How Customer Success Drives Business Performance

Enlightened Self-interest

The business purpose of cultivating a community of clients and prospects is to build value over time. To do so, however, requires ─ and reflects ─ an authentic and sustained commitment to customer success. After all, the community is not about you. Nevertheless, the benefits of a commitment to the holistic success of your customers and prospects can be substantial.

How Customer Success Drives Performance Over Time

In this video, we present a causal loop diagram ─ a model ─ that makes explicit the logic of customer success. The benefits of using such a model include making our assumptions clear and, consequently, testable.

After all, cultivating community and other efforts dedicated to customer success require the investment of time, money, and emotional and creative energy. Models help us to evaluate the conditions under which such investments make sense.

Illuminate Shadows in Our Thinking

A causal loop diagram, but itself, can’t help us quantify trade-offs between cultivating community and investments in building awareness, for example. Nevertheless, causal loop diagrams like the one we present here can help us uncover blind spots in how we view our businesses.

For example, most of us are accustomed to thinking about advertising and other awareness-building marketing efforts in terms of return-on-investment. We realize that we have to spend money to make money. On the other hand, we (too) often think of customer success efforts as expenses to be minimized.

By doing so, we miss opportunities to fuel several potentially virtuous cycles:

  • Happy customers are loyal
  • Happy customers buy more
  • Happy customers accelerate word-of-mouth referrals

Quantifying the Value of Customer Success

None of this is news. So, it’s surprising how often we neglect and under-invest in customer success. Part of the challenge lies with the salience of sales to new customers relative to the value of an existing relationship over time.

We “ring the bell” when we “land a new logo.” But how often do we celebrate when we retain a customer for another year?

In order to make informed comparisons, we need to level the playing field. That is, we need to quantify the value of customer success. To do so requires other tools, such as the customer lifetime value framework, which we’ll address in other posts.