Success Potential: Real Customer Success Starts Here

Customer Success starts with acquiring customers that have Success Potential.

Customers that have Success Potential are said to be good fit customers. This is the opposite of bad-fit customers that cannot get value from a relationship with us now or in the near future.

If you knowingly allow bad-fit customers to be acquired, nothing else you do in Customer Success will have the result you’re hoping for as those customers – no matter what you do – will never achieve their Desired Outcome.

You can’t solve upstream problems downstream.

To help you better understand and implement the concept of Success Potential in your business, here are some resources I’ve published on the subject.

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Account Expansion: How to Upsell Unsuccessful Customers

Getting your customers to buy more from you is awesome.

Remember, you’re in business here and getting customers you’ve already spent money to acquire and serve to then expand their relationship with you – giving you more revenue – just seems like a super-efficient way to grow.

And it is.

But if you think for one minute you’re going to build a sustainable growth engine off the backs of unsuccessful customers, you couldn’t be more wrong.

Stop trying to upsell unsuccessful customers.

Unsuccessful customers don’t need – or want – to buy more of your stuff.

Obviously, right? Maybe… let’s explore this together.

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Customer Growth: Why Lack Of Expansion Is A Really Bad Sign

Customers buying more from you is awesome.

I mean, you’re in business here and getting customers you’ve already acquired to expand their relationship with you just seems like a super-efficient way to grow.

And it is.

So when you have customers that don’t expand their relationship with you, it’s obvious that this is less-than-ideal revenue-wise.

But it’s more than that.

So much more than that.

Let’s dig in, shall we?

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Account Expansion: If You Want To Grow Fast, Do This…

If you want to grow fast, don’t do what most companies do!

When most companies want to eke out some quick incremental growth, they’ll often have their sales people turn to their existing customer base to make some sales.

After all, you have a captive audience that you can sell to with little to no real effort, right?

Yeah… and you’ll get little to no real results, too.

Look, your existing customer base IS incredibly valuable… assuming you leverage that asset the right way.

Most companies handle Account Expansion poorly and therefore experience very poor results.

If you don’t want to be like most companies and to actually grow fast, leaving incremental growth for the other guys, and doing so in a customer-centric (and therefore sustainable!) way, continue reading.

This post could change your business. Seriously.

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Customer Growth: Upselling Hurts Trust (When You Do It Wrong)

When it comes to Customer Growth or Account Expansion (upselling & cross-selling), I assumed people knew that…

…you don’t have to hurt the relationship with your customer to hit your numbers.

…it doesn’t have to be a difficult slog that you struggle through to barely hit your numbers.

…giving CSMs or other non-sales people a sales quota is fraught with danger (on so many levels).

…expansion quotas – and, frankly, most expansion strategies – at best result in incremental growth, doing much damage in the process (which often offsets whatever “growth” they bring)

I assumed… but I was wrong.

I think it’s time to dive into why upselling hurts trust (when you do it wrong).

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Customer Growth: The Difference between Sales and Expansion

If you missed it, I’m done talking about churn. If you have a churn problem, read this post and follow my directions. Churn won’t be an issue for you anymore.

Now we can move onto GROWTH!

And the first order of business is understanding the difference between Sales and Expansion and why knowing the difference is so important.

I’ve said that Sales is part of Customer Success before, and by that I mean Sales – like every other part of the company – should be governed by Customer Success as a philosophy.

But, when it comes to operationalizing account growth, where do you draw the line between sales and expansion?

Good question, let’s dig in.

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Eliminate Churn Forever in 5 Simple Steps

Churn… ya boring. Yawn. Time to move on.

I’m so over talking about churn and if you really understand what Customer Success is all about, you should be, too.

Churn is so easy to get rid of… you just have to do five simple things.

If churn is a problem for you, this post will change that (if you’ll let it) and then you can move onto bigger and better things.

Once churn is a non-issue, you can focus on growth.

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Introducing the BEAST Message Framework for Customer Engagement

Let’s talk about Customer Engagement, specifically one part of the Communication Model, which is my BEAST Message Framework for creating messages that actually engage customers.

It’s really interesting that we communicate all day long – with our friends, with our peers, with our customers – but when was the last time you actually thought about what goes into communication?

Most of the time, we simply never stop to consider what needs to go into communication… we just do it.

If we do spend any time at all thinking about communication, we only focus on the message itself. But it’s truly important – imperative, actually – that we spend time thinking about all of the components of the Communication Model.

Whenever we try to send an email, have a call with a customer, set up a meeting with a customer, etc., we need to be thinking about communication and what goes into it.

