This year, Deloitte conducted an enterprise customer success (CS) study of 50 CS leaders from enterprise-scale technology businesses with annual revenues greater than $500M. From this research, they compiled a comprehensive report on the current state of CS, and predicted the future trends for the industry.
In our second installment of TaskRay Reviews, we’ve put together a list of the three major takeaways from this important report so you can easily apply it to you and your business.
Here’s what you need to know:
#1: CS is now a mainstream practice and is driving tangible value.
As the shift towards a flexible consumption model has spread far and wide throughout the tech/SaaS landscape, customers have become more empowered to make their software work for them, fitting both their needs and budgets. This demand for agility and flexibility has raised the bar for customer expectations, pushing CS principles to the forefront of successful adoption. Of the surveyed leaders’ companies, approximately 70 percent had CS teams that were two or more years old (p. 4).
These well-established teams, and even the other 30 percent, all experience great success from implementing CS principles: more than half of respondents saw:
“10 percent higher up-sell and cross-sell revenue, renewal rates, and annual recurring revenue” (p. 4).
The latter of which saw the most positive impact, with nearly a third of companies gaining a 20 percent or higher increase (p. 4). One thing is clear from the data: CS, when done right, is having a measurable impact across revenue streams company-wide, so why isn’t it a company-wide philosophy yet?
#2: The CS mindset has yet to become an organization-wide philosophy.
The survey found that the biggest challenge faced by CS leaders right now is nailing-down a cross-functional operating model, which makes it more difficult for other parts of the enterprise to wholly adopt the CS philosophy. CS leaders were also quick to admit that their primary focus is on implementing CS principles throughout the post-sales process: onboarding, adoption, retention, and growth. In fact, an average of 61% of their time is spent on these four aspects of the customer journey (p. 8).
Top 4 areas CS leaders are focused on implementing CS principles
However, this report makes it abundantly clear that in order to have a truly successful adoption of the CS philosophy, CS functions must connect different parts of the customer journey and, in the process, bind together internal teams that would otherwise not be so intertwined. The exclusion of product development, sales, and marketing from the agenda should be considered a continuity — meaning that a consistent view of the customer across the company isn’t possible without infusing CS values at every stage in their journey.
#3: CS is not yet a key driver in the boardroom.
In case the first two takeaways haven’t emphasized it enough, here is the underlying theme of the report again: customer success is more than just focusing on improving retention and renewal metrics. The fact that CS is still not a key talking point in boardrooms across the tech landscape is probably a testament to the fact that business leaders continue to believe that CS is no more than a strategy for retention and renewal. CS-centric organizations have a proven track record of greater success and monetization than organizations that do not prioritize CS.
For example, there is a measurable improvement to overall customer health for companies that have adopted at least some CS principles, but significantly more so in companies that prioritize CS everywhere.
In company’s who prioritize CS, “75 percent of these CS functions track the rise in renewal rates and have demonstrated a double-digit increase; 67 percent of them have seen a similar rise in the annual recurring revenue”, while only 43 percent of non-prioritizer companies have had a double-digit increase in renewal rates and ARR (p. 6).
TaskRay is proud to be a leader in customer onboarding and success. For companies looking to revolutionize the way they think about customer success and become company-wide adopters of this philosophy, TaskRay can help you get there. Schedule a call with us here to learn what we can do for your business.
And if you’re still questioning how crucial CS can be to the overall health and success of your business, check out the full report here.