For businesses built on a recurring revenue model, customer success is everything. It’s a key factor influencing whether customers renew or churn — and whether revenue grows or shrinks.
Acquisition is no longer enough to drive growth. To build a stable, efficient, and enduring business, organizations need to shift to a customer success-led growth strategy centered on customer retention and loyalty.
Customer success teams are the heroes of the new growth agenda.
Here’s how you can scale with purpose using customer success — including a 4-point customer success-driven growth framework and examples of businesses reaping rewards from prioritizing customer success.
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The shift from acquisition to recurring revenue models
Customer acquisition costs (CAC) can kill businesses. According to research by Frederick Reichheld of Bain & Company, acquiring a new customer is anywhere between five to 25 times more expensive than retaining existing customers —nd the cost is rising.
Organizations are looking beyond customer acquisition and toward more sustainable, long-term models focused on customer retention. This is a new era of recurring revenue business models.
The global Software as a Service (SaaS) market size is forecast to grow by 18.4 percent in the next 10 years — and 70 percent of business leaders claim recurring revenue business models are crucial to their prospects in the future.
Why the switch? Recurring revenue business models provide organizations with a range of benefits, including:
- Yielding predictable revenue
- Reducing customer acquisition costs
- Promoting long-term customer relationships
- Increasing customer lifetime value
The move to a recurring revenue model is key for ensuring long-term stability and growth. By building stronger, closer connections with customers, organizations can boost renewals and expansion while fostering customer loyalty.
The role of customer success in revenue growth
For businesses focused on customer retention, customer success teams take center stage. Customer success managers move from being facilitators to becoming growth generators.
Customer success managers are linchpins in revenue growth across the customer journey, including:
- Product adoption
- Contract renewal
- Account expansion
The best part? Customer success managers are natural growth heroes. They’re energized by helping customers succeed — as many as 89 percent of customer success managers surveyed reported finding genuine fulfillment in assisting their clients. They’re highly motivated to drive growth in organizations.
Organizations taking a proactive approach to customer success can move ahead of competitors by delivering deeply engaging and impactful customer experiences that move beyond post-adoption support to personalized engagement across the entire customer journey.
3 Key areas for driving customer growth through customer success
While every stage of the customer journey is important, organizations looking to drive customer growth and increase annual recurring revenue (ARR) have three key areas of focus: Adoption, Renewal, and Expansion.
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Adoption
Customer success teams have an important role to play in driving customer growth at the product adoption stage of the customer journey.
Adoption is a critical stage for recurring revenue model businesses because this is where customers start gaining more value from a product or service. For customer success teams, it’s a chance to start building stronger connections with customers by delivering continuous bursts of value, including targeted training and tips, and generating quick wins.
Each customer has their own priorities for adoption, so a personalized approach is important here — for example, 82 percent of customers report feeling more positive after seeing custom content.
Driving growth requires answering new strategic questions about adoption in your organization, including:
- Which type of customer is most likely to adopt?
- How can their onboarding be accelerated?
- How can we help customers learn the way they want to learn?
- Are customers setting themselves up for success?
- Which customers are engaging deeply with our product?
Ensure your customers are prepped and ready for success with comprehensive customer education programs to encourage customers to engage deeply with your product — and deliver maximum ROI in the minimum time.
- Renewal
When customers reach the renewal stage, customer success managers can be make-or-break in promoting renewal and reducing the risk of churn.
For organizations looking to increase ARR through customer success, renewal is a key focus area — 97 percent of customers report they would choose not to renew a subscription without warning. That means customer success teams need to take a proactive approach to identifying and addressing churn before it occurs.
Here are five questions organizations need to answer around renewal:
- Who is most likely to churn and why?
- What is the defense strategy against churn?
- How can continuous bursts of value be delivered —- not just at renewal?
- How do we get ahead of friction and deliver superior service?
- Can we quantify the value delivered to our customers?
By understanding which customers are most at risk of churn and creating a targeted defense strategy against churn, organizations have the chance to rewrite the rulebook on renewal.
Reframe the narrative by shifting to proactive customer support centered on frequent, personalized bursts of value and knowledge to help customers get quick wins with your product.
- Expansion
There is no one-size-fits all approach to expansion. Not all customers will be suitable for expansion and different add-ons, upsells, and cross-sells will be right for different customers.
