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Success Factors of Customer Success

Companies with SaaS products and sales organizations have probably had numerous discussions about Customer Success and have gone through many trials and errors. And with the publication of Yasutaka Fukuda’s “THE MODEL” in 2019, it has further raised the profile of the field. However, even if the four job categories of Marketing, Inside Sales, Field Sales, and Customer Success are actually created, there are other problems that may arise if the roles are simply created, such as the fact that each category may have a different orientation, which in turn may give rise to sectionalism. In particular, customer success is more difficult to define, as it is mainly responsible for providing customer support.

In this article, I would like to briefly discuss some of the elements that make customer success work. Generally speaking, customer success is about increasing customer satisfaction and LTV through retention and up-selling to existing customers, with churn and up-sell sales as KPIs. When I was in a customer success position at a SaaS product company, we had THE MODEL type organization, but there were always complaints such as “the quality of customers brought by marketing was not good enough for inside sales to connect with” and “the customers listed by inside sales had low unit price”. The customers listed by inside sales were low in terms of unit price,” etc. This led to the customer success department, whose activities and effects were relatively less visible than those of the sales department, and the following complaints were made: “Even if we could control the churn, it would not contribute to sales,” “Isn’t this just support work? Some even say, “Even if we could control the churn, they are not contributing to sales,” or “They are just doing support work. (However, as an organization in any age, there are always a certain number of people who want to make enemies within the company, so I don’t think this kind of talk will ever completely disappear.)

Although this is only my rule of thumb, I believe that what is important in customer success is a large part of the work and efforts that go before the work.

1.Management should clarify the role of Customer Success and KPIs.
2.Clarify the linkage between business KPIs and management KPIs.
3.Conduct evaluations at regular intervals, such as monthly, and share them with the entire company.

I think it is important to recognize that Customer Success is a department that addresses management issues. Also, the second one is particularly important, because it clarifies the reason why we are pursuing these numbers. This directly affects the motivation and contribution of the field staff. This will help us to clarify the reasons why the churn rate (churn) must be below a certain percentage, and what measures are necessary to achieve that percentage. What measures are needed to achieve this? How much sales must be generated in the medium to long term by up-selling? The entire company can work together to address these questions. Sectionalism has already become nonsense.

As for churn, I believe that each company has its own target values, but surprisingly, these are often industry standard values or comparisons with competing companies. In other words, they are the expectations of management. This lacks validity and will lead to a lack of motivation in the organization, and as a result, the achievement of these goals will be difficult to attain.

Of course, it is also important to have a leader who can lead the above KPIs and actions to achieve them. We will discuss this in the next issue of “The Ideal Leader for Customer Success.

Takehiro Yamaguchi