There is the old and still valid rule that it is cheaper to retain existing customers than to acquire new ones. It is undisputed that customer retention is a crucial factor for the long-term success of a company. An important aspect of customer retention is customer satisfaction, as satisfied customers are ultimately the best salespeople. To generate new customers, you need a good sales team. To satisfy customers and therefore retain them in the long term, you need a good Customer Support team, but also the often underestimated or even non-existent Customer Success team.
Acquiring new customers is expensive – losing existing customers is expensive too
Acquiring new customers takes a lot of time and money, especially in B2B sales. Of course, the goal must be to steadily increase the number of new customers to be successful in the long term. But existing customers usually require less convincing to buy my products or services in the future. Especially for companies whose business is based on subscription models, such as SaaS companies, retaining existing customers is essential. Acquiring new customers is usually expensive because you have to invest in marketing campaigns such as social media marketing or search engine advertising (SEA) to attract the attention of potential customers. The more competitive the industry, the higher the cost. The resources required to maintain existing customer relationships are usually much lower, but should not be underestimated. Customer support, customer service, training, and regular communication usually require well-trained employees who know how to bind customers even more strongly to your company.
Customer Support vs. Customer Success
The Customer Support team usually helps customers reactively in case of problems or questions about a product or service. This support is usually provided by phone, email, or chat. For internationally operating companies it is very important to also consider the time zone. For the customer in California it simply does not help if he can only reach the customer support of his German supplier between eight and nine in the morning. Customer support is an important factor for customer satisfaction. When customers quickly receive effective help, they feel appreciated and usually remain loyal. The Customer Success team, on the other hand, proactively helps the customer achieve their goals. The primary goal of the Customer Success team must be to bind customers to the company in the long term and, in turn, proactively sell them additional products or upgrades. For all companies offering subscription models, such as the already mentioned SaaS companies, the Customer Success team has the important task of avoiding churn, i.e., ensuring that customers regularly renew their subscription or do not cancel it. Both roles, Customer Support, and Customer Success, are crucial for customer retention, and it is important that they are well-coordinated. If Customer Support is effective, Customer Success can focus on the strategic aspects.
Account Management vs. Customer Success
Also, we often see the roles of Customer Success Manager (CSM) and Account Manager used interchangeably. Both roles work with customers to ensure long-term success. But the way how they do this is notably different. An Account Manager goes after existing customers with the goal of renewing, cross-selling, and upselling. The Account Manager’s goals are based on sales quotas rather than a deep knowledge of the customer’s key metrics. The role of the CSM actually emerged with SaaS models, which required new strategies to achieve customer loyalty, satisfaction and retention. A CSM is not only focused on renewing, upselling or cross-selling, but even more on the customer’s ultimate success using a product or service. The CSM works closely with customers to ensure they are satisfied with the product and to improve on areas of dissatisfaction. This often includes also technical support in one or the other way. Account Managers are focused on the bottom line revenue. Their role is often more reactive when the account is about to expire. CSMs interact with the customer throughout the lifecycle. They assist customers with product setup, product usage and also with employee training to expand product use and ultimately help the customer realize its full potential. The CSM focuses on long-term customer success rather than just the numbers.
The successful Customer Success Manager
A successful CSM builds strong customer relationships, which are essential especially for subscription-based companies to be successful in the long-term. Customer Success starts and ends with customer relationship. But a good CSM also solves actual problems and, above all, understands the customer’s goals. Hence, the CSM needs a wide set of skills as the job requires customer interaction in various areas from strategic product expansion to specific problem troubleshooting. A deep understanding of the customer’s audience and specific market challenges is required, as the ultimate goal is that the customer uses the full potential of the company’s products and services. To achieve that the CSM helps the customer optimize its business processes and ideally offers training and consulting. Last but not least, during the conversations with the customer, the CSM also receives valuable feedback for the product team to improve and further develop products and services. Customer Success is hard sales – and even more than that.