Customers are the key to any service business, but while companies spend millions on finding new leads, too many companies forget to focus on customer success and can lose out on customer lifetime value.
We’ve all seen the promotions for attracting new customers – discounts for the first year to entice a potential customer away from the competition – but while finding new customers is important, to be really successful you want customers to be happy with your service and to keep them for the long term. To really grow, a company needs to continually find new sales and maintain their current relationships by creating happy customers.
As service companies and the SaaS (software as a service) sector in particular continue to dominate the corporate sector, the customer success field has become ever more important, and whilst it is a fast moving field there are generally three components:
- Onboarding – the original setup of a new customer on your service/system
- Knowledge enablement – providing the customer with the knowledge needed to make the most of your service/system through training, documentation, and customer-to-customer interactions via forums
- Account management – personal interactions between the business and the customer to listen to the customer’s feedback and guide them towards deeper integrations and to ensure renewal.
Each of these components provides a different way to ensure the customer is happy that they understand the service, that their concerns are being listened to and acted upon by the business, and that they are getting good value for money.
How to track customer success
The customer service team should provide constant feedback to management and the technical team so they can act upon the needs and desires being expressed by their customers. However, this feedback is difficult to measure and so companies also rely on a quantitative scale to measure their customer success like the NPS promoter score.
The net promoter score (NPS) is the result of a simple customer survey that asks just one question: How likely is it that you would recommend X to a friend or colleague? The customer is given a scale of 0-10 to provide their answer, and also sometimes a chance to explain their score if they would like to provide more feedback.
These 0-10 scores give measurable insights into customer sentiment towards a company and its services, and combined together create the NPS score that shows the company how many of their customer are promoters, passives, and detractors.
- Promoters – people who give scores of 9 or 10 are seen as customers that are positive enough to promote the company to others, and have a relationship that could be developed more deeply to drive sales
- Passives – those who score the company 7 or 8 are seen as content with the company, but will likely not be evangelists and are more happy to just continue on the same path
- Detractors – those who score the company 0-6 are seen as unhappy with the company or service and considered some of the most important people to listen to if the company wants to avoid churn.
To determine your NPS Score, you calculate the difference between the percentage of Promoters and Detractors, with the final figure expressed as a number between -100 and +100. For example, a business with happy customers could have 70% promoters and 10% detractors with an NPS score of 60, or a business with unhappy customers could have 10% promoters and 60% detractors with an NPS score of -50.
Photograph by Alexas Fotos