Dan SteinmanDan SteinmanNovember 28, 2018
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6min665

There’s a lot of buzz in the B2B world about the concept Customer Success these days.

I work for a company – Gainsight – that has raised over $150M to deliver a software platform originally designed specifically for CSMs (Customer Success Managers). Along the way, we found that the value of this thing called Customer Success went far beyond the team of people with the CSM title.

We also found ourselves bumping into this other thing a lot called Customer Experience. It turns out that Customer Success was becoming a big thing in B2B at about the same time that Customer Experience started stretching its wings from B2C into B2B. So what’s the deal? Are they the same thing? Do they have the same goals? Does one subsume the other? Do they even belong in the same organisation?

Let’s explore.

First off, we should answer the question the title asks. Is Customer Success (CS) the new CX? The answer is no. CS is most definitely not replacing CX. In fact, CX is one of the two parts of an equation that can help determine overall loyalty, or health if you like. More on that soon.

To state it simply, Customer Success is the philosophy of being customer-centric. In daily practice, at the point-of-the-spear are people whose job it is to ensure that customers are maximising the value of the products they have bought. It turns out that, in a subscription world, this is necessary to avoid churn and deliver expansion, both of which are imperatives for survival.

Both CS and CX contribute to delivering on that philosophy and, in many companies, a department called CX might sit under the umbrella of Customer Success, or vice-versa. What these companies are figuring out is that these two things are not separate-but-equal, nor are they the same thing. They are really two halves of a whole, where the sum of the parts truly exceeds the whole. We use a simple mathematical equation to crystallise this idea:

Customer Success (CS) = Client Outcomes (CO) + Customer Experience (CX)

Shorthand is: CS=CO+CX.

The equation is simple and inarguable. The success of your customers, no matter what industry or market, is the combination of outcomes – does the customer receive the value they expected from your product(s)? And their experience – does the customer have a positive, enjoyable experience in working with you?

If you could objectively apply numbers to that equation, the vendor with the highest sum will be the most successful company in the long run. I carefully say “in the long run”, because different elements of that equation do not have equivalent value at every stage of a company’s life-cycle. Outcomes are likely to be more important in the early days while experience becomes a differentiator as markets and companies mature.

Let’s concoct a simple example to make the point. Let’s say that your company measures ROI on a scale of 1-10 and used NPS (or some other CX score) on the same scale. A customer with an ROI of 6.5 and an NPS of 8.2 would have an overall “health score” of 14.7.

Whether that is good or bad is up to each company. But often, the next step would be to apply Red, Amber, or Green (RAG) to that score. Suppose this company decided that 15-20 is Green, 10-14.9 is Amber, and 0-9.9 is Red. Immediately that score just became very interesting and even more so when put in the context of all other customers.

Most importantly, that score (or the trend of that score) can be used to drive appropriate action. And therein lies the whole theory of Customer Success – create a health score and use it to take action because a higher health score leads to a higher likelihood of our desired outcome which is loyalty. And, as we all know, loyalty delivers monetary rewards in the form of renewals, repeat buyers, customer expansion, or advocacy.

The bottom line is that Customer Success and CX must coexist and work closely together to achieve company goals. One is not more important or better than the other. They are complementary pieces which, when put together, have an impact much bigger than if they live in isolation.




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