Customer Success: What It Means, Why It Matters & More | Top Sales Executive Search Firm | Sales Executive Recruiters

      Customer Success:  What It Means, Why It Matters, and More

      Today, customers not only demand great products but great product experience. Consequently, firms are in a race to attract and retain the attention of paying customers, and a focus on customer success is central to this. 

      But unlike quantitative metrics like sales, revenue, and profit margins, customer success is a qualitative function. There is no formula for calculating customer success. As a result, formulating a plan for customer success and achieving desired results in this area can be an inexact science. 

      What can organizations learn about customer success and the route towards ensuring satisfied and loyal customers? 

      Origin of the term ‘Customer Success’

      From the ages, businesses are run from the viewpoint of the business owners, aiming to increase their profits and cut down their costs. But over the last few decades, the primary motive of a business has shifted from profit generation to customer satisfaction. 

      Senior management started realizing that customer retention is far more crucial than customer acquisition. The odds of making a sale to a retained customer are 60-70% while the odds of making a sale to a new customer are anywhere between 5-20%.

      They understood that the role of a business is not confined to sales. But actually, it starts from there. After-sale service is the nucleus of getting repeat purchase orders and renewals. 

      The responsibility for achieving success with the product lies more with the seller than the customer himself. But who coined the term customer success?

      In 1996-97, Marie Alexander, an executive in the Vantive’s service group devised a new approach to customer service by creating a department, and coined it ‘customer success team’. 

      Over time, many organizations adopted this technique and it turned out to be one of the most crucial subjects in the world of management.

      Meaning Of Customer Service

      The function of an enterprise that caters to the plan of action devised for aiding the customers in  achieving success with its products or services is popularly known as customer success. 

      It involves creating a blueprint of customer experience beforehand and sharing solutions for the potential difficulties that the customer might come across, to ensure a smooth customer experience journey. 

      Earlier, customer service was a secondary function that was not heeded as a function that required dedicated attention. But now, the customer success management teams are, in any event, on their toes to make sure that the customer’s experience with its product is sublime.

      It’s a win-win situation for the management as well as the client. The client achieves success in terms of reaching his goal, while the management, riding on their client’s success, achieves the overall objectives of the organization. 

      Need for Customer Success

      To understand why customer success is critical to a business, let’s first understand customer success at the ground level. 

      A customer is said to be successful when his/her demands or requirements meet the value you provide to them. If the value added to the customer falls short of their expectations, they turn to some other service provider. 

      You might develop a hit product or service which becomes the talk of the town, leading to a boost in your revenue. But this type of success is often short-lived. If you want to capitalize on this success and achieve long-term results, customer success is the way to it. 

      Having an excellent product with no customer success is futile as the entire goal of the production process is to meet consumer needs and deliver shareholder value. 

      To get the customers attached to their products, companies have started incorporating recurring subscription revenue models in their businesses. Especially in the software industry, where you renew the service time and again for a predetermined subscription fee instead of selling one-time software to your clients. 

      In other words, you are leasing your software to various clients at once. This model is known as the Saas model (software as a service)

      The cost of acquiring a new customer is 6-7 times more than retaining an existing customer. By making the business owners aware of the customer’s experiences with their products, and providing valuable insights from the customer’s perspective, customer success reduces this cost exponentially. 

      The Goal of Customer Service

      The ultimate goal of customer success is to make the customer such an expert of your product that he cannot afford to look beyond you and your product. It aims to create harmony between the customer and the management and nurture a healthy business relationship between both. 

      However, there are 3 basic goals that an organization intends to achieve through customer success:

      #1:Customer Retention

      Customer retention is the symbol of success for any CSM team. It is the heart and soul of any subscription-based business model. 

      Customer retention means the ability of a business to retain their existing customers by getting repeat orders from them and preventing them from deflecting towards any of your competitors in the industry. 

      If the rate of retention is low, it clearly implies a failure on the part of the CSM team. It is their primary object to resolve any queries faced by the customers so they develop a sense of faith and loyalty towards the brand.

      #2: Focus on Upselling 

      Once you have a customer on board, it is necessary to expose him to as many relevant products as possible. 

      Upselling includes persuading the existing customers to buy something above what he was actually looking for, in most cases, something more expensive or complementary to the original product. 

      This technique often helps the revenue go through the roof. The goal here is to create an ecosystem in and around the customer which acts as a boundary, beyond which, he turns sightless.

      An excellent example of upselling is Apple. Apple has created such an opaque ecosystem around their customers, that they turn indifferent to any other brand having similar SKUs. 

      #3:Improve customer health score

      Customer health is a very subjective term that differs from industry to industry and even from company to company. There is no tool that can quantify the health of customers accurately. 

      However, the customer health score is a metric that comes in handy in calculating the overall health of the customers. The customer success team engages in close communication with the customers to predict the behavioral trends of the customers. 

      If the CSM team finds that the customer’s health is at risk, they may take the necessary steps to push the score to a healthy level.


      With the modernized and high-tech resources that are accessible to the smallest of the businesses, you cannot differentiate your brand just based on your product. The only way to survive and stand out from the crowd is by focusing on customer success and ways to achieve it. Happy customers are the best marketing mouths of your service. 

      Customer success can act as the nerve center of your business operations around which the other business functions may revolve. It’s high time business owners realize that customers are indeed the real owners of their businesses and their success lies with the success of their customers.

      B2B Sales & Marketing and Demand Generation Recruiters | Cowen Partners


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