This is chapter 2 from my book: Farm Don’t Hunt — The Definitive Guide to Customer Success. You can order the complete book here
If in this new world your customers must be farmed not hunted, then Customer Success is the farming paradigm. As a concept, Customer Success has been around for just a few years. In fact many business leaders are still unclear on what exactly Customer Success entails. That is why the farming metaphor is useful.
Think of a farmer. While not particularly sophisticated, he maximizes his harvest with simple tasks that he repeats every year. He prepares the soil. He carefully tends to young seedlings. He provides his crop with attention, water, and fertilizer over time in order to ensure that his harvest will be healthy, not only this year, but in years to come. He identifies problems and tests solutions, keeping only what works.
If you think of farming your customers rather than hunting them, then what you know about farming takes on new meaning. Simple repetitive farming tasks become replicable business processes. Tending to new plants becomes onboarding your customers into on your product. And all of the things you provide your plants have business equivalents in terms of time, money, and attention. Crucially, when farming the goal is to profit over many years and any single plant will have many crops. This concept of nurturing and a long time horizon is the opposite of hunting with its upfront reward and short term focus. While there are some exceptions, farming is a remarkably robust way to describe Customer Success.
So think of Customer Success as farming your customers.
Your Customers Are Like Trees
I was born in a Moshav in Israel, which is basically an agricultural village. My parents were farmers and we grew all sorts of stuff for a living. If you accept farming as a mental model for your business I recommend raising metaphorical trees rather than perennials that die off every year.
I loved the smell of orange blossoms from the trees on the Moshav, so let’s think of your customers as orange trees. When you are growing orange trees, you have an innate understanding for their maturity stages — you need to do different things to them depending on their stage of growth in order to get the most oranges from your grove. Saplings require intensive care until they take root. Young trees have to be watered and fertilized differently than mature trees. When harvest time comes the focus of activities shifts to harvesting. When you identify sick trees you have to move very quickly to nip disease in the bud. In addition, when you plant a tree you expect an annual yield from the tree over multiple years. The work is not a one-time effort and the tree is not a perishable asset.
Customer Success is about treating your customers like trees, nurturing them until they begin to yield a harvest, and then husbanding them for as many seasons as possible.
Your Grove is Your Business
No single tree will make or break your season, rather it is the sum of profits from all of the trees that matters. Thus, you do need to monitor the overall health of your grove, with its many trees in various stages of growth. This allows you to maximize its yield. And to do this you generally have to apply resources that are limited — your time, water, fertilizer and so on. You should prioritize your time and effort to ensure that no tree is left behind and that you’re focused on every tree and at the grove performance (yield) overall.
In much the same way, implementing a program of Customer Success means managing your overall customer base and making choices about how to apply your limited resources to the segments of customers that will have the greatest benefit to your business, both in terms of current and future revenue, all while ensuring that every customer is provided with appropriate value from your product. The prioritization of work required to do this effectively is a major challenge to all Customer Success organizations.
Your Harvest is Your Revenue
Have you ever smelled orange blossoms? The scent means that the best time of year is coming — the harvest. Experienced farmers know in advance if the season is going to be normal, great or disappointing. The predictability is a result of the work that has gone in over the course of the year and its impact on the trees — and little can be done to improve the harvest by the time it actually rolls around.
If you have done your work well you will have a bountiful crop — meaning if you have prepared the ground, nurtured the seedlings and carefully nurtured your trees so that they will bear as much fruit as possible.
And if you do the work of nurturing your customers correctly so that they are getting real ongoing value from your product — well then that sort of success has a nice smell too.
The point of all this is not necessarily to maximize your harvest in any one season — in fact it can be counterproductive to do so. Rather, your goal is to maintain a healthy grove and ensure you can continue to harvest from it for years to come. This type of management often involves making tradeoffs between the long term and the short term, which need to be balanced carefully. Your goal as a farmer is to maximize the yield from your grove over time.
In terms of Customer Success, that balance and maximization is embodied in the concept of Customer Lifetime Value, or CLV.
CLV is the sum of the profit you make from your customers over time as opposed to in a single upfront amount. Like an ongoing Profit and Loss statement on a per-customer level, the CLV takes into account how much the customer pays per year (value) less the costs of maintaining them per year (Customer Retention Costs or CRC) and the number of years during which they subscribe to the product.
The goal of Customer Success is to PROACTIVELY IMPACT CLV.