Here are the 4 Steps to Customer Success

The hottest job title in marketing right now may be "Customer Success Officer," though there remains some debate about exactly what that means.

For example, it's fair to ask: Is customer success management  different from customer support or  customer relationship management?

Obligingly, Forrester's consulting arm  issued a paper entitled "How to Get Started with Customer Success Management." It should serve as a handy primer for those who want a state-of-the-art interpretation of this emerging marketing strategy.

The paper, sponsored by Gainsight -- a big fish in this still-small pond -- even provides a nifty, four-step process for building a customer success program that will be a revenue-generation operation instead of an extension to existing cost centers.

The Recent Past

First, it's important to understand where this is coming from. Forrester traces its roots in the trend towards a subscription economy, where the value of a customer is defined in the long-term revenue generated by subscribing to a service instead of buying a packaged product.

Think software, music or web services. Or think about it this way: you buy a TV, but you pay the cable company hundreds of dollars every year to watch it. It seems like there are more subscription services every week — and there are.

"Industries like media, entertainment and telecommunications have fully embraced this model, while other industries such as publishing, computer storage and healthcare services are moving in this direction," states the white paper (registration required). "This shift in spending habits, in which goods are repackaged as services, has the potential to fundamentally reshape our economy."

The report later explains that customer success management lets companies have data-driven conversations with customers that can lead to more sales, add-on services and generally higher revenue. Hence, customer service management or CSM has won a large following in software-as-a-service (SaaS) companies, and particularly in B2B SaaS vendors.

Trusted Advisors

What is a customer success officer? 

It's a senior role, whose function is to become the 'trusted  advisor' to the company to make its customers successful with the products they have purchased, ensuring that they are realizing economic value from their investments in order to preserve their revenue."

In other words, it helps customer find the return on investment (ROI) in the services and, thus, encourages them to buy more.

CSM can help subscription-based companies find new customers, increase sales to existing customer, optimize customer processes, and, eventually, add value for their clients.

Forrester studied companies with strong CSM programs and found they tended to follow four steps:

  1. Articulate: The first step involves defining the tiers of customers who are important to the business, the frequency of contacts desired with each tier and the business outcomes desired.
  2. Focus: The idea here is to ensure the processes used to engage customers are consistent across tiers and still agile enough to support customers as they evolve.
  3. Organize: Forrester said successful CSM organizations have strong support at the executive level and clear metrics by which they are judged, usually based on customer retention. It said CSM efforts typically reside in three different departments: sales, operations or customer support.
  4. Data: The fourth step requires access to the right data to help drive customer conversations. This data may highlight such things as product usage, financial considerations and customer feedback.

Title image by Anky / Shutterstock.