Steps and Points for Launching Customer Success

Customer Success Launch Steps and Points

Table of Contents

1. What is Customer Success?
2. Things to Check Before Launching Customer Success
3. How to Build a Customer Success Organization
4. Summary

1. What is Customer Success?

Customer success refers to the efforts to guide customers towards a successful experience, as the name suggests. In addition to providing products and services, we actively provide information and support to achieve both customer success and improved profitability.

Difference between Customer Support

There is a term that is often confused with customer success, which is "customer support". Customer support means "support for customers".
Customer support is carried out with the aim of providing appropriate and speedy support for any issues that may arise when customers use products or services, in order to increase customer satisfaction. The main actions are passive, such as responding to inquiries received at call centers.
On the other hand, customer success aims to help customers achieve success and proactively provides advice and support. As such, there are significant differences in purpose and approach between customer success and customer support.

Background of Customer Success Attracts Attention

With DX, market needs have become more diverse, and products and services have shifted from a "one-time purchase model" to a "retention model". As a result, many subscription-based services are now being offered. While customer success initiatives have been implemented early on in overseas markets, their importance has been increasing year by year in Japan as well.

•Market Maturity
The globalization of the market has progressed, allowing for quick access to products and services from all over the world. Additionally, with new products and services being developed one after another, it has become difficult to maintain a competitive advantage in terms of features, technology, and price. Therefore, added value through customer success is necessary.

•Expansion of Subscription Models
With the commoditization mentioned above, not only the physical value of ownership, but also the experience and joy obtained through use have become more important. As a result, the "subscription-based" business model is expanding. In this model, it is important not only to make a purchase (contract), but also to "continue to use" without cancellation. It is necessary to continuously provide value such as experience and joy according to the customer's usage status.

•Spread of CRM (Customer Relationship Management)
With DX, many companies have introduced customer management systems (CRM) which has expanded the environment for individual customer support. As a result, it has become easier to implement measures to improve customer satisfaction.

Role of Customer Success

The role of customer success includes the following:
• Maximizing LTV (Lifetime Value)
• Maintaining retention rate
• Improving customer satisfaction
• Expanding usage (upselling and cross-selling)

Maximizing LTV (Lifetime Value)
LTV (Life Time Value) refers to the total profit that can be obtained from a customer over their lifetime. This includes all profits generated by the customer from the start of their service or product usage until they cancel. In a one-time purchase model, the time of purchase is the LTV timing, but in a subscription model, LTV continues to increase as long as the customer remains subscribed. In other words, a subscription model is the most optimal for achieving maximum LTV.

Maintaining Retention Rate
In order to continue using our products and services, it is necessary for customers to fully understand and feel the value of them. Therefore, detailed support for customers is essential. It is necessary to eliminate any doubts or concerns that customers may have. By actively communicating and continuously addressing any questions or uncertainties, customer trust will increase and retention rate will improve.

Improving Customer Satisfaction
When dissatisfaction accumulates with a product or service, it leads to cancellation. Therefore, it is necessary to always be aware of customer satisfaction. In order to maintain high customer satisfaction, it is necessary to continuously improve and enhance, and to continue providing value with products and services. We will create a system to continuously conduct surveys and hearings, and use the issues identified there to provide feedback to improve products and services. By doing so, not only will it improve convenience, but it will also lead to the joy of "improvement" for customers, and further improvement in satisfaction can be expected.

Service Expansion (Upsell/Cross-sell)
As examples of service expansion, there are upselling and cross-selling.
・Upsell: Encouraging customers to upgrade to a higher grade service
・Cross-sell: Encouraging customers to purchase additional products or services
Upselling occurs when a customer upgrades from a standard plan to a premium plan, while cross-selling occurs when a customer adds optional services. By achieving upselling and cross-selling, it can lead to increased revenue and maximize LTV. If customers are satisfied with the product or service, it becomes easier to achieve upselling and cross-selling.

