How to build a successful customer-obsessed company
As a founder of a startup, an owner of a small company, or even the lead of a small customer department, it’s important to define the meaning of customer engagement at every stage of your organizational growth.
Depending on the type of business you are running, growing your company mostly relies on how your customers engage with your business. It is often more efficient to support the growth of your current customer base rather than spending resources acquiring new customers.
At the founding stage, with limited resources available, your priority is to meet customers’ expectations and respond to their queries in a timely matter with dedicated customer service agent(s). However, the more you grow, the more you need to start thinking about how to keep your customers engaged. In addition, you should make sure that your growth matches the customers’ usage of your product/service growth.
While this sounds like a natural and inevitable transition of customer engagement operations, it can be daunting to find the right strategy and tools to make it happen. Here is how we did it at Trengo.
It’s story time: Trengo’s journey to success
Trengo began its business journey in 2017. As with all startups, the first employees had to be jacks of all trades. For a while, part of the everyday job was to answer the most diverse customer questions. From how to use a feature, to error codes and billing questions.
In 2019, it became clear that we needed more than one person with the sole goal of supporting customers. This is how we hired additional customer support specialists.
Then, 2020 hit! We all remember this year because of a certain virus that caused a worldwide pandemic. But we also remember it as the year in which we started our exponential growth! The product was getting the recognition it deserved and we quickly grew our customer base. We also moved offices as we grew the team. In one year, we went from 12 people to 45.
With these changes, we noticed that we also needed to change the way we approach customers. To make sure that they didn’t miss any new releases, we started proactively reaching out to them. We checked in with all our customers about their overall satisfaction but also introduced new functionalities that could help them potentially grow their own operations, be more efficient and reach a higher level of success.
Naturally, this became a job function in itself and we started making a split between customer support and customer success.
Federico, our head of customer experience, tells us that “in the end, the most important thing is to work towards the same goal: making customers happy. The only difference is the way, the instruments, and the different approaches you use to reach this goal. Customer support and customer success act as two different functions for a strategic purpose, but they become one unified division regarding satisfaction and success.”
Customer support vs. customer success
Before digging deeper into how you can make your company more customer-focused, let’s make a clear distinction between customer support and customer success.
With customer success, you are adding another dimension to your customer experience. It’s not just answering queries anymore, but also proactively engaging with the customers, making sure that they are using your product or service to its fullest potential. For this, you will need both human interaction and tools that will facilitate the automation of flows.
When you are a small company and you are just selling a product or a service, the most traditional customer support is all you need. Your priority is to make sure the customers know how to use your product or service.
In SaaS though, if you want to scale, you need both customer support and customer success. If you are not in SaaS, you might find roles such as account managers or partner managers instead of customer success managers, which can relate the same way.
How do I know when to transition to customer success?
That is an excellent question. Here are 3 questions you should ask yourself to know if you are ready to make the transition:
1. What is the main objective of the company?
At the beginning stage of any company, the main goal is to bring customers in. You can’t have a business without customers buying your product or service. However, after having gained a substantial number of customers, you can ask yourself if your goal is still only to generate new leads or also fuel your current customer base and ensure they will become loyal and sustainable customers over time.
If your answer leans toward the second option, you should start thinking about customer retention. And you can do that with a customer success team.
2. What kind of issues does my customer need to solve?
If you are suddenly growing your customer base, you should analyze their needs.
For example, you can have a customer base whose sole need is getting answers to a handful of questions. It could be knowing how to operate one of your features, and/or knowing where their parcel is. With this kind of customer base, you only need to focus on answering those specific questions. It might be repetitive but needs to be efficient. In this case, you only need customer support.
However, if you notice that multiple customers have multiple and more complex needs (e.g. only 10% of them want to know about how to operate one of your features, another 30% need to implement new features and the rest have other various needs), then you need to change strategy.
Besides answering queries efficiently, you also need to proactively reach out to those customers. Your customer success managers can plan a call with the goal of checking whether the customers are still happy with your product if they need any help optimizing how they use certain features, or even look for any upselling or cross-selling opportunities by giving customers advice on a strategic level. This will lead to higher retention and higher revenue.
And lastly, talking about revenue…
3. How is my revenue distributed?
You can now analyze how evenly your revenue distribution is. In other words, what percentage of your new revenue is brought by which customers?
With this question, you are tapping into the Pareto principle. Without getting too philosophical, this principle, which is also known as the 80/20 rule, states that roughly 80% of consequences come from 20% of causes. In a business context, we translate this principle into revenue distribution. According to the theory, some companies reach a point at which 20% of their customers bring 80% of their revenue. And it is at this specific moment when you need to transition into customer success.
Think about it, if you lose even half of the customers that bring you 80% of revenue because you only focus on answering support emails, this will cause you to lose 40% of your revenue! For this reason, you need to make proactive efforts to keep that 20% of customers happy, engaged and make sure they are successful.
Alright, we talked about the difference between customer support and customer success, what kind of questions you can ask yourself to understand when you are ready to make a transition, and also a small summary of the Trengo history.
Your customers’ satisfaction and success depend on the structure of your team and how they approach their requests.
If you turn out to have two teams, customer support and customer success, don’t forget to put some effort into making sure that these two teams work together and that there is always a continuous flow of communication. That’s why the employment of the correct tools e.g. the customer engagement platform and others will make a difference in this process. The more these tools are efficient and intuitive, the more successful they will bring in your strategy. This goes for when you have both teams, but also when you only have a customer support team.