Customer Success Magazine
For the Management of Customer Lifetime Value
By Mikael Blaisdell

It’s a nice dream, to walk into a company with all of the power from Day One to create The Most Perfect Customer Success Group That Absolutely Ever Was, World-Class In A Box.  Most CS execs, however, are going to have to build their way toward realizing the true potential of the role across the months and quarters of the first year and beyond.  The first step of that journey is to start to define where you want to be twelve months from now.  The second is to start collecting data about your customers and process.  The third is to analyze and effectively use it.

Get The Data

Digital RealmThe indispensable key that can, if properly used, move you from whereever you began toward your goal is: The Data.  What are the earliest signals of a code red scenario?  What did you do about it and how effective were those actions?  What did it cost?  What will you do better next time?  Proving that the earlier you address customer retention, the more effective you can be and the less it will cost isn’t hard if you have the data to back up your statements.  Without it, you have no credibility.

What sources for customer data are accessible to you?  If Support isn’t already a component of your Success org, go build a relationship with that team.  Get access to their data and thinking.  Do the same with Training and Professional Services.

Create test groups of your most valuable customers, the middle tier and the lowest.  Define all of the interaction / touch points (a.k.a. The Customer Journey) for each group.  What are they?  How do they begin and end?  How often do they occur?  What does it cost to do them?  What resources are required?  Does it make sense to automate them if you could?  Are there alternative approaches?  If your company doesn’t segment its customer base, do it anyway.  Pick a group of your most loyal customers to study and get the data.

Beyond your best logo customers, there’s another cohort that you need to know everything there is to know about: the power users or mavens of your app.  These are the people who know the most about the features and functionality of your product and how to use it to maximum effect.  These are also the people who get the most value from it.  Who are they?  What distinguishes a maven from the average user?  What does the process of creating a maven look like?  How long do they typically last in their jobs?  If they move to another company, that’s simultaneously an At-Risk and an At-Opportunity situation, for you need to help the former company to replace them on one side and see if they can become your champion at their new employment on the other.

Analyze and Use the Data

The job of retaining and expanding customer relationships is a lot easier if you’ve sold to the right customers in the first place.  But before you can think about having a conversation with Sales about the quality of deals in the pipeline, or with Marketing about attracting the right prospects, you need to understand their process and have built a trust relationship with them.  While you’re about building those relationships, don’t overlook the CFO.  The vital requirement for talking about the pipeline and/or the marketing campaigns is that you must be able to prove the effect that optimum customer acquisition has on overall company profitability

As you can see, it’s going to take time — the first year is only the beginning.  But if you want to be more than just one of the successive Vice Presidents or Directors of your company’s Customer Success group, you need to make those 12 months count.

We’re also discussing this topic in The Customer Success Forum on LinkedIn.  Please join us.

 

August 27, 2015