Why Customer Success is Essential for SaaS
"SaaS" refers to software that is provided as a cloud service. Some examples include business chat and office software.
Many SaaS companies adopt a subscription model where customers pay a monthly fee. Therefore, in order to continue generating revenue, it is necessary to increase retention rates and keep customers for a long period of time.
Customer success is the key to achieving this. By anticipating and resolving customer dissatisfaction, providing continuous benefits, and taking other actions, customer satisfaction can be increased, preventing cancellations and improving retention rates.
Currently, there are many SaaS offerings and competition is fierce. If customers do not feel the effects of problem-solving, it will be difficult to keep them using the product or service for a long time.
To succeed in the SaaS business, it is essential to implement customer success and increase customer satisfaction to improve LTV.

Relationship between Customer Success and CX
"Customer Experience (CX)" is a term that refers to "customer experience" or "customer experience value". It refers to the experience and value that customers receive from the pre-purchase to post-purchase process.
CX includes not only objective values such as product functionality and price, but also experiences and values that affect customers' emotions, such as communication, after-sales service, complaint handling, and store atmosphere.
Therefore, it can be said that the way in which customers are involved in Customer Success directly affects CX. For example, if the contact from the company after purchase is favorable, the impression of the product itself will improve and CX will increase.
When working on Customer Success, it is important to focus on how to improve CX and consider measures from the customer's perspective.

2. Things to Check Before Launching Customer Success

Confirming the Customer Success Organizational Model

By building an appropriate customer success organization, you can fulfill the role of customer success mentioned earlier. There are several models for customer success organizations. Here, we will classify them as follows.

・All-Rounder Type
・Specialist Type
・Sales-Oriented Type
・Partnership Type

All-Rounder Type
The All-Rounder Type is a model that, as the name suggests, covers everything from sales to onboarding, support, retention, and upsell/cross-sell.
This model is often seen in companies that have just launched customer success or in small startups. The advantage of this model is that customer success becomes the center of the business, which can lead to a decrease in churn rate. For example, if sales are no longer focused solely on meeting quotas and instead focus on attracting customers who are a good fit for the product or service, the churn rate will decrease. The disadvantage is that the workload for customer success will increase.

Specialist Model
The specialist model is a model that builds specialized teams such as onboarding teams, tech touch teams, and sales teams in the customer success department.
The advantage of this model is that each team can focus on their assigned tasks, allowing them to provide the best support to customers. It also helps reduce the overall workload of the customer success department. The disadvantage is that if there is not smooth coordination between teams, delays in response may occur, leading to an increase in churn. Additionally, it can be difficult to implement the specialist model without a sufficient number of customer success personnel.

Sales-Oriented
This is a model in which Customer Success works closely with sales to advance business.
The advantage of this model is that close collaboration between Customer Success and sales enables product sales to customers that are suitable for the company, as well as proposals for upselling and cross-selling at the optimal timing. This is often seen in companies with simple products or a small number of customers. The disadvantage is that collaboration becomes difficult when the number of customers increases.

Partnership Model
This is a model where Customer Success supports customers in a form of running together.
The advantage of this model is that Customer Success can anticipate and solve customer issues by running together with them. Additionally, since the customer's situation can be accurately understood, upselling and cross-selling can be easily implemented. This model is ideal for companies with a high-touch layer of customers with a high average customer value per company, but the disadvantage is that it may not be able to provide sufficient support if there are a large number of customers.

Others
There are also models that build customer success teams by region to match the customer's area, and organizational charts that create teams for each customer size are also effective.

Points to Check Before Launching

Customer Understanding
Customer Success is an effort to maximize LTV (Lifetime Value) by supporting the success of customers. Therefore, it is necessary to clarify in advance what "customer success" means. The challenges and goals of customers vary depending on the industry and sector. It is important to deeply understand the customer and specify what "customer success" means and what is necessary for the customer to succeed. This will make it easier to grasp the optimal organizational structure and direction of goals.

Setting Performance Goals for Customer Success Activities
In customer success activities, improving the cancellation rate of subscription products and services is a key goal. Additionally, improving customer loyalty and maximizing LTV through upselling and cross-selling are also important goals in customer success. As the priority of tasks to be tackled changes depending on the goals, it is necessary to carefully consider and clarify the expected results before taking action.

Clarify Roles within the Organization
In addition to the sales team and customer support, which have direct contact with customers, it is necessary to collaborate with almost all departments, such as marketing and development, in terms of "providing value to customers". It is important to clarify the roles of each department and how they contribute to customer success. From the perspective of customer success, it is necessary to establish metrics such as retention rate and upsell/cross-sell rate for the sales team, and customer satisfaction for the customer support department. Clarifying the roles and metrics for each department can help prevent confusion when launching a customer success organization.

