Customer success in product management: A conversation worth having

Customer success helps product teams thrive. Whether it’s managing SaaS platforms or physical products, the relationship between customer success and product management can make or break your business. Why? Because happy customers lead to better retention, increased revenue, and a stronger brand reputation.

Let’s jump into why customer success is important for product managers (PMs) and how to create a customer success strategy that drives results.

Why is customer success critical for PMs?

Product managers have a unique role as the bridge between customer success teams and product development. Your job is to translate customer insights into product strategies that lead to retention and growth.

Here’s why this matters:

Retention beats acquisition: Acquiring new customers is costly. Retaining existing ones is not only cheaper but also contributes to sustainable growth.
Influence on NRR (Net Revenue Retention): NRR vs customer retention is a hot topic. While retention focuses on keeping customers, NRR factors in upsells and renewals. A solid customer success strategy drives both metrics, creating a cycle of growth.
Competitive advantage: A strong focus on customer success can differentiate your product in a crowded market, making it the go-to choice.

Building a winning customer success strategy

Crafting a customer success strategy isn’t a one-size-fits-all process. However, there are a few universal principles that can guide your approach:

Listen to your customers

This might seem obvious, but truly listening goes beyond reading survey responses. Use tools like customer retention management software to gather qualitative and quantitative data:

Feedback tools: Collect input on features and pain points.
Usage analytics: Monitor how users engage with your product.
Customer interviews: Dive deeper into the “why” behind their actions.

Segment and personalize

Every customer is unique, so treat them that way. Use segmentation to tailor your customer success efforts:

High-value customers: Focus on upselling opportunities and personalized support.
New users: Offer onboarding programs that set them up for success.
At-risk users: Identify users with declining engagement and proactively address their concerns.

Align success metrics with business goals

Your customer success strategy should directly impact key business metrics, such as:

Customer retention rates: How many customers renew their subscription or continue using your product.
Net Revenue Retention (NRR): The revenue retained from existing customers after factoring in upsells and churn.

Empower your team with the right tools

Customer retention management software is a game-changer. These tools help your team:

Track customer health scores.
Automate follow-ups for at-risk accounts.
Provide insights into upsell opportunities.

Some popular options include Gainsight, ChurnZero, and HubSpot’s customer success platform.

NRR vs customer retention: Why it matters

At first glance, NRR and customer retention might seem interchangeable, but they tell different stories. Understanding both is crucial for product managers aiming to align with customer success goals.

Customer retention

This metric measures the percentage of customers who stay with you over a given period. It’s a foundational measure of loyalty and satisfaction.

Net Revenue Retention (NRR)

NRR goes a step further by incorporating:

Renewals: Are customers sticking around?
Upsells: Are they spending more over time?
Downgrades/churn: Are you losing revenue from downgrades or cancellations?

Here’s why NRR is often the gold standard:

It captures the overall health of your customer base.
It reflects your ability to grow revenue from existing accounts.
It aligns with customer success efforts, showing the value you deliver beyond retention.

In practical terms, NRR is like a report card for your customer success strategy. If it’s high, you’re doing something right. If it’s low, it’s time to dig into the data and reassess.

The role of customer retention management software

Managing customer retention at scale is impossible without the right tools. That’s where customer retention management software comes in. These platforms centralize your efforts, helping you:

Track customer health: Get real-time insights into satisfaction, usage, and engagement.
Predict churn: Use data models to identify at-risk customers before they leave.
Automate success workflows: Schedule regular check-ins, send personalized messages, and log customer interactions seamlessly.

Key features to look for

When choosing customer retention software, prioritize these capabilities:

Integration with product data: To understand how customers interact with your product.
Health scoring: To prioritize which customers need attention.
Customizable dashboards: For clear visibility into customer success metrics.
Collaboration tools: To keep customer success and product teams aligned.

How product teams can collaborate with customer success

Collaboration between product management and customer success teams is where the magic happens. Here’s how to foster this partnership:

Share data transparently

Customer success teams often have valuable insights from customer interactions. Sharing this data with product teams ensures that feedback is incorporated into future updates.

Co-define success metrics

Product managers and customer success leaders should agree on metrics like NRR, retention, and customer health scores to ensure alignment.

Regular syncs

Schedule regular meetings to discuss:

Customer feedback trends.
Feature adoption rates.
Strategies for addressing churn.

Customer success-inspired roadmaps

Incorporate customer success goals directly into your product roadmap. For example:

Add features that reduce support tickets.
Focus on improving onboarding flows for new users.

Final thoughts

Customer success isn’t just a department; it’s a philosophy that should be woven into the fabric of product management. By focusing on customer outcomes, aligning with retention and NRR goals, and leveraging tools like customer retention management software, product teams can create lasting value.

The bottom line? When your customers succeed, so does your product—and your business.

So, how will you integrate customer success into your product strategy? The answer might just be the key to unlocking your next growth milestone.

Wondering how top product managers are making informed decisions that shape the success of their products in 2024? The State of Product Analytics report is here to answer that and more.

We’ve surveyed product professionals from around the world to get a real-world snapshot of how data is driving product decisions today.