The Biggest Buzzword in SaaS: The Real Meaning of “Customer Success”

“Customer success” — it’s a term that has been getting a lot of attention in SaaS circles lately, but what does it really mean? SaaS veteran Lincoln Murphy searches for a definitive answer behind the buzz, and explains why it’s about more than just service or support.

When Lincoln Murphy attended the Customer Success Summit in San Francisco in mid-March, the SaaS veteran and founder of Sixteen Ventures expected there to be a noticeable — and obvious — buzz around the growing popularity and implementation of “customer success” (it’s a topic he’s been thinking a lot about recently, and has even written a guide around here: Customer Success: The Definitive Guide).
After all, the conference (hosted by customer success management provider Totango) brought together more than 500 customer success experts, executives, and tech company founders (including Evernote CEO Phil Libin and Box VP of Customer Success Jon Herstein), most of whom had some experience with — or were directly invested in — better ways to understand, engage, and please their customers.
And while Murphy came away from the conference believing the SaaS world as a whole is getting closer to grasping the core tenants and purpose of customer success, he says some people mistakenly hijack the term “customer success” to describe their old school customer support or service functions.
“Unfortunately, the perception that customer success is synonymous with customer support or service is misguided,” says Murphy. “Customer success is about more than delivering service or support. It’s about having real-time visibility into the issues customers are facing and finding smarter ways to manage those issues in ways that allow customers to extract maximum value from your product.”

The Real Meaning of Customer Success: It’s About Being Proactive, Not Reactive

“Customer success is about more than delivering service or support. It’s about having real-time visibility into the issues customers are facing and finding smarter ways to manage those issues.”

— Lincoln Murphy, Sixteen Ventures

 
During one of the Customer Success Summit’s sessions, Murphy recalls a moderator polling a panel of customers, analysts, and other thought leaders from the SaaS industry for their definitions of customer success. While each panelist’s answers varied in complexity and detail, Murphy says there was one prevailing theme: The importance of being proactive instead of reactive.
In many SaaS companies, customer support and service teams rely on the latter. Something goes wrong or breaks, a customer calls or emails to tell you about the issue, you launch into damage control, and the customer support or service teams begin to work feverishly to fix the problem and repair the relationship with the customer.
Customer success is designed to work another way — helping businesses proactively seek out issues or opportunities in real-time, in order to help them have a better experience and enjoy more value/improved results as a customer.
“With the real-time visibility businesses have into customer activity and their own operational metrics, there’s no excuse not to be proactive,” Murphy says. “If churn is too high, it’s relatively easy to diagnose that problem and do something about it before it’s too late. And if customers are struggling with a particular product feature or function, you can recognize those issues as they’re happening and address them before they cause churn.”

Defining What Customer Success Means to Your Customers

Then again, beyond being proactive about delivering customer value, Murphy suggests there isn’t a singular definition of customer success that can be applied across the board.

The reason?
“It’s right there in the name,” Murphy says. “It’s customer success. You have to figure out what success means to your customers, and then deliver that value. Depending on who your customers are, what they care about, and what they need to be successful, that definition will be different for every company.”
To build that definition, Murphy recommends creating a customer success map that answers a few key questions:

• What does your existing customer experience look like?
• How can customer success impact your customers and their experience?
• Which content and communications channels do your customers prefer?
• What’s the appropriate rhythm for engaging customers and monitoring them throughout their lifetime?

The answers to those questions should help your team develop a stronger focus around the things that matter most to your customers, but Murphy says the ultimate goal of customer success boils down to a relatively simple idea.
“If the customer is successful, the business will be successful,” Murphy says. “Customer success is great for a lot of reasons, but one of its biggest benefits is that it provides a very clear view into the health of the company. If your customers are extracting value from your product or services, then you’ll extract value from them. It’s a very cyclical and mutually beneficial process.”
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