How to deliver the best value for your customers and boost your revenues
Customer success has exploded in the B2B software world.
No surprise, given that key customer success metrics – customer retention, engagement and satisfaction – are at the core of every SaaS business strategy.
And because the SaaS business model means that if customers don’t use your software or aren’t happy with it, they’ll simply unsubscribe.
But making customer success actually successful is still a challenge.
Many businesses are unclear what customer success means, how they can build an effective customer success program, who they should staff their customer success departments with – and crucially, how they will measure customer success.
It allows you to develop a level of ‘customer intimacy’ that pinpoints problems, improves retention, helps ensure your customers actually adopt your software, and highlights opportunities.
And because this short guide doesn’t just cover these areas, it’s also full of practical tips our experts learned the hard way.
If you want to help your business make informed strategy decisions, and map your customer lifecycle (so you can improve it) – read on.
It’s a valuable 12-minute read but if you only have two minutes, click here to jump to the key takeaways.
OK, let’s meet the brains behind the insight:
— CEO, Wiraya
Malin has had an incredible career in customer success. Before becoming CEO, Malin was head of customer success at Wiraya, and this was preceded by experience using their products as a customer during her time at Vattenfall. This insight into both sides of the process has allowed her to ensure Wiraya delivers excellent value to clients built on great customer experience.
— Managing Director, Operations, Monterro
Leif is a veteran of the SaaS world. He has over 20 years’ experience starting, building and managing SaaS companies, both Nordic and international. His most recent role was the CEO of Unifaun, a fast-growing, market leading SaaS company within Transport Management Systems (TMS). We’re extremely pleased to have him on the Monterro team.
— Head of Loyalty & Expansion, Lime Technologies
Anna lives and breathes customer experience. As head of loyalty and expansion at the high-flying Lime Technologies, she’s championing
an increased focus on the customer after implementation to further improve the customer experience. Using key pillars of help, delight, retain, and expand – she’s helping Lime increase customer satisfaction, retention, and upselling.
Ready? Let’s do this.
Defining customer success should be straightforward – yet it’s often overcomplicated.
Customer success is a mindset change which needs to permeate the whole organisation to be effective. This shift has three main focus areas:
Many overlook existing customers as a potential source of revenue, when compared to new sales.
Upsell and cross-sell are outcomes of good customer success, not a given.
In our Nordic B2B Software Growth Benchmark Report, 44% of the companies we surveyed said expanding upsell on existing customer base was a primary concern. In spite of this, only 19% had customer retention as a key metric and just one in four actually knew their net revenue retention rate.
SaaS companies understand that the days of fire-and-forget when it comes to software, are gone. But many don’t allow this to inform their approach when it comes to customers.
Anna Hansen“If you think once you’ve won a client you can forget about them, you’re going to run into problems. You need to remember that with SaaS, when you acquire a customer, you still have 90% of the sale to close.”
Anna Hansen“Customer success is about delivering continuous value to your customers. How you do that is more complex, but you have to start with this simple idea as your basis.”
For SaaS companies – customer success isn’t a nice to have – it’s fundamental.
Why? Because the SaaS business model means that by the time you’ve acquired a customer, you’ve already invested. To make good on that investment, you need to deliver value so you can retain them and lower your churn rate. (You can read more about keeping on top of churn in our key metric checklist).
But SaaS companies are also uniquely positioned to deliver customer success.
You have a software product, which means there’s a virtual channel through which you interact with your customers. Every engagement point – right down to a simple login event – can be recorded and used to measure customer engagement.
The smartest SaaS companies don’t stop there. They use this channel as a conversation. This means not only maximising data capture to help them hear their customers, but also using it to make upgrade announcements, offer guidance, and drive engagement.
Pro tip: Think “outside the box” when it comes to engagement.
Leif Bohlin“Your product is a great place to engage your customers but it isn’t the only channel you can use. Forward-thinking SaaS companies support their in-product customer dialogue via their website, email, mobile, supporting content assets, online training/ e-learning, and interactivity such as webinars.”
