Customer Success vs Customer Satisfaction: What’s The difference?

In today's competitive business landscape, companies constantly strive to outperform themselves in customer experience. This article will delve into the nuances of customer success and customer satisfaction - two critical components of a stellar customer experience strategy.

Understanding the benefits of both these aspects can give companies a competitive edge, ensuring long-term customer loyalty and consistent business growth.

According to a study by Bain & Company, increasing customer retention rates by just 5% can increase profits by 25% to 95%. Therefore, it's vital to meet customer expectations (customer satisfaction) and exceed them (customer success).

While we won't focus on the definitions of customer success and customer satisfaction in this article, we recommend checking out CSAT vs NPS and What is Customer Success? for further reading.

Customer Success vs Customer Satisfaction: The differences

In this section, we'll delve into the distinctive characteristics of customer success and customer satisfaction, providing a more granular understanding of these pivotal aspects of customer experience.

Understanding and implementing both can pave the way for a robust and comprehensive customer experience strategy.

Customer Success vs Customer Satisfaction: What do they mean?

While related, customer success and customer satisfaction are two distinct concepts in the business world.

Customer satisfaction is a measure of how a company's offerings meet or exceed a customer's immediate expectations. It's a snapshot of your customer's feelings after a single interaction or transaction with your business.

This could be a purchase, a customer service call, or even a visit to your website. It's transactional, immediate, and only paints part of the picture.

Conversely, customer success is a broader, more encompassing concept. It's not just about a single interaction but the entire customer journey. It is a long-term strategy focusing on understanding the customer's goals and ensuring they achieve them using your product or service.

A successful customer achieves the desired outcome through their interactions with your company. This is not a one-off event but a continuous interaction, feedback, and improvement process.

Simply put, while customer satisfaction most often measures a single experience, customer success is about the entire customer life cycle and their ongoing relationship with your company.

A business that prioritizes both ensures happy and prosperous customers who continue to engage with and grow with its offerings.

Customer Success vs Customer Satisfaction: What are their goals?

Both customer success and customer satisfaction place the customer at the center, but they each have different objectives geared toward ensuring an exceptional customer experience.

• Customer success focuses more on creating exceptional onboarding experiences for users to improve product adoption and ensure customers are meeting their business goals with your product, while customer satisfaction is about creating excellent customer support and product experiences that leave customers delighted and excited to continue using your product.
• Customer success focuses on the long-term relationship between the customer and the company; customer satisfaction is more focused on meeting immediate needs and resolving any issues that may arise.
• Customer success aims to ensure the customer's overall success in achieving their goals with your product, while customer satisfaction seeks to provide a positive experience that leads to happy customers.

Both play essential roles in maintaining a thriving and loyal customer base but have different focus areas and objectives.

Customer Success vs Customer Satisfaction: What metrics do they use?

Both customer success and customer satisfaction have specific metrics that give companies insights into how well they are meeting their customers' needs. Understanding these metrics can help companies enhance their customer experience and drive growth.

Customer Success Metrics

• Churn rate: The churn rate is the percentage of customers who discontinue their relationship with a company over a given period. This metric helps identify issues before they become more significant problems and also measures the impact of customer success efforts.
• Customer Lifetime Value (CLV): CLV predicts the total value a business can derive from its entire relationship with a customer. The higher the CLV, the better the customer success.
• Expansion Revenue: This metric measures the additional revenue from up-selling or cross-selling to existing customers. Higher expansion revenue indicates successful customer success strategies.

Customer Satisfaction Metrics

• Net Promoter Score (NPS): NPS measures customers' willingness to recommend a company's products or services. It's a good indicator of customer satisfaction and loyalty.
• Customer Satisfaction Score (CSAT): CSAT measures customers' satisfaction with a company's products, services, or experiences. A high CSAT score indicates high customer satisfaction.
• Customer Effort Score (CES): CES measures the ease with which customers can get their issues resolved. The lower the effort a customer has to expend, the higher their satisfaction.

Knowing and tracking these metrics allows companies to develop better customer success and customer satisfaction strategies, ultimately leading to improved customer loyalty and retention.

Customer Success vs Customer Satisfaction: Which business function do they come under?

While closely interlinked, Customer Success and Customer Satisfaction often fall under different departments within a business.

Customer Success Department

Typically,customer success is its own department, especially within larger organizations.

A dedicated customer success team's primary role is to ensure customers achieve their desired outcomes while using the company's product or service.

They actively engage with customers, guide them throughout their journey, and work towards increasing the Customer Lifetime Value (CLV) and Expansion Revenue. The Customer Success team usually works hand in hand with sales and product teams, acting as the voice of the customer within the company.

Customer Satisfaction as Shared Responsibility

On the other hand, customer satisfaction is usually a shared responsibility across several teams. The Customer Experience (CX) team, Customer Support, and Product teams all significantly influence a customer's satisfaction with a company's products or services.

The CX team designs the overall experience, the Customer Support team solves immediate issues and concerns, and the Product team ensures the product or service meets and exceeds customer expectations.

These teams contribute to the company's Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES).

While both functions aim to enhance the overall customer experience, they are typically handled by different teams within a corporation. However, effective collaboration and proactive communication between these teams are crucial for a holistic and positive customer experience.

Customer Success vs Customer Satisfaction: What are their benefits?

While both play significant roles, they carry distinctive advantages that, when combined, can propel a company to new heights in customer growth and retention.

Understanding these benefits can help organizations effectively leverage them to enhance their customer experience. Let's explore these advantages in more detail.

Benefits of Customer Success

• Proactive problem solving: The customer success team proactively identifies and rectifies issues before the customer is aware of them, reducing churn and enhancing customer loyalty.
• Upselling and Cross-Selling Opportunities: Through regular interactions and knowledge of the customer's business, the Customer Success team can identify opportunities for upselling and cross-selling, thereby increasing revenue.
• Customer Retention: By ensuring customers achieve their desired outcomes using the product or service, the Customer Success team plays a vital role in customer retention.
• Referrals: Satisfied customers are likelier to refer the product or service to others, driving new business.

Benefits of Customer Satisfaction

• Brand Reputation: High customer satisfaction leads to positive word-of-mouth, enhancing the brand's reputation.
• Customer Loyalty: Satisfied customers will likely stay loyal to the brand and make repeat purchases.
• Reduced Customer Acquisition Costs: It's cheaper to retain an existing customer than to acquire a new one, and high customer satisfaction makes this possible.
• Competitive Advantage: Companies with high customer satisfaction can differentiate themselves from competitors, providing a competitive edge.

Customer success and customer satisfaction are critical to the company's growth and profitability. They are complementary strategies that, when properly integrated, can lead to improved customer loyalty, reduced churn, increased revenue, and overall business success.

Wrapping things up

To encapsulate, both customer success and customer satisfaction are critical factors in propelling a business towards growth and prosperity.

Customer success, focusing on proactive strategies, ensures customers derive maximum value from the product or service, fostering long-term relationships and opening avenues for upselling and cross-selling.

On the other hand, customer satisfaction is a measure of how well the product or service meets the customers' expectations, influencing brand reputation and customer loyalty and providing a competitive edge.

Together, they create a harmonious synergy that elevates the customer experience, reduces churn, and drives revenue, cementing the path for overall business success.