Six Dimensions of Customer Success
WisdomTree Consulting uses a Six Dimensional Customer Success model as a foundation for Solutions and Service offerings.
Successful customer journey begins with acquisition of good-fit customers. Fit is a measure of variance between the Customer and your Target Customer profile. If you begin with a bad-fit customer, don't be surprised if you have challenges with Churn, Growth, Adoption, Advocacy and Value creation metrics.
Churn and Growth are two-sides of the same coin. In this dimension, we are referring to Gross Churn - actual churn numbers, not masked by any other growth metric. It is very important to understand Gross Churn numbers, and more importantly understand the underlying factors behind the Churn. Different segment of your portfolio may have different churn numbers and different underlying factors. In our experience, the underlying factors usually fall within other Functions (Marketing, Sales, Engineering Support, Services) and its rare for a CSM to be able to fix churn problems all by herself. Churn is an example of a truly cross-functional Success Metric that requires support from the entire organization.
If there is a remake today of the 1992 movie Glengarry Glen Ross, Alec Baldwin would be saying - Always be Up-Selling and Cross-Selling. And, if Alec Baldwin is a CSM instead of a Sales guy, he would wait for the right relationship signals before attempting to Up-Sell and Cross-Sell. Bottom line is that Revenue Growth is the ultimate proof of Customer Success.
Advocacy is absolutely essential to drive viral growth, but the flip side is that bad feedback travels faster than good feedback. It takes significant amount of effort to convert a customer into an advocate, and it takes even more effort to ensure a positive experience for your advocate. Advocacy is a very important non-revenue Success metric.
Adoption is a good proxy for Success, but it is NOT Success. As they say in philosophy, Adoption is Necessary but not Sufficient condition for Success. Adoption creates stickiness which increases switching costs for your customers, but it is still not the same as Value. Remember that Usage ≠ Value.
Value is Benefits derived by Customers by using your products and services - Costs of your products and services. Value is arguably the single most important factor impacting Success. As long as customers gets Value, they may be willing to overlook many other aspects of the relationship that would otherwise have doomed the account. Value is usually a combination of three aspects - 1) Increase in revenue 2) Reduction in costs 3) Increase in productivity.
Customer Success should primarily focus on creating Value for Customers by impacting their business outcomes, and that requires understanding the customer's business. In a simple world, Value Creation = Customer Success.