center workers cost their employers an average of $30 per hour. At $60,000 per pop for a full-time worker, it doesn’t take a large call center to put customer retention expenses into six-figure territory.

3. Builds trust with customers.
In recent years, consumers’ trust in business has tanked. Last year’s Edelman Trust Barometer survey reported the largest-ever drop in the percentage of people who trust businesses to do the right thing, from 45 percent the prior year to 33 percent in 2017.

Why does that matter for customer success? Because if a customer doesn’t trust a company, he’s unlikely to be a customer for long. The trouble is that traditional customer support doesn’t build relationships; it’s a transactional function that seeks to solve the problem at hand and move on.

Customer success is fundamentally different because it’s an ongoing effort. Software firms with customer success teams monitor usage metrics, provide ongoing education, and reach out at the first sign of trouble. Customer success teams play a role in all five critical moments in a customer’s experience, whereas customer service teams are rarely present for more than the last: the moment of truth, which occur after crises that put the relationship at risk.

Data science may make headlines, but it’s customer success that companies need most. Unlike customer service, customer success benefits every area of the business: It improves products, boosts brand perceptions, reduces operating expenses, and supports marketing. If those reasons aren’t enough to invest in customer success, companies haven’t been paying attention.

Brad Anderson

Brad Anderson

Editor In Chief at ReadWrite

Brad is the editor overseeing contributed content at ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase. You can reach him at brad at readwrite.com.

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