kicking ass with customer success; the ultimate growth hack for startups

KICKING ASS WITH CUSTOMER SUCCESS

Lincoln Murphy, Founder, Sixteen Ventures

The Ultimate Growth Hack for Startups

Presented at:

Lincoln Murphy@lincolnmurphy

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 BusinessThe 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.


Customer Churn Kills!• Company Value• Total Addressable Market• Employee (and Founder) Morale• Time!


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


Customer Success is not Required•You will not FAIL without it•But you will not THRIVE


Without Customer Successyou will end-up…

AVERAGE!!!!!


AVERAGESUCKS!

What is Customer Success?


Customer Success is not

Customer Support


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


When to do Customer Success?

Before you Launch (or Now)…whichever is sooner


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


Why is Customer Success the Ultimate

Growth Hack?


David SkokMatrix 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

20xEV

/ Re

venu

e M

ultip

le

Dollar Net Renewal Rate60% 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.


Customer Success is Transformational1. Acquire the Best Customers2. Engage & Deliver Value Quickly3. Expand Their Investment4. Mobilize your Advocates5. Retain & Renew Customers


1. ACQUIRE THE RIGHT CUSTOMERS


ReadyWillingAbleAcquisition EfficiencySuccess PotentialExpansion PotentialAdvocacy Potential


Ideal Customer Profile

Ideal Customer ProfileReadyWillingAbleAcquisition EfficiencySuccess PotentialExpansion PotentialAdvocacy Potential


Success Potential• Only Acquire Customers with Success Potential

• Technical Fit• Functional Fit• Experience Fit• Support Fit


Use Customer Success to influence your

Marketing and Sales


“Enter the conversation already taking place in your customer’s mind.” – Robert Collier


“Enter the conversation already taking place in your customer’s mind.” – Robert Collier, c1937



Customer Success = Their Desired Outcome

The topic of the conversation in their

mind


Customer Success = Their Desired Outcome

2. ENGAGE & DELIVER VALUE QUICKLY


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

3. EXPAND THEIR INVESTMENT



“Customers that take an upsell offer stay longer”

- McKinsey & Company


Customer Lifetime Value is the Key Metric

4. MOBILIZE YOUR ADVOCATES



“Customers that come in through advocacy stay

longer and buy more.”- McKinsey & Company


“Customers that advocate for you become stronger customers themselves.”

- Influitive

5. RETAIN & RENEW CUSTOMERS



When Customer Success is operationalized around Desired

Outcome-based Success Milestones, renewals become a non-issue…

renewals just happen.

WHAT ABOUT CHURN?


“The purpose of business is to create and keep a

customer.”

Lincoln Murphy@lincolnmurphy