Why It's Critical to Invest in Customer Success

Thanks to the growing popularity of the subscription services model, customer expectations and behaviors are changing and, in turn, forcing businesses to change as well.

One of the biggest benefits of a subscription services model is that customers can increase or decrease their investment in the service based on their needs. This might justifiably frighten subscription services providers during difficult economic times. However, what if the solution wasn't for customers to simply decrease usage but for them to be helped with garnering more value out of the service, so that their businesses can become more profitable?

This was exactly the situation that Salesforce.com faced during the Great Recession. By the beginning of 2009, the faltering economy had caused such significant disruptions among the business community that Salesforce.com executives were worried about losing customers. In an interview later that year with Chairman and CEO Marc Benioff, the executive revealed that this worry prompted Salesforce.com, within a month's time, to change the way it views and serves its customers. When I asked him to elaborate on the change, he replied, "The big change in February was really that we needed to focus much more on the existing customers and their success and who they are and how they're using the service even more than growing [our] business. While growing the business is important—and we certainly are growing the business—we're putting a lot of energy back into the customers…. I get messages from customers every day asking us to help them understand how to be more competitive and work well in this environment. And I'm spending a lot of time on that, staffing that, focusing on that. That was not as high a priority, honestly, in January." 

Whether organizations are struggling during an economic downturn or simply have to justify every expense in a healthy economy, helping them make the most of a service they are paying for is always a smart move. Subscription services providers should study usage patterns to determine how often and in what ways clients are using the service and make recommendations based on that analysis.

The concept makes so much sense, in fact, that the customer success management industry has emerged because of it. Pioneers in this industry rightfully posit that the more customers use a service, the less likely they are to cancel it.

While the idea makes plenty of sense for subscription services providers, it also makes sense for other business models. As people and products become more digitally connected, there will be new data for organizations to study. Therefore, all businesses can and should become much more attentive to customer behaviors.

Already, RetailNext Inc., an in-store analytics company, provides an analytics platform that measures shopper behavior through Wi-Fi, video cameras, POS systems, mobile devices, and other sources. Retailers can see how shoppers are moving around their stores and how marketing decisions are affecting the path to purchase. With each shopping trip generating an average of 10,000 data points, RetailNext analyzes trillions of data points annually. Additionally, Groupon's Breadcrumb POS system creates customer profiles that capture buying behaviors, transactions, and specific preferences. Based on this information, employees can offer discounts and make relevant recommendations to improve the buying experience and sales.

To see how companies such as Bluenose, Gainsight, ServiceNow, and Totango are tracking customer behaviors for hosted CRM vendors, read our feature story "Customer Success Management Comes of Age," by Associate Editor Oren Smilansky. These solutions are not limited to CRM vendors; their approach to tracking customer behaviors could spark an idea that can be applied to your company.