Hypergrowth companies create predictable revenue. This predictable revenue is possible through a careful combination of the three types of leads: Seeds, Nets and Spears.

In this blog, let’s see all about the Seeds and how they can help you to make sales scalable.

What Are Seeds?
Seeds are many-to-many campaigns relying especially on word-of-mouth marketing. While few companies like Slack, Box and Dropbox took off to a great start with Seeds, for many others, it comes through systematically making sure that the customers are happy. After all, happy customers are all that matters for word-of-mouth marketing!

Making sure that the customers get value from the product is a sure way to build relationships and get the word-of-mouth referrals going. Building relationships and helping others succeed is altogether a part of ‘planting the seeds’ with employees, investors, customers and partners.

To put it simply, it’s getting what you want by helping others get what they want. This way, your happy customers will tell others about your brand and you can land more customers through such networks, relationships and referrals. 

Though Seeds are highly profitable and have the greatest win rates, the main drawback is the less control you have over the pace of growth.

Customer success is also about revenue growth
If you want to grow your Seeds, then the best way is to keep your customers happy. This is now being called Customer Success. 

You reduce customer churn and increase upsell and referrals. But the one main thing to note here is that Customer Success is more than just keeping the customers happy. It’s also about creating revenue growth. As marketing and sales, it is also a revenue driver, a form of growth investment.

When you invest in Customer Success, you will notice lower churn rate, more revenue and better marketing. 

6 Keys to Customer Success
Let’s start with an example. You retain 95% of customers every month. Sounds like a good mark, isn’t it? But let’s look at it from another direction. You lose 5% of customers i.e. 5% churn rate per month which totals to 60% per year. Just imagine how much effort you need to put in to replace that 60%. Even when that number boils down to a 2% churn rate, it is still 25% per year; a quarter of your revenue.

The best SaaS companies have -2% churn rate which means they make more money than they lose. The customers who stay spend more than the ones lost resulting in a higher margin. 

Here’s a target churn metrics in Saas for you:

  • Customer churn of 15% or less in a year.
  • Revenue churn of 0% or less in a year.
  • One Customer Success Manager per $2 million in revenue.

Let’s see the six key rules to make this happen.

Rule 1: Customer success is your core growth driver
In Customer Success, the leads may come either through direct referrals or through case studies, references and testimonials. This can be tracked through renewal rates, upsell amounts and referrals and added to the recurring revenue models. 

Rule 2: Customer success is 5 times more important than sales
Of course, sales bring in customers. But the resources of Customer Success is the main reason to close deals in sales through case studies, testimonials, stories, high retention rates and references. 

Founders concentrate on closing the sales and bagging the new customers. And once it is done, they are off to the next new deal without concentrating on the current customers which is a grave mistake.

Rule 3: Start early, hire early
A Customer Service person is an investment to the company just like a salesperson. Which is why SaaS companies, as a rule of thumb, hire one Customer Success manager for every $2 million in revenue before it reaches the mark. And, hire a Customer Success person within the first 10 hires of the company. 

Rule 4: Visit customers in person
If the customers are unhappy, they don’t often say it before they leave. This when in-person visits matter a lot to identify the problems and resolve them. Here is a 5+2 rule that every Co-Founder, CEO and Customer Service Manager can follow:

  • Meet on-site with 5 customers per month.
  • Get two customer badges every year (because you visited so often that they gave your own ID badge!)

When you visit directly, you can earn the trust of the company and find out any grievances. Even when there is nothing to discuss, you can talk about your plans and get feedback on your roadmap.

Rule 5: Customer success needs financial responsibility and metrics
Without financial goals, the Customer Success function can easily get confused. Even when you have incredible products, you need people to explain and talk about it to potential customers. Don’t make the bad assumption that great products will create happy customers.

Since Customer Success is majorly needed to reduce the customer churn, you need tools to check if it’s working and measure the performance of the team. Customer Success needs to justify the investment made. At the least, you can use the retention rates or upsell revenue to show some financial results.

Rule 6: Evolve customer success goals and metrics as you grow
As you grow in your business, your Customer Success goals should also change and go through these phases.

  • Traction Phase (0 to $1 million): What do customers want? What do they do with the product? 
  • Adoption ($1 to $5 million): How can customers include the products daily?
  • Retention ($5 to $20 million): Why should customers keep using our products after the initial honeymoon phase?
  • Expansion ($20 to $100 million): Why should customers expand to more features?
  • Optimization (more than $100 million): Automation and data-driven improvements.

You can be in any phase at this point. All that matters is you need to keep your goals evolving as you grow.

Are you wondering how to measure Customer Success?
There are several indicators that can be used to measure Customer Success like customer stagnating, renewals, delayed invoice payments, marketing engagement, survey feedback, support interactions and many more. You can use the FaceValue Application to get such metrics for Customer Service and Customer Survey which are two points in the 20 Points of Purchase. 
FaceValue is an innovative CRM platform that lets you manage prospects and customers skillfully. Load your brand information into the FaceValue App and gather metrics based on customer responses to measure Customer Success. Discover here how.

Learn more about the 3 types of leads: Indeed, 3 types of leads: Meet the 'Nets'.


This blog is excerpted from: ‘From Impossible to Inevitable: how hyper-growth companies create predictable revenue’ co-authored by Aaron Ross and Jason Lemkin.

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