Let’s dig in, shall we?

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Introducing the Customer Engagement Communication Model

Let’s talk about Customer Engagement, specifically the Communication Model.

We communicate every day, all day.

We communicate with friends, family, co-workers, industry peers, customers, vendors, celebrities, trolls, politicians, restaurants, airlines, etc., every day.

We communicate more today than we ever had in the history of the world, and tomorrow, we’ll do it even more.

Yet despite all this communication going on, we really know very little about how to communicate effectively.

We think, since we do it all the time, we must be good at it, but as with most things, frequency should not be confused with proficiency.

So let’s dive into this whole Communication Model thing and figure out how to more effectively engage our customers by simply communicating better. Join me, shall you?

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Churn Classification for Customer Success Management

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.

If you focus on Customer Success, churn will not be an issue. At least in theory.

To take that from a simple theory to your Operating Model, you need to put systems in place, be able to monitor their effectiveness, and routinely perform root cause analysis when things go wrong (and also when things go well so you can replicate, right?).

So while our goal is to live in a world where churn doesn’t happen, while you have it, you really need to understand it so you can avoid it in the future.

To that end, I put together this Churn Classification system (or matrix or quadrant or whatever) to help you do that.

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Sales is Part of Customer Success

Sales is part of Customer Success. Like it or not.

No, I don’t mean the Sales organization should report to the Customer Success Management org.

I mean that Customer Success as an Operating Philosophy, as a way of doing business, includes sales. It includes marketing, product, support, etc, too.

It’s critical to understand that Customer Success is not just about “post-sale.”

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.

Those interactions start early – from the first marketing touchpoint, at the start of the sales cycle, on the first cold outreach email by your SDR – and they continue throughout the entire lifecycle of the customer.

Which means we need to be thinking about Customer Success when creating marketing campaigns, determining Ideal Customers, optimizing the sales cycle, etc.

In fact, let’s talk about Sales.

Sales is important. Sales is critical.

But…

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Appropriate Experience is Required for Customer Success

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.

As I’ve said before, Customer Success as a concept is very simple. Don’t overthink it.

But I always have to unpack one piece of that definition and that’s Desired Outcome, or what your customers need to achieve (their Required Outcome) and the way they need to achieve it (their Appropriate Experience).

Required Outcome + Appropriate Experience = Desired Outcome

Desired Outcome is also a relatively simple concept. Unlike Customer Success, however, Desired Outcome isn’t something people tend to overthink…

… it’s something they just tend to ignore.

Well, if they don’t ignore the entire thing, they only focus on one part… the Required Outcome.

Appropriate Experience either doesn’t matter to them or is just too hard to figure out (which makes them give up and say “it doesn’t matter”).

I can’t help you if you don’t believe Appropriate Experience matters, but if you believe it matters but just can’t wrap your head around the concept, here’s something that might help you figure it out.

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What Are The Best Customer Success KPIs?

As you can probably imagine, I’m asked all the time what the best Customer Success KPIs are.

What metrics should you use to know if your Customer Success initiative is working.

Here’s the deal. I’m not an analyst… I’m a consultant.

Companies hire me to help them rapidly acquire good-fit customers, keep those customers longer, get them to buy more over that extended lifetime, and get those customers to advocate for them, too.

That’s called Customer Success-driven Growth.

The reality is, though, that every company is at a different stage as a company, with their Customer Success initiative, etc. so wha the “best” metric for one company at one point may not be the best metric for another company (or even the same company) at a different time.

Let’s dig into this, but first I have to address something serious…

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You Can’t Solve Upstream Problems Down Stream

When it comes to Customer Success, I’ve seen a lot of things.

I’ve seen what works (and what works REALLY works… it’s amazing).

Unfortunately, I’ve also seen what doesn’t work. A lot.

In 2017 I heard “Customer Success doesn’t work” way more than I ever expected.

The main reason I saw for Customer Success “not working” wasn’t org structure, comp plans, operations, wrong CSMs, etc.

No, the main problem wasn’t a CSM Org problem at all.

It actually starts further upstream.

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Customer Success is a Simple Concept (Don’t Overthink It)

Customer Success is a very simple concept that you’ll really want to overthink.

Resist the urge.

The beauty of this concept is in its simplicity.

Implementation is another story, though.

But the concept is simple.

My definition of Customer Success has evolved as my understanding of Customer Success has evolved.

The definition of Customer Success is very simple.

And here it is…

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Customer Success can’t fit into Existing Frameworks

I’ve been battling more and more misconceptions when it comes to Customer Success than the fewer that I expected.

