Tech Customer Success Programs Focus on Increasing Product Usage, Cutting Churn

February 26, 2018

Customer Success executives at tech companies are primarily focused with reducing churn and increasing product usage, but may be missing opportunities to gain referrals and upsell their customers, according to a report from Regalix [download page].

Based on a survey of 100 senior customer success executives in computer software (61% share), internet (30%) and IT and services (9%) companies of various sizes, the report indicates that 72% have a clearly defined Customer Success strategy.

These strategies appear to coalesce around product adoption and churn reduction efforts. Asked which were the top 3 business objectives of their Customer Success program (among 7 identified), respondents pointed almost equally to reducing churn (66%) and increasing product usage (65%).

Increasing renewals (57%), which is related to churn reduction, was another top priority, while fewer reported prioritizing upsell and cross-sell (38%), increasing average revenue from each customer (32%) and gaining referrals (16%).

In other words, these programs appear to be centered on keeping customers satisfied as opposed to deriving more revenue from them.

Previous research from Totango on Customer Success likewise found that top priorities for these programs included churn reduction, customer onboarding, and product adoption.

Given these main objectives, it’s unsurprising that Customer Success executives most commonly measure their performance through renewals (68%) and customer churn rate (55%).

Metrics associated with broader revenues – such as revenue generated, quantum of up-sell and cross-sell, and customer referral rate – are sparsely used.

Also largely ignored is customer lifetime value – a key metric for just 5% of respondents. Separately, 57% admitted to not tracking the customer lifetime value of all their customers.

Meanwhile, although executives are looking to keep their customers happy, only around one-third or fewer measure Net Promoter Score (34%) and customer satisfaction level (31%), with many complaining that measuring customer satisfaction is challenging.

Which Activities Are Execs Running – and to What End?

To keep customers satisfied and using the product, most Customer Success programs rely on regular account updates with clients (82%), tutorials and demos to help use the product (63%) and live screen-shares to help use the product (60%).

A majority also collect feedback about the product and send welcome emails, though slightly fewer make use of customer satisfaction or NPS surveys.

The end goal of these activities is to help customers use the product and get a better return on their investment.

Live Demos Count for Onboarding

When it comes to onboarding customers, Customer Success executives overwhelmingly turn to live demos (78%) as their preferred asset. Most also offer web walk-throughs with images and telephonic support.

As one might expect, videos are more popular than text-based content for onboarding purposes.

Other Highlights

In other key findings from the report:

  • Salesforce is far and away the preferred Customer Success software for respondents to this study;
  • Almost 4 in 10 do not track what their customers are saying about them on social media, and another 31% only do so to some extent;
  • 61% don’t reward their customers for referrals; and
  • Executives are excited about predictive analytics technology, with two-thirds either using it or hoping to in the near future.

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