Clarify the scope of services
It is also important for the Customer Success department to clearly define what services they provide to their clients. For example, they may establish a weekly or bi-weekly meeting schedule. They should also clearly define the scope of their duties, such as whether or not they will be creating reports.

3. How to Build a Customer Success Organization

Create a customer journey map

A customer journey map is a visualization of the series of processes that a customer goes through in their interaction with a product or service. The term "journey" refers to the stages of the customer's service usage and their overall experience. In other words, a customer journey map can be described as a visualization of a customer's series of product and service experiences. Creating this map is the first step in accurately understanding a customer's business environment, needs, and challenges. Additionally, since multiple departments are involved in customer success, creating a customer journey map allows for the visualization of the support services process, sharing of the process, and preparation for the successful execution of customer success services.

Determine Organizational Structure

We will create an organizational structure to focus on customer success. As mentioned earlier, there are several organizational models, so we will consider the most suitable structure for our company. This may involve placing it directly under the sales or service department for support, or appointing a Chief Customer Officer to oversee the entire department separately from other departments. In cases where there may not be enough human resources, some companies may start with just one dedicated person for customer success.

Determine the collaboration method between departments

It may be said for any service, but the key to promoting company-wide initiatives is collaboration between departments. In order to facilitate the operation of customer success, it is important to divide the scope of work and decide on a collaboration method in advance.

Set KPI

Set KPIs to ensure the proper functioning of the customer success organization.

Example:
LTV	Total amount (sales) used by customers from start of use to cancellation
Onboarding Completion Rate	Percentage of customers taking actions expected to continue using
Cancellation Rate (Churn Rate)	Percentage of Canceled Customers
Upsell/Cross-sell rate	Upsell/Cross-sell Ratio

When setting KPIs, ease of operation is also important. Additionally, since situations are constantly changing, it is also important to regularly verify that the set KPIs are appropriate.

Common Failure Examples

Efficiently Address a Wide Range of Customers from the Beginning
Even if you enrich documents such as initial setup manuals without thorough support, it seems that such documents are not utilized and can actually create a high psychological barrier to starting to use them. When trying to solve a wide range of customer issues, it is possible that the way to solve the issue is wrong, or even if the issue is solved, there may be no success beyond that. First, it is necessary to create a successful model and clarify the path to customer success.

Taking customer opinions at face value
It seems that reflecting exactly what customers say in support and services can also lead to failure. Customers do not always accurately convey their needs and challenges. Therefore, even if it is reflected in the service, it may not lead to customer success. It is very important to understand the customer's actions and statements, and to infer and listen to the underlying situation and needs.

4. Summary

At Human Science, there are many services available for customers in the Customer Success department. In particular, we believe that the quality of the content provided by the Customer Success department is the key to success. Therefore, it is necessary to improve and create manuals, enhance FAQs, and create training content. All of these require costs if done in-house. Additionally, the quality must be easy to understand. At Human Science, we have a proven track record of creating easy-to-understand manuals and e-learning content. We offer the following services:

•Improving the quality of manuals and training texts
We propose the most suitable instruction manuals, technical documents, help, and FAQs for your environment. We provide consulting services from evaluating current manuals to creating a multilingual support system and building and operating a CMS. We can also produce video manuals.

•Support for creating educational content and introducing LMS (Learning Management System)
Just like manuals, we will propose the most suitable educational content for your environment. Starting with evaluating your current content, we can also optimize LMS and provide multilingual support.

•Chatbot Implementation and Construction Support
Many companies are adopting chatbots to streamline customer support. We will propose the most suitable chatbot for your environment. We offer one-stop support from chatbot system implementation to content creation.

The following are achievements for the Customer Success Department.

WingArc1st Inc.: Consulting and content creation services for the Customer Success department, including content evaluation and improvement consulting.
https://hs-learning.jp/case/wingarc1st/

We also offer services that can handle the creation of easy-to-understand "manuals" and "video manuals", as well as e-learning content, which are necessary for customer success, all in one stop. Please take advantage of them.