Last updated: Customer success vs customer satisfaction: Know the difference

Customer success vs customer satisfaction: Know the difference


There’s a ton of literature on customer success. Most of it focuses on preventing churn or increasing expansion. Little of it focuses on how to truly help customers succeed on their own terms, even though this is the essence of what we should all do.

Marketers for years have equated customer satisfaction with customer success. But they don’t mean the same thing. In fact, they’re very different.

Let’s examine the difference between customer success vs customer satisfaction, and drill down into how a business can become a true customer-centric organization.

The evolution of customer success

To understand customer success vs customer satisfaction, we need to first look at how the term customer success has evolved.

SaaS companies initially promoted it and eventually expanded to all industries. The first iteration focused on preventing customer churn.

In the early days of SaaS,  many early adopters would cancel their subscriptions after testing out a service, resulting in a high churn rate. To boost customer retention, suppliers developed a set of techniques, including tracking customer “health” (active usage of the solution), training, and moderating user communities.

Sellers discovered that techniques used to retain buyers could help “expand” customers. In the science of customer success, this means adding more users to the same account or increasing revenues from existing users (through an upgrade, for example).

Customer success evolved into a relationship that not only aimed to retain customers, but encouraged them to buy more. This produced a new metric: the Net Retention Rate (NRR), which monitors the balance between churn and expansion with a target above 100%.

Today, customer success is about enabling customers to achieve more. The focus isn’t “How can we be successful thanks to our customers?” but rather, “How can our customers be successful thanks to us?”

This shifts the focus from product features to customer outcomes. For many companies, this is a revolution that goes beyond sales and marketing to involve all functions.

Customer success vs customer satisfaction

Here’s what’s become clear: There’s no correlation between customer success and satisfaction.

It doesn’t mean that we should stop making our customers happy; it means that happy customers are not necessarily successful and vice versa.

To illustrate this, imagine someone who starts a transportation business with a second-hand truck. It’s uncomfortable and noisy, but they make a decent profit so that they can afford to buy a beautiful and shiny sportscar. They’re so happy driving it, but when an economic downturn hits, they’re forced to get rid of an asset. The choice is obvious; the truck is indispensable, not the car.

So the right question isn’t “How do we make our customers happy?” but “How do we build a solution that will become indispensable to our customer’s success?”

It’s a completely new story.

Beyond satisfaction: Helping customers reach their goals

Success has two inherent characteristics beyond customer satisfaction. It’s deeply personal; each person defines it differently. And it’s a goal. We aspire to it, knowing we may never reach it.

How can we help such a wide diversity of customers progress toward their drifting goals?

First, we can split our target users into personas. As marketers will tell you, a persona is a fictional character created to represent a specific type of user or customer that a business or organization targets. In most businesses, 80% of revenues can be divided into up to five personas.

A design company, for example, might target architects, civil engineers, construction engineers, and entertainment designers. Personas could be home architects, large building architects, industrial architects, etc. The assumption is that each has a common definition of success. For instance, it’s a fair guess that most architects look for faster design, creative possibilities, sustainable projects, and easier visualization.

Next, we can build a success map — a description of the usual steps that lead to success. Creating a success map is a science in itself but does not need to be overly complicated. A thorough understanding of your target users is what counts.

Here are some benefits of success maps:

  1. Articulate how the solution contributes to customer outcomes
  2. Segment customers by where they are currently, and where they’d like to be
  3. Structure programs and tools  (“success vehicles”) to help users get from A to B, including contextualized training, user community management, or enablement curriculum.

The success map must be dynamic and frequently adjusted to keep up with the evolution of technologies or the market.

Customer success and the role of sales

While early iterations of customer success were clearly sales functions, that’s not the case today. As the goal is to ensure users achieve their desired outcomes, it doesn’t automatically lead to incremental revenues for the supplier, at least not in the short term.

Suppliers monitor results through other measures, such as the usage of specific features of a solution or ad-hoc assessments related to user progression. This is why some companies separate customer retention and health, which sales and field marketing manage, from  “segment success” or “persona success,and assign those to the product management function.

This way, costs and revenues related to programs and tools can be booked against the P&L of the product line. In addition, the design of the success map closely relates to the design of the solution itself.

Setting up a customer success organization

Many companies eagerly want to move beyond the customer satisfaction mindset by setting up a customer success organization. But it’s not a simple thing; it requires a diligent leadership process:

  1. Set a recurring business or a business-as-a-service.
  2. Define the personas, success map, and success vehicles
  3. Define customer success roles and responsibilities within the current organization
  4. Identify untapped needs or problems to solve
  5. Streamline your customer success organization

Numerous companies have evolved their mission thanks to implementing a customer success strategy. Employees feel a sense of purpose  beyond making the numbers. This comes from the empathy required to enable customers toward their desired outcomes.

But in order to succeed, companies must make customer success a company-wide effort, not just a new marketing charter.

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