Customer Success: The Definitive Guide

SaaS business model customer successMy original definition of the SaaS Business Model, published way back in 2009, included a tight-coupling of Core Product/Intellectual Property, Marketing, Revenue Model, and Network Centricity… but now I’m modifying the definition to include Customer Success.

Having worked with over 300 SaaS companies – as well as Enterprise Software vendors migrating to SaaS – I can say without a doubt that Customer Success must be a fully-integrated, tightly-coupled component of a complete SaaS Business Architecture.

Why? Simply put: No Customer Success = No Your Success.

The reality is “Customers for Life” don’t happen because of long contracts and technical lock-in like the “good old days” of Enterprise Software.

Nope… today, Customer Success is the new “vendor lock-in” … you make sure your customers are successful and they’ll make sure you’re successful. It’s a Win-Win!

This cannot be overstated… if your customers are not achieving “success” with your SaaS, your success is at risk.

Of course, what “success” looks like for your customers is 100% unique to your customers in the context of your product. So while there’s not a one-size-fits-all definition of lower-case customer success – that’s up to you to know – as far as the concept of upper-case Customer Success is concerned, I’ve attempted to define that for you.

Customer Success Defined

Here’s my attempt to define: Customer Success – a proactive, holistic, and organization-level approach that leverages technology and real-enough-time visibility into customer health (not just usage data, but any contextual inputs) to ensure your customers – including those who directly use (users, administrators, etc.) and those who benefit from the use of your product – continually and increasingly receive value from your product over the course of their lifetime as a customer.

Customer Success defined at a conceptual level like that is great, but what does it actually mean, at a tactical execution level?

It all starts with “lower-case” customer success

Before you can operationalize customer success, figure out how to build your team, or even look at the 17 elements that go into Customer Success below, you have to take a step back and look at what actual customer success really is.

At the core, customer success is simply ensuring that your customers achieve their Desired Outcome through their interactions with your company. That’s it.

If you can keep that in mind, everything else on this page will make sense. If you fail to continue with that core principle in mind, nothing else I say will make sense to you.

17 Key Elements of Customer Success

Well, I look at Customer Success as a complete customer-lifecycle process that, when implemented to its fullest includes at least these elements (if I missed any, let me know in the comments):

  1. Customer Development
  2. Customer Acquisition
  3. Sales Process Engagement
  4. Metering / Billing / Payment Process
  5. Customer and User On-boarding
  6. Initial Engagement
  7. Post-Acquisition Follow-up
  8. Functional Support
  9. Technical Support
  10. Customer Feedback Loop
  11. Ongoing Engagement
  12. Customer Advocacy
  13. Customer Intelligence
  14. Customer Expansion
  15. Customer Renewal
  16. Customer Retention
  17. Post-Churn Follow-up
  18. Bonus: Customer Success Transgenesis
  19. Bonus: Customer Success At Your Expense Hurts Everyone
  20. Bonus: Let’s Improve your SaaS Customer Success

1. Customer Development

Often thought of only for pre-launch startups, this methodology should be employed whenever you wish to enter a new market segment, bring a new product to market, or if you need a sanity check on the addition of substantial new functionality.

This way you know who your customer is before you do all the hard work rather than the other way around. Customer Success starts with Acquiring the right customers, and that starts with Customer Development.

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2. Customer Acquisition

If you don’t attract, seek out, and acquire the right customers, not only will you have a harder time (they’ll be less profitable, harder to deal with or please, etc.), they’ll have a harder time. If they’re not a perfect fit with your product, service, support infrastructure, or even your company culture, they are unlikely to have a great customer experience… and are not likely to be successful.

That hurts both of you. Just to repeat myself… Customer Success starts with Acquiring the right customers! Once you understand better who your Ideal Customer is – perhaps based on Expansion Potential, Virality, or the level of Customer Happiness they achieve – you should proactively seek out other customers just like them.

