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The Economic
Value of
Customer
Success
June
2014
#customer
success
2014 Gainsight, Inc. All rights reserved.
Housekeeping
• Q&A panel on your right
• Recording for colleagues who can’t make it
• Attendees will receive slides and final
Forrester report
• Twitter hashtag #customersuccess
2014 Gainsight, Inc. All rights reserved.
Your Speakers
Lincoln Murphy
Customer Success Evangelist
@lincolnmurphy
Kate Leggett
Principal Analyst
@kateleggett
2014 Gainsight, Inc. All rights reserved.
What We’ll Cover
1. The State of Customer Success
2. The Economic Value of Customer Success
3. AKA CSM
2014 Gainsight, Inc. All rights reserved.
2014 Gainsight, Inc. All rights reserved.
The Conversation
PULSE2013
2014 Gainsight, Inc. All rights reserved.
The Roles
5500 companies hiring
2014 Gainsight, Inc. All rights reserved.
The Curriculum
access.gainsight.com/csm-university
Summer Session starts June 30
Making Leaders Successful
Every Day
The Economic Value Of
Customer Success
Kate Leggett
Principal Analyst, Forrester Research
@kateleggett
kleggett@forrester.com
We have entered the “age of the customer”
Source: October 10, 2013, “Competitive Strategy In The Age Of The Customer” Forrester report
1900 1960 1990 2010
Age of Manufacturing
Mass manufacturing
makes industrial
powerhouses
successful
Age of Distribution
Global connections
and transportation
systems make
distribution key
Age of Information
Connected PCs and
supply chains mean
those that control
information flow dominate
Age of the Customer
Empowered buyers
demand a new level
of customer obsession
Beyond
• Ford
• Boeing
• GE
• RCA
• Wal-Mart
• Toyota
• P&G
• UPS
• Amazon
• Google
• Comcast
• Capital One
• Macy’s
• Salesforce.com
• USAA
• Amazon
Our world is moving to a subscription economy
Credit: www.zuora.com
Our world is moving to a subscription economy
And the business model for technology is
moving to subscriptions
14%
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
And the business model for technology is
moving to subscriptions
21%
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
And the business model for technology is
moving to subscriptions
13%
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
The subscription model has tipped for many B2B software
categories
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
The subscription model has tipped for many B2B software
categories
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
The subscription model has tipped for many B2B software
categories
January 2014 “TechRadar™: Software-As-A-Service, Q1 2014”
And because of this relationships are becoming more
important
Product Focused Relationship Focused
www.zuora.com
Good relationships have business value
March 2012 “The Business Impact Of Customer Experience, 2012”
Relationships improve business metrics
April 2012 “Define the Right CRM Metrics”
Customer success
managers actively manage
customer relationships to
reduce churn, increase
existing revenue and
influence new sales
CUSTOMER SUCCESS
MANAGEMENT REDUCES CHURN
Companies follow a standard growth trajectory
25
Where are you in your growth?
26
Where are you in your growth?
27
Along the way, you tier your customers
28
As you grow, revenue from
existing customers becomes a
larger and larger part of your
company’s economic value
29
Calculating the impact of customer churn
30
The negative impact of churn can be quantified
31
revenue
time
95% retention rate
- Acquired 600 customers
- Lost 30
80% retention rate
- Acquired 600 customers
- Lost 120
$2M difference
Churn is dependent on deal size
32
CUSTOMER SUCCESS
MANAGEMENT INCREASES NEW
REVENUE
Data-driven conversations make cross-selling and
upselling easy
• Product utilization data. Can be used to have data-driven conversations on
the economic benefit of the purchased solution
• Active users exceed purchased users. Indicates a customer who is utilizing
their purchased products beyond the negotiated terms of their contract.
Customer success managers can use this data in customer conversations to
showcase the value of their purchase, as well as drive upsells and upgrades.
• Active features exceed purchased capabilities. Indicates a customer who
has a greater need for product capabilities than what is purchased.
Find the white space
CUSTOMER SUCCESS
MANAGEMENT INCREASES
ADVOCACY
Brand advocates are more valuable than average
customers
Happy champions will buy you again
38
CUSTOMER SUCCESS
MANAGEMENT DRIVES TEAM
PERFORMANCE
You can amplify the effects of each team member
Teams automate manual reporting and task
management to deliver more value.
ENGAGEMENT
STRATEGY
ENGAGEMENT
PROCESSES
ENGAGERS
ENGAGEMENT
LEVERS
Customer success management takes coordinated
effort across four dimensions
ENGAGEMENT
STRATEGY
ENGAGEMENT
PROCESSES
ENGAGERS
ENGAGEMENT
LEVERS
Customer success management takes coordinated
effort across four dimensions
What data do you need?
44
Customer
Goal
Inactive
users
Provisioned
users
Contract
Terms
Renewal
Realized
economic
value
Audit
records
Feedback
Advocacy
Support
feedback
Customer
feedback
Active
users
Measures
of success
Features
Alerts
Calls and
tickets
Onboard
ing
What do you do with data?
Integration Validation Visualization
Analytics Exploration
Workflow
Data
Insights
Action
The Advanced Playbook
LOB
Data
Enterprise
Insights
Outside-in
Action
• Customer360
• Alerts
• Surveys
• Automated Email
• Health Scorecards
• Playbooks
• Workflow
• Embedded Apps
• External Sponsor Alerts
• Automated Customer
Presentations
• Mobile
• Data Science
ENGAGEMENT
STRATEGY
ENGAGEMENT
PROCESSES
ENGAGERS
ENGAGEMENT
LEVERS
Customer success management takes coordinated
effort across four dimensions
Thank you
Kate Leggett
Principal Analyst
kleggett@forrester.com
@kateleggett
Thank you
2014 Gainsight, Inc. All rights reserved.
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