railroad tracks for customer experience and customer success

2018: The Year Customer Experience and Customer Success Converge

This week, I read an online comment that Customer Experience is a part of Customer Success.

Customer Success professionals believe customer experience is a subset of customer success. Customer Experience professionals believe customer success is a subset of customer experience.

Each discipline has its own idea.

The Customer Experience vs. Customer Success debate has been an interesting one.

So, let’s back up a bit to dive into history and where we are.

 

Parallel Paths

 

Customer Success, defined, is the relationship between a vendor and its customers with the goal being to make the customer as successful as possible with the product so as to increase customer lifetime value (CLV).

The Customer Success Association has a similar view:

Customer Success is about customer relationship, retention, and optimization, and the most effective way to keep your customers is to make them as successful as possible in using your products.

And, Technology Services Industry Association (TSIA) defines customer success as the intersection between the promise of a supplier’s technology and customer’s desired business outcome.

 

Customer Experience, defined, is the product of an interaction – customer journey, brand touchpoints the customer interacts with, and the environments (digital and physical) the customer experiences – between an organization and a customer over the duration of their relationship.

Forrester defines it as “every interaction, or touch point, your customer has with your brand. It not only includes the what’s (the interactions), but also the how’s (perceptions, feelings) the customer experiences”.

Gartner describes customer experience management as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy.”

 

For me, Customer Success is a subset of Customer Experience for a few reasons:

 

-Customer Experience is strategic.

Because customer experience involves all interactions a customer has with a brand, it takes the entire organization to ensure great experiences that drive value and growth.

A company’s customer experience strategy must align with its corporate strategy to impact the bottom line and be successful. As a result, all teams across an organization must work together to execute on this strategy.

Those organizations that are customer experience leaders invest a lot of effort to ensure that customer experience is embedded in the culture; there is a clear and consistent customer experience vision driven by the top that is communicated, understood and embraced by every employee; employees are engaged so they are committed to the organization; and customer feedback is integrated throughout the organization.

-Customer Success has been transactional.

As the successor to account management, customer success has been transactional.

Customer Success has been a means to drive customer adoption of technical products in SaaS and other companies that utilize the recurring revenue model. Also, these companies have adopted Customer Success to strengthen relationships with the customer. And, they create frameworks and processes to onboard, nurture, retain and expand customer accounts to drive CLV.

-Customer Success has been product-centric.

The focus is to ensure the customer is successful with the product to reduce churn and drive revenue. And, customer outcomes reflect that. Being product-centric comes with its own set of limitations. For example, it tends to create siloed organizations that compete for customers.

Yet, we’re in the experience economy. And, customers are no longer buying products and services, they are buying experiences delivered via products and services. Thus, customer outcomes must transcend mere product success.

 

The Road to Convergence

 

Customer Experience and customer success have been viewed as two completely different disciplines.

But, thanks in large part to the transformation surrounding customer success, customer success is starting to converge with customer experience.

In my 2017 trends post, I stated that we were going to see customer success become a key growth driver in 2017.

TSIA, in its State of Customer Success: 2016 report, stated that this growth is due to three factors:

1. Recurring Revenue is SaaS and subscription-based companies’ bread and butter.

For these types of companies, customer retention is the only way to growth. That’s because if a company doesn’t convince customers of its value, these customers will churn. And too much churn is a killer.

According to Retently, there are three leading causes of churn:

3 causes of churn for customer experience and customer success

 

53% of all causes of customer churn are due to these leading causes.

Of these, poor onboarding leads to the most churn. Churn is very much at risk during the first year because a company could lose more than 50% of its customer base during that time.

A large part of customer success focuses on onboarding.

Onboarding is one of the most important milestones in the life of the customer. In fact, it may be the most important milestone, as it sets the tone of what the relationship could become.

Statistics have shown that a formalized onboarding program can reduce churn rates by 25% or more.  Also, Esteban Kolsky found in his research that 11% of customer churn can be avoided by simple company outreach. And, SaaS Capital pointed out that a 1% difference in churn can have a 12% impact on company valuation in 5 years.

2. It costs less to keep a customer happy.

It can cost 5-25% less to keep a customer than get a new one. And, a company can increase profits by 25-95% by raising retention rates by as little as 5%.

3. Businesses Need to Show Immediate Profit.

The pressure is on to show a quick profit and favorable CLV. And, return on investment must be clear at each stage of the customer’s journey.

High-growth companies realize that customer success is the front line to impact whether a customer stays or goes.

They realize customer success is no longer a product-centric endeavor, with focus on churn management. It is now a customer-centric one, with focus on driving growth.

Thus, those companies that include customer success as a major growth strategy and deliver experiences to keep customers win.

 

2018 will be the year that Customer Experience and Customer Success converge. Click To Tweet

Will Customer Experience and Customer Success Converge in 2018?

 

I predict that 2018 will be the year customer experience and customer success converge. The focus will be on defining and deepening customer outcomes. And, this will enable complete convergence.

To drive convergence, customer success will start embedding more emotion analytics and metrics into its framework. This will have two results – it will (a) enrich the customer feedback it receives and (2) help customer success understand how underlying emotions drive customer outcomes so as to generate deeper customer outcomes. Customer Experience will focus more on the specifics of onboarding (to combat churn), retention, and expansion in the customer journey to help align customer metrics to business outcomes in order to drive deeper customer outcomes.

Convergence will also occur at the customer journey level. Customer journey mapping will expand in 2018. More companies will invest in customer journey mapping. More teams will use customer journey mapping. And, customer journey maps will go into more depth. The result will be that customer success journey maps will morph to look more like end-to-end customer journey maps.

Convergence will also go a long way to bust silos. This unified, customer-centric approach will enable more collaboration among teams. And, as a result, it will drive even more growth.

 

 

 

 

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