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3. Sales Process Engagement

Whether during a self-service Free Trial or a higher-touch sales process involving demos and pre-sales Engineering, architecting a sales process that optimizes the path to Success for your customer is critical. You have to know what a successful Trial or Demo means to your prospect and work diligently to get them to that point.

In fact, done correctly, you can easily work past that point and get them on the path to conversion… but that’s a story for another day.

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4. Metering / Billing / Payment Process

One of the key differentiators between a customer and a non-customer is that one (the former) pays you money to use your product. So ensuring that you have a way to collect payment from the customer, in a way that is congruent with their preferred method of payment, is critical to their success. Yes, their success. If they do not pay, they cannot benefit from your product.

It’s also critical to your success, obviously. If they don’t pay, you do not get money, you go out of business, they can’t use your product… they are not successful. It’s a Fail-Fail! So having a billing and payment system – whatever that looks like – is critical to a solid Customer Success initiative.

And monitoring that for potential red flags like late payments, failed payments, credit cards that are going to expire, and other things that could keep them from paying for – and therefore using – your product is critical to Customer Success.

Metering use, billing customers, and collecting payment – all while monitoring for churn threats and other red flags – is an ongoing part of any good Customer Success initiative.

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5. Customer and User On-boarding

The first step post-sale is to get your customer to start using your product. This process is generally referred to as on-boarding, and includes the First Run or first in-app experience of the customer, whatever it takes to migrate from an existing system – Data Seeding, Data Migration, User Training, Integration, Customization, Implementation, etc. – and to get up and running on your system.

In fact, if you offer a Free Trial – also considered a part of the Customer Acquisition and Sales Process Engagement phases mentioned above – on-boarding should be part of the experience your prospects go through to ensure they’re using your product (and not just evaluating it!) during the trial.

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6. Initial Engagement

The first step beyond on-boarding, when you move a customer from starting to use your product to starting to get value from your product. This is a critical phase of the customer lifecycle… either you engage them here (what that means is 100% dependent upon the customer in the context of what they’re trying to – or would like to – achieve with your product) or you lose them forever.

The seeds of churn are often planted early, and while over-promising in your marketing or during the sales cycle can be the culprit, very often, those seeds are planted during the Initial Engagement phase. It can be a poorly executed hand-off from the Implementation team to to the nameless email address that is “support” or it can be that the vendor just disappears after they take your money.

I often look at the 90-days post-sale to get a better idea of what’s happening in this Initial Engagement phase; a large amount of churn in that time frame could indicate several issues – from attracting the wrong customers, to other issues mentioned above… to the SaaS vendor failing the customer in this Initial Engagement phase.

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7. Post-Acquisition Follow-up

This is the phase – and it can fall anywhere after acquisition, not necessarily after Initial Engagement; don’t feel constrained by the order of this list – where you make sure everything is going well, ask questions about why they signed-up, where they heard about you (assuming you can’t automatically determine first-touch source), ask Word of Mouth follow-up questions to understand the catalyst for their initial contact with your product, etc.

This is an opportunity to set the tone for the relationship  you’ll have with your customer – to manage their expectations and start building customer loyalty – now that you’ve sold ’em and they’re on-board.

A lot of SaaS companies disappear at this stage. Don’t be like a lot of SaaS companies.

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8. Functional Support

This part of the Customer Success initiative (Online help, tutorials, forums, knowledge base, webinars, etc.) is one that continues across the entire customer lifecycle, but is likely most needed at very specific points within the customer lifecycle. During the initial use (on-boarding and engagement) of the product by the customer, when on-boarding new users within the customer organization, as new features and functionality are introduced and/or adopted by the users, to name a few.

This type of support is often reactive – the customer or user sees that they need help doing something and seeks out the answer – but can (and should be) proactive around known success milestones. Rather than waiting for your customers and users to get lost and feel anxious about what to do next – or how to do it – you should build a proactive approach to Functional Support into your lifecycle messaging (ideally pegged to activity).

