For SaaS companies today, there are many aspects of their business to consider when creating and measuring success. What Saas businesses do not realize is that excelling in Customer Success (CS) can be a key component to low churn rates and successful business growth.
Hence, Customer Success Management together with a solid strategy, results in a decreased customer churn, increased upsell opportunities, and renewals.
Subscription Economy
We all live in a subscription economy today. We are no longer in the ownership economy, which basically means that you don’t have customers who are purchasing your product but rather you have subscribers who are renting or subscribing to your product or service.
Hence, like in the ownership economy, acquisition was the ultimate goal but not anymore in the subscription economy. Here when you acquire a customer you actually don’t make any money in fact you only make potentially between five to maybe fifteen twenty percent of potential lifetime value of a customer. That means eighty percent eighty ninety percent of your potential lifetime value of the customer is still locked in the retention cycle. Hence it is the retention cycle and not the acquisition cycle that decides if you will make money as a business if you are able to keep that customer.
CAC and CRC
CAC(Customer Acquisition Cost) and CRC(Customer Retention Cost). We speak so much about CAC in the entire SaaS industry but nobody talks about CRC, well CAC talks about cost of acquiring a customer, CRC is cost of retaining a customer.
As an industry we need to understand that cost of acquiring is important will continue to be important but CRC is going to be even more important .What is the cost of keeping your customer ? what is the cost of delivering not just the product but the value which is likely going to be beyond just typical server maintenance costs .
start measuring CRC if you have not done so already. To know more about CAC and CRC, check https://www.struto.co.uk/blog/exploring-customer-acquisition-cost-vs-retention-costs
Why Customer Success?
Scale your SaaS sales
Through customer success advantages, CSMs can sell more products to the same customer. Instead of completing a sale and letting the customer use your product worthlessly; the CS team focuses on developing a strategic relationship with the customer.
Business Sustainability
For long-term sustainability of your business, you need to join the customer in their success journey. Customer success confirms that customers are developing continuous value from your product. And when they are always satisfied and are able to maximize their ROI, they will keep using your product for a long time..
Enhance your marketing
When you cooperate with customer success while marketing, you get valuable inputs for generating the right customer personas. This ensures you are not only planning an effective marketing strategy but also targeting the most-fitting audience.To know how marketing can be enhanced by customer success, check more resources.
