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2015 Customer Success Industry Trends Report
22015 Customer Success Industry Trends Report
Table of Contents
3 EXECUTIVE SUMMARY
4 MEET THE SURVEY RESPONDENTS
6 WHO DOES YOUR HEAD OF CUSTOMER SUCCESS REPORT TO?
8 HOW WOULD YOU CHARACTERIZE THE MATURITY LEVEL OF YOUR CUSTOMER SUCCESS ORGANIZATION?
10 WHAT ARE YOUR PRIMARY CUSTOMER SUCCESS OBJECTIVES?
12 WHAT KEY PERFORMANCE INDICATORS / METRICS ARE REPORTED TO THE C-SUITE AND / OR BOARD OF DIRECTORS ON A REGULAR BASIS?
14 WHAT IS YOUR APPROXIMATE RATIO OF ANNUAL RECURRING REVENUE (ARR) TO CUSTOMER SUCCESS MANAGERS?
16 APPROXIMATELY HOW MANY CUSTOMER SUCCESS PROFESSIONALS DO YOU PLAN TO HIRE WITHIN THE NEXT 12 MONTHS?
17 WHAT ARE THE BIGGEST BARRIERS YOU EXPERIENCE THAT MAKE IT HARDER TO FULFILL THE PROMISE OF YOUR CUSTOMER SUCCESS ORGANIZATION?
18 DO YOU PLAN ON MAKING ANY SIGNIFICANT CHANGES TO YOUR CUSTOMER SUCCESS ORGANIZATION OVER THE NEXT 6 TO 12 MONTHS?
19 ARE CUSTOMER SUCCESS MANAGERS IN YOUR ORGANIZATION CHARGED WITH PROACTIVE OUTREACH TO CUSTOMERS?
20 ARE MEMBERS OF YOUR CUSTOMER SUCCESS TEAM ELIGIBLE TO RECEIVE COMMISSION OR OTHER FORMS OF VARIABLE COMPENSATION?
2015 Customer Success Industry Trends Report 3
Executive Summary
The 2015 Customer Success Industry Trends Report aggregates responses from 125 Customer Success professionals servicing customers across a wide range of industries. The survey included a combination of close-ended and open-ended questions designed to assess the structure of the Customer Success organization and identify common challenges experienced in this still relatively new field.
As the following report shows, the Customer Success organiza-tion is growing rapidly and already has a “seat at the table,” often reporting to someone at the C-level. This justifiably gives the de-partment significant exposure and empowers Customer Success leaders to influence positive change. Across all industries surveyed, the department is most commonly accountable for reducing churn, increasing product adoption, and enhancing the customer experi-ence. This has led many survey respondents to establish listening posts at various stages of the customer journey with programs such as Net Promoter Score® or Customer Satisfaction Surveys and using third parties to ensure the data is objective and reliable.
While there is a growing appreciation for the Customer Success organization, survey respondents agree there are still hurdles to overcome. In particular, they cite the struggle to scale (due primarily to finding qualified candidates and budget), buy-in
across the entire company, and determining the appropriate compensation plans as common pain points.
Despite these obstacles, Customer Success professionals remain focused on delivering customer value and creating long-term relationships as illustrated in this respondent’s verbatim feedback:
“Baseline, we are stewards of our customers’ investment. We ensure we protect every renewal and identify opportunities for cross-sell and up-sell. We also look for opportunities to capitalize on their great experience through cultivating references, video, and case studies. Beyond this, we are the trusted advisors to our customers, being their internal advocates within our organization and identifying opportunities to connect customers with other customers to learn from each other and share ideas with our company leadership as well.”
We would like to extend our gratitude for all those who responded to our inaugural Customer Success Industry Trends Report. This is clearly a very exciting and quickly evolving role and we sincerely hope you find the following summary research both valuable and actionable.
Learn how Satrix Solutions can help your company build a world-class Voice-of-Customer program.
