Customer Success: A Brief History | CustomerGauge Customer Success: A Brief History

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Customer Success: A Brief History

In the realm of the customer, Customer Success is a phenomenon that is starting to carve out a niche for itself. Looking at the Google Trends graph below, it is evident just how new a search term both “customer success” and “customer success manager” are. But how did we get to where we are now, what is the history of the customer? In no way a comprehensive history of customer experience and making use of a wide array of ideas and technologies, we take you from the very (jokingly inaccurate) beginnings of the customer up until the birth of customer success.

Around 10,000 – 1 A.D. – With the advent of agriculture around 10,000 B.C. the first human settleThe First Marketplacements were constructed, surpluses of food existed and people started using tools in greater and more varied ways. At some point someone had an epiphany and turned to another person and said something like “I’ve invented this great new thing, I call it “the wheel” and if you give me some of your harvest, you can have it.” And just like that trading was born and the notion of the customer.

Jumping forward a 1,500 years – The industrial revolution starts in England in 1760 and another concept is born: Scale. With scale arrives a wide variety of new products, and with it the consumer market is born and the need for the first customer service teams.

1876 & The Telephone – The first major milestone for customer experience takes place. It is the year when customers no longer have to travel miles by horse in order to have face-to-face conversations to resolve a problem or receive product information. This is the year of the telephone.

Eighteen years later in 1894, the telephone switchboard isCall Centers invented and the telephone firmly plants itself as an integral part of the customer/company relation for the next hundred years.

The 1960’s Call Centers – Private Automated Business Exchanges come to prominence. What’s that you ask? It’s what we now commonly referto as “call centers.” And while this was a shift in technology and business efficiency, the real shift for the customer was that these centers were tasked with solely answering and resolving customer issues. These centers and the contact center solutions that were developed were the beginnings of what are now customer service departments.

1965 & Email – Meanwhile over at MIT a unknown customer revolution was taking place. The first host-based electronic mail program known as CTSS was developed, and all that was needed was a larger network for it to run on.

1986 CRM before CRM Email– The first contact management software is introduced to the world, which allowed the digitization of customer information meaning greater efficiency and organization.

1991 & The WWW – That MIT invention finds a home in the invention of the World Wide Web, and email along with live chat support begin their journey as customer interaction mediums.

2000s & The Real CRM – Customer management software grows up and becomes customer relationship management (CRM). Although actually invented in the mid-1990s, it isn’t until the turn of the century that data tracking becomes more sophisticated and companies are able to use the insights of CRM to reward customers for their loyalty.

These same years also see the rise of the online help desk. Meaning customers can now with greater ease access information and support, saving the time of both the customer and company.

Meanwhile,

on the theoretical front, a book is published called the “Experience economy” by Pine and Gilmore (1999), in which experiences are proclaimed to be the new economic opportunities that await companies. This book and its ideas become the underpinning for the modern day field of Customer Experience (CX).

This modern day conception marked a break from customer experience in the more general sense, because although the existence of the customer inherently creates customer experience. The realization was that as the age of the service economy dwindled with products becoming commoditized, price differentiation diminishing and customers demanding more, an excellent product or service was no longer a guarantee for success. So while for millennia there had always been an experience for the customer, what was needed from the perspective of the company was a grander picture. One that looked at the sum of all the experiences that customers had with products and/or services across the entirety of their relationship with a company, so as to remain competitive.

A New Dawn

As both CRM and CX took shape, the CX camp advocating for customer-centricity saw the perfect means to put their beliefs into action through the use of CRM software.

“Customer experience management is not just repackaged CRM," says Andrew Hull, director of Product Marketing at RightNow (a CRM heavyweight). "The internal focus of CRM often left the consumer out in the cold. CX marks the shift from internally focused solutions to solutions that focus externally to deliver superior customer experiences."

The Metric Kids

 NPS, CSAT and CESWhile at this same time, another group of individuals were raising their hands and saying that while using customer data is great and it does improve Customer Experience, it was still missing something crucial – the Voice of the Customer. With CSAT already in existence since the 1980s, NPS and CES were also created in the mid 2000s and the age of the voice of the customer was born.

The significance was that this was a complete break from the past decades of market research as these metrics were short, simple and most importantly only focused on understanding the customer’s experience. Coinciding with the increasing adoption and scope of the Internet, and software improvements, surveying customers became ever easier and with their ability to easily pair with CRM data they were able to firmly place themselves within CX.

Customer Success

 And so we find ourselves at the end of the 2000s, and the newly labeled SaaS industry is struggling with an issue: Retention. Before that of subscription software, on-premise software companies would typically have sales people bring in new business, account managers would work on quotas and commissions and focus on upselling, and tech support would be there to soCustomer Successlve problems.

SaaS companies in the beginning felt they could transplant such a model, but it wasn’t working. It was far too easy within the SaaS model for the customer to switch systems. In the past, the old on-premise systems meant often thousands if not millions of dollars were invested. Switching software companies was a very expensive and difficult endeavor, however with the pay-by-month model switching was neither expensive nor difficult. SaaS had a problem, they were an industry that was based entirely on renewable subscriptions and yet their customers had the ability to be as fickle and disloyal as they wished.

The solution: To engage their customers by making sure their software stayed relevant to their customers’ business. By managing their relationship with each individual customer in order to give each customer the most success possible with a product, SaaS companies were able to retain customers and with it Customer Success came into its own.

But while SaaS may have brought Customer Success to the fore, it is not a branch of CX that is solely used by subscription-based businesses. For what industry does not benefit from proactive customer engagement that resolves problems or rewards customers, so as to retain and maximize ongoing customer relationships. So while SaaS is particularly reliant on Customer Success for its survival, many other industries have benefited from focusing on the success of individual customers. Take that of e-commerce giant Zappos whose rise to prominence has, in a big way, been due to their focus on loyalty and customer relationships.

Where We Stand Today and What Tomorrow May Hold

It is hard to say what will come next; as different ideas have arisen over the decades they have found partnerships with technologies that at the time would have been thought of as having no applicability to customer experience. What may come then, could be completely unforeseen.Customer Success

However, unless radical unexpected change happens, it would appear that Pine and Gilmore were correct in stating that the marketplace is moving into a space that is ever more focused on experience. One clear example, The Internet of Things, highlights just how unlikely it is that the current customer experience trajectory is to abate as technologies become more immersive and integrated in our everyday lives.

So, while there are numerous companies that still do little to focus on the experience of the customer, the question is not IF they will become customer centric but WHEN, because those that don’t will be squeezed out by those that do.

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