Leif Bohlin“The first step is to understand that there’s huge sales potential in your existing customer base if you can deliver value to them via customer success.”
Delivering customer success (CS) is a detailed process but there are five principles that form the backbone of any meaningful CS program.
1. Map your customer lifecycle 2. Get the customer started 3. Be proactive 4. Segment your customers 5. Automate
First, identify all the steps that your customer will go through with your product – from purchasing right through to renewal.
We’ll cover this in more detail in our section on workflows, but it’s important that your first step is to identify, standardise, and streamline your customer’s experience.
After you’ve made a sale, you need to get your customer to actually use your software.
This will require you to get customers to change their behavior, and as we all know – that’s always a challenge.
To overcome this, strong onboarding, implementation, and adoption programs are a must.
Anna Hansen“Many SaaS companies miss out because they assume a new customer will just start using their software but actually, it can be a real challenge.”
It’s crucial that you have a way to see how your customers are doing (before they have to tell you).
Establish a customer health score. This is a metric used to assess whether customers are healthy or at-risk of churn.
Deciding the parameters for this is a subjective process which differs from company to company (depending on what’s important to them). But all have the same objective – to assess how likely a customer is to renew or churn.
Malin Wahlberg“It’s really important that the customer health score includes calls to action if it drops below your minimum threshold. This ensures you’re proactive instead of reactive.”
Understanding how valuable each customer is to you is vital.
As you develop a strong customer success culture within your organisation, there will be a tendency to want to help every customer equally. But to make your CS wins scalable, you’ll need to segment your customers.
Base this segmentation on how big a customer they are to you, their growth potential, and the annual contract value (ACV).
It’s also important to keep your lower-value customers happy. To do that without draining the resources you need for key accounts, incorporate as much automation and self service as possible.
To do this effectively, the CS team should collaborate with Customer Support to identify what their most frequently asked questions are. You can then automate answers and fixes to these questions or ensure they’re covered by guidelines that your customers can follow.
Anna Hansen“Establish what a great customer looks like for your business – the size and potential of the account – and allow this to inform your approach.”
Why are you building this department?
The answer will reveal the type of customer success department you’re looking to establish.
For example, if you’re building this department because you have a high churn rate, a support-leaning CS approach is best.
If you have high retention but are not hitting upsell and cross-sell goals, you might want a more sales-driven department.
There can be a temptation to rush into hiring. This is natural. Once you have a plan you want to get going ASAP.
But it’s important you map out the responsibilities you’ll need to cover first. Look at your customer lifecycle, work out the tasks and responsibilities that will need to be covered, and then how you’ll cover those in the department you’re building.
Make sure it includes an extremely clear division of responsibilities between the sales team and CS team, e.g. who is responsible for upsell/cross-sell. Ensure that this culture of transparency and accountability permeates the entire organisation.
You’ll also need to know your chain of command, who answers to who, and who has the final say.
When you’re starting out, draw up your ideal scenario of where you want the department to be in three years’ time. If you have the resources to make that happen now – great! If not, distill it into its core elements and hire to cover those. Your department can grow overtime towards your ideal.
Now it’s time to recruit great team members.
A good CS persona has a “farmer” mindset – but don’t forget they’ll also need to close deals and hit targets. Set KPIs for upsell and cross-sell.
Striking this balance is especially important when you have a small department, as each team member will cover a range of responsibilities.
Farmers cultivate existing relationships. They have an opportunistic mindset and look for new avenues of revenue within an existing customer base.
Hunters turn their opportunistic thinking outwards and focus on sales to new customers.
Leif Bohlin“Businesses can be overwhelmed by the scale of building a CS department — but if you have a map of the responsibilities, it’s possible to start with a small team of a couple of people.”
If you’re building a CS department from the ground up, start with generalists who can handle all elements of customer success.
Key skills needed: domain expertise, multitasking, and shared job experiences for the customers they’re serving.
As your team grows, it becomes increasingly important to create specialised roles so you can channel your team’s skill sets and priorities.