42015 Customer Success Industry Trends Report
RESPONDENTS BY TITLE
Director, Customer Success 33%
VP, Customer Success 24%
Account ManagerCustomer Success
22%
C-Level 10%
Other 6%
Manager/Supervisor 5%
RESPONDENTS BY NUMBER OF EMPLOYEES
1001 +12%
501 — 10007%
251 — 500 18%
51 — 25041%
1 — 50 22%
Meet the Survey Respondents
n=125
52015 Customer Success Industry Trends Report
“WE HAVE CUSTOMER SUCCESS AND ACCOUNT MANAGEMENT IN THE LARGER CUSTOMER SUCCESS TEAM — ACCOUNT MANAGEMENT IS RESPONSIBLE FOR SALES/RENEWALS AND CUSTOMER SUCCESS MANAGER’S ARE RESPONSIBLE FOR ADOPTION, SATISFACTION, AND PRODUCT USAGE AND CLOSELY CONNECTED WITH SUPPORT.
”
62015 Customer Success Industry Trends Report
CEO
35%
COO or similar 17%
Head of Sales / Business Development
15%
President
9%
Other
8%
CCO
7%
CMO or simiar
7%
Still evaluating
2%
According to survey respondents, a majority of Customer Success leaders report directly into the C-Suite. This is significant in that customer experience leaders repeatedly outperform competitors and are rewarded with higher retention levels, greater share of wallet, and lower customer acquisition costs.
Who does your Head of Customer Success report to?
72015 Customer Success Industry Trends Report
“WE ARE A COMPLEX ENTERPRISE-LEVEL PRODUCT THAT REQUIRES SIGNIFICANT CUSTOMER INVESTMENT AND COMMITMENT TO GET FULL ADOPTION. AS A RESULT, MORE CUSTOMER SUCCESS RESOURCES ARE NEEDED TO PROVIDE THE LEVEL OF ATTENTION THAT CUSTOMERS NEED EARLY IN THE RELATIONSHIP.
”
82015 Customer Success Industry Trends Report
How would you characterize the maturity level of your Customer Success organization?
Just getting started 30%
Established, but we have a ways to go 51%
Fairly sophisticated 11%
More advanced than most 7%
World-class 1%
“BEING A STARTUP, WE’VE BEEN
TASKED WITH A LOT OF
DIFFERENT DUTIES, INCLUDING
TECHNICAL SUPPORT. AS WE’VE
BEEN SCALING, DETERMINING
HOW AND WHAT TO HAVE
MEMBERS OF OUR ORGANIZATION
SPECIALIZE IN HAS BEEN A
CHALLENGE.
”
“THE CHALLENGES WE FACE
IN FULLY LAUNCHING THE
CUSTOMER SUCCESS
ORGANIZATION HAVE TO DO
WITH DISORGANIZATION IN
THE SUPPORT DEPARTMENT
AND THE CUSTOMER SUCCESS
MANAGERS GETTING PULLED
INTO SUPPORT RELATED ISSUES.
”
“DATA RELIABILITY IS A BIG CHALLENGE. WE NEED CONSISTENT AND
RELIABLE DATA TO MAKE IMPROVEMENTS TO OUR OUTREACH AND
INVESTIGATE CUSTOMERS’ EXPERIENCE WITH THE PRODUCT AND THE
SUPPORT WE PROVIDE. WE ALSO NEED DATA TO ASSESS OUR IMPACT
ON OVERALL CHURN RATES AND REVENUE.
”
Most survey respondents agree the Customer Success organization is still in an early stage of development, citing a lack of resources as one of the many inhibitors of growth. To help guide their programs to a higher level of maturity, companies are attending conferences, relying on online communities, and working with consultants.
92015 Customer Success Industry Trends Report
“WE ARE WORKING ON STANDARDIZATION, PROCESSES, AND REPORTING. THE OBJECTIVE IS TO IMPROVE OVERALL CUSTOMER ENGAGEMENT, IMPLEMENTATIONS, AND CUSTOMER SATISFACTION. WE WANT TO PROVE VALUE TO DRIVE CUSTOMER TESTIMONIALS AND UP-SELL/ CROSS-SELL OPPORTUNITIES AS WELL AS MAKE THE RENEWAL PROCESS A SMOOTH EXERCISE AND NOT A LABORIOUS TASK FIGHTING OFF VARIOUS COMPETITORS.
”
102015 Customer Success Industry Trends Report
What are your primary Customer Success objectives?
Reduce churn/ improve retention 73
Increase product usage/adoption/stickiness62
Enhance customer satisfaction/loyalty 56
Increase up-sell/ cross-sell 41
Increase renewals 34
Improve onboarding/ implementation 23
Increase customer lifetime value 17
Inrease customer references, testimonials, case studies 17
Gather “voice of the customer” 12
Enhance company reputation 7
Reduce customer effort/friction 5
Increase margins/profitability 4
Reduce support tickets submitted 4
Other 2
While the Customer Success organization has many objectives, survey respondents focus primarily on reducing churn, increasing product adoption, and enhancing the customer experience.
