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Customer Success Driving the Top Line Part 3: Data Driven

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In our first two posts we’ve discussed how building long-term relationships and focusing on ROI for your customers can help move the needle and drive the top line. In this post we’ll get into the nitty-gritty of how we make that possible.

Previously, customer success was known simply as a qualitative process — how can you quantify the happiness of a customer? However, through innovative tools, scoring the health of customers, and defining specific metrics we can turn the department into a quantitative practice.

SaaS Hardships

In today’s SaaS-dominated market, customer success becomes mandated and specific metrics are vital. Customers are accustomed to receive instant gratification when testing or trialing a new tool. If they can’t immediately see the value, they’ll end their subscription resulting in high churn.  Churn is the archnemesis of SaaS companies. Without top-level adoption, the company will crumble.

However, it’s much easier to see ROI when you have SaaS solutions because you can collect usage metrics and gauge how advanced a customer is in adoption. Gathering this information before engaging with a customer will help make your conversations more powerful and helpful for the customer. How empowering is it to know a customer isn’t using runbook automation so you call them to tell how using this will reduce his remediation for critical problems from hours to seconds? You will make their life easier, sleep better, and make them a winner for his company.

With the onset of more complex environments, there is an urgency to support business growth and infrastructure demands. More and more user technologies need to be supported and connected to support end user demands. Visibility becomes crucial.

Building Your Health Score

I recently spoke at Gainsight’s Pulse Conference 2014 on a couple of timely customer success topics. One area of special interest is how to use data and metrics to create a customer health score. Depending on the customer’s use of your product, SaaS versus on-premise, calculating the scores can vary drastically.

Here are the 3 takeaways I use to successfully build the score:

  1. Understand your customer’s learning journey
  2. Understand your customer’s usage journey
  3. Understand how this translates into helping your business now

These tools often come into light as customer satisfaction scores, product adoption scores, and business  metrics. So using these metrics, the equation is fairly straight forward: customer experience + value + result = health score.

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With on-premise customers the calculation becomes a bit more tough since we can’t see their usage metrics. However, it’s important to create an adoption model which can help measure the stickiness of your product. I recommend building regular checkpoints with the executive buyers to align on the project and measure the progress. Also, without usage metrics, score the customer based on other touch points from your team.

Tools

In Part 2, we briefly talked about tools which helps provide actionable insights for our customer success teams, and subsequently our customers. However, we have developed a few other tools which help drive efficiency for both our team and our customers.

Proactive

Proactive is only truly innovative tool in the customer success field. By using specific metrics, sourcing from third-party APIs (Zendesk, PAP, etc.), and using unique learning analytics, Proactive actually projects a customer’s renewal rate probability. It also scores and rates the health of any given customer. We’re currently using this as an internal tool to receive more visibility and data into our customers and their happiness with the product.

Obviously the projected renewal rates and sales is a nifty thing to have, however, it’s also incredibly useful for providing the visibility on the customers not doing so well. This data allows our team to focus our concentrated efforts to help even the most critical accounts. Another efficiency-driven function is the automation tool. For instance, if we see a customer is still using an outdated version of our product or their adoption / usage scores have dropped then Proactive would flag that account as high risk prompting action from the customer success manager.

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Another area where the tool is handy is in allowing us to calculate expansion (new) business in existing accounts and correlate that with the health scores on the account.

Going back on how customer success drives the top line, this is it. Since software companies rely heavily on upsells and renewal rates, this tool has become indispensable for our team and a key instrument in having over a 95% annual renewal rate.

Clearly, it’s a common theme throughout the series that AppDynamics is transforming the customer success department and as a direct result it has become a key factor in driving revenue. Antiquated companies tend to view customer success as a necessary email which will siphon money away from other departments, however, we’ve shown that through innovation and data we can see real ROI. As the legacy software vendors become slower and slower to adopt change and become a more flexible company, their customer success team has taken a large hit. Their rigid practices are magnified when it comes to their support department and as a result the customer experience suffers. There is no relationship building.

I hope you enjoyed our series on Customer Success 2.0 and how the department has become a quantitative and ROI-focused department.

The post Customer Success Driving the Top Line Part 3: Data Driven written by appeared first on Application Performance Monitoring Blog from AppDynamics.

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