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The Startup CEO’s Guide to Customer Success and Onboarding >
The business impact you can expect from your customer success strategy

Chapter 4

— 4 min read

The business impact you can expect from your customer success strategy

Shareil Nariman

Shareil Nariman, Head of Customer Success, Arrows

Common misconceptions:

  • 🚫 Once you have a customer success strategy in place, you'll never lose a customer again.
  • 🚫 All my business metrics will improve in perfect harmony.

Now that you've hired your first customer success person and they've helped establish your CS strategy, it's time to measure the impact of your investment.

There is no reason to shy away from the ultimate goal here; you're trying to make more money so you can grow your business.

If done well, your customer success strategy will result in that and much, much more.

Let's take a look at the impact on both your customers and your business, and how to gauge the effectiveness of your strategy in respect to both.

Customer impact

Customer success is supposed to make your customers successful. Hopefully, we've conveyed that by now. The proactive nature of the strategy is intended to improve the overall experience your customers have with your business and brand.

Creating a better customer experience also fosters an opportunity to strengthen the partnership with your customers. This relationship is the foundation for retaining revenue and growing future revenue.

Customers who embrace this partnership and the value you provide are more inclined to speak highly of you, resulting in future referral opportunities.

These metrics can help you measure and track the impact your strategy is having on the experience your customers have:

  • net promoter score (or NPS) - a way to measure if customers are likely to recommend your service to others, and understand why. Typically, there are 2 questions: a 1-10 scale to numerically gauge this likelihood and an open-text question to unpack why.
  • customer satisfaction score (or CSAT) - similar to NPS but with a focus on understanding a customer's own experience with your service. The same question format can be applied here.
  • surveys - can be manually or automatically sent based on reaching different milestones in your customer journey. Surveys help you understand how customers experience different interactions with your teams, like finishing the sales cycle or completing onboarding. Exit surveys can be especially helpful in understanding why customers are canceling your service!

The key to any of the above is analyzing the results and optimizing your strategy to improve what's not working, while doubling down on what is.

Business impact

Improving the customer experience, in turn, should result in improving your business goals (especially the financial ones).

Here are some key metrics you'll want to track so you can validate the impact of your customer success strategy:

  • churn rate - during any given timeframe, you can calculate the number of customers leaving against those who remain. This % should decrease as your program improves. Here are some common reasons customers churn and how you can prevent them.
  • revenue - whether you measure it monthly (often as monthly recurring revenue or MRR in SaaS) or annually, you want to understand to what degree this is increasing.
  • retention rate - this is the inverse of your churn rate, or what percent of customers are sticking around. 100% means you net zero churn. You can measure this in terms of revenue as well. Going over 100% means the customers you have are staying and growing with you. You should measure retention rates for revenue and total customer counts separately.
  • growth revenue - if your customers are spending more money with you and using more of your premium features (upselling and cross-selling), you'll see this aspect of your revenue grow. Establishing customer onboarding helps unlock this potential future revenue for your business by showing your customers how they'll benefit from your product or service.
  • onboarding completion rate - during any given timeframe, you can calculate what % of your customer base is completing your onboarding program. Ultimately, the higher this rate, the more customers are likely to be retained. Here are some specific pointers on how to measure the effectiveness of your onboarding.
  • lifecycle check-ins - as your customers stick around longer and grow their business with you, you'll want to keep checking in to provide ongoing value, capture feedback, and strengthen that relationship. Tracking these interactions allow you to understand your team's reach and budget for team expansion when the time is right.

In conclusion…

As you launch your customer success strategy, measuring the customer and business impact can help you learn what's working and where you have room to improve. Focusing on both gives you the opportunity to foster a customer experience that's memorable for your customers and profitable for your business.

Once you have the data above and have tangible improvements to share, you can prove that customer success is a profit center versus a cost center for your business. Armed with this data, you can strategize how to grow your success organization.

We can help you get there

Book a consultation

A free 30-minute consultation about customer sucesss or onboarding from Shareil, the book's author.

Need help? Email our CEO: dz@arrows.to

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