If you work in the SaaS B2B world or venture capital, you’ve noticed a trendy new buzzword over the past couple years — Customer Success Management. An increasing number of companies are hiring Customer Success Managers, and more B2B companies are adopting Customer Success software packages. So the question becomes, what is Customer Success? According to The Customer Success Association, the goal of this emerging functional area within a company is to develop “... a solution to [address] the core issues of technology customer portfolio development, retention and expansion.” For many people that definition may sound familiar. It is quite similar to what has been traditionally called Account Manager. But is the role of a Customer Success Manager different than a traditional Account Manager? Yes!
In a world where data is increasingly accessible, using analytics to understand and improve customer behavior and happiness is becoming not only the norm but also a necessity. A Customer Success Manager requires a different skillset than that of the traditional account manager.
The role of a Customer Success Manager is not reactive, it is proactive — perhaps why one key industry player named its solution, Preact. According to a recent Forbes article, Preact’s Customer Success software is a mixture of “behavioral science, machine learning, and big data analytics.” By using Preact’s software, Customer Success Managers “can predict whether customers will churn, renew, or upgrade based on their past behavior.”
This is powerful and CEOs should care. CEOs and CMOs are already seeing the value in leveraging big data analytics to improve the sales and marketing funnels. Think of companies along the lines of Marketo, InsideSales.com, and ExactTarget. The argument might even be made that there is a pervasively strong focus on customer acquisition without as much of a focus on retention and growth of existing accounts. This observation has lead to the emergence of new software vendors that are focused on helping you to retain, upsell, cross-sell and generally ensure you have happy and successful customers.Who are these new Customer Success software vendors? By most accounts, GainSight is viewed as the industry leader. Last year, in an effort to improve the understanding the customer success space, GainSight hosted a conference which attracted more than 1,000 professionals. This year, GainSight anticipates that figure will increase significantly as part of Pulse 2015 on May 12-13 in San Francisco.
Dave Blake, Founder/CEO of ClientSuccess, believes “there is room in this industry for several winners. It’s such a new space, and the needs of each customer will vary.” Although ClientSuccess is a newer entrant in the market, Dave said their solution is really resonating well with customer success teams who are looking for a holistic solution tailored to their needs.
With so much activity around Customer Success, the best way to track it is with DataFox. Below are the primary companies defining this new industry:
BlueNose is a customer success platform that empowers SaaS businesses to proactively manage customers through complete visibility, built-in playbooks, and a robust early warning system. Bluenose’s customers include leaders in the Software-as-a-Service (SaaS) industry such as DoubleDutch, Replicon, LiveRamp and Blue Jeans Network.
- DataFox Score: 956
- Location: San Francisco, CA
- Total Funding: $10M
- Recent Funding: $8M in November 2013
- Investors: Norwest Venture Partners, The Social+Capital Partnership
ClientSuccess is revolutionizing the way SaaS companies manage, retain, and grow their existing customer base. ClientSuccess delivers a holistic, personal approach to managing success throughout the customer lifecycle. ClientSuccess’s true Customer Success Management Platform™ provides actionable insights, rich customer analytics, and best practices to reduce churn, increase revenue, and maximize a customer’s lifetime value.
- DataFox Score: 826
- Location: Lehi, UT
- Total Funding: $1M
- Recent Funding: $750K in December 2014
- Investors: Plus550, Bullet Time Ventures, Peak Ventures
- DataFox Score: 1040
- Location: Redwood Shores
- Total Funding: $54M
- Recent Funding: $25M in October 2014
- Investors: Lightspeed Venture Partners, Bessemer Venture Partners, Salesforce Ventures, Summit Partners, Bain Capital Ventures, Battery Ventures, Silicon Valley Bank, Cultivation Capital, Capital Innovators
Preact is a cloud-based customer success service that helps subscription software companies maximize customer lifetime value by reducing churn, acquiring new paid customers, and increasing user revenues. Preact provides health metrics tailored to each user and account by tracking detailed session-level usage of web and mobile applications and server APIs. Preact predicts and informs which customers are likely to churn, renew, or upgrade by modeling usage and behavior patterns using big data analytics, behavioral science, and machine learning. Preact integrates with Gmail, Salesforce, Stripe, Zendesk, Desk.com, Helpscout, Mixpanel, and Marketo, and other leading cloud-based apps.
- DataFox Score: 938
- Location: San Francisco, CA
- Total Funding: $4.6M
- Recent Funding: $4.6M
- Investors: Trinity Ventures, Atlas Venture, Bee Partners, Karlin Ventures, Lion Wells Capital, Bee Partners, Launchpad LA, Atlas Venture, BOLDstart Ventures
Totango is a customer engagement platform helping SaaS companies create an active and engaged user base. Totango is built on the idea that customer success is all about understanding, measuring, and delivering business value to customers. To do this, Totango’s platform is focused on identifying and monitoring “leading indicators” that help SaaS companies predict at-risk customers and proactively drive positive customer experiences. Totango pulls in data from multiple systems to assemble a rich profile of every customer, including a predictive health rating and an “engagement score,” which is computed based on data science and machine learning.
- DataFox Score: 1010
- Location: Palo Alto, CA
- Total Funding: $19.3M