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9. Technical Support

This part of the Customer Success initiative is one that continues across the entire customer lifecycle. Even this typically reactive part of the organization should move to be as proactive as possible. Looking for patterns that might indicate a customer is having trouble, monitoring for application, data, and infrastructure-level issues that may negatively impact the customer’s experience are all ways to become proactive.

But, there are times when the customer may be experiencing pain that we can’t – or don’t – know about in advance or as it happens. In that case, the Help Desk is there to react to the customer’s problem, to correct it, and to ensure the customer is once again getting value from your product.

The Technical Support team should examine every in-bound request to see if there’s a way to proactively monitor for that kind of issue in the future, and stop it or reach out with a solution before the customer has a chance to submit a ticket.

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10. Customer Feedback Loop

This part of the Customer Success initiative is one that continues across the entire customer lifecycle, and might currently fall under the Account Manager or Customer Service role to manage.

The Customer Feedback Loop consists of Net Promoter Score (NPS) surveys, creating and monitoring the Customer Health/Happiness Index, input from your Customer Advisory Board, frequent outreach to/touch-points with your customer, etc.

Basically, this is where you monitor the heartbeat of the customer in a way that’s powered by technology, but involves a good amount of human interaction.

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11. Ongoing Engagement

This part of the Customer Success initiative is one that continues across the entire customer lifecycle, and – coupled with the Customer Feedback Loop – is the key to ensuring your customers are successful and happy. Ongoing engagement is the process by which your customers continue to realize value through the use of your product.

What “engagement” is changes over the customer lifetime. What engagement looks like 1 week after becoming a customer is very different than 1 month after, which is different from 1 year in, etc.

So knowing what “success” looks like for your customers at every stage along their trajectory as a customer – and monitoring for congruent activity, continually scanning for churn threats, etc. – is key to this part of the Customer Success initiative.

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12. Customer Advocacy

Social Proof is amazingly powerful… when your Ideal Customer prospects see others like them using and succeeding with your product, there’s a level of validation that trumps just about everything else you say or promise. As your customers achieve various success milestones along their journey, their willingness to help spread the word about you – to display their loyalty to your company – goes up, and it’s up to you to recognize that and take advantage of it.

Keep in mind that in some industries, in some product categories, etc. this is still a hard sell that requires legal department approval, which you should probably factor into determining your Ideal Customer profile… being the “best kept secret” in your market might seem cool… but it really is a drag on growth velocity.

That said, remember that some aspects of Virality and Advocacy are built-into your product (if you built it correctly), so “social proof” occurs simply by your customers using the product as intended. But it’s up to you to build a system around the customer lifecycle to, at various milestones, work with your customer to create marketing based around their success with the product.

The more invested they are in your product, as will happen over time, and the happier they are with it (what we work hard to increase over time), the more likely they are to work with you on your customer marketing initiatives.

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13. Customer Intelligence

A big part of Customer Success is knowing your customers better than they know themselves. The most obvious way to achieve this is to talk to your customers and network inside the industry/niche/vertical that you serve. You know those people that just seem to know everything that’s going on in their market? Yeah… you want to be like them. They’re the CIA: Customer Intelligence Agents.

Another way to stay on top of this – or an additional way, really – is to create a customer intel process that backfills and appends relevant data from external systems to ensure you have a complete picture of your customer, and to seek out information on the activities of the company (M&A, hiring, layoffs, bankruptcy, etc.), while looking for expansion opportunities, but also for potential red flags.

For instance, you could use a service like BuiltWith or Datanyze to see if our customer has installed a competitive widget on one of their web properties. Of course, if they removed your widget that would signal a churn threat in your system as you monitor for ongoing engagement. But by not properly monitoring for signals beyond your SaaS, you only get part of the picture.

Rather, if you monitor the activities and signals from your customers (ethically and within reason, right?) you can be clued into potential issues and proactively reach out to ensure everything is good and maybe save the customer. Remember, the customer just wants to be successful, so if they’re checking out a competitive product, that means they’re not getting the level of success from your product that the would like.