Numbers represent the absolute count of respondents for each category.
112015 Customer Success Industry Trends Report
“OUR CUSTOMER SUCCESS TEAM WORKS POST SALES TO ENSURE THE CUSTOMER IS ONBOARDED SUCCESSFULLY AND HAVE A GROWING ADOPTION RATE. FROM THERE, CUSTOMER SUCCESS EVALUATES CUSTOMER SATISFACTION AND USAGE TO DETERMINE ANY RENEWAL RISKS AND THEN ACTS OR ESCALATES AS NEEDED.
”
122015 Customer Success Industry Trends Report
What key performance indicators / metrics are reported to the C-Suite and / or Board of Directors on a regular basis?
Customer churn data 63
Customerretention rate54
Net Promoter Score 54
Additional revenue from up-sell / cross-sell 52
Customer renewal rate 52
Overall customer satisfaction rate 33
Number of support tickets submitted 28
Number of formal customer business reviews ( quarterly, annually, etc. ) 13
Don’t know / still evaluating 10
Customer share-of-wallet /spend-per-customer 9First Contact Resolution 7
Product usage / adoption 5
Social media data ( followers, etc .) 5
Other 4
Customer Effort Score 3
To successfully meet department objectives and determine the health of customer relationships, a large majority of Customer Success organizations track customer retention and churn KPIs. Equally valuable to survey respondents: Net Promoter Score (NPS)®. Both a customer loyalty metric and organizational discipline, NPS identifies behaviors directly linked to profit, such as defecting less, spending more, and referring the company to others.
Numbers represent the absolute count of respondents for each category.
132015 Customer Success Industry Trends Report
“I AM ONLY ONE PERSON MANAGING A LARGE NUMBER OF CLIENTS. UNFORTUNATELY, CUSTOMERS WHO ARE “ON FIRE” GET THE MOST ATTENTION. THIS LEAVES ME NEGLECTING CUSTOMERS WHO MAY BE STAGNANT IN THEIR ADOPTION OR SUCCESSFUL CUSTOMERS WHO I COULD BE SUPPORTING MORE.
”
142015 Customer Success Industry Trends Report
What is your approximate ratio of Annual Recurring Revenue (ARR) to Customer Success Managers?
Many of the respondents surveyed are employing a tiered approach based on Annual Recurring Revenue. When formulating these multi-tier Customer Success strategies, companies establish “listening posts” to collect feedback at various touch points to continually assess customer needs and expectations.
$ 0 — $ 100 K 11%
$ 100.1 K — $ 1 M 38%
$ 1.1 M — $ 5 M 33%
$ 5.1 M — $ 10 M 15%
$ 10.1 M + 4%
Responses ranged from: $ 15 K — $ 17.5 M
Average response was: $ 2.7 M
“I HAVE SEVERAL TIERS OF CUSTOMER SUCCESS MANAGERS —THREE
WITH DIFFERENT RATIOS AND BOOKS OF BUSINESS. TIER 1 HAS 25/1
RATIO WITH ARR OF 12.1M, TIER 2 HAS 60/1 RATIO WITH ARR OF 9M, AND
TIER 3 IS THE SCALABLE TEAM WITH RATIOS OF 750/1 AND ARR OF 17M.
THEY ARE NOT DIRECTLY ALIGNED AND ARE PROACTIVELY MANAGING
CUSTOMERS THROUGH OUTBOUND CALLING AND EMAIL CAMPAIGNS.
”
152015 Customer Success Industry Trends Report
“WE WERE JUST APPROVED TO ADD MORE CUSTOMER SUCCESS MANAGERS. ONCE THEY ARE HIRED, WE WILL BE AT 130:1 AND 10M:1 BY THE END OF THE YEAR.
”
162015 Customer Success Industry Trends Report
The responses suggest Customer Success Teams of all sizes will double over the next 12 months.
Approximately how many Customer Success professionals do you plan to hire within the next 12 months?
87%
172015 Customer Success Industry Trends Report
What are the biggest barriers you experience that make it harder to fulfill the promise of your Customer Success organization?
