What’s the difference between customer success vs. customer satisfaction
It seems easy to confuse the two terms. And in honesty – it can be. But if providing great customer experiences is a crucial part of your business, then it really shouldn’t be.
While the two terms are intertwined, there are a few key differences that set them apart.
Understanding the differences and commonalities between customer success and customer satisfaction is as simple as knowing the key metrics you need to look at to provide both.
Most importantly, we’ll also explain why knowing the difference between customer success and satisfaction matters.
But before we dive in, let’s quickly go over what each term means respective to your business:
What is customer success?
The simplest definition of customer success is that your business or service has helped your customers meet the goals they set out to achieve.
Customer success in this case relies on the product or services your business offers to them.
Depending on your business case, customer success can mean a number things.
For example, if you operate a ride sharing app, then customer success could mean ensuring that your user gets to their destination quickly, affordably, and securely.
Another example could be a bank, which could define customer success as a client closing financing on their dream home.
The goal of customer success is, well – to help your customers succeed at what they’ve set out to accomplish with your business.
The benefit of focusing on customer success to your business is that it boosts customer lifetime value (CLTV), customer stickiness, and can prevent churn.
Focusing on customer success can result in a stronger bond between you and your customers, as well as increased and enduring loyalty.
I say “can result” because customer success doesn’t necessarily equal customer satisfaction.
…and how about customer satisfaction?
Helping customers achieve their goals and be successful is fantastic. It’s at the very core of what many businesses set out to do when just getting started.
But what’s the point of all the customer success in the world, if using your products or services makes your customers miserable?
Customer satisfaction can be simply defined as how happy customers are with your products or service.
Now, this level of satisfaction can be directly tied to how successful they are at achieving their goals – but it doesn’t have to be the case.
Sometimes, customers love your products or service – but not the outcome.
This can be turned into customer feedback that can go towards helping you improve your products and services.
What’s the difference between customer success and customer satisfaction?
Quick summary so far – customer success is the net business outcome a customer has using the products and services you provide.
Customer satisfaction indicates how satisfied customers are with your products and services. This can be (but doesn’t have to be) linked to the level of personal success a customer has had using your products or services.
So, the two terms are related and can be co-dependent – but also aren’t. Remember how I said it can be easy to confuse the two terms? Yeah…
Just keep in mind the roots of each respective term:
- Customer success – is about how successful you make your customers in achieving their own goals
- Customer satisfaction – is how satisfied customers are using your products and services
Where the two get intertwined is in the potential (but not necessary) reliance of customer satisfaction on success.
Now that we’ve made this clear, here’s why knowing the difference between customer success and satisfaction matters.
Why knowing the difference between customer success and satisfaction matters
Customer success and satisfaction are two key components of customer experience.
And CX is the arena in which all businesses compete in a life-or-death battle for competitive differentiation.
Customers today are more empowered than ever.
No business is immune to the growing expectations customers have for friction-free customer journeys.
It’s easier now than ever before for customers to plug into a new platform and start reaping the rewards of products and services that are optimized for both their success and satisfaction.
So, what goes into building customer success and satisfaction?
I got you covered.
Building customer success and satisfaction – know the metrics
The first and most obvious customer success metric is customer health score. This score can indicate whether customers see any value from your products and services. This is at the very core of customer success.
A business can calculate its customer health score by examining a few key factors – i.e. what are their finances like, is their user base growing, are they hiring… these are indicators of positive growth.
Low customer churn is a complimentary success metric to customer health. If your customers are retaining their customers – then you’re clearly providing them value on that end.
Another good indicator of customer success you can see on your end is customer lifetime value.
This fundamental customer success metric shows the total revenue you can expect from a single customer over their lifecycle with you.
It’s easily calculated by looking at average purchase value, purchase frequency rate, and customer lifetime span.
Examining all these gives you an indication of whether your customer is on the fast track to success thanks to you.
Lastly, looking at monthly recurring revenue shows what your customers spend (along with positive and negative trends) with your business each month. This is a more granular indicator of your customer’s success.
And if you’re a SaaS, you also want to look at:
- Product usage rate – this metric shows how often your customers use your service. Also look at average time on platform or in app
- Active users – keep an eye on this metric to see whether the number is going up or down, which will show you how many users are finding value with you
- Trial conversion rate – customers will use your free trial to immediately evaluate whether or not your service provides them any value
Customer satisfaction metrics
Key customer satisfaction metrics start with your Net Promoter Score (NPS).
NPS shows how satisfied your customers are by simply asking whether they’d be likely to recommend your service and rating on a 1-10 scale.
Very closely related to NPS is the customer satisfaction score – the key difference being CSAT asks to rate the customer’s experience with your company.
CSAT is measured by dividing the number of positive scores by the number of total scores and multiplied by 100 to express as a percentage.
And if you’re wondering how to increase customer satisfaction, we’ve covered just that in another blog.
The detailed steps in that blog can be condensed to these bullets:
- The customer journey – make guiding customers through their journey convenient and easy with omnichannel communications options
- Provide omnichannel support – the right platform helps you provide consistent support on all channels your customers choose
- Personalization – combine rich customer profiles from your CRM with rich messaging capabilities on a variety of channels to provide highly personalized experiences
- Automation & self-service – chatbots and IVRs can help you provide your customers with the quickest support
- Quickly adapt – use a system that can quickly add new channels to follow dynamic customer communication trends and demands
Now that you know the difference between customer success and satisfaction, know why you should know the difference, and how to measure each – you’re just about ready to start providing customers with superior customer experiences.
All you need now is a partner who can help you leverage omnichannel communications to reliably deliver excellent CX. This is where the CPaaS model becomes the crucial differentiator.
How CPaaS can help make you more successful
CPaaS or Communications Platform as a Service is a cloud-based platform that enables businesses to quickly and easily add multiple communication channels into their own applications. For businesses looking to explore the benefits of introducing omnichannel messaging capability, it allows them to very quickly get results without the expense and hassle of developing their own solutions and managing the associated infrastructure.
For platform companies that provide communication services to their own set of customers, the flavor of CPaaS that they need to be successful needs to be more evolved. This is why we have introduced CPaaS X, a modular API stack designed to help platforms scale exponentially with reduced engineering effort and greater operational efficiency.
With CPaaS X platform companies can tap into all the ingredients for success:
- Channel flexibility with no increase in deployment and management overheads.
- Automation that brings immediate and tangible benefits, not just promises of future returns.
- Ability to scale communication up and down during the natural cycles of the year.
- Optimized costs by reducing waste and minimizing management and reporting effort.
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