Kicking Ass with Customer Success; The Ultimate Growth Hack for Startups

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Kicking Ass with Customer Success; The Ultimate Growth Hack for Startups. Presented at CASE2015 in Sao Paulo, Brazil November 3, 2015

Business

KICKING ASS WITH CUSTOMER
SUCCESS
Lincoln Murphy, Founder, Sixteen Ventures
The Ultimate Growth Hack for Startups
Presented at:

For a Deep-Dive on Customer Success
http://sixteenventures.com/case2015

“The purpose of business is to
create and keep a customer.”

Startups are a Business
The Product / Market Fit Fallacy
Copyright © 2015 Sixteen Ventures. All rights reserved.

You’ve got 99 Problems…
but Product / Market Fit isn’t One
Copyright © 2015 Sixteen Ventures. All rights reserved.
99 PROBLEMS

Startups need Churn to Learn?
No. This is a dangerous lie.
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Churn Kills!
• Company Value
• Total Addressable Market
• Employee (and Founder) Morale
• Time!
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success is Hot
• Now part of the SaaS Business Model
• Driver of Customer Lifetime Value (LTV)
• Customer Stays Longer
• Customer Pays you More
• Customer Brings in Other Customers
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success is not Required
•You will not FAIL without it
•But you will not THRIVE
Copyright © 2015 Sixteen Ventures. All rights reserved.

Without Customer Success
you will end-up…
AVERAGE!!!!!
Copyright © 2015 Sixteen Ventures. All rights reserved.
AVERAGE
SUCKS!

What is Customer Success?
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success
is not
Customer Support
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success is when
your customers achieve their
Desired Outcome through
their interactions with your
company.
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success
Management is proactively
managing the process of your
customers achieving their
Desired Outcome
Copyright © 2015 Sixteen Ventures. All rights reserved.

Copyright © 2015 Sixteen Ventures. All rights reserved.

When to do Customer Success?
Before you Launch (or Now)…
whichever is sooner
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Development Process
• Identify their Desired Outcome
• Required Outcome
• Appropriate Experience
• Build your MVP around that
• Give them what they need, not what they want
Copyright © 2015 Sixteen Ventures. All rights reserved.

Why is Customer Success
the Ultimate Growth Hack?
Copyright © 2015 Sixteen Ventures. All rights reserved.

David Skok
Matrix Partners
http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/
Customer Success
Drives First-order
Growth

Source: http://www.saastr.com/its-not-just-cltv-its-your-trgcltv-that-matters-total-all-in-revenue-generated-by-your-customer/
Customer Success Drives Second-order Growth

0x
5x
15x
20x
EV/RevenueMultiple
Dollar Net Renewal Rate
60% 70% 80% 90% 100% 110% 120%
Source: Altimeter and FactSet 10/2014
10x 7X
15X
Customer Success Drives Third-order Value

All of this is too important to
be left to chance.
Copyright © 2015 Sixteen Ventures. All rights reserved.

Customer Success is Transformational
1. Acquire the Best Customers
2. Engage & Deliver Value Quickly
3. Expand Their Investment
4. Mobilize your Advocates
5. Retain & Renew Customers
Copyright © 2015 Sixteen Ventures. All rights reserved.

1. ACQUIRE THE RIGHT
CUSTOMERS
Copyright © 2015 Sixteen Ventures. All rights reserved.

Success Potential
• Only Acquire Customers with Success Potential
• Technical Fit
• Functional Fit
• Experience Fit
• Support Fit
Copyright © 2015 Sixteen Ventures. All rights reserved.

Use Customer Success to
influence your
Marketing and Sales
Copyright © 2015 Sixteen Ventures. All rights reserved.

“Enter the conversation
already taking place in
your customer’s mind.” –
Robert Collier
Copyright © 2015 Sixteen Ventures. All rights reserved.

“Enter the conversation
already taking place in
your customer’s mind.” –
Robert Collier, c1937
Copyright © 2015 Sixteen Ventures. All rights reserved.

Copyright © 2015 Sixteen Ventures. All rights reserved.
Customer Success = Their Desired Outcome

2. ENGAGE & DELIVER VALUE QUICKLY
Copyright © 2015 Sixteen Ventures. All rights reserved.

The initial sale is critical, but
it’s just the tip of the iceberg

Success Milestones are
the steps required for a
customer to achieve their
Desired Outcome.
Copyright © 2015 Sixteen Ventures. All rights reserved.

3. EXPAND THEIR INVESTMENT
Copyright © 2015 Sixteen Ventures. All rights reserved.

Copyright © 2015 Sixteen Ventures. All rights reserved.
“Customers that take an
upsell offer stay longer”
- McKinsey & Company

Copyright © 2015 Sixteen Ventures. All rights reserved.
Customer Lifetime Value is the
Key Metric

4. MOBILIZE YOUR ADVOCATES
Copyright © 2015 Sixteen Ventures. All rights reserved.

Copyright © 2015 Sixteen Ventures. All rights reserved.
“Customers that come in
through advocacy stay
longer and buy more.”
- McKinsey & Company

Copyright © 2015 Sixteen Ventures. All rights reserved.
“Customers that advocate
for you become stronger
customers themselves.”
- Influitive

5. RETAIN & RENEW CUSTOMERS
Copyright © 2015 Sixteen Ventures. All rights reserved.

Copyright © 2015 Sixteen Ventures. All rights reserved.
When Customer Success is
operationalized around Desired
Outcome-based Success Milestones,
renewals become a non-issue…
renewals just happen.

WHAT ABOUT CHURN?
Copyright © 2015 Sixteen Ventures. All rights reserved.

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