These quotes represent the most common themes identified across respondent feedback.
“THE BIGGEST BARRIER IS
EXTRACTING USAGE DATA
FROM OUR PLATFORM TO
PROACTIVELY HELP OUR
CUSTOMERS SUCCEED. SALES
HAVE ALSO LED TO MULTIPLE
(SOMETIMES COMPETING)
PATHS TO SUCCESS, WHICH
DAMPERS OUR ABILITY TO
SCALE. AS WE REBUILD OUR
CUSTOMER SUCCESS
ORGANIZATION ORIENTED TO
THE NEW PRODUCT, WE CAN
TAKE THESE LESSONS LEARNED
AND IMPLEMENT THEM INTO
OUR NEW SOLUTIONS
STRUCTURE.
”
“A LACK OF AWARENESS
INTERNALLY OF WHAT
CUSTOMER SUCCESS IS
AGAINST OTHER DEPARTMENTS.
”“
A SILO MENTALITY. DATA IS
THEREFORE NOT INTEGRATED
SO THAT WE HAVE ONE VIEW
OF THE CUSTOMER.
”
“AS A NEW TEAM, THE BIGGEST
BARRIER WAS HIRING THE RIGHT
PEOPLE WITH THE RIGHT
ATTITUDE AND SKILLSET.
THIS TOOK LONGER THAN I
ANTICIPATED BUT IT WAS MORE
IMPORTANT TO ME TO HAVE
THE RIGHT TEAM MEMBERS THAN
PUTTING A TEAM TOGETHER
QUICKLY.
”
“SCALING — WHETHER IT’S
MONTHLY ACCOUNT
SNAPSHOTS REPORTS FOR
CUSTOMERS, HANDLING
THE IN-PERSON MEETINGS
FOR ACCOUNT REVIEWS,
OR ANSWERING A FLURRY
OF QUESTIONS FROM
CUSTOMERS.
”
182015 Customer Success Industry Trends Report
Do you plan on making any significant changes to your Customer Success organization over the next 6 to 12 months?
These quotes represent the most common themes identified across respondent feedback.
“WE WOULD LIKE TO START
CELEBRATING THE
SUCCESSES OF OUR CLIENTS,
“HUMANIZING” OUR TEMPLATES,
ENGAGING OUR DEVELOPMENT
STAFF WITH CUSTOMER
FEEDBACK AND HAVE BETTER
METRICS FOR BENCHMARKING
OUR SERVICES.
”
“EXPANDING OUR OUTREACH
TO LOWER TIER CUSTOMERS
THROUGH AUTOMATED
ACCOUNT MANAGEMENT.
”“
BRING CUSTOMER SUCCESS
TO ALL DEPARTMENTS —
PROMOTING THE TEAM
AND THEIR ACTIVITIES.
”
“PART OF MY JOB IS TO CHANGE
THE CULTURE. WE HAVE
ALREADY STARTED TALKING
ABOUT CHANGING THE
DISCUSSION FROM “SAVING” A
CUSTOMER TO FOCUSING ON
HOW TO HELP THEM SUCCEED
IN ALL AREAS (NOT JUST WITH
OUR PRODUCTS).
”
“WE PLAN TO IMMEDIATELY
SEGMENT OUR CLIENT BASE.
FURTHERMORE, OUR GOALS
INCLUDE CUSTOMER
SATISFACTION SURVEYS AND
CUSTOMER HEALTH SCORING.
”
192015 Customer Success Industry Trends Report
Are Customer Success Managers in your organization charged with proactive outreach to customers?
These quotes represent the most common themes identified across respondent feedback.
“YES, DEPENDING ON THE TIER
OF THE CUSTOMER. HIGHER
TIER CUSTOMERS GET MORE
REGULAR PROACTIVE
OUTREACH, WHILE THE LOWER
TIERS MAY NOT GET AS MUCH.
HOWEVER, WE ARE DEVELOPING
MECHANISMS AND AVENUES
TO PROVIDE LOWER TIER
CUSTOMERS WITH THE SAME
INFORMATION HIGHER TIER
CUSTOMERS GET THROUGH
WEBINARS, NEWSLETTERS, ETC.