This team ensures your customers actually use your software after signing. They configure the solution, integrate it with other systems, migrate data, and conduct end-user training as the solution is rolled out.
Will include: project managers, integration architects (if appropriate), and end-user training folks.
The people your customers can email/chat with/ call about feature problems (e.g. features not working correctly) or if they don’t understand how to use your product. The team manages the support queue in your ticketing system and helps with customer troubleshooting alongside product managers, and engineers. They create/contribute to learning resources to drive internal efficiency and customer self-support outcomes.
Work proactively with customers after go-live to ensure they’re using the product correctly/ understand how to use new features so they can guide the customer toward their desired outcomes. Crucially, they’re responsible for retention and renewals. They also identify upsell opportunities alongside an account executive.
Pro tip: Make sure you hire CS team members with great prioritisation skills.
Malin Wahlberg“Your CS team will regularly have an inbox full of customer requests. You need to trust they’ll be great at prioritising effectively – especially when it comes to high-value customers or key accounts. To support them, make sure you’ve also set up an effective ticketing system.”
Internal workflows should be designed to deliver the best value for your customers.
This might sound easy, but across the customer lifecycle there are many pitfalls which SaaS companies can fall into.
In this section we asked our experts for the lessons they’ve learned (the hard way).
If a customer gets passed to a new member of your team and they’re not fully prepared, you’ll damage the relationship and lower the customer’s health score.
To counter this, ensure your workflows allow for rigorous internal handovers.
Ahead of customer meetings, get all the necessary people together to share information and insight. This will get you up to speed and ready to deliver value.
Communicate any handovers between team members (and the reasoning behind them) clearly to your customers. This stops customers getting confused, or disengaged by unexpected changes.
Customer success leans heavily on soft skills so internal feedback sessions can also inform your customer health score. If a team member gets a gut feeling about a churn risk, your workflows need to allow for that.
Malin Wahlberg“It can be very easy to assume your colleagues are up to speed on customer details and are fully equipped to deliver value to them. But this is often not the case.”
Pro tip: If you don’t have the resources to get everyone in the room – don’t panic – get creative.
Anna Hansen“While there’s no substitute for a meeting, in some businesses, it just isn’t possible to have all your stakeholders in the room or the Zoom. If that’s the case, invest in a great Customer Relationship Management (CRM) system. That way your team can get a single, up-to-date view of the customer without the need for facetime.”
“Some SaaS companies don’t bridge the gap between the sales and customer success departments – this leaves them with a big accountability gap.”
Many SaaS companies still consider the sales department’s job finished once the implementation phase begins – this is a big mistake.
At worst, this creates a culture of over-promising amongst sales representatives. They say what they need to make the sale and let someone else deal with the feasibility of it. It can also mean that once their accountability ends, there’s little incentive to ensure the next stage of the process runs smoothly.
To combat this, we strongly recommend you design workflows in which your sales representatives are also responsible for the success of the implementation process. By working in close cooperation with the technical consultant or onboarding staff actioning the implementation, they ensure the customer gets what was promised, in the agreed timeframe.
It’s also extremely important that sales don’t simply close an order and dump things onto the customer success team to resolve – this will damage both internal and customer relations. So throughout both mid to late-funnel stages, explain to the customer how you’ll interact with them as you drive towards the go-live date.
Secondly, to ensure that the CS team can successfully deliver on what’s been promised to the customer, they need to be engaged before a deal closes so the customers expectations and needs are properly understood.
Leif Bohlin“Onboarding shouldn’t only be a technical exercise, it’s your first chance to start building fruitful customer relationships – so don’t waste it.”
Your CS representatives should start building customer relationships right from the onboarding phase.
And if you want to develop true ‘customer intimacy’, the onboarding process shouldn’t be a one-way street where you tell the customer about your product.
Instead, use the onboarding process as a fact finder. Who is this customer? What are their pain points? How will this specific company use your software? What can you learn about their industry and how could this inform upsell or cross-sell opportunities?
There’s a wealth of information on how to build a customer success department.