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14. Customer Expansion

The idea of “extracting as much revenue as possible” from clients, if not the antithesis of Customer Success, is certainly not the right way to look at things. Rather, if we can work to help our customers extract as much value out of our product as possible, the benefit to us will be increased revenue.

The way that we do that is to create a customer experience that delivers increasing amounts of value over time, creating a natural growth in base-product use, a logical expansion into additional functionality, and where appropriate, adoption of adjacent products from your company.

Just to address a common question that is often raised when we talk about Expansion: currently there is no agreed upon organizational structure in the Customer Success movement that dictates who within the company handles up-sells and cross-sells. Should the sales organization handle it? Should the Customer Success team be responsible for it? The answer is “it depends.”

Now, I’m of the mindset that sales should be responsible for bringing new customers into the organization and a different part of the organization should be responsible for growing the customer (hunters vs. farmers)… but as a matter of practicality, I can’t lay down a definitive recommendation as every company is different.

And while I’m sure at some point soon we’ll have enough companies implementing Customer Success initiatives as soon as they reach Product / Market Fit and start to scale that, rather than existing companies having to work around legacy “baggage,” we’ll be able to say “this is what works” when building from a pristine starting point… that isn’t the case right now.

So, for now, with most companies adopting a Customer Success initiatives being quite mature, trying to lock down “general specifics” is impossible… at least from a practical point of view.

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15. Customer Renewal

Assuming you’ve done everything above, the renewal process should either be a non-event (i.e. it should just happen) or if negotiations take place and a new contract must be written, it will be to lock in rates at their new, expanded usage/deployment level. If you’re on a month-to-month agreement with your customers, you deal with “renewals” every month when they pay their bill… if you’ve done everything above well, those payments will just keep coming and should get bigger on average over time.

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16. Customer Retention

Interesting that Customer Retention – one of the key elements most people associate with Customer Success – is such a small part of this post. It’s not that Customer Retention isn’t a massive part of Customer Success, it is. It’s just that when you’ve done all of the other stuff on this list well, the time, effort, and resources you spend actively trying to retain a customer – to keep them from churning out and going to a competitor – should be minimal.

Retention will go from a reactive activity to something that you don’t need to worry about.

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17. Post-Churn Follow-up

Churn happens sometimes. They say the only churn that’s acceptable is either due to marriage or divorce; a company is either bought or goes out of business. However, if you’ve done everything above well – including really nailing the Customer Intel piece – some of this churn can even be mitigated.

No matter what, you need to know for sure why they left, if there was anything you could do better, etc. A phone call after a cooling-off period – a couple of days or weeks, depending – is probably the best option, versus sending an email. BTW, this is NOT the time for an NPS survey…

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Customer Success Transgenesis

Transgenesis, according to Wikipedia, is the process of introducing an external gene into a living organism so that the organism will exhibit a new property.

While “Customer Success” as a term and a movement may be relatively new, most of those things I listed above certainly aren’t new. What is new this time around, however, is that having each of these things we do – these tactics – roll up under the umbrella of Customer Success – not just the organizational owner of the Customer Success initiative, but the overarching Customer Success concept within a company – and having the entire organization aligned around this concept.

I believe you can create initiatives or invest in technology to make each of those items on that list happen or happen more efficiently, and if you do you’ll be better off than if you didn’t, but without a top-down mandate (or at least highly-visible and promulgated buy-in) from the CEO, the assimilation of Customer Success into the organization’s DNA is unlikely to occur.

Without that, the likelihood of Customer Success actually taking hold in an organization is tenuous at best.

So we look to Transgenisis… Customer Success is the gene we’re injecting… and your company is the living organism.

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Customer Success At Your Expense Hurts Everyone

No matter what, though, Customer Success as a core tenet of the organization must be implemented in a way that is positive for both the customer and the company.