”
“YES. OUR CUSTOMER
SUCCESS TEAM REACHES OUT
WITH “TOUCH POINT CALLS”
AND QUARTERLY BUSINESS
REVIEWS (QBRS)/ROADMAP
DISCUSSIONS. TYPICALLY THEY
CONTACT EACH OF THEIR
CUSTOMERS ON A QUARTERLY
BASIS, BUT THE ONES WITH
MORE REACTIONARY ISSUES
(OPEN SUPPORT INCIDENTS)
ARE CONTACTED WEEKLY
OR MONTHLY.
”
“YES, WE ARE VERY SENSITIVE TO
HOW OUR CUSTOMERS REACT
TO OUR PRODUCT. IF WE SENSE
ISSUES, WE PROACTIVELY TRY
TO GET IN FRONT OF THEM TO
MAKE SURE WE CONTINUE WITH
SYSTEM ADOPTION AND USAGE
RATES. WE DO NOT TRACK
FREQUENCY OF OUTREACH.
”
“YES. WE STRIVE FOR
SUBSTANTIVE, PROACTIVE
OUTREACH. THE FREQUENCY
VARIES FROM CLIENT TO
CLIENT BUT, ON AVERAGE, IT IS
APPROXIMATELY BI-MONTHLY
PROACTIVE OUTREACH. THE
GOALS OF THESE CALLS ARE:
ENGAGEMENT WITH PLATFORM,
STRATEGIC INITIATIVES, AND
RESOLVING ISSUES.
”
202015 Customer Success Industry Trends Report
Are members of your Customer Success Team eligible to receive commission or other forms of variable compensation?
These quotes represent the most common themes identified across respondent feedback.
“THEY RECEIVE A QUARTERLY
BONUS FOR CROSS-SELL/
UP-SELL OPPORTUNITIES WITHIN
THEIR CUSTOMERS. IF THE TEAM
HITS THEIR GOAL, THEY ALL
RECEIVE COMPENSATION. THIS
ENCOURAGES COLLABORATION,
GROWTH DISCUSSIONS WITH
CUSTOMERS, AND DOES NOT
PUNISH ONE PERSON WHEN A
LARGE COMPANY DECIDES NOT
TO RENEW.
”
“NO VARIABLE COMPENSATION
FOR THE CUSTOMER SUCCESS
MANAGERS, BUT THEY ARE
ELIGIBLE FOR A BONUS BASED
ON INDIVIDUAL AND COMPANY
PERFORMANCE. ACCOUNT
MANAGERS RESPONSIBLE
FOR UP-SELL AND RENEWALS
ARE ELIGIBLE FOR SALES
COMMISSION.
”
“YES, WE HAVE A QUARTERLY
VARIABLE BONUS PLUS
COMMISSIONS ON RENEWALS
AND UP-SELLS. CUSTOMER
SUCCESS IS NOT RESPONSIBLE
FOR CLOSING OR SELLING
TO CUSTOMERS. HOWEVER,
WE ARE RESPONSIBLE
FOR DEMONSTRATING VALUE
SO THAT WE CAN RETAIN
AND GROW OUR BUSINESS
WITH THESE CUSTOMERS.
THEREFORE, WE PARTNER WITH
THE SALES ORGANIZATION
AND SHARE IN THE REWARDS.
”
“YES, THEY RECEIVE
COMMISSIONS ON EACH
RENEWAL THAT THEY CLOSE.
THEY GET PAID ON UP-SELLS
OF ADDITIONAL PRODUCTS
AND SERVICES, THEY GET A
QUARTERLY RETENTION
BONUS AND THEY ALSO GET
PAID A % OF ALL CLOSED
DEALS THAT STARTED WITH
A LEAD THAT THEY PASSED TO
THE NEW BUSINESS SALES
TEAM FOR A LAND EXPAND
DEAL OF A CLIENT THAT THEY
WORK WITH.
”
17470 N. Pacesetter WayScottsdale, Arizona 85255
480.773.6120
@SatrixSolutions
SatrixSolutions
Satrix Solutions is a customer success champion, helping com-panies derive maximum value from their most important assets—customers, employees, and reputation. Benefitting from a range of feedback programs and a consultative approach, companies that partner with us realize Net Promoter Scores® twice the B2B average and experience increased retention, referrals, and sales win rates. The objective insights and recommendations deliv-ered empower business leaders to outperform the competition and achieve higher valuations in the public and private markets. For more information, please visit: www.SatrixSolutions.com or call 480.773.6120.
©2015 SatrixSolutions LLC. All rights reserved. ®Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.