Customer Success: what it means and how to gauge it
Marketers are moving on from CX management. Customer success is the new game in town, but what does it entail, and – more crucially – how is it best measured?
The Customer Success Association – a membership body comprising more than 55,000 specialists in the field – describes customer success (CS) as “a long-term, scientifically engineered and professionally directed business strategy to increase sustainable, proven profitability for both the customers and the company.”
In essence, effective CS entails building good relationships with customers, understanding their needs, and ensuring that what your business offers them meets those needs so well that they keep coming back for more.
Most companies will apply a whole range of CS measures to get an accurate picture of how much it costs to acquire and keep customers, how they feel about the company’s performance, how long they are likely to remain customers, and what will happen when they leave. Popular metrics include first-contact resolution rate, customer acquisition cost, and net promoter score (NPS). Churn rate is widely seen as one of the most important ones to track, as it’s the ultimate signifier of whether customers are happy or not.
Holly Ainger, marketing director at Nuffield Health, explains that the metrics can be classified into “two buckets: acquisition and retention. For acquisition, you’d be looking at the return on investment against various above-the-line and below-the-line media channels, including econometric modeling and looking at ‘test and learn. For retention, it’s very much based on churn, NPS, and activities that keep your customers ‘sticky’.”
WeightWatchers is another company that uses “a variety of metrics, as they are not all created equal”, according to its vice-president of growth and performance marketing, Tony Miller.
“We tend to focus on those that drive longer-term business outcomes – for instance, customer lifetime value against customer acquisition cost and overall sign-up numbers – balanced with those that drive lifetime value and the ratio of new to returning customers,” he says.
Miller’s comments are timely in light of research published recently by the Data and Marketing Association and Salesforce, which has found deficiencies in the measurement tools and techniques widely used by marketers. Their Meaningful Marketing Measurement 2022 report reveals that organizations have been using as many as 170 metrics to articulate the effectiveness of their campaigns, 41% of which are “digital vanity” measures, such as the number of clicks and social engagements. Such numbers contribute little to their understanding of CS.
“People can get stuck on these short-term metrics because things changed so drastically when Covid struck that they felt they had to make an immediate impact. But they can forget the long-term requirements when they do this. There has to be a balance,” Miller warns.
He adds that NPS is an important indicator – and it seems to be a key consideration for many other senior marketing professionals. Dan Rubel, brand and marketing director at Currys, reports that it’s his company’s most important measure, indicating whether the sum of its efforts has translated into customers who would recommend Currys to friends and relatives.
We look at a variety of metrics, as they’re not all created equal
The company has received particularly strong approval for its ShopLive service, for instance. Currys started enabling customers to consult technical experts using video calls when the UK’s Covid lockdowns obliged them to shop online. This service has become a fixture, consistently attracting positive reviews.
“The single biggest thing our brand lovers rave about is the humans who work so hard every day to help customers choose their tech,” Rubel says.
NPS, then, can take the intangible and subjective individual elements of customer service and customer experience and translate them into insights that become actionable and, crucially, repeatable. It sounds simple enough in theory.
“When you’re getting things right, you see that flowing into your commercial metrics, operational performance KPIs, and customer perception metrics,” says Rubel, although he adds: “Achieving that success is a far harder task.”
Dan Bowers, chief strategy officer at creative agency TMW Unlimited, is responsible for delivering CS strategies through customer relationship management, communications, and more for companies such as Vodafone and McLaren.
The key factors in CS are “the service, the communications, the product, how the customer engages with it and if it delivers what they hope”, he says. “Finding a way of measuring all that can be challenging.”
The key point, Bowers notes, is to make a link between marketing and business intelligence without losing human decision-making as a result. He warns specifically against relying too much on measuring things just because you can, especially on the digital side.
“Did someone go into an app? That gives you some little indications, but it doesn’t necessarily give you the inside story of what’s really going on,” he says.
Data and business intelligence lie at the heart of effective CS. Rubel reveals that such insights are available to employees across the company, enabling them to adjust their approach accordingly.
“Stores can see and analyze customer satisfaction themselves, via a digital platform, and colleagues can look at the scores given by the individuals they have served,” he says.
The strategies that emerge from insights derived through CS measurement need not be overly complex. For companies such as Nuffield Health, Currys, and WeightWatchers, it seems to be a matter of fine-tuning proven formulas to ensure that they can adapt to new trends and challenges as they arise.
Miller observes that value for money becomes ever more important to consumers when times are tough financially. As the UK economy falters, WeightWatchers “really has to ensure” that its members can see evidence that its offering is significantly more effective than a DIY weight-loss program.
Rubel concludes that, in essence, effective CS is about helping the company make the right decisions for the customer, and itself, at the right times.
“Big improvements in big business often rely on complex process transformation or tricky tech changes,” he says. “Some of that can be expensive, so it’s important to choose where you’re focusing your energies carefully, especially when customer expectations are constantly on the rise.”