The 2 keys to Customer Success

If you’ve been reading up on Customer Success, you’ve probably seen a number of articles that outline the keys to Customer Success. There are posts about 10-step programs, 12 guiding principles, and even a manifesto. While these approaches aren’t wrong (they’re actually pretty good), they are complex.

At Sparked, we don’t think it needs to be that complex. If you’re in a role where you’re working to deliver more value to your customers and revenue to the business, you can narrow your objectives down to two:

  • Customers should login more
  • Customers should spend more

Ok, so why does this work?

First, let’s talk about logins – otherwise known as daily actives or monthly actives (DAUs or MAUs). After looking at the data from many different companies across industries, we know that customers who use a product frequently are those who are retained over the long term. It’s really that simple. The reason is that people who use a product a lot are getting a lot of value from it. Of course, there are a few exceptions, but they really are edge cases. So, from the customer-value perspective, you can really just boil it down to: are they using it?

BUT, that’s not all you have to care about. Because at the end of the day, you want your business to thrive. So you also need to look at how much money the customer is spending with you (or generating for you, if you’ve got an advertising model). Luckily, if you’re doing well on objective #1, this one falls in line. Customers who are logging in every day or every week are much more likely to find your product indispensable. So when up-sell, cross-sell, or renewal time comes, they’re primed for the purchase.

It’s worth noting that these are key objectives – not metrics. You can formulate your metrics around the specifics of your business. For your business, DAUs might make more sense than MAUs. In fact, when we look at the data, we find that weekly actives are often most significant to retention. But WAUs sounds kind of funny. Maybe that’s the reason we don’t see this metric used very often.

As for spending more, you might care about monthly recurring revenue, average basket size, or lifetime value. In fact, it’s probably lifetime value that you’ll care about most. If so, it means that sometimes you win when the customer spends less per month, but sticks with you for longer. That’s more valuable for the business in the long term.

And there you have it. Two key objectives for Customer Success. See you next time.

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Ben started his career as Lead Engineer at a social software company, acquired by Student Advantage, and co-founded a company that built award-winning web sites for Nokia, The North Face, Sony Pictures, and Calvin Klein. In 2002, Ben became CTO of DFILM, a web and mobile company with clients such as Sam Adams, Hyundai, Old Navy, IBM, The Sierra Club, and Scion. Ben graduated from Stanford University with Honors, Distinction, and Phi Beta Kappa.

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