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11 Customer Success statistics, quips and quotes on investing in these teams
The purpose of a Customer Success team is to help a company’s customers get the most value out of its product. The hypothesis is, if a customer maximizes the obtainable value, they will remain loyal and spend more with the company.
This isn’t merely a theory. Case studies have shown loyal customers spend more—up to six times more—over the customer lifetime. In other words, the growth a company generates from loyal customers will vastly outweigh the value of the initial sale.
As businesses strive to balance finite resources for maximum benefit, leaders are sometimes forced to choose between undesirable options. Yet, if there’s ever been a good argument for retaining a Customer Success team, it’s the outsized benefit to the company in the long run.
Here are 11 statistics, quotes and quips that make the case for investing in Customer Success teams.
1. Customer Success keeps sales team promises
Sales and Customer Success teams both interact with customers at “different stages of their journey,” according to HubSpot. Salespeople strive to demonstrate how a product solves a pain point for prospects—to convince them to become customers. Customer Success Managers (CSMs) pick up the baton after that “to deliver on the promises made by the sales team.”
2. Delivering customer value is an outsized responsibility
Customer Success should be measured in the value they gain. Preferably that value is quantified in financial terms at the beginning of the relationship.
So wrote Phil Wainewright in a piece for Diginomica:
“Once clear KPI targets have been established, it’s up to the vendor’s customer success team to then work out the steps it can take to help the customer meet those goals. This will be a mixture of advice, guidance and mentoring, as well as ensuring that the technology is doing the job it’s intended to do. If the vendor has been smart enough to collect aggregate data about how its customers use the product or service, it can also offer useful benchmark metrics to bolster that guidance.”
That’s an outsized responsibility that requires a dedicated and expert Customer Success team.
3. Renewals and retention are key in trying economic times
Most Customer Success professionals the Customer Success Collective spoke with for a trend round-up expect their companies to put greater emphasis on customer renewals and customer retention.
The article cites Ben Childers, vice president of global client success at Engaging Networks who summed up the rationale nicely:
“Organizations will be looking to their CS team to increase their net renewal rates as new business prospects are shaky at best. Every sector is different, but if we are entering into a period of slow growth, keeping clients and growing those where you can, will be key to success in 2022.”
As ChurnZero CEO You Mon Tsang wrote for “Harvard Business Review,” in a downturn, focus on existing customers—not potential ones.
4. One bad experience is enough for some customers to leave
A study by PwC found one in five (17%) of U.S. customers will leave after “just one bad experience.” Another 59% “will walk away after several bad experiences.”
This means a single mistake leaves little room for any error. As the consulting firm said in the study, “If you think you’ll have plenty of time to get it right because you’re a beloved brand, think again.”
However, people can be very forgiving if a company responds quickly and authentically. Speedy action that resolves an issue can leave a customer with an even better perception of a company. A Customer Success team has the time and resources to respond this way. In many cases, they prevent it from happening in the first place.
5. The average customer churn rate is 5.6%
OnlyCFO, a popular Substack newsletter, likens customer churn to a snowball rolling down a hill—it gains mass and velocity as it advances. With it goes recurring revenue (ARR, MRR) and expansion opportunities.
The billing platform Recurly tracked 1,900 subscription services in 2021 and 2022 and found the average customer churn rate is 5.6%. It’s slightly higher in the B2C sector at 6.8% and slightly lower in B2B at 4.9%.
“Minimizing churn is key to the growth and long-term success of any subscription business,” the company says in a report detailing the study’s data. If your customer churn rate is higher than these benchmarks, chances are, your company would benefit greatly by redoubling its efforts on Customer Success.
6. Expansion opportunities come with Customer Success
In the words of Forrester Principal Analyst Shari Srebnick, Customer Success “is sales because of success.”
Shari explains Customer Success teams help “create the conditions for retention and expansion by building trust-based relationships.” These teams “relentlessly” lead “customers toward their outcomes, measuring value along the way, and connects them to the success criteria that customers defined early in the relationship.”
