Have you been considering implementing a Customer Success program for your business? At the very least, you've probably been reading about this phenomenon that has been taking the business world by storm (and if you haven't, you should check out our comprehensive Customer Success guide here to get the scoop).
Although still a fairly new field, Customer Success initiatives have always been critical to retaining and delighting customers, whether they've been executed as formalized, documented processes or not. In fact, you're likely already "doing" Customer Success to some extent through the activities you carry out to check in with and take care of your clients. After all, Success is all about delivering exceptional outcomes and exceptional experiences.
The concept seems pretty straight forward when you think about it, yet there's a considerable investment necessary if you're going to implement an effective Customer Success program. Many companies—particularly in the SaaS world—are beginning to hire Customer Success managers, or even complete Customer Success teams.
So what does this investment look like? And how will it pay off? These six Customer Success statistics below break down some of the costs (and opportunity costs!) of implementing a program, as well as why this undertaking is worth it in the long run.
1. By the year 2020, customer experience will overtake price and product as the key differentiator.
In a recent study about the future of B2B customers conducted by Walker Information, they discussed how excellent customer experiences will set you apart from your competitors. Not only is great customer service—even in the brand awareness and acquisition stages—going to help you stand out, but it's also going to become equally, if not more important, than the actual product you are selling, as well as the price of that product. Sure, it comes to little surprise that building a well-oiled Customer Success program is going to lead to customer satisfaction and higher retention rates; that's one of the primary purposes. But it's amazing to think that in just a few years, Customer Success will play a vital role in selling your product. That’s why it’s so important to start investing in Customer Success now.
2. 86% of buyers will pay more for a product or service if they receive a better customer experience.
A positive experience—from the first time they visit your website or check out your store location, to the sales process, all the way through to post-purchase—can set you apart from your competitors in so many ways. One of which is to enable you to price your products or services at a premium. If you’re confident in your Customer Success program and the value it delivers while empowering your customers to maximize your product or service (and they're consistently seeing exceptional results), you may be able to bump up prices and increase revenue. 86% of buyers are that enticed by the customer experience!
3. Those companies who prioritize customer experience generate 60% higher profits.
Building on #2, when you take the time to implement a Customer Success program, you’re going to deliver a better experience. Customer Success focuses on proactively managing your customer relationships, leveraging data to pinpoint when there might be a problem with an account, and intercepting the issue before it even occurs. It also involves helping your customers use your product or service to its full advantage in order to help them accomplish their own business goals. Delighted customers lead to upselling and cross-selling opportunities, as well as referral business. Imagine seeing a 60% increase in profits simply due to ensuring your customer’s experiences are good? Well you could!
4. According to Forrester research, only 37% of leaders have a dedicated budget for customer experience improvement initiatives.
Despite the proven bonuses of having a Customer Success program in place, the number of organizations that have a piece of the budget dedicated solely to customer experience improvements is lacking. Allocating money directly to Customer Success initiatives is going to separate you from the pack – increasing your thought leadership presence and building your credibility. Setting a budget for an entirely new program, including onboarding and training new employees, may be easier said than done, but if you start planning ahead now, you’re going to look like the industry superstar relative to your competitors.
5. The bulk of enterprise organizations have Customer Success Teams that cost 10% of ARR or less.
It's true, large enterprise organizations are going to have more money to play around with compared to small and mid-sized companies, but it’s still shocking to see that an entire Customer Success team could cost less than 10% of a company’s ARR (Annual Recurring Revenue). For SMBs, this data from Gainsight suggests a better benchmark range would be 10 - 20% of ARR (know that this percentage will decrease when your Customer Success program really begins to take shape).
Ensuring excellent customer experiences doesn’t always require an entire team either – when you're just getting started, this can be someone from Operations (an account manager for example), until you are able to hire a Customer Success Manager. Depending on what your customers need and what your business can handle, you can determine the proper amount of money to set aside for your Success team or employee.
6. A bad customer service experience will have a reach twice as large as a good experience, and it will take 12 positive experiences to make up for a single bad one.
12 interactions is a lot of time! Although most of these Customer Success statistics have primarily been related to the financial investment and returns, you can’t forget about the amount of time and energy involved. Ensuring customers have good experiences is crucial to their success; therefore, it's also crucial to your success. If your company commits to Customer Success to mitigate those negative experiences as much as possible, you’ll be spending far less time trying to make up for them later – just another good reason to invest in making this happen.
Not sure where to start? Well it doesn't need to happen all at once! For more information on definining and operationalizing Customer Success for your business, check out our free resource: The Ultimate Guide to Harnessing the Power of Customer Success. Enjoy!