I assumed as Customer Success became more well-received, moved more into the mainstream, and simply became more common that we’d all agree more on things… not less.

I was wrong.

I was WAY wrong.

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Those aren’t Problems. Those are Customers!

I work with companies around the world as a Customer Success consultant, I speak at events, and I do workshops.

I’m constantly teaching others about Customer Success.

And even more, I’m constantly learning.

My understanding of Customer Success is constantly evolving.

As I am exposed to what’s working – and what’s not – both at a conceptual or strategic level and the day-to-day tactical level, I am continually evaluating and refining my approach to this incredibly complex and valuable business function.

But sometimes I learn something that doesn’t change anything but the way I talk about Customer Success and its core principles.

Often it’s a change that exponentially improves my ability to get the point across.

And that change usually comes directly from the people I’m working with.

Here’s an example of one of those changes.

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Customer Onboarding Success Secret: Don’t Overwhelm Customers

I’ve said this before, but it is worth repeating; Customer Success is not limited to one part of the customer lifecycle, and Customer Success Management is not limited to simply helping the customer get up and running at first or to save them from churning later.

Rather, when a company has Customer Success as their operating model, they see every aspect of the customer lifecycle and every milestone of the customer journey as just as important as the rest.

In this article I tackle one of the biggest problems I see in Customer Onboarding. It’s a problem that isn’t caused by neglecting the customer… in fact, it’s caused by the exact opposite: overwhelming the customer.

Let’s explore this, shall we?

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A QBR is NOT Required for Customer Success

There’s a myth in Customer Success Management that you must conduct Quarterly Business Reviews (QBRs) or Executive Business Reviews (EBRs) with your customers.

This myth is propagated by those who only work with high-touch customers, by software vendors who are trying to attract those who work with high-touch (and consequently high-revenue) customers, and of course… by those people who just copy what those people say.

But like some myths, it has a basis in reality; it’s just likely that you don’t share that same reality.

But if you understand that Customer Success is when our customers achieve their Desired Outcome through their interactions with your company, then a blanket statement of “yes, you must conduct QBRs” is obviously a statement you shouldn’t listen to.

So while I say that QBRs are not required for Customer Success in general, that’s the same as saying they ARE required in general. And you shouldn’t listen to that, either.

The real question you should be asking is: “Do our customers require QBRs as part of their Appropriate Experience?”

Let’s dig in, shall we?

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Customer Success: The Importance of User or Customer Onboarding

Customer Success is not limited to one part of the customer lifecycle, and Customer Success Management is not limited to simply helping the customer get up and running at first or to save them from churning later.

Rather, when a company has Customer Success as their operating model, they see every aspect of the customer lifecycle and every milestone of the customer journey as just as important as the rest.

That said, it is totally possible to plant the seeds of churn early, and that’s where an understanding of the process – and value behind – customer and user onboarding are so critical.

Let’s dig in…

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How to Define Roles in Customer Success Management

Most companies just getting into Customer Success start by defining roles (well, one… Customer Success Manager), then they try to figure out the size of the “book of business” the CSM should handle, etc. That’s wrong.

But I won’t leave you hanging! Nope, I’ll tell you the correct way to define roles in a Customer Success Management organization.

Hint… it all starts with proper Customer Segmentation

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: High/Low/No Touch Customer Segmentation

The traditional Customer Success method of simply looking at what a customer pays us and giving them a particular level of ‘touch’ is old and outdated. It’s time to logically segment customers based on Appropriate Experience (AX).

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: Incorporating High/Low/No Touch into Onboarding

Proper Customer Onboarding isn’t done to prevent churn; it’s done to ensure the customer achieves their Desired Outcome. Retention comes from that. But what is “proper” customer onboarding? Let’s find out.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: How to help Salespeople with Customer Segmentation

The age-old issue of Customer Success and Sales alignment, only this time focused on segmentation.

This is my attempt to definitively address this eternal quandary.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: Determining Which Customers on which to Focus

From a Customer Success perspective, this is the wrong question to ask.

You must “focus” on all customers since proper Customer Onboarding is critical for all customers to achieve their Desired Outcome.

The way you operationalize around all of your customers to ensure they’re all Onboarded in an Appropriate way will come down to logical Customer Segmentation.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: Who Should Handle Upsells?

One of the great Customer Success questions – regardless of how many answers are given or by whom – that refuses to ever actually be answered is who should handle upsells… sales or Customer Success.

This is my attempt to definitively answer this question.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: How to Reset Mismanaged Expectations

Carefully. One of the biggest drains on Customer Success Management resources is customers that have not had their expectations properly managed and having to work around that.

