|By Sandi Mappic||
|May 6, 2014 12:00 PM EDT||
Customer success has become an integral part of nearly every company, but an area which traditionally does not receive much attention in the enterprise software industry. Why not? SaaS companies focus on reducing churn, a major hindrance to growing subscription-based companies, so why don’t more companies focus on ensuring their customers’ success?
At AppDynamics, we quickly realized the possibility to gain our customers’ loyalty by not only giving them the tools to become successful, but also through a thorough customer success program which converts a product into a full-fledged solution for the customer. We knew that by becoming innovative in this area we could take on some of the larger legacy players in the industry. Fittingly, we coined this advanced customer success methodology “Customer Success 2.0”.
For some reason, customer success is not usually deemed a competitive differentiator among technology companies. It seems odd that one of the fastest growing, most innovative, and forward-thinking industries is so antiquated in an individual department. At AppDynamics, we showcase and brag about our customers’ love for us. There is a reason our NPS score is 84 when the industry-average is 19.
The NPS score is just a number, however. What it represents and what it leads to is much more substantial — referrals, references, and upsell opportunities.
Bottom line, customer success has a huge impact on the top line. We focus on high renewal rates, high expansions in opportunities, and high customer satisfaction. In fact, renewals and expansions resulted in nearly half of our previous quarters’ overall revenue.
This will be the first of a three-part series detailing how we support our customers and build long lasting relationships.
Building Long-Term Relationships
Clearly, the goal for any company (not just software) is to create long-lasting relationships with its customers. Referrals, word of mouth, and genuine testimonials go a long way to increasing sales and growing your company. These also happen to be sales enablement areas you can’t fake and need to create through organic relationships.
We have seen that by enabling our customers to succeed and use our product to help them solve their own problems, we in turn succeed. Our customers not only renew their license subscriptions, but also become advocates and help us grow through word of mouth.
At AppDynamics, our customer success is based on the following core principles:
help your customers solve their business problems using your tools
they renew and spread the word
repeat steps 1-3
Long-term relationships also mean something extremely important for software companies, renewal rates. Our high renewal rates is a strong testament to our customer success team. Not only does our product work wonderfully, but the customer success team is able to drive adoption and enablement among our best customers.
Most companies (should) offer some sort of support mechanism. However, the quality of this support can vary drastically. We have all been on hold with an outsourced call center who don’t really understand how to help you. The employees getting paid pennies on the dollar are not specialized or experienced enough to provide the support customers need. AppDynamics has no 1-800 number. There is never an endless cycle with support agents transferring customers to the “right” person.
What we do, and obviously recommend, is hiring the right type of people who can help a customer on the spot. The support team at AppDynamics is full of articulate engineers with years of experience with technical software. They are basically your typical nerdy engineers; however, they all have the ability to speak to your technical level and help solve the problem in ways you understand. Because every support member can solve the issue themselves, new support members are rarely introduced to an issue, creating a pact between the customer and the support process.
A positive byproduct of having such skilled engineers is their ability to realize inefficiencies in the support system and create the tools to fix them. We incentivize our teams to create such tools to help scale and improve the overall process. Promoting self-service among our customers or building scripts to automate menial tasks are just some of the examples team members have accomplished.
Technical Account Manager (TAM) Model
We have two customer success teams who each serve a specific purpose. The first of which is our Technical Account Manager (TAM) team. These are highly-technical success managers with around 10 years of experience. TAMs handle accounts with the highest complexity, typically our larger accounts due to the deployment size. These also tend to be highly technical solutions where the TAM will need a very specific skill set — more than simply customer service.
Previously, customer success teams were largely reactive — only interacting with customers if there was an issue or if it was time to renew. Our model changes that approach. The relationship begins with the onboarding and each TAM member has 3 goals:
enable product adoption
Along with regular communication, they schedule checkpoints at 2, 4, and 6 months to ensure the customer is getting the most out of the software and see how AppDynamics is solving their issues. Another goal for the TAMs is to provide value every time they communicate with a customer. Whether it’s a great tip, resource, or guide it will be tailored towards their specific use case and be beneficial for the customer.
Customer Relations Manager (CRM) Model
Our other customer success team is the Customer Relations Manager (CRM) team.
CRMs check in at least once a quarter and discuss usage statistics and how the customer is experiencing the product. They also focus on success metrics such as the overall NPS score and satisfaction scores. They use these satisfaction scores to analyze how to do their job better and help their customers succeed further.
The CRMs also send out customized emails detailing how the customer currently uses the product and tips and tricks how they can achieve the most success. A common theme among all the teams is delivering value and enabling the customer with the right tools.
In the end, long-term relationships are some of the most valuable ROI assets derived from the customer success teams. Through high renewal rates and expansions, these success metrics will have a direct impact on the company’s top line.
Stay tuned for Part 2 of the Customer Success 2.0 series, ROI Focused Adoption.
The post Customer Success Driving the Top Line Part 1: Building Long-Term Relationships written by Hatim Shafique appeared first on Application Performance Monitoring Blog from AppDynamics.
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