Certification Fuels Customer Loyalty

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    Certification Fuels Customer Loyalty

    In the book, Customer Success, author and Gainsight CEO Nick Mehta, tells the story of the ultimate wake-up call.

    In spring 2005, executives from Salesforce, the company with the world’s most popular customer relationship management (CRM) software, gathered at an offsite meeting to celebrate their 2004 achievements.

    Those included a successful IPO, a market cap of $500 million, an impressive 88 percent year-over-year growth in bookings and a record-breaking number of customers, 20,000, up from just 6,000 two years before.

    Salesforce was on a roll.

    And then David Dempsey, global head of renewals for Salesforce, stepped to the podium.

    Renewals were essential for Salesforce, which had single-handedly reinvented the subscription-based revenue model for SaaS (Software as a Service) companies.

    In that model, customers typically signed one-year contracts, paid monthly for the use of the software and then, 12 months later, renewed those contracts.

    Dempsey announced that Salesforce, for all of its high-flying success, was actually in a death spiral.

    While new customers were signing up in droves, existing customers were leaving (churning) at an alarming rate.  

    Customer churn at Salesforce was eight percent.

    Per month.

    Salesforce was effectively losing 100 percent of its customers every 12 months.  

    Sales Funnel Outline 252x275.jpgPer Mehta, “You can’t pour enough business into the top of the funnel to sustain real growth while customers are simultaneously pouring out the bottom.”

    Dempsey’s wake-up call was answered with deafening silence.

    In the weeks and months following the meeting, Salesforce CEO Marc Benioff elevated customer renewals to a companywide priority status.

    Benioff and his team knew that churn occurred when customers weren’t emotionally invested in the software.

    The task then was to get them invested by showing them how to drive their own success using the CRM product.

    From the point of view of an SaaS company, customer success is ultimately about customer loyalty.

    The loyalty that results in renewals and buying more products and services (e.g., more software licenses, more upgrades, etc.).

    Certification: Your Loyalty Building Secret

    In our last blog post found here, we showed how certification amplifies customer success by creating the emotional investment that leads to renewals.

    The goal of certification is to test candidates—who could be customers, employees, resellers or partners—to verify that they possess the knowledge, abilities and/or competencies necessary to fulfill a specific job role or function.

    For the past 20 years, we’ve worked closely with customers as they use our flagship test-development and test-delivery solution, Webassessor, to manage their certification programs. In that time, we’ve observed several truths.  

    Here’s one. For the exam candidate, certification is a financial, temporal and emotional investment. It’s a commitment.

    Here’s another. Certification can be life changing for the external benefits (e.g., promotions, raises, perks) it delivers as well as for the internal benefits (e.g., enhanced self-esteem, recognition) it confers.

    One more. Certification stirs strong emotions. A bond develops between certificant, product (software) and sponsor.

    OK, last one. Certificants become de facto product/brand ambassadors. They’re a loyal source of referrals, recommendations and renewals.

    There’s a reason why so many SaaS companies develop certification programs. Certification is a powerful strategy for customer empowerment, product adoption, customer retention, brand loyalty and customer success.  

    We’ll say it again. Customer success is ultimately about customer loyalty. And your certificants are often your most loyal customers.

    We have a two-minute video on how certification amplifies customer success. You can view it by clicking the image below.

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