Mention Customer Success for SaaS companies, and the discussion almost always goes to usage data.
And it makes sense; as a SaaS vendor you (should) have amazing visibility into your users’ and customers’ actual use of your product.
In fact, it is this level of visibility that the vendor has into the user and customer-behavior that made the SaaS business model really attractive to me back in the day.
Even though few companies were taking advantage of this visibility way back in 2005, the fact that a SaaS vendor could move from being reactive to proactively moving customers toward value recognition (what we call Customer Success today) is what really got me fired up.
It still does.
Fast forward to 2014 and no longer do I have to try to convince SaaS vendors of the value in that visibility or that you need to architect your product to provide that window into user behavior. Nope, today this is just a generally accepted best practice.
But there’s a problem. A misconception.
Usage data – while great – is just ONE input into overall customer health… not the only input.
A good analogy for this came to mind while crossing the street in NYC the other day…
Usage data is like a walk signal; you can pay attention only to it and cross when it’s says WALK, or…
… you can look both ways when the WALK sign lights-up to see what else is going on and NOT get hit by the speeding car running the red light!
Context. Is. Everything.
And that applies directly to Customer Success, too!
If Customer Success was only about user data – just about signals – it would be easy, right? Just instrument your app to collect usage metrics and we’re good to go.
No logins? Boom… churn threat.
Frequent user? Boom… customer for life.
In the real world, those are actually the edge cases; more frequent are situations like this:
- A customer you knew was a guaranteed renewal based on usage data – daily use, they use all their purchased seats, and use > 80% of your features – will blindside you when they don’t renew.
- A customer you’ve pre-mourned as a loss because usage data shows they barely got on-boarded, only use < 25% of your feature set, and activated just a fraction of the seats they contracted for will upgrade and actually double the ARR you get from them.
- You have some customers that are seasonal, like a snowplow service. You already know usage will be seasonal, but if they don’t login at the start of winter, should you be worried? I don’t know… have you checked the weather where they live? Maybe it hasn’t snowed yet and everything is fine. Context.
- Did you know the internal champion for your product left and her replacement is the person you didn’t hire for the same role? Even if you have great usage that would indicate a “healthy” customer, would you say that your “sure thing” foothold is at risk now? (Hint: it is)
- Are you aware your customer just got an investment from the main investor in your competitor. You should be, because that most definitely trumps your “frequent login” usage metric in indicating a churn threat.
Remember… real-time access to incomplete data simply gives you instant visibility into an incomplete customer story.
Context. Is. Everything.
I go into a lot more detail in my Definitive Guide to Customer Success where I lay out the 17 Key Elements of Customer Success (that’s a lot of context!) that you need to be aware of to get a complete picture of your Customer’s Health.
This post was originally published on LinkedIn.