It seems odd to have to say this out loud, but if you do whatever it takes to please the customer (like never saying “no” to customization requests), but you do so to the detriment of your company, this is not Customer Success.

If you go out of business or otherwise fail, your customer loses just like you. And that’s the opposite of Customer Success.

Of course, if you actually do all of the things I listed above – starting with Customer Development and attracting the right customer in the first place – which may be those that don’t require so much customization, support, on-boarding help, etc. – that’ll be a huge step in the right direction for you and your customers.

You have to – and its okay to – do things that are in your best interest, too. Take care of yourself (and your company) so you can continue to help your customers be successful (and support them on that path in the manner with which they expect or have become accustomed).

Because I want you to be successful, and I believe I’m the one to help you get there, I’d be remiss if I didn’t say…

Let’s Improve your SaaS Customer Success

For consultation and advice on SaaS Customer Success – assuming there aren’t any conflicts of interest – schedule at least a 15-minute meeting with me via Clarity. If you’re looking for a software solution to drive real Customer Success in your organization – beyond simple in-app user behavior data – you should check out Gainsight, where I am Customer Success Evangelist.


About Lincoln Murphy

If you need help growing your SaaS, request at least a 15-minute call with me via Clarity. My role of Customer Success Evangelist at Gainsight has me super-busy, so I'm not taking on any new long-term consulting clients right now. Clarity is it for now. Be sure to join my mailing list - I send cool stuff to the list all the time - or circle me on Google+, connect LinkedIn or follow me on Twitter.


  1. Good blog – and one that resonates with us.

    We’ve just implemented Zopim (online customer engagement) and customer ‘experience’ seems to be rocketing (as well as lead to customer conversions).

  2. Great run-down of the high level topics, Lincoln!

  3. Great walk-through.

    I’m really big on customer feedback loops. Need to accompany them throughout the journey.

  4. Lincoln, how are Customer Renewal and Customer Retention different? Can you explain it in the context of a “month-on-month” SaaS model?

    • In a month-to-month setting, renewal and retention are pretty much the same thing since 100% of your customers could churn at any time and 100% of your customers renew every month (even if it’s automatic via Credit Card).

      This is different from a longer-term contract scenario where customers can only churn (at least in legal theory) when their contract is up. Technically, we’d say they didn’t renew if they churned and when measuring churn in the months where they aren’t up for renewal, we wouldn’t count them when figuring the churn rate since they couldn’t churn (doing so makes churn seem low; only figure in those that could churn).

      That said, annual or multi-year contracts aren’t always in the vendor’s favor, especially for early-stage startups and even more especially for those who aren’t savvy to the Enterprise game. Contracts are often written “on the customer’s paper” which means they use their terms, their legal department, and the contract basically locks you into the customer some way (lock-in pricing for some time, usually at a discount is the most common), but doesn’t necessarily lock the customer into you.

      That means, even with long-term contracts, the customer could still churn. So there’s both retention – where the customer doesn’t actively cancel – and renewal – where the customer renews the contract.


  1. […] When Lincoln Murphy attended the Customer Success Summit in San Francisco in mid-March, the SaaS veteran and founder of Sixteen Ventures expected there to be a noticeable — and obvious — buzz around the growing popularity and implementation of “customer success” (it’s a topic he’s been thinking a lot about recently, and has even written a guide around here: Customer Success: The Definitive Guide). […]

  2. […] Customer Success: The Definitive Guide – by Lincoln Murphy […]

  3. […] To that end, your forms should ask as little as possible from a new customer and offer as much as possible in the form of product demos, free trials, educational content, or custom promotions. What matters more than the specific offer is how you make it compelling to your audience. Sales is about educating customers on why they need your product – a demo or free trial is great, but only if you tie it back to customer success. […]

  4. […] Honestly, Customer Success should be your main focus – not just in your Free Trial but overall […]

  5. […] the reasons for their departure are addressed. In fact, Lincoln Murphy lists 17 Key Elements in his summary of Customer […]

