What Happens After “R”
Google “Customer Success Framework”.
You’d be hard pressed to find a Customer Success Lifecycle Framework that doesn’t end in “R”.
Renewal.
Makes sense. That’s the ultimate goal. Land the customer. Increase adoption. Increase usage, and renew the customer (ideally with some increase in license scope).
Below are three common Customer Lifecycle Management frameworks laid out in the CS community. Your company has some variant of the following in use at your own company:
TSIA’s LAER (Land, Adopt, Expand, Renew) Model where the final stage is renew. At which point…. is the lifecycle complete? Do we start over? Is the customer journey done?
ESG Success takes a slightly different approach where the “R” is about Realization in step 4. After the customer has achieved or expanded value….
What’s next?
ClientSuccess has an ideal customer lifecycle end in Renewal after value realization.
What are the timeframes in this example? If we’re talking a 12 month contract, do steps one through six happen in the first 11 months?
There are numerous other CS models I’m missing, but point being… there’s much more clarity in CS frameworks before the first renewal cycle.
What about after that first renewal?
That is, after all, where companies start to earn profit from a given customer in SaaS. A company’s breakeven point in SaaS runs between one and two years on average. At that point, your customer acquisition costs have been paid back. Thus, for every year that customer sticks with your solution, the higher your customer lifetime value will be. This is why renewals after year one matter.
Salesforce has a bit of experience in this area… They can be credited with the concept of Customers For Life. Salesforce’s way of describing customers that buy their platform (say, SalesCloud) and stay with that solution for seven, ten, twenty years or longer. To their credit this isn’t fluff. Many of the businesses that bought Salesforce in the early days, are still customers today (20 years later).
Jason Lemkin (Thought leader in SaaS and founder of SaaStr) also talks customer longevity in his post about the 10 Year Customer. It’s not unheard of.
Now, a decade is a long time. Think about where you were 10 years ago. Now imagine a customer sticking with your solution for that period and going through NINE renewal cycles to get to that 10th year. The frameworks above are great for year 1, maybe year 2 if the deployment cycle leans more enterprise, but how do you continue to create lasting valuable touch points after the first renewal cycle?
How do you continue the excitement / momentum / positive sentiment in year 9 as you did in years 1 and 2?
While this list is by no means comprehensive, here are ways I’ve seen Customer Success continue to drive value realization after the year one renewal.
Relationships
Ziv Peled, Chief Customer Officer at Appsflyer and CS thought leader, firmly believes that Customer Success is all about the relationship. I could not agree more. Strong customer relationships can make or break a Customer for Life scenario. In the case of building the 10 year customer, finding, nurturing, and diversifying relationships is a practice that is never “complete”. Why? A few reasons…
Champions are promoted or moves into different roles
Executive buyer has a different perspective of your product than do end users
New players come into the partnership who are fans of your competitor
If you’re not continuously and preventatively fighting off these situations, you’ll always be behind in understanding the dynamics that fuel this customer account.
So what can you do?
As a CSM
Identify and build three new relationships this month at three different levels of the organization. Ideally one end user, one manager, one director/VP or above.
As a CS Leader
Consider having some form of net-new relationship quota or MBO (Management by Objective) associated with new relationships.
Adoption
Our friend, Jason Lemkin again, talks about the importance of activation and adoption as a key focus area for Customer Success.
Again, I enthusiastically agree. Just because your customer renewed, doesn’t mean they’re done adopting. Are 100% of the people who are supposed to be using your software really using your software? What about ways for other departments to be using your software? What about customers of your customer using your software? If you ever feel you have a customer that’s 100% done adopting your software, email me: (brian@customersuccessfieldguide.com) and I guarantee we can find new ways for your customer to adopt.
So what can you do?
As a CSM
Pick 3 customers this quarter and establish adoption / utilization targets for those three customers. Report those to your manager. If three customers are too many, start with one. Focus on increasing adoption to 100%+ of license utilization number. (Note: Depending on the sophistication of your data practices, this could mean manually tracking utilization numbers yourself).
As a CS Leader
Consider having a KPI orientated around license utilization and adoption. Have an MBO in place to increase an agreed amount percentage by the end of the quarter.
Maturity
Has your software platform had an update recently?
Do your customers know about every one of the new features? Really?
Have they been trained? For larger customers has there been a custom walkthrough of how those new features might impact existing workflows? These are all examples of ways Customer Success can increase maturity of use. You shouldn’t expect to see additional licenses being utilized here — it’s the same group of folks using your platform from last week. However, investing in these power users makes your solution more sticky. Your goal should be to find these power users and make them super fans of your product.
So what can you do?
As a CSM
Identify a single customer this month in which a new feature can make a positive impact on that customer’s workflow. Go all in on creating content around that feature (Animate recorded gifs, ghost write an email for your champion to send to end users, custom branded screenshots, videos). Be sure to explain how that new feature (the “what”) connects with the business goals that customer is trying to achieve (the “why”). Ensure tracking is set up for monitoring adoption of that particular feature. Repeat this exercise every month with a new customer. You’ll end the year with 12 mature, sticky customers, who are on the path to realizing even more business value from your product.
As a CS Leader
Set a KPI for % feature adoption: For instance, # of customers with 50%+ features utilized.
Alternatively, instead of assigning a goal to a broad feature set, you could pick one highly strategic feature, and prioritize adoption for that feature. Driving up maturity of use around a sticky use-case is exactly the type of outcome you’re hoping by setting these targets.
Evangelism
At Looker, we often say that we’re in the business of getting people promoted.
If we’ve done our job well, our customers will have taken a chance on Looker, succeeded in their efforts of driving self service data use, and ideally they’re on their way to a Director, VP, or C-level position.
This should be a Customer Successes goal. That is, sharing mutual success with our champions, as demonstrated by a promotion. On the way to that promotion, it should also be our job to help customers evangelize their success with your product or platform. Let’s face it, people love having the opportunity to talk about their work. If you’re building solid relationships, ensuring strong adoption, increasing maturity of use, then this is a natural byproduct of the above steps.
So what can you do?
As a CSM
Identify 1 champion this quarter who has a killer success story to share: Blog post, Webinar, Video
Bonus: Identify 1 champion this year (from the list of champions above) who’s a fantastic public speaker. Get this person to tell their story in-person either at your annual user conference or your annual sales kickoff event.
As a CS Leader
Chat with your Sales Leadership about what demand there is for additional customer stories. Does the sales team need blog posts, videos, webinars? Get their input. Next, chat with your Marketing Leadership about what help they can offer in design and distribution of this content. Finally, consider establishing an MBO that identifies strong champions who want to tell their story in the format your Sales team is demanding. Your Sales team is going to love you.
This list, again, not comprehensive. But the continuous effort in these areas can ensure strong value delivery after your first renewal.
Keep focusing in these areas year in, year out, and you’re on your way to building a Customer for Life.
✌️