Avoid that where you can by doing things correctly from the outset, but if you’re there already, maybe this will help you.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: Customer Engagement Across the Entire Lifecycle

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company. Those interactions occur across the entire lifecycle.

I define Customer Success Management as the process of moving customers toward their ever-evolving Desired Outcome. Again, across the entire lifecycle.

You can’t have Customer Success without engagement across the lifecycle.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: Working with Customers that don’t like Technology

Luckily this type of thing is rare, but with Customer Success as our operating philosophy, or Customer Success Management as our operating model, we need to work within the confines of our customer’s comfort zone… not ours.

This is a thought-provoking question with, hopefully, an equally thought-provoking answer.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: How to Tell Customers What to Do

For many Customer Success Management teams, it’s easy to fall into the trap of ‘just let your customers figure it out.’

In fact, it’s easy to think that’s in their best interest.

Leave them alone and they’ll discover what they need to on their own. But in most cases, that’s the exact opposite of what you need to do.

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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How to Get Customers to Help Define Engagement Models

Don’t hide from your customers. Don’t pretend you know everything. Talk to your customers and figure out from that discovery process what your engagement model should look like.

You can then extrapolate segment-based models or, for some customers, create unique engagement models just for them (if it makes sense).

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success-driven Marketing: Targeting Offline Customers

Customer Success should drive everything your company does, including sales and marketing.

When it comes to targeting customers that aren’t online, first, I’d push back on the assumption that your customers aren’t online.

Second, I’d remind you that Customer Success-driven Marketing means understand the customer’s Desired Outcome so you can craft a message that gets their attention and then understanding where to put that message so they see it.

Let’s dig in, shall we?

For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Lincoln Murphy Customer Success AMA Transcript and Video – May 19, 2017

On Friday May 19th, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video is embedded below, along with the questions that were asked and my answers.

Yep, if you don’t want to watch or listen, no problem! I got the entire AMA transcribed (and cleaned it up a bit for readability, added links, etc.) and posted that below. I answered 13 questions in great detail.

Follow me on Facebook so you can find out the next time I do one.

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The Process for Discovering your Customer’s Desired Outcome

Customer Success is when your customer achieves their Desired Outcome through their interactions with your company.

Desired Outcome is Required Outcome + Appropriate Experience.

Each customer segment will have its own Appropriate Experience (AX) – even if they share the same Required Outcome – and this will tell you the type and level of coverage (humans – required skills, characteristics, etc. – plus technology).

But below I go into more detail about the process and why it’s critical for you to understand…

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success: How to Close the Feedback Loop with…

Customer Success Management, Marketing, Sales, Product, and the Executive team all have unique information about the customer.

This includes how the customers talk about what they do, how they talk about and use our product, how any of this aligns with our strategic direction (or not).

So creating feedback looks among all of those parts of the company is part of Customer Success Management.

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success and Upgrading Grandfathered Customers

If you’ve been in business for any amount of time, you likely have customers that you’ve “Grandfathered” into old pricing tiers or feature sets that are obsolete now.

How can you get Grandfathered customers to move to your current pricing model in a customer-positive way?

I have some ideas for you…

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Customer Success in Early-stage Startups

Early-stage startups think Customer Success isn’t for them. Wrong!

Not only is Customer Success for startups (along with established companies), it’s also your key to growth without the friction of churn and bad-fit customers distracting you from rapid expansion.

Let’s talk about how to apply Customer Success in early-stage startups.

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Drawing the Line between Customer Success and Support

How do you draw the line between Customer Success and Customer Support?

This seems like a logical question until you understand the reality behind operationalizing Customer Success Management.

Let’s dig in…

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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The best Customer Success Management (CSM) Software

What is the best Customer Success Management (CSM) Software on the market today?

As you might imagine, that question comes up frequently for me.

Below, I try to give you the best answer I can on this very important piece of your Customer Success strategy.

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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Why Aligning Sales and Customer Success is Critical

The goal of Customer Success for your company is to get customers to stay longer, buy more, and advocate for you.

So it’s critical to remember that Customer Success begins at the first interaction with prospects by your sales team, continues across their entire lifecycle, and is required for scalable, repeatable Account Expansion.

Which means it’s absolutely critical for Sales and Customer Success Management to be aligned.

Let’s dig into this…

For context, on Friday, May 5, 2017, I did a Customer Success Ask Me Anything (AMA) on Facebook live. It was awesome. The video (audio only… sorry) is embedded below and below that is the transcript (edited for better readability) that answers the question.

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