So how do you manage expansions to maximize customer growth and ARR? It starts by reframing your process for evaluating customers.
Here are five questions to answer:
- Who is ripe for expansion and when?
- What features matter most to our customers?
- Do customers know about our latest capabilities?
- Are customers using our product to their full possibility?
- What opportunities exist in other parts of our customers’ businesses?
- What new problems can we solve for those customers?
According to a report by McKinsey & Company, B2B companies that are strongly or moderately effective at solution selling are 1.5 times more likely to be outperformers. Help customers find the best-fit solutions for their needs to drive growth, maximize recurring revenue, and increase customer lifetime value (CLV).
How customer success drives growth
Customer success teams have a critical role to play in driving growth in their organizations — including boosting customer engagement and reducing churn. Here are four key ways customer success drives growth:
1. Customer engagement and loyalty
Dedicated customer success managers are ideally placed to increase customer engagement and loyalty by delivering strategic advice and coaching to open your customers’ minds to what’s possible with your product.
On average, loyal customers spend 67 percent more with a business compared to new customers. By exceeding customer expectations — with personalized training and support — your customer success team can win long-term customer loyalty, increasing ARR and encouraging existing customers to become brand advocates.
2. Customer renewals
It’s simple. Keep customers happy and they’ll renew their contracts. Customer success teams who maintain regular communication with customers and maximize engagement throughout their journey can increase renewals and drive revenue growth.
Customer success managers have a significant impact on customer renewals — research shows organizations with a strong customer success program can achieve renewal rates of up to 80-90 percent.
3. Churn reduction
Customer churn is one of the biggest barriers to ARR growth. Annual churn rates for SaaS businesses that make less than $10 million annually is 20 percent on average.
Addressing churn reduction is where customer success teams can make a significant difference to an organization’s bottom line. Customer success teams can mount a defense against churn with targeted strategies aimed at delivering small victories to customers to maximize product adoption, drive renewals, and foster closer connections with customers.
4. Customer expansion
On average, SaaS businesses generate 16 percent of their Annual Contract Value (ACV) sales from upselling to existing customers. As customer success teams are the primary point of contact for customers, they’re best positioned to identify customers most ripe for upselling and cross-selling opportunities while helping to demonstrate the value of expansion to key accounts.
Your frontline customer success teams can play a direct role in customer expansion to increase the lifetime value of existing customers and move the needle on growth.
The customer success-driven growth framework
For organizations looking to capitalize on customer loyalty to promote growth, a customer-success driven growth framework is essential. Here are the top strategies you need to power customer growth and increase ARR.
Onboarding and user adoption
The best onboarding programs give customers the knowledge they need to get up and running with your products and services as quickly as possible. According to a report by McKinsey & Co, 68 percent of top performing B2B businesses combine traditional and digital channels in the customer journey, including during onboarding and adoption.
Organizations can prioritize customer success by blending a digital onboarding experience with a human touch. Online courses and micro-learning programs tailored to different use cases lets customers learn independently and in their own time, with customer success managers available to answer specific questions and assist with any personalized onboarding needs.
Some top onboarding strategies include:
- Online knowledge bases
- Self-serve online course academies
- Webinars and masterclasses
- One-to-one sessions
By prioritizing customer education during onboarding, you can set your users up for success and kickstart their journey towards hitting their goals.
“Our end users are more educated and we have better product adoption because they are more confident in what they’re doing in our system.”
– Jacob Sewell, Training and Certifications Manager at Procurify
Education and nurturing
Customer success-driven growth prioritizes proactive, positive, and inspiring customer learning experiences throughout the customer journey.
By integrating flexible, tailor-made customer education programs into your customer success process, your teams can deliver continuous value to customers throughout their lifecycle to help open customers’ minds to what’s possible with your products.
Look for opportunities to educate and nurture users at every stage of the customer journey, including:
- Interest: Before prospects become customers, inspiring learning experiences can help potential customers see what could be possible — and position your products as the natural choice to help them get where they want to go.
- Adoption: Help customers get maximum value from your product by educating them on how to achieve their goals with feature-specific learning experiences from day one.
- Expansion: Show your existing customers how to take the next steps with your products to maximize their success — including add-ons and upselling — and increase revenue growth at the same time.
With a customer education tech stack that’s scalable, customizable, and user-friendly, organizations can educate new customers with ease, reducing time-to-value and increasing adoption, renewal, and expansion.
