“Customers that are unhappy might not churn if they see the value they expected to see from the product”. Or describes an everyday scenario where a customer is very demanding and constantly upset. “Most CSMs would definitely define that customer ‘unhappy’. But here's the catch: if he sees the value, I don't expect him to leave, whereas a happy customer might.”
We all know that a new title is up and coming: Director of Customer Happiness. We asked Or his thoughts on that in light of his statement that ‘happiness doesn't lead to renewal and vice versa’: “It's a tricky one. Ultimately, it's about how the company defines what customer happiness means to them. If internally, customer happiness is defined as having the customer reach the desired outcomes, then so be it, but it's not the definition of customer happiness. So I think it's a little unclear but it might work for some companies. As long as customer happiness leaders define the role and the definition properly, it may work.”
You can't talk about customer happiness without talking about NPS and how it affects forecasting churn. “NPS is a good practice because we aren't speculating what the client's feeling is and instead we're turning it to a more scientific method. That way, you can actually start measuring that level of satisfaction, see the trends over time, act upon it. From that perspective, it's definitely a step in the right direction”, says Guz.
We asked Or for practical advice on how to start measuring retention in a scientific way, like he measured. How can companies get started with it? “I mentioned the term desired outcomes a few times because I think the concept is very important. Not just for customer success. I think it's about the customer journey and being able to define the outcomes very early in the process. It starts with marketing, looking at what you talk about when you do lead generation all the way to the sales cycle, when they need to talk about business values and drivers for the company you sell to. Most companies think of the desired outcome only in relation to a smooth transition from pre-sales to post-sales, but that’s not the case.
“If you have that desired-outcome mindset, and you can customize the way you measure it depending on your customer base (If it's more low touch, you need to find automated ways to measure it, vs. high touch model, where you can utilize business reviews, enablement sessions, and trainings), then you’re on the right track”