In a competitive landscape where customer acquisition costs are skyrocketing, and customers are expecting higher and higher standards, your customer success program has never been more important.
Did you know on average 80% of your profits come from just 20% of your customers?
Customer success is the lifeline to solidifying those key relationships.
You may just be getting started with a customer success program, or you may not have even dipped your toes in the water yet. Either way, these three surprising statistics that may help motivate your efforts.
3 Surprising Customer Success Statistics
1. Account Management teams can reduce customer churn to below 1%.
Your customer success program is all about building lasting customer relationships.
Great customer success reps can cultivate and grow client relationships to a deeper level than other employees. Where a sales rep might have a short term focus on the getting the deal signed, account managers can focus on longer term timelines with less pressure.
In a nutshell, these are the people who keep your customers happy. A lot of their day revolves around:
- Owning the client relationships
- Handling objections or complaints
- Assisting with end user adoption
- Communicating news and updates
- Training clients on updated features
With such a close relationship to your clients, customer success reps have a huge impact on churn.
In fact, one study found that some account management teams are reducing customer churn to lower than 1%.
Why is churn so important? It has a direct impact on your bottom line.
And the effect only gets more critical as your business grows. A 2.5% monthly revenue churn rate can mean a lost of 30% annually. This means that a company that does $100m in revenue would face a $30m loss that would need to be replaced in order to maintain positive growth for the year.
Using customer success strategies can proactively reduce churn, and improve customer retention before it gets too painful.
2. It’s 50% easier to sell to existing customers compared to new prospects.
Yet another reason why lowering your customer churn rate is critical. It’s much easier to sell to your existing customers than new ones. 50% easier to be exact.
Many organizations focus so much on getting new customers that they forget the opportunity to grow existing ones.
Upselling and cross selling are huge opportunities to bring in additional profit, and they’re perfectly crafted opportunities for customer success reps.
Your customer success reps have deep, long term relationships with your clients which leads to a valuable level of trust. One study shows that 70-95% of revenues actually come from renewals and upsells.
Leveraging a customer success program to drive growth and stay competitive is critical to not only to keeping your customers happy, but keeping your revenues healthy.
3. 60% of organizations have had a customer success program for less than 2 years.
Although it is clear that customer success programs are critical to organizational success, they are still relatively new to most companies.
With 60% of organization reporting their customer success programs are less than 2 years old, the majority of companies are just getting started.
Part of the reason is that building a new team takes knowledge and an investment. But the good news is, customer success teams quickly pay for themselves.
As we’ve looked at the huge gains in terms of customer retention and also the importance of upselling to existing customers, you should be able to easily measure actual revenue dollars coming from customer success activities.
Customer success reps can cost between $50-75k a year, but if your plan in orchestrated properly, it’s an investment that pays off.
These three surprising statistics are just the beginning of why you should be investing in a customer success program for your organization. When considering customer churn, the potential to upsell, and the opportunity to get a step ahead of competitors, it’s an investment you can’t afford not to take.