Engagement and community building
Customer engagement can have a significant impact on growth, helping to increase retention and drive renewals.
In a customer-success driven growth framework, customer engagement includes a range of activities to build closer connections with customers, including:
- Celebrating milestones and achievements
- Giving opportunities for feedback
- Developing interactive content
- Building a supportive community
- Recognizing customer needs
Customer success managers understand the importance of customer engagement but many lack the time to engage customers at the scale they would like — 63 percent said they wish they had more time to dedicate to client engagement.
With a robust customer education platform, customer success managers can recommend personalized learning and interactive content without taking extra hours out of their day for customer training.
Plus, take advantage of digital community spaces to enable customers to engage with brand and community discussions and Q&As for maximum success.
Customer support
Struggling to reduce churn? Deliver world-class customer support that’s proactive and personalized.
In a customer success-driven growth framework, customer support is no longer about helping your customers when they come up against a problem. It’s about identifying and combating friction before it happens by actively providing the knowledge customers need to achieve their goals.
Offer omni-channel customer support to customers, including self-serve knowledge hubs with online courses and digital downloads to actively reduce support tickets while empowering your customers to help themselves. Organizations can increase customer satisfaction and product adoption while freeing up time for support teams.
Customer success-driven growth examples with Thinkific Plus
See customer success-driven growth in action! Here are two examples of companies that’ve successfully driven customer growth by leading with customer success.
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Building customer loyalty at Hootsuite
For social media management platform Hootsuite, customer success-driven growth centers on next level customer education. Hootsuite educates thousands of learners every day, using Thinkific Plus to create and deliver their custom Hootsuite Academy — an online platform for training customers on social media and Hootsuite’s range of products.
Initially starting as a customer success strategy, Hootsuite’s customer education plan has quickly turned into a revenue engine of its own. With subscriptions and memberships built into the platform, Hootsuite was able to capitalize on Thinkific Plus-powered business growth by turning their wildly successful courses into monetized products to support, educate, and guide their customers to new heights.
By investing in online education as a customer retention strategy, Hootsuite has decreased churn and converted more customers into active brand advocates.
- 1 million+ courses delivered
- 500,000 learners enrolled
- 72,000 certificates issues
- 1000+ universities enrolled
“In 10 years, we want every single one of our customers consuming Hootsuite Academy education content. And even beyond that, we want to become the world leader in social media education.”
– Sarah Whyte, Former Education Marketing Specialist at Hootsuite
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Scaling customer onboarding at PayShepherd
Faced with the challenge of how to scale customer onboarding without hiring new team members, contractor management platform PayShepherd enlisted the help of Thinkific Plus to transform their onboarding process.
By creating and launching custom onboarding courses in just four weeks, PayShepherd was able to equip users with valuable training materials to get set up quickly and easily, accelerating time to value, and maximizing customer success on the platform.
PayShepherd streamlined their customer onboarding, drastically reducing the time internal teams were spending on one-to-one customer onboarding calls from 60 minutes to just 15 minutes. The outcome? PayShepherd was able to rescue 350 hours of employee time from repetitive training tasks and refocus on strategic initiatives to drive business growth.
- 75 percent reduction in onboarding time
- 350 hours of employee time reclaimed
- 15 minutes average onboarding call time
“We had an incredibly successful rollout. We were using Thinkific Plus within four weeks, and it had returned back 350 hours to our team within three months.”
– Jenn Hunter, Co-Founder and Director of Operations at PayShepherd
Start your customer success-driven growth journey
With more businesses moving towards recurring revenue models, focus is shifting towards relationship-led customer success strategies to drive growth and ARR. Customer success initiatives centered on deeply engaging customers, delivering continuous value, and providing fresh learning experiences that drive adoption, renewal, and expansion are the future of growth.
To find out more about how to drive growth through customer success in your organization, download the Customer Education 101 Guide below:
Customer success-driven growth FAQs
- What is customer-driven growth?
Customer-driven growth is a strategic approach focusing on customer engagement, education, and relationships to power growth for recurring revenue model businesses. - How does a strong customer experience drive growth?
By prioritizing a strong, positive customer experience, organizations can reduce customer churn, boost brand loyalty, and maximize customer lifetime value by increasing retention, helping to drive long-term growth and ARR.
