A great product alone is not enough to retain clients in today’s ultra-competitive marketplace, especially when your competitors offer more finely tuned customer experiences.

(Editor’s Note: These concepts were originally shared with LLR’s portfolio companies as part of a Virtual LLR Collaborate discussion on Customer Success.)

Sales and product teams typically get the lion’s share of the glory when things go well. But while signing new clients and designing great products are crucially important, it’s the customer success team that largely keeps customers happy and coming back for more.

A great product alone is not enough to retain clients in today’s ultra-competitive marketplace, especially when your competitors offer more finely tuned customer experiences. Companies that deliver ongoing value and positive experiences at every stage of the client lifecycle are more likely to retain and upsell their clients. Added to this is the fact that organizations often see less differentiation between vendors that solve a business problem. So what sets your company apart from others in the market will often be your ability to offer strategic guidance and advisory services to your end customers.  And that, in turn, can have a massive impact on company growth.

Consider this example:

  • A firm with $2M annual recurring revenue (ARR) and 10% churn will likely grow to $13M ARR over a typical decade.
  • A firm that achieves 10% growth from existing customers could reach $32M ARR and see its enterprise value rise by over 100%.

That’s a significant difference in company trajectory, but it’s not surprising when you consider that growing existing accounts costs about a third of what it takes to acquire new customers. Organizations that invest time and energy into customer success, retention and account growth typically grow faster with a much lower cost of sales.

I’ve spent the past two decades helping organizations build their customer success functions into revenue-generating, customer-retaining machines by implementing three important— and complementary— actions. I’ll explain each of them in detail below.

Actions that build a better customer success function

Map the customer journey

The goal of customer journey mapping is simple: to plot the major steps and touchpoints required to deliver the desired experiences at each of the five stages of a customer’s journey, from awareness to consideration to acquisition to service and loyalty.

These steps can include customer actions such as clicking on a landing page, landing on a thank-you page, receiving a package, or providing an online review. Touchpoints are the specific actions your organization takes during each step to improve the customer experience or expand an account.

If you think about your customer experience like an iceberg, the customer experience is the only part you see.

Because the customer experience is impacted by multiple company functions, however, this must be a cross-departmental exercise. Customer onboarding, for example, involves handoffs between multiple groups whose messaging and activities must be aligned to ensure a consistent and coherent experience. With this in mind, establishing a tiger team that includes representatives of various departments can help keep everyone informed and aligned around shared goals, including customer churn and expansion. Involving the marketing group, for example, can help the customer success team build the right messaging into its touchpoints.

If you think about your customer experience like an iceberg, the customer experience is the only part you see. The employee experience is hidden under the surface, and if teams are feeling tension or not working well together, it will affect the experience you create for your customers. It’s important to make this a collaborative event internally and to align on a journey everyone can support.

Not only does this keep everyone on the same page in terms of what the ideal customer journey looks like, it also helps with tracking KPIs including churn, expansion and customer health. It’s also invaluable for determining when certain teams should take specific actions at specific points on the customer’s journey. Another bonus is that you’ll quickly start to see which assets or processes consistently lead to positive outcomes among clients, so you can reuse those assets when appropriate.

Where do I start?

This exercise can seem daunting at first, but getting started is more important than perfection. Mapping everything can become overwhelming, so start simply and focus on the most critical touchpoints, assets and processes that drive the journey. Be sure to capture the emotions and attitudes of your customers and internal team for each phase.  Use a whiteboard or sticky notes on a wall (or the digital equivalent if you’re collaborating remotely) to line them up and identify the gaps. Then take an iterative approach, filling out and adding to the journey in subsequent sessions. Keep in mind that this isn’t a one-and-done exercise; the journey needs to adapt and evolve as your business changes and grows.

Analyzing this data will reveal the actions or touchpoints that most often lead to client success or risk… while also informing your customer journey mapping.

Report on customer health metrics

Customer health reporting uses data and visual indicators to track customer status over time, allowing you to answer important questions on risks and opportunities around churn and expansion. Building out your customer health reporting can seem simple, but as you dig into it the level of complexity can grow quickly.

The first step to take is to evaluate your historical activity.

  • Who are your top 10 best customers?
  • How have they interacted with your company over time?
  • What was their experience during onboarding or renewals?
  • Conversely, who are 10 churned clients from the past few years?
  • Do any activities correlate between them?
  • Who are the clients that are actually successful, but require a lot of maintenance to keep them realizing success?

An analytics dashboard that’s easily shared among several stakeholders is perfect for surfacing this information. Set it up to track customer health metrics including account size, product use or login frequency, interactions recorded in your CRM and their Net Promoter Score. This, in turn, allows the categorization of clients into various cohorts depending on account health. Analyzing this data will reveal the actions or touchpoints that most often lead to client success or risk, providing a near real-time glimpse of customer health while also informing your customer journey mapping activities.

Analyzing your customer health data in this way will also allow you to see opportunities to take action at scale. As an example, if you have a broad issue of customers not using a feature that you know leads to value and retention, you can do a marketing campaign and training focused on promoting those features.

Where do I start?

As with customer journey mapping, try to begin simply and build your reporting program in careful iterations. Don’t feel you need 30 different metrics across dozens of data sources. Start with a handful of metrics that are closely aligned with expansion opportunities or churn risk and build from there.

Create customer feedback loops

Building a system to capture client feedback at various stages of the customer journey—including the period after the sales process, during onboarding and prior to or following renewals—is also highly recommended. It’s also important to collect that feedback from the full range of stakeholder groups within your client base, from everyday users to executive or business sponsors.

Where do I start?

You can do this by installing a feedback portal and widget on your website or in your product, then collecting that feedback in one place for analysis. This feedback allows you to build product roadmaps based on the best insights from your customers, and prioritize improvements based on user suggestions.

Implementing feedback tools also helps the organization use NPS scores or other ways of measuring customer sentiment in a more programmatic way. Which clients are promoters? Who are potential passives or detractors? Identifying these cohorts can help you leverage your best customers by launching brand advocacy campaigns or putting more resources into retaining at-risk accounts.

Here’s the bottom line.

Integrating strong customer journey mapping, health reporting and feedback loops into your operations can create happier customers, support timelier cross-selling and accelerate company growth. But your customer success team can’t pull this powerful growth lever by themselves. By taking a cross-departmental approach involving your product, training, sales and marketing teams, you can create and maintain the most accurate view of your customers and craft customer experiences capable of elevating your ARR and enterprise value.

This GrowthBit is featured in LLR’s 2022 Growth Guide, along with other exclusive insights from our portfolio company leaders and Value Creation Team. Download the eBook here.