And we strongly recommend you read up on some of those resources (like this one) to ensure you can learn from the mistakes and successes of others.
But to avoid drowning in guidance, it pays to focus on what will give you most value and create most value for your customers.
Clear, standardised workflows make for happy customer success teams.
Customer success relies on a lot of soft skills, people skills, and intuition, but that doesn’t mean you can’t back it up with key metrics – in fact it’s vital that you do.
On the following pages we’ve outlined a checklist of metrics to help you on your customer success journey.
Annual Contract Value (ACV) per customer: The annual revenue per customer contract (excluding any one-time fees).
Aids segmentation by allowing you to see the value the customer holds for your business.
Adoption Rate: A measure of how many of your customers’ users actually use your SaaS product.
There are many ways to measure this. E.g. If 75% or more are logging in, this would indicate a good adoption rate. If it’s lower, it should trigger a call to action so you can address the issue.
ACV or ARR Gross Churn: Measures the Annual Contract Value (ACV) or Annual Recurring Revenue (ARR) of customers that churned during the period, divided by the total ACV or ARR of the full customer base at the beginning of the period.
In addition to upsell and cross-sell, a low churn rate is a key component of high net revenue retention. This is where your CS team can make a huge difference.
You can read more about the kind of ACV Gross Churn rate you should strive for, in our Nordic B2B Software Growth Benchmark Report.
Delivery Approval: Measures the time it’s taken for the customer to sign off on the delivery of what they were promised.
Discuss this with implementation consultants or onboarding teams, and the appropriate salesperson via monthly reviews.
Customer Renewal Rate: Measures the percentage of customers that renew their subscriptions.
Calculation: The number of customers who renew, divided by the total number of customers who could renew, multiplied by 100.
Upsell and cross-sell quota: This measures your sales quota (upsell and cross-sell) per sales representative and per customer success manager.
This helps keep your upsell and cross-sell goals on track.
Net Promoter Score (NPS): This measures how likely a customer is to recommend your product to another prospect. As such it’s a good measure of customer satisfaction.
Calculation: The percentage of promoters, minus the percentage of detractors (those who actively dislike your product).
Quote-to-cash (QTC) process: The journey that begins the moment a buyer expresses intent to buy your product through to the moment you receive revenue.
Keeping track of this can give you an insight into the health of your sales and implementation processes.
Annual recurring revenue (ARR): Shows how much recurring revenue you can expect, based on yearly subscriptions.
Net Revenue Retention (NRR): Measures what would happen to your company if all sales to new customers came to a full stop.
Calculation: Add Monthly Recurring Revenue and Expansion Revenue together (this gives you the total revenue for the month).
Then subtract the month’s revenue lost (those that relate to unsubscribers or downgraders). Finally, divide by the original Monthly Recurring Revenue number.
The net revenue retention rate should ideally be above 100%, since it suggests a predictable and scalable business growth.
The key metric is (of course) your customer health score.
This is the backbone of your customer success program and will be specific to your organisation.
Take time to establish it and remember it’ll also be based on soft skills, gut feeling and customer input.
Pro tip: Don’t forget to log (and measure) the support hours you’ve provided for customers.
Leif Bohlin“We had a situation where our customers were entitled to three hours of support. We assumed our teams were sticking to this. Then we discovered a customer had used 120 hours of support during a year! Our support representative had done a fantastic job – but with this data, we were able to reassess the value of the customer to our business.”
And that’s it. Here are our key takeaways…
Acknowledge the importance of customer success, earn upsell and cross-sell, and don’t fire and forget customers.
Map your customer lifecycle, get the customer started, be proactive, segment your customers, and automate.
Give the CS team clear responsibilities and ensure that this culture of transparency and accountability permeates the entire organisation.
If you want to retain customers, you need to make sure they’re actually using your SaaS product. Make sure you have a system in place to drive that behaviour change.
Bolster your soft skills with key metrics, with none more important than the customer health score.
We’re Monterro, an investment firm (of the get-your-hands-dirty with strategy and operational support variety) that helps Nordic software companies hit their biggest growth goals.
