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Customer success management, customer health, and retention in B2B industries

Author

Listed:
  • Hochstein, Bryan
  • Voorhees, Clay M.
  • Pratt, Alexander B.
  • Rangarajan, Deva
  • Nagel, Duane M.
  • Mehrotra, Vijay

Abstract

Customer Success (CS) Management is an emerging B2B marketing strategy. The task of CS management is to increase customer retention through dedicated and ongoing proactive attention to improving the value customers realize from a product or solution. Leveraging a theories-in-use approach, we demonstrate the adoption of CS management across a wide range of B2B settings and unpack how the implementation of a CS strategy can complement existing sales and service efforts to increase customer retention. We find that a central element to CS management is the tracking of customer health, which is a new marketing metric that is viewed as the pulse of CS strategy. Customer health is a formative metric comprised of objective and subjective data points that track (1) relationship quality, (2) product usage, and (3) customer value realization. CS managers leverage customer health data to proactively manage B2B relationships and reduce churn. While CS management has been widely adopted, we also find that not all CS implementations are initially successful. As such, we describe contingency factors related to short-term ambiguities within the organization and long-term factors that impact implementation of CS management. Given the nascent nature of research on CS management in the marketing literature, our article closes with a comprehensive set of future research opportunities and emerging challenges for firms focusing on customer success.

Suggested Citation

  • Hochstein, Bryan & Voorhees, Clay M. & Pratt, Alexander B. & Rangarajan, Deva & Nagel, Duane M. & Mehrotra, Vijay, 2023. "Customer success management, customer health, and retention in B2B industries," International Journal of Research in Marketing, Elsevier, vol. 40(4), pages 912-932.
    • Handle: RePEc:eee:ijrema:v:40:y:2023:i:4:p:912-932
    DOI: 10.1016/j.ijresmar.2023.09.002
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    References listed on IDEAS

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    1. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "The Rise of a New Business Function: Customer Success (Management)," Management for Professionals, in: Customer Success Management, chapter 1, pages 1-6, Springer.
    2. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer Success Management Structures," Management for Professionals, in: Customer Success Management, chapter 10, pages 91-100, Springer.
    3. Oded Netzer & James M. Lattin & V. Srinivasan, 2008. "A Hidden Markov Model of Customer Relationship Dynamics," Marketing Science, INFORMS, vol. 27(2), pages 185-204, 03-04.
    4. Colleen M. Harmeling & Jordan W. Moffett & Mark J. Arnold & Brad D. Carlson, 2017. "Toward a theory of customer engagement marketing," Journal of the Academy of Marketing Science, Springer, vol. 45(3), pages 312-335, May.
    5. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer-Related Customer Success Management Activities," Management for Professionals, in: Customer Success Management, chapter 6, pages 45-59, Springer.
    6. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer Success and Customer Success Management," Management for Professionals, in: Customer Success Management, chapter 2, pages 7-24, Springer.
    7. Catherine Pardo & Stephan Henneberg & Stefano Mouzas & Peter Naudé, 2006. "Unpicking the meaning of value in key account management," Post-Print hal-02311677, HAL.
    8. Eggert, Andreas & Ulaga, Wolfgang & Gehring, Anna, 2020. "Managing Customer Success in Business Markets: Conceptual Foundation and Practical Application," SMR - Journal of Service Management Research, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 4(2-3), pages 121-132.
    9. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer Success Management Drivers," Management for Professionals, in: Customer Success Management, chapter 3, pages 25-32, Springer.
    10. Thompson, Craig J & Locander, William B & Pollio, Howard R, 1989. "Putting Consumer Experience Back into Consumer Research: The Philosophy and Method of Existential-Phenomenology," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 133-146, September.
    11. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer Success Management," Management for Professionals, Springer, number 978-3-031-26178-7, December.
    12. Michael Kleinaltenkamp & Katharina Prohl-Schwenke & Laura Elgeti, 2023. "Customer Success Management Outcomes," Management for Professionals, in: Customer Success Management, chapter 9, pages 75-90, Springer.
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