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12 Reasons Your SaaS Needs a Customer Success Strategy

By Ryan Law on Fri, Jul 22, 2016

Competition is growing. With more startups appearing each day, now, more than ever, the success of your own SaaS business hinges on the service part of software-as-a-service. 

It's no longer a race to see who can acquire the most customers. Instead, it's a competition to see who can create the most active, engaged and impassioned customers, and see which SaaS businesses can:

  • Turn as many ad-hoc users into committed, paying customers.
  • Retain the greatest percentage of their customers.
  • Upsell and cross-sell the most customers.
  • Earn the most successful customer referrals.

The Customer Success Methodology

Given the SaaS sector's unique need for monthly recurring revenue, and the importance of upselling, cross-selling and customer referrals for achieving negative monthly revenue churn, making customers successful with your solution is no longer a nice-to-have: it's an essential part of your growth strategy.

Customer Success is a defined strategy for understanding and enabling your customers' goals. It's a way to systematically learn what it means to be "successful" with your solution, and adapt your product and service to ensure that success.

Much like your business has a defined approach to Marketing and Sales, your approach to Customer Success needs to be strategic and considered, addressing four key areas: activation, expansion, retention and referral.


Activation

1) Turn Free Trial Signups into Free Trial Users

Customer acquisition is a big goal for most SaaS businesses, and with good reason: new visitors, leads and free trial signups are essential to growth. But there's a difference between acquisition and activation.

10,000 free trial sign-ups is a vanity metric if no-one actually uses your software. Activation is the science of turning acquired users into active customers: people that pay for and value your solution.

2) Discover What People Want From Your Solution

Getting people to use and value your solution is dependent on your understanding of their Desired Outcomes: the goals your customers want to achieve as a result of using your solution.

Customer Success is designed to help you understand those Desired Outcomes, combining usage data, interviews and surveys to uncover their goals and align your solution around achieving them.

3) Help Users Get Immediate Value

Desired Outcomes are usually big, multi-stage goals. In order to help customers achieve them, Customer Success defines "Success Milestones": smaller, intermediary steps that move customers closer to their Desired Outcomes.

By helping customers hit these Success Milestones, you can deliver value from their first day using your solution: keeping them engaged, active, and receptive to account expansion.


Expansion

4) Identify and Offer Complementary Solutions

Customer Success asks the question: "How could you better enable your customers' Desired Outcomes?" By shaping your solution to meet your customers' needs, you can identify and develop additional services and add-ons: diversifying your revenue streams, while improving the value customers get from your solution.

5) Encourage Expansion Revenue

The combination of active, engaged users and highly-relevant add-ons makes cross-selling and upselling opportunities a viable way to expand your business. Whether you're offering an upgraded package with greater functionality, or pitching an add-on service, your complementary soutions have a clear value proposition: they'll make it easier to achieve the customers' Desired Outcomes.

6) Achieve Negative Revenue Churn

This "expansion revenue" is the key to achieving negative monthly revenue churn: allowing you to increase Customer Lifetime Value (CLTV) and accelerate your growth.


Retention

7) Stay Ahead of Changing Needs

Over time, both your product and your customer base will evolve and mature. There's no guarantee that long-term customers will be motivated by the same needs as new sign-ups, so it's important to stay connected to your customers' needs.

8) Keep Adding Value

By periodically validating your assumptions, and staying one step ahead of your customers' changing needs, you can ensure your solution continues to add value, day-in and day-out. You can build a "sticky" solution: something integral to your customers' lives, and not just an added extra. 

9) Stabilise Revenue and Reduce Churn

Customer Success is the ultimate insurance policy against churn, continually incentivising the use of your solution, and protecting your business from revenue and customer fluctuations that create volatility and undermine the growth of your business.

Download your free churn calculator!


Referral

10) Incentivise Customer Referrals

Customer referrals won't appear out of the ether, and an important part of Customer Success is the creation of an incentive-driven referral program: offering a valuable reward (more storage, added functionality, etc.) in exchange for customer referrals.

11) Encourage Ideal Customer Referrals

It's better to have 10 carefully considered referrals than 100 scatter-gun social media invites. Customer Success helps you encourage ideal customer referrals - identifying the people that stand the best chance at benefiting from your solution, and encouraging existing users to reach out to them on your behalf.

12) Boost your Viral Growth

Happy customers are more than a nice-to-have: they're a powerhouse of potential growth. In addition to the huge positive impact of expansion revenue, the referrals driven by happy, successful customers can create a viral loop of growth: rapidly accelerating the growth of your business through the power of Customer Success alone.


 Getting Started with Customer Success

Looking to leverage the awesome power of your customer-base to accelerate your growth? Want to create a SaaS solution that your customers love, and not just like?

Request a free SaaS growth consultation, and we'll give you personalised advice and guidance on the best ways to improve your current approach to Customer Success.

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