The Language of Customer Success
This blog would cover all the keywords used by a customer success manager and what do they mean for them and the company.
Every Customer Success Manager should know these terms in order to be aligned with the company's mission.
If you feel why does a company need customer success manager in the first place, you can read more about it here<Hyperlink>
Before we start defining each term, let's understand a little about what Customer Success Managers do, in order to understand better the terms they use.
Customer Success Managers exist in every company to make sure the customers are successful while using their products and services.
This ensures an extended customer lifecycle, reducing churn and allowing the company to grow.
Success is different for every customer and over time and practice the needs of the customer are understood and the customer success teams bridge the gap by allowing the company to adapt to customer's goals in order for them to be successful.
No matter which industry the CSM is part of there are some basic terms that are standard across all CSM teams.
We'll have a look at the most important terms below.
Churn, simply put is the loss of an account. It's when the customer stops using your products and terminates the contract.
There are many ways you can reduce churn. But the best ways to avoid churn is by becoming aware of the warning signs you may get based on the relationship and immediately act on it before it's too late to win them back.
Customer Engagement is the number of valuable conversations between the customer success manager and the customer. If there's a minimum or no conversation that's a warning sign. The conversation is important to always be updated about what the customer feels about the product, are they making the best use of it, are they having any issues with the product. Even if the customer is not reaching out to you because they are happy with the product, a constant effort needs to be made to make sure to check-in with them.
Engagement can even happen by keeping them aware of the latest features you may have and providing other tips and tricks which can help them make the best of your product.
As mentioned earlier, customer success managers bridge the gap between customer and the product team, at times customers will have feature requests which helps them solve a certain problem they have.
The first thing to do is looping it back to the product team, the product team will update on the timeline on how soon that can be incorporated if it's too long based on prioritizing of product team the CSM can provide an alternate solution which comes closest to solving the customer's problem.
CSM here identifies how critical the feature is to the customer based on which the prioritizing of products can reduce or alternate features that can be created to solve most part of the problems.
The important thing here is to communicate the problem and urgency of it.
NPS is a metric that helps a CSM to gauge how likely is a customer going to advocate for them or in simple terms what are the chances of the customer referring the product to someone else.
A lot of tests can be done to find this data. Click here to know more.
Upselling is a term used when you convince your customers to buy more than what they eventually came to buy.
When and what you upsell is crucial in deciding conversions.
Both are decided based on the data you acquire from the research and conversations you've had with the customer. Research about the features they are using lately and what features they can make use of to achieve their goals better. Conversations tell you what are the latest development happening within their team and you can plan your upsell accordingly.
Upselling also happens based on the relationship between two companies and product value, when I say companies I mean everyone involved in the customer lifecycle at various touchpoints which develop the trust and increases the chances of a customer buying the product from you. The value you provide as a product is also important because only if the problem is solved delivering lifetime value the customer would be open to upselling
Lifecycle stages are the different stages during which the customer goes through when they are considering, buying, using and remaining loyal to a particular product. It has been broken down into five distinct stages: reach, acquisition, conversion, retention, and loyalty.
Exceptional service and value needs to be provided at each stage so that customer moves onto the next stage and even beyond.
A SaaS product is mostly subscription-based and you will have to provide exceptional service and value at each stage so that customer moves onto the next stage and even beyond.
Onboarding is the among the first stages of a customer journey, which tells you how important it is in not just giving an impression of the company but also sets the tone for the relationship within the companies. Onboarding takes patience, skill and practice to understand the software and explain it in the most simple concise manner which is easily understandable by the customer.
Emphasis should be given on key sections that are crucial to the customer.
Remember, that every touchpoint defines their experience from the introduction to implementation.
Agreeing to renewal is the opposite of churn, the customer agrees to use your product for another period.
Your product continues to solve their problems and they love your service.
Renewals also act as a key performance indicator for Customer Success Managers given they communicate everything internally in order for other teams to be equipped to solve the customer's problems.
ARR (Annual Recurring Revenue)
Annual Recurring Revenue is the total amount of revenue a CSM manages from all the clients that it is managing. An enterprise CSM manages anywhere between 160,000 dollars-460,000 ARR or more. That’s a lot.
MRR (Monthly Recurring Revenue)
The monthly recurring revenue is the crucial to gauge how much the company is generating each month and also helps to plan the few upcoming months.
For CSMs expansion MRR is more important as it indicates the amount of money generated through upsell/cross-sell or add-ons.
In fact, this also helps in reducing churn as more value is provided.