Importantly, it’s a Customer Success team’s focus on the customer experience, not closing deals, that leads to cross-selling and expansion opportunities: “The customer success team is able to identify expansion opportunities because it has demonstrated value from those outcomes.”
7. Customer Success drives up to 50% of total growth
CSMs know the customer best and “can surface opportunities to provide relevant solutions and expand customer value,” according to Paul Roche and his fellow co-authors at McKinsey.
The authors refer to CSMs as “growth engines” and note “McKinsey benchmark data suggesting that existing customers account for between a third to half of total revenue growth, even at start-ups.”
Further, the customer acquisition costs (CAC) are “a fraction of those for acquiring new business.”
8. Customers will pay a premium for good experiences
Aside from driving renewals and expansion opportunities, research suggests customers are willing to pay premium prices for great experiences, says Walker, a customer experience consulting firm:
“Satisfied customers typically buy more, and 86% indicate they are willing to pay a higher price for that positive experience with the brand.”
What’s more, those customers will also be vocal about it:
“Research shows 90% of consumers tell their networks about service experiences. They refer friends and family, post online reviews, or share stories on social media.”
Word-of-mouth from customers effectively becomes a self-propelled sales channel. Isn’t that a key objective in tracking and measuring a Net Promotor Score?
9. A focus on the post-sale experience can 6x your revenue
Jason Lemkin calls it “second-order revenue.”
It’s the idea that existing customers who stay tend to spend a lot more with you over time. In his words, second-order revenue stems from upsells, renewals, word-of-mouth and champion change.
He points out founders will do whatever it takes to close a deal, such as getting on a plane, but often do “a suboptimal job of everything after that.” The same personalized touch that wins a customer is required post-sale as well:
“It works just the same with your customers after you close them—only more so. You have to meet them. Talk to them. Hear their concerns. Share your vision and roadmap. And show them respect for having chosen—and often risked a bit of their career on—you.”
There may be more on the line after the sale too. This is because “if you do it right, you’ll make 6x or more in revenue from your customers after the sale itself.”
10. Experience is just as important as product quality
“A growing number of customers look for organizations to understand and anticipate their needs—for instance, by proactively notifying them of a contract renewal.”
That’s what Salesforce learned when it polled 17,000 consumers and business buyers for its 2022 State of the Connected Customer survey. Some of the findings include:
- 88% say “the experience a company provides is as important as its product or services”
- 73% “expect companies to understand my unique needs and expectations”
- 62% “expect companies to anticipate my needs”
- 56% “expect offers to always be personalized.”
The majority of companies fall short of delivering that experience. The survey found:
- 56% say “most companies treat me as a number.”
If there’s one team with the knowledge and mandate to remediate this, it’s the Customer Success team.
11. Connect customer experience with account planning
“Most large business-to-business companies have long used account size to guide account planning efforts, focusing attention and resources on a few large clients. They tend to overlook the role that customer experience measurement can play in guiding account plans.”
That’s according to a thought-provoking piece by Bain & Company building on research it performed. The consulting firm found:
“As few as 22% of B2B companies consistently measure and act on their customers’ experience. Among companies that do measure the experience, those metrics rarely connect with the sales process.”
A case in point?
“Most companies don’t marry readouts of satisfaction surveys or Net Promoter Score results (a key metric of loyalty and advocacy) with account planning efforts. A team might examine customer sentiment in aggregate or for one step of the experience, but fail to connect these insights to individual buyers, opportunities with individual accounts, or particular sales campaigns.”
Such information could be used in several ways, ranging from identifying at-risk accounts to finding customers who “love the company and are open to buying more, but they don’t get much love or attention.”
The team best positioned to do just that is your Customer Success team.
Learn how Customer Success helps build a company’s financial fortitude and resilience in the podcast recap with Punk CX and ChurnZero CEO You Mon Tsang: Why Customer Success is your best investment during an economic downturn.