Customer Success Is the Secret of Hyper-Growth SaaS Startups
As a SaaS company, you’ve likely seen the success stories of tiny startups amassing crazy amounts of users and revenue, seemingly overnight. Of course, these stories don’t necessarily give us the entire picture. We don’t see all of the time and effort the founders put into creating their product, and we don’t know how many failed products they launched before finding an idea that worked. Even so, the speed at which some of these startups grow is insane.
And while many of them have their own unique approaches to growth hacking, earning media coverage, and other creative PR stunts, there’s one element that almost all of these hyper-growth startups have in common: focus on customer success.
Customer success can make all the difference in a SaaS company’s ability to earn and retain users — both of which are essential for growth. And even if you prefer to take a more “slow and steady” approach to scale your business, you can take a page out of these startups’ playbooks by making customer success an integral part of your business model.
What is “Customer Success”?
If you’re unfamiliar with the term, the basic concept of customer success is a relatively simple one. A customer success team is responsible for empowering users to get the most out of their investment and helping customers find long-term value in a product. Now, you might be thinking that this sounds like the role of a customer support team. And the two do often go hand-in-hand. But they’re not the same — and the difference between the two is an important one.
Customer support teams take a reactive approach to providing assistance, meaning that they wait for customers to reach out with questions and issues. Customer success teams, on the other hand, are much more proactive. They aim to prevent customer issues before they even occur, and look for ways to help each user get more value from a product. And these teams can have a significant impact on a company’s overall success. In fact, behavioral analytics company CleverTap attributes their growth in large part to their focus on customer success.
Part of this focus, for example, involved creating a direct line of communication between their customer success team and their developers. This way, one customer’s feedback can quickly translate into a product improvement that benefits their entire user base.
But beyond that, CleverTap established a company-wide focus on providing excellent customer experiences by requiring all employees to spend two weeks working directly with users as part of their customer success team. This way, employees across all departments have a clear idea of what the customer experience is really like — and can work with a focus on improving it.
How does Customer Success Translate into Growth?
It’s clear that a focus on customer success can be beneficial to your users — but you might be wondering whether it can move you any closer to your company’s goals. So with that in mind, here are four ways customer success can have a positive impact on any SaaS company’s growth.
1. It increases activation
Many SaaS companies make the mistake of focusing their growth efforts solely on the acquisition. And to be clear, earning new users is an essential step in the process. But if those users never actually engage with your product, they won’t move you any closer to your goals.
After all, inactive accounts don’t generate revenue. That’s where it becomes essential to have an activation strategy in place.
Encouraging users to get comfortable with your product and try out specific features are essential steps in showing them the value in what you offer. And a customer success team can work toward identifying ways to do just that. Typeform, for example, offers comprehensive tutorials written specifically for first-time users.
This way, if a user is unsure of how to get started but doesn’t want to reach out to the company’s support team for help, they don’t have to. Instead, they can follow this user-friendly tutorial and launch their first survey within a matter of minutes. This makes it easy for them to get value out of Typeform’s product very early in the process — reducing the likelihood that they’ll abandon their account before giving it a real chance.
2. It improves retention
For most SaaS companies, acquisition and activation are only half the battle when it comes to growth. That’s because the SaaS business model typically revolves around establishing steady monthly recurring revenue. And to achieve this goal, you need to not only earn new customers but retain your existing ones.
And when it comes down to it, boosting retention should be a priority for every business. When you consider that acquiring a new customer is five times more expensive than retaining an existing one, it simply doesn’t make sense not to make it a priority.
Now, to be clear, this is one of the areas in which customer support and customer success can overlap. Even a more traditional approach to customer service can reduce churn. After all, if your customers’ questions and needs go unresolved, they’re unlikely to stick around — and a solid team of support agents can go a long way in ensuring that this isn’t the case.
But a customer success team can take it a step further. While a traditional customer support team can be effective in addressing issues once they’re brought to their attention, it’s important to recognize that not all of your customers will take the time to get in touch. Many of them will just get frustrated and stop using your product — and that’s especially true of those in the earlier stages.
With customer success, you can reach out to users before they reach out to you, and give them a chance to ask questions they may not have otherwise. This way, you decrease the chances that you’re losing customers merely because they don’t want to ask for help.
3. It enables improvement
As you can imagine, taking a proactive approach to support can drastically increase the amount of time your employees spend engaging with your customers. And each of these interactions presents opportunities to uncover possible improvements to your product.
After all, most of your users are unlikely to contact you about specific features unless there’s a major issue preventing them from accomplishing a task. If something merely presents a minor inconvenience, they’ll often choose to work around it instead of taking the time to let you know.
But when you actively seek feedback, you might be surprised at the small details that make a difference in the user experience. And in many cases, the adjustments you’ll need to make to fix them are relatively simple.
Still, the better you become at identifying and fixing even minor bugs and inconveniences, the better a user experience you’ll provide — and when all of these small fixes come together, the result is a superior product.
4. It encourages upsells
Each interaction with a user presents you with the chance to improve how much value an individual customer gets from your product. And while this may seem like more of an advantage to the customer than to your company, the benefits work both ways. That’s because the more value a customer sees from their current usage of your product, the more likely they’ll be to want to maximize that value with higher-tier plans and products. And that’s especially important if your company operates on a “freemium” model.
Today, many SaaS companies use this model to establish their user bases, with the goal that those free users will eventually opt into a paid service. While some users will take this step on their own, others may need a bit of a push to fully realize the benefit of an upgrade.
And that push is often most effective when it comes in the form of encouragement to use the features they already have access to — so that a potential upsell will seem less like a sales pitch, and more like an opportunity to get more from a tool that already works to their advantage.
Customer support is an absolute necessity for any SaaS company. But while most take a reactive approach to addressing customer issues and questions, some brands stand out by actively looking for ways to assist users and improve their product. That’s customer success.
And while the benefits of this approach to customers are clear, many of the companies who’ve incorporated it into their business models have seen significant payoffs in terms of growth. So if you’re not yet looking for ways to improve your customers’ experience with your product, it’s time to start — and you just might be surprised at how closely their success correlates with your own.