Two years into its founding, Gmail CRM NetHunt decided its customer support model needed a revamp.
At the time, its support team was helping customers with one-off solutions to their problems. However, the business didn’t think interacting with customers only “when they’re angry or upset” was effective in fostering good relationships with its customers—much less keep them for the long term.
The solution?
The business decided to invest precious bootstrapped resources into developing a customer success team and building customer success strategies.
“As a subscription-based SaaS company, we can only be successful if our customers are too,” wrote Anna Pozniak, Digital Marketing Manager at NetHunt.
Applying new customer success strategies—on top of the business’s existing support functions—involved running webinars on improved features and conducting periodic account reviews, among other efforts.
Things paid off.
Since moving to a customer success model, NetHunt has kept its churn rate down to 4.3%—well on the underside of the SaaS industry average of about 5-7%. And the business isn’t unique in deciding to invest in customer success.
According to a 2020 survey conducted by customer success software Totango, 80% of respondents said their customer success teams saw some level of growth in the previous 12 months. Additionally, there was a 6% increase in the number of teams with 0-10 members, indicating more businesses are adding customer success teams.
But how is customer success different from customer support, and how do both functions coexist in the SaaS subscription business model?
SaaS customer success versus SaaS customer support: what’s the difference?
Customer support is a relatively simple concept. When one of your SaaS customers runs into issues while using your product, you help them out.
- Customer support is a reactive and more transactional process, where you interact with customers only when they seek assistance.
For example, imagine your SaaS business offers email marketing solutions. A customer completely new to email marketing signs up. However, the end users on the customer side aren’t sure how to add images to their email forms.
The customer reaches out to your support team, which walks the users through the process.
Problem solved.
Customer success, on the other hand, goes beyond that.
- Customer success is a more proactive, big-picture process where you work on helping customers use your product to achieve value and reach their business goals.
Continuing from the example above, that customer’s users may now be a pro at adding images to forms thanks to your support team. However, if the customer’s users don’t know how to leverage their forms to get the most subscribers, the customer still might not be making much progress toward its ultimate goal of growing its email list.
This is where customer success would come in and educate the customer’s users on effective list-building strategies using the platform.
Then, after the customer starts seeing its email list grow, it may become so pleased with the value provided by your product that it becomes a long-term customer.
“Traditional customer service teams are generally the highly technical, ‘in the weeds’ heroes that (sic) solve day-to-day support issues,” shared Lori Stout, former Senior Product Marketing Manager at cloud call center software Talkdesk.
“Customer success teams, on the other hand, oversee the holistic health of the entire journey for each customer.”
Why are customer support and success crucial to a SaaS subscription business model?
The key to running a thriving SaaS subscription business lies in getting your customers to continue subscribing and growing with you for as long as possible. And customer support and success both have a part to play in achieving this—albeit from different angles.
- When a customer contacts support, it’s facing friction in the user experience. As a result, your support team has to swoop in to resolve the customer’s issue.
Needless to say, the quality of your customer support will have to be stellar to make up for the potential inconvenience. After all, you don’t want to compound a poor user experience with poor support. This all but invites the risk of churn.
In fact, SaaS salesperson Aaron Regrev went so far as to write that “a customer can still compromise with the product’s quality but will never give you business if he (sic) receives bad customer support from your end.”
- With the user experience friction taken care of, it’s up to customer success to help the customer get full value from your product in accordance with the customer’s macro goals. Prove value; make renewal a no-brainer.
“In simple terms, [the customer success] team proactively engages with the right customer with the right content at the right time through the right channel which in turn helps retain customers and turn them into advocates,” writes Yasasree Nerayanuri, former Global Lead of Customer Success at customer service platform Freshworks.
What are the roles of support and success in SaaS customer subscription management?
Apart from troubleshooting customers’ technical issues, customer support may also assist with managing customer subscriptions.
For example, if your business is using a SaaS subscription management software solution that doesn’t offer self-service portals, you may then task customer support with handling subscription management-related matters such as:
- upgrading or downgrading subscriptions
- adding seats to an existing subscription, and
- canceling subscriptions when necessary.
On the other hand, the role of customer success in subscription management is more overarching.
Apart from helping customers succeed using their existing subscriptions, your customer success team may leverage its ongoing relationships with your customers to:
- propose relevant upsells, and
- suggest logical cross-sells.
By making trusted recommendations, your customer success team helps customers continue realizing value from your product as their businesses grow. And of course, they also help create expansion revenue to grow your business’s MRR.
“The vendor in turn benefits [from maximizing customer value] as the customer is more inclined to renew the subscription in full and in many cases to subscribe to even more software,” says Daniel Couto, VP of Client Success EMEA at customer relationship management software Pegasystems.
Working hand-in-hand to help SaaS subscription customers succeed
Customer success appears to be a unique quirk of the SaaS industry. For example, you don’t often see retail or food and beverage businesses setting up dedicated customer success departments. Yet, it seems almost all SaaS businesses have one now.
But does the SaaS subscription business model need both a customer support team and a customer success team? Or can you get away with having just one or the other?
Jamie Davidson, CEO of customer success platform Vitally, believes SaaS businesses should have just a customer success department, which is then put in charge of customer support.
“Every time a CSM answers a support query, they learn something about the barriers customers face in getting value from your product,” Davidson shares.
“They can then take those learnings and proactively knock down those same barriers for other customers.”
While this suggests customer support and success should be merged into a single department, you may have good reasons for keeping them separate—and that’s perfectly fine.
The key is to ensure your customer support and success teams don’t operate in silos, but work hand-in-hand to help customers benefit from your product to the fullest extent possible.
