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Customer Success Is Not For All Customers

This week's Newsletter:

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NO, YOUR CUSTOMERS ARE NOT ALL UNIQUE! At least not when it comes to driving retention โ†“


You've heard versions of these endlessly...


๐Ÿ’ญ "Every customer is different."

๐Ÿ’ญ "It depends on the customer."

๐Ÿ’ญ "Each customer's situation is unique."


Customers are obviously different in infinite ways. But this way of thinking is counterproductive because it leads down the wrong path.


๐Ÿ“ˆ The key is to understand that it's all about CUSTOMER RESULTS! Customers who get measurable results stay SIX TIMES LONGER than those who don't.


Therefore, the right question is,


๐Ÿ‘‰ Are customers different in the results that matter and how they achieve them? ๐Ÿ‘ˆ


NO. Let me explain...


FIRST: FEW RESULTS MATTER

The reality is that your product only produces a small number of actual business results.


This can be difficult for people to grok because of the tendency to conflate the things products DO with the RESULTS they provide.


Resolving this is simply a matter of having a correct idea of what a customer business result is and identifying the results your product reliably produces.


Here's my definition:


๐Ÿ“ถ A business result is a measurable increase or decrease in something that significantly impacts the customer's success.


I conduct this exercise every day in my work with companies and consistently find that just a few key business results are the foundation for long-term retention. In many cases, it's just one!


Customers who arrive with "unique" results expectations (e.g., not one of the key results you provide) will fail. That's the definition of a "bad fit."


SECOND: HOW CUSTOMERS WIN

It's tempting to think customers are all different in how they get results because we observe astonishing variety in how they operate at every level.


But it's not about whether customers are different. They are!


Since customers only stay to get measurable results, the right question is...


๐Ÿ‘‰ How many different WAYS are there to achieve good results with your product? ๐Ÿ‘ˆ


This can be resolved by identifying the exact customer processes essential to produce results. Study your successful customers, and you'll find that they all adopted a few key behaviors necessary to get to first results. (BTW: it's not just about product adoption!)


Any failure to engage in these key behaviors invariably leads to poor results.


This means customers are NOT all unique in what they must DO to get good results. Customers who insist on their own "unique" approach will fail.


This is a key principle:

โ–บ There are endless ways to fail but only a few ways to succeed.


WHY DOES THIS MATTER?


โน๏ธ Treating customers as unique discourages us from building robust systems and processes that consistently produce measurable customer results. These are often dismissed as "cookie-cutter" and "one-size-fits-all."


๐Ÿ”„ Embracing customer results unlocks the power to build scalable systems and processes that consistently produce the measurable results that drive high retention!


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The Key to Reducing Churn is Knowing What Kind You Have


There are different kinds of churn and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024.


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CUSTOMER SUCCESS IS NOT FOR ALL CUSTOMERS. Here's why, and how this is actually good news! โ†“


A fascinating reality has emerged from our research on customer retention over the past several years: Some customers don't need your help to succeed!


Perhaps this should be obvious, but if we truly understand what it means, then it has huge implications for companies fighting churn.


First, we need to establish that this is true. The best place to start is with your own experience:


โ“Have you ever finished a kickoff call with a new customer and concluded that they are NOT GOING TO MAKE IT?


Why did you think that? The reason is that you saw clear signals that the customer wouldn't do everything they would need to succeed.


You've also had the opposite experience, where the customer arrives with a solid plan, good leadership support, and the necessary skills and tools to get it done right. You expect them to be successful.


๐Ÿ“ˆ Our customer churn research reveals that your judgment in both cases is surprisingly likely to be correct. The vast majority of churn comes from unprepared customers who don't know what they're doing.


This has a very practical application.


It means that if your goal is to reduce churn dramatically, the primary target of your Customer Success efforts must be the lowest-maturity customers.


Higher-maturity customers don't need much, if any, help to succeed.


That's not to say these sophisticated customers don't DEMAND a lot of support and attention. They almost always do.


I'm saying these efforts have little to no measurable impact on long-term retention.


That's what our research consistently shows.


WHY THIS IS GOOD NEWS

The investment required to build Customer Success teams and processes is significant, and over the past year, many companies have begun to question its value openly.


I am convinced there's a compelling case to be made for CS, but in order to survive, it must be scalable.


In my last post, I argued that the best approach is to stop treating every customer as unique and start building standardized customer success processes by targeting the lowest-maturity customers.


This is good news because trying to account for customer variation adds complexity, making it nearly impossible to build scalable customer processes.


UNDERSTAND: Acknowledging that Customer Success is not for all customers isn't a justification for denying attention to some customers. Of course, we always strive to provide the requisite level of services for all customers.


Instead, it isย a crucial starting point for identifying the prescriptive customer processes that can be standardized and deployed at scale to the customers most likely to fail without them.


Embracing this truth unlocks the power to build scalable systems and processes that consistently produce the measurable results that drive high retention!


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QUOTE OF THE WEEK:


You don't win by beating the competition. You win be achieving customer bonding.





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