Over the past several years there has been a buzz around customer success, building out, enhancing, and expecting more from a customer success organization has been one of the hottest topics in the industry the last three years. Just in the previous year, I have seen an ever-increasing number of customers turn to customer success departments in the hopes of reducing churn, uncovering hidden expansion opportunities, and reducing their overall costs. The trend towards more customer-focused businesses in itself is a positive trend not only for these companies but also their customers. The move puts more of a premium on building long-lasting relationships while creating products that meet customers needs. While the outcomes here are excellent, I do have concerns over the impact on the broader user community as a whole. The issue I have started to see and that worries me is that as businesses focus ever more on paying subscribers, they risk starting to neglect the overall community, many of whom are non-paying users. These “free” members of the global community can easily be overlooked or shuffled to the back burner in favor of providing more value to paying subscribers.
If this pendulum swings too far too quickly that can put your business at risk. Let me explain.
Most customer success organizations are designed to service paying subscribers. You want to keep customers as ongoing subscribers for as long as possible and prevent churn. One of the best ways to keep those subscribers from churning is to provide and show value to them continually. You can do this through several different methods, such as: creating new features, producing content, giving training, adding additional services, building tools, or running events. Many of these items also are crucial to growing your user community ( who may not, in fact, be a paying subscriber ). Because these two groups overlap so much this can put these two areas at odds with competing outcomes. This conflict is especially true in the open source space as well as with applications that have a freemium model.
Most open source software (OSS) and freemium models work on the premise that users will start using freely available tools, content, and software to solve some of their business needs. If those users are successful, they will look to expand the usage of that application and will be looking to address additional needs and get even improve the amount of value out they are receiving from the app. Because they have already had some success with the application, they feel more comfortable paying for additional features and functionality and subscribing. This conversion from free to paid is the first essential step to success as a business. For SaaS companies tracking and optimizing these conversions is critical. In the open source space, we all want to track these, but the distribution model often makes it difficult ( there are ways to do it, however ).
Bottom line the conversions are critical. If you have a freemium or OSS model, reserving too much specifically for subscribers risks slowing down new user adoption and introduces uncertainty into the user->subscriber conversion process. That said even companies who are not relying on one of these models are often not sure where the line between free community and paid subscriber features and content should be drawn. For instance, over the past year, I have talked with many companies who struggle with the question of what content and education should be out in the open and what should be behind a paywall for subscribers only. I have also talked with a few different companies who got this mix wrong. The downside for them was a minimal decrease in churn, but a substantial ( think 20-30%) drop in new users coming in. When you boil it down, this is a discussion about balancing new customer acquisition -vs.- existing customer retention and both are critically important.
What can you do?
Once you start to think through this, I think you will begin to see that customer success is one component of a broader more coordinated effort involving “Community Success” or “User Success”. This distinction may be semantics, but there is an incredibly significant difference between these. I believe that mapping out the customer life-cycle and the customer journey is paramount to creating a successful customer program. You need to understand end to end how someone becomes a customers, what keeps them a customer, and what causes them to churn. The more you can map out and plan that journey, the more successful you can be in anticipating customer needs and capitalizing on opportunities when they come up. When you map out that journey, what falls on either side of a paywall should start to clear up. In a freemium or OSS model, you need to have a vibrant, passionate, and thriving community to get customers. Paying customers are just a smaller subset of the overall community, and making the global community a success will help not only your users but your paying customers as well which is a win-win. In the future I see the customer success function expanding and growing to have much more overlap and say in the global community, not just the paid subscriber community.
Categories: Customer Success Basics, Open Source
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