SaaS companies have been discussing the importance of building and maintaining a strong sales team to the success of organizations for years. However, it’s only recently that sales leaders have begun to truly understand the value of customer success to revenue retention and generation.
Churn is an inevitable part of the industry, but it is every SaaS leader’s objective to keep churn as low as possible and generate repeat revenue from loyal customers. Research revealed that only 20% of software features are actually used, while 50% are never used, and 30% are used infrequently. If businesses are not continuously demonstrating the functionality and value of the product, especially during the early days of the engagement, it is unlikely that customer lifetime value targets will be hit, and customers will be retained.
What is customer success?
The fundamentals of customer success are ensuring that customers have a great experience with the SaaS solution, and they are getting the most value possible. A customer success team begins by onboarding the client and making sure they know how to use the product properly. Ideally, these team members are delivering on the promises made during the sales process and ensuring that the software solves the pain points that led to the purchase.
Often customer success teams are confused with customer support teams. However, customer support teams are reactive in that they only respond to customers once they have raised concerns. Customer success teams on the other hand are proactive in that they anticipate any needs of customers before they raise a concern.
Salespeople are the face of the brand because they serve as the first representation of the company. But, after the sales process ends, their position changes. The customer success team becomes the face of the software after-sale and will interact with the customers for months. or hopefully years to come. It
is therefore critically important to invest in the training of team members to ensure they are armed with the tools and skills they need to impress customers and address issues.
The importance of customer success in the SaaS industry
In the SaaS industry, net retention is a critical metric that determines whether businesses sink or swim. When dealing with contracts that are predicated on monthly or annual recurring revenue, it’s not just about acquiring customers, it’s about keeping them. Maximizing the lifetime value of a customer is very important, and although some churn is inevitable, businesses need to maintain a strong and loyal customer base.
Customer success representatives are tasked with not only keeping customers happy, but also ensuring they renew and even upgrade in order to continue generating revenue from the same company. An important aspect of customer retention is encouraging a high level of adoption and engagement to keep building a use case in the customer’s mind, particularly when the contract is coming up for renewal.
Beyond revenue retention, most effective customer success teams are compensated for their ability to upsell and cross-sell. Most SaaS organizations have a modular solution that benefits from a ‘land and expand’ approach and are therefore dependent on customer success for its prosperity.
How to build the best customer success team
Most organizations put customer success teams through feature only training to make team members well prepared to answer product-specific questions. While this training is certainly necessary, few organisations invest in sales training for their customer success teams. This can be problematic
for representatives as they are responsible for continually selling the value of solution and extracting more money from customers.
Evidenced by only 20% of software features actually being used, proper onboarding and succession planning is a rarity. If people aren’t seeing the true value of the software solution, this will inevitably lead to high churn levels and missed opportunities. Representatives need to be trained correctly on onboarding customers, frequent and meaningful interactions, and approaching renewal conversations.
Representatives must also be able to discuss potential cross-sell and upsell opportunities, how to re-engage disengaged users, and how to generate additional business through referrals.
The best customer success teams are constantly monitoring for disengagement, and multithreading the account to establish relationships beyond the main point of contact. There are all soft and tactical sales skills that organizations cannot expect customer success representatives to develop on their own. If SaaS businesses are to improve churn rates and retain revenue, investment into customer success teams is vital. Businesses should be investing in a customer success training program upon onboarding that provides representatives with the foundations they need to confidently approach customer interactions.
To learn more about how to effectively train sales teams please visit: salesworks.io
BY: By Shabri Lakhani, CEO of SalesWorks