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Blog: The Impact of Customer Success on Business Practice

The CX Express continues with my second guest, Sarah Poonawala, Channel Account Subscription Specialist at Ingram Micro. In her role, she on boards partners onto Ingram Micro subscription programs. Our discussion focuses on “The Impact of Customer Success on Business Practice.” Customer Success has changed the way business operates. Think of how products were generally sold. There was no need for continuous touches with the customer, and therefore no need to create a model for continual engagement. Today we have high-touch, low-touch, tech-touch and hybrid models in between – all designed to keep the customer loyal to your business.

As Sarah puts it, it’s a great “time to be alive [with] so many tools and resources available to build a strong relationship with your [business] partner over time.” Indeed, strong partnerships are important to the B2B market, which Sarah believes is playing catch up with the B2C world, where customer engagement is more visible. With the advent of subscriptions comes an increased need for partner engagement. Subscriptions cater to the needs of all business types from enterprise to SMBs and jive with the shift from capital expenditure to operational expenditure: falling somewhere in the middle of both models.

Sarah puts forward some benefits of the subscription model, including scalability, flexibility, portability, and, of course, the de-prioritization of upfront costs. The idea of being able to sever ties at any time is also an ideal benefit as it allows the customer to feel more in control. With the ease of entering and leaving a business relationship, investing in the improvement of customer success is paramount. Here’s the kicker – a customer will not renew if there is no perceived value or desired outcome. The move, therefore, needs to be a lateral one from customer service to customer success, the latter being more proactive as it deals with how to create and retain successful customer relationships.

I pose the question of what the value is that a business receives when they move to operational expenditure from capital expenditure. Sarah notes that it makes the purchasing decision easier for the buyer. For example, they can receive a non-standard license key to test the product to see how customers are responding. This gives the buyer more control. Price is also a huge determinant in embracing the subscription model. The longevity of the relationship is crucial in ensuring that revenue is still realized under the subscription model.

There are associated risks in moving to the subscription model. As Sarah points out, a company has to remain competitive in the marketplace, but despite the risks, there exists a significant opportunity to continuously invest in customer success, which adds credibility to the business acumen.

Here are some stats to get your brain buzzing - it only costs about 10% or less of your annual recurring revenue (ARR) to maintain customer success management. And it costs six times more to recruit a new user than to retain one. The emphasis should not be on what is being sold at the beginning of the lifecycle journey but on maintaining a healthy partner relationship. Customer Success enables customer retention. The Customer Success manager can ensure that the customers utilize all the product features, and not only one or two features as is the common practice, and therefore increase the chance of renewal due to an increase in the value realized from products and services (solutions).

Watch my full interview with Sarah

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