Customer Success (CS) is “a longterm, scientifically engineered, and professionally directed business strategy for maximizing customer and company sustainable proven profitability”.

Customer Success Association

In simpler words, customer success is any effort businesses undertake to maximize long-term value creation for both the customer and the company. The customer benefits from their own profitability and a better understanding of the product and the company benefits from loyal customers, more repeat sales, and lower churn. In this article, I will briefly touch upon the changing market scenarios in the current decade and what role customer success would play. So, let’s delve a little deeper!

The Evolution of Customer Success

Classical management theory proponents such as Frederick W. Taylor likened the firm to a machine where the workers were not to think and only to execute the assigned tasks to ensure higher productivity. The goal was to repeatedly produce the same product in a stable environment following the same sequence of tasks. This approach of dehumanized production achieved efficiency at the cost of innovation or change. We’ve come a long way from that era. Not only have we reworked our management ideas, we have also drastically changed our consumption patterns.

As opposed to products, we are increasingly consuming services. For instance, we’ve stopped purchasing CDs or DVDs, instead we opt for Netflix or Spotify subscriptions. The increasing ‘servitization’ of many industries can be witnessed from the rise of companies offering anything as a service (XaaS). Here, ‘anything’ could mean software, platform, infrastructure, database, storage, network, communication, and more . When combined with the Internet of Things (IoT), you get smart wearables, smart homewares, or even Jet Engines as a service. This shift away from previously individual-transaction-based product industries made customer relationships crucial. Since revenue came from subscriptions, Customer Success was now pivotal to the success of an organization.

Customer Success originates from Customer Relationship Management (CRM). In the 1990s, relationship marketing with a focus on customer satisfaction and loyalty evolved from customer transaction focussed marketing. Later on, marketers realized the importance of customer engagement over mere loyalty, and customers became a part of the continuously evolving product development and value creation process.

Since we stopped owning what we consume and merely needed access to its services, data took precedence. In the past, companies relied on face-to-face conversations to assess customer satisfaction and there was no planned data collection. With the rise of modern CRM systems, social media, and the cloud, companies could collect customized data from their customers and could use these technologies for two-way communications with their customers. Under this setup, modern Customer Success finds itself engaging in customer relationships with the use of data at its disposal. It complements the marketing, sales, product development, and support functions of the organization.

Practicing Customer Success

Customer Success is still an emerging role in an organization and what works best is still being discovered by trial and error. Although it is clear customer engagement is the prime objective, the details such as the frequency of engagement, the channel of engagement, or the type of engagement still need to be systematically investigated.

From personal experience, I know that to sell organic vegetables to a highly price-sensitive customer base, you need to show up every day with fresh produce, a good story, and a willingness for engagement. In other words, consistency, story-telling, and a friendly approach are enough to convert your customers into customer success champions for your organic farm.

For a B2B setting, it is also important that you possess the analytical skills to dissect the business model of your customer to present potential solutions to them guaranteeing their success. While working at BZBMart, a B2B social commerce company, I realized that CS begins before the product launch itself. The key to a successful product has two facets: 

1. Our understanding of what the customer needs, and 
2. Their understanding of what we are offering. 

I could sense the excitement in our potential customers’ voices during market research calls when they could grasp the differences in our product from our competitors and see how it would help them expand their network. Unlike traditional service and sales roles, a CS role requires an outward focus and advocation for the customer within the vendor firm. CS reps act as the single point of contact between the firm and the customers. They focus on the customer’s journey with the product and their engagement with the brand.

Now, customer engagement is challenging but indispensable. With digital and subscription-based service offerings, firms are facing the risk of a higher churn rate. As switching costs continue to decrease, customers who fail to realize value from a service opt-out. Higher churn would mean higher customer acquisition cost, and lower profitability. Under these operating models, traditional customer support is inadequate. To hold on to the existing customers, the company must proactively increase the customers’ engagement with the brand.

A good engagement technique is gamification in which elements of gameplay such as points, competition, and other rules are used to increase customers’ engagement with a brand. I’m personally sold on Nike’s Run Club and Duolingo. Engaged customers participate in co-creation of offerings, spread positive word of mouth, create online reviews, generate content for the company, and so on. 

To summarize, traditional sales and service roles with profit-driven motives may not be enough to retain customers for repeat purchases and service upgrades under the dynamic markets firms operate in today. Furthermore, companies need to proactively use customer data and newer technologies like machine learning, AI, and big data to better engage with their customers. This book by Nir Eyal elaborately discusses how to create habit-forming products. Lastly, do not forget the timeless basics of Customer Success – empathy, proactiveness, good communication, and critical thinking.