Rating: Average
The Customer Success Economy blurb excerpt: If leaders aren't integrating their digital offerings into a philosophy of Customer Success, they will be defeated in the next decade, because technical excellence and other traditional competitive advantages are becoming too easy to imitate.
The Customer Success Economy offers examples and specifics of how companies can transform. It addresses the pains of transforming organizational charts, leadership roles, responsibilities, and strategies so the whole company works together in total service to the customer.
Shows leaders how their digital implementations will make them more Amazon-like
Helps you deliver recurring revenue
Shows you how to embrace customer retention
Demonstrates the importance of "churning" less
My opinion: Their first book, Custome Success, was a really good read that provided practical insights into the world of customer success and it's value for organisations willing to adopt. Although this book offered some good take aways, it wasn't what I expected. There was a lot of generic information on concepts like how to vet a CS tool vendor, or the value of working with your IT team to integrate your solution, the growing demand in the job market fo CS specialists, understanding if IQ, EQ or Grit are most important in your team etc. Worth a read, but not as good as their first book.
Lessons from The Customer Success Economy:
Customer Success as a function can provide:
Predictability.
The ability to identify growth opportunities,
The ability to identify areas of innovation.
Opportunity for balance.
Each business faces 4 key risks:
Churn risk.
Capital risk.
Competition risk.
Employee risk.
The 10 laws of customer success:
Customer success is a top-down, company-wide commitment.
Sell to the right customers.
The natural tendency for customers is toward churn.
Customers expect you to make them wildly successful.
You must relentlessly measure and manage success.
You can no longer build loyalty through personal relationships.
Product has to be priority #1.
Obsessively seek to improve time-to-value.
You must deeply understand the details of churn and retention.
Customer Success teams must become metrics-driven.
3 types of customer success managers:
CSM for value gaps - there is a significant gap between the value customers get out of the box and the value they are expecting. The role of the CSM is to help plug that gap.
CSM for value delivery - once a product and its associated paid services reach a critical level of maturity a CSM will shift their focus towards guiding customers through their journey towards value achievement.
CSM for value expansion - some products are so well designed that they can automate much of the value delivery. In this instance, the CSM can focus on expanding the relationship with the client.
4 pillars of return a company would seek from a CS investment:
Reduce churn.
Drive growth.
Exceed client expectations.
Increase enterprise valuation.
4 reasons why a customer could be at risk:
Your internal champion leaves and is replaced by someone with experience working with your competitor.
Your client has a bad experience with your team.
The customers' business strategy changes rendering your offering less valuable.
Your competitors evolve faster than you, creating a more valuable offering and earning market share.
Retention can be measured on:
Gross dollar renewal rate.
Gross dollar retention rate, including multi-year.
Logo retention rate.
Net dollar retention rate.
Top reasons for customer churn:
Price.
Unmet sales expectations.
Competition.
Internal champion change.
Now separate the root cause from the catalyst:
The product doesn't fit the customer need.
The customer had a poor onboarding experience.
The product had a low adoption rate early on.
The wrong people were supporting the client early on.
If an organization has high churn, it's typically one of 3 causes:
The account executives oversell and pass the account to CS in a bad state.
The product or solution doesn't deliver what is advertised.
The customer success managers are ineffective.
Helix model of sales captures - new logo, expansion, and renewal.
The 4 stages of change for CS Teams:
Reactive - companies in fire fighting mode.
Insights and actions - leveraging data to determine what action to take to help those clients.
Outcomes - systematically delivering outcomes for the clients and revenue growth for the company.
Transformation - every department is aligned around the success of the client.
How churn impacts growth:
Churn results in a leaky bucket - it's hard to grow fast when you have to compensate for a revenue leak.
Lost renewals result in lost expansion opportunities.
More churn leads to more detractors.
Companies with high churn rates raise less money.
Companies with high churn rates are less profitable.
Customer Success = Customer outcomes + Customer experience
When it comes to customer outcomes, the customers expect:
You will set a vision for jointly owning their outcomes.
Leverage a methodology for achieving that outcome.
Adopt prescriptive behaviours that help them follow that methodology.
5 principles of a human first product should treat each human as:
Growing - Instead of expecting humans to adopt products instantaneously, guide them on how to adopt them through education and user guides.
Special - how can you learn what makes someone unique and create an experience for them.
Vulnerable - create unique experiences whilst honoring their need or desire for privacy.
Ends not means - since technologies is a means to a humans end, it should be created and adapted with that in mind.
Autonomous - a product should help people test their hypothesis, not be a vehicle to push an agenda on someon.
9 methods to ensure CS and Product are aligned:
Create a common data set.
Branch from situations to patterns.
Productize those work arounds to regular problems.
Create a product risk process and playbook.
Leverage your online community.
Create a subject matter expert program.
Publish the roadmap.
Develop in-app messaging.
Foster mutual empathy and compassion for reach other.
CS and marketing must:
Align on the customer journey.
Adopt shared goals.
Share data, insights and contacts.
Collaborate on one-to-many touch points in the service of revenue generation.
It's critical in a company to change the focus from who owns the customer, to who owns the task responsible for contributing to the success of the customer. When alignment and a shared responsibility evolves, everybody wins.
Questions leaders should be asking of their CS Team:
What type of CSM's do we have?
What skills do they have?
Where do CSM's spend their time?
How much time are they investing in small business clients vs high value and strategic customers?
What is the repeatable methodology that allows us to produce a repeatable retention rate?
How could we change the way we spend our time to get a 1% improvement in retention rates?
What root causes of churn can be addressed in the next year, 6 months, 1 month, now?
Why the CSM role can be challenging:
Glass half empty - Whilst sales is growth focussed, CSM is loss adverse.
CSM's are a downstream department that inherits all the issues created by other departments.
The buck stops here phenomenon - CSM's handle the worst of the escalations.
The helper phenomenon - by nature CSM's love to help other people and when they can't help them the way they really want to, it can be tough for them.
The cost constraints associated with doing a dynamic job with constantly changing and growing expectations.
It can be lonely.
The worlds top CS leaders are doing these 4 things:
Successfully charging for customer success - similar to consulting and TAM hours you can sell success points.
Standardising more metrics.
Move from a product centric to customer centric model.
Getting serious about personal development.
10 ways leaders are scaling their CS function:
Improve the product and leverage it with virtual customer success.
Build an online community with your customers. Customers contributing to answering each others questions is a way of crowdsourcing and improves value proposition.
Centralise content.
Re-segment your customers.
Expand your tech touch strategy.
Expand your support team.
Hire in a low cost location.
Sell services and CS.
Hire early career CS and develop them.
Reduce waste - not every activity is valuable.
10 Questions a CEO should be asking their CCO:
What does success mean for our clients?
What are early indicators of risk?
How can we tell if a client is sticky?
How should we segment our clients?
What segments should we not serve?
How do you decide how many accounts each of your team members manage?
Whats our cost model?
What your economic value, how should you be measured?
What do you need from the rest of the company to drive results for our customers?
What should I do, and not do, to culturally support customer success?
The Customer Success Economy Best Quotes:
“CSM teams function as a clients advocate inside the vendors"
"Vendors must earn their customers business every day"
"Grow fast or die slow"
"The user experience should conform with the human, not the other way around"
"The problem always comes before the solution"
"Why hire 10 reps to sell for you when you can create 100 customers who advocate for you"
"At some point, customers are greater than prospects"
"Unhappy teams members impacts your P&L"
What Next:
If you are interested in this book, you may want to check out our list of The Best Business Books.
My personal recommendation for those who loved this book - Customer Success
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