  6. […] To that end, your forms should ask as little as possible from a new customer and offer as much as possible in the form of product demos, free trials, educational content, or custom promotions. What matters more than the specific offer is how you make it compelling to your audience. Sales is about educating customers on why they need your product – a demo or free trial is great, but only if you tie it back to customer success. […]

  7. […] 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 […]

  8. […] Lincoln is one of the most popular faces of SaaS and Customer Success. He talks in detail about what is customer success, and the  20 things you can do to ensure customer success. I would add an important step post making your customer a success. I would recommend you to […]

  9. […] I’m always refining that quick definition of Customer Success – though my definitive definition of Customer Success and all of the functional areas of a business it encompasses still stands –  but […]

  10. […] Think of this not only as a way to accelerate your Customer Acquisition process (imagine writing cold prospecting emails using words your customers have given you), but to guide the Customer and User Onboarding process, and even to drive your Customer Success initiative. […]

  11. […] would have seen their Customer Success knowledge vastly expanded from studying such lessons as Customer Success Definition, How to Measure Customer Success and combining both disciplines of growth hacking and customer […]

  12. […] their success. Don’t know what customer success is? It’s pretty new and hip. Read this. And this. And this […]

  13. […] Related: Customer Success: The Definitive Guide […]

  14. […] success is subjective and the use case is entirely dependent on the business. In an article for Sixteen Ventures, Lincoln Murphy describes it […]

  15. […] Customer Success: The Definitive Guide ( […]

  16. […] So why does the Ticket still stubbornly remain in modern help desk vocabulary? Why do we still refer to customer interactions as tickets? Because no one has suggested anything better. It remains with us as a relic of the past, even as the one-off transactions that tickets represent no longer have a place among the ideals of customer success. […]

  17. […] the Principle of Consensus, otherwise known in marketing as “Social Proof” and in Customer Success as […]

  18. […] led me to realize that many of the behaviors we employ around surveys – especially in the Customer Success world with the use of NPS surveys – can have a very negative impact that does the exact […]

  19. […] I immediately thought how stupid this is and how it flies in the face of everything that has to do with customer success and what I’ve been preaching for the last few years, but also goes against the core […]

  20. […] maybe send them this link – but I also wanted to give the origin story of this powerful Customer Success […]

  21. […] my Definitive Guide to Customer Success for a great primer on this concept if it’s new […]

  22. […] led me to realize that many of the behaviors we employ around surveys – especially in the Customer Success world with the use of NPS surveys – can have a very negative impact that does the exact opposite […]

  23. […] fact, one of the things we have to do as part of an operationalized Customer Success initiative is to tell the customer what they need to hear – not what they want to hear […]

  24. […] talk about Success Milestones all the time, not just in the context of Customer Success, but in the context of the overall success of my SaaS clients and companies I work with through […]

  25. […] the other day I was talking to some folks at a well-known search optimization software vendor about Customer Success at a high level when this very tactical question came up; how to get […]

  26. […] “Customer Success – a proactive, holistic, and organization-level approach that leverages technology and real-enough-time visibility into customer health (not just usage data, but any contextual inputs) to ensure your customers – including those who directly use (users, administrators, etc.) and those who benefit from the use of your product – continually and increasingly receive value from your product over the course of their lifetime as a customer.” –   Sixteen Ventures […]

  27. […] drives a company to focus on Customer Success is changing. In the past, churn (or retention, depending upon how you look at things) was generally […]

  28. […] “A proactive, holistic, and organization-level approach that leverages technology and real-enough-time visibility into customer health (not just usage data, but any contextual inputs) to ensure your customers – including those who directly use (users, administrators, etc.) and those who benefit from the use of your product – continually and increasingly receive value from your product over the course of their lifetime as a customer.” – Lincoln Murphy, Sixteen Ventures […]

  29. […] “Customer Success starts with acquiring the right customers.” – Lincoln Murphy, SixteenVentures […]

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