Guide to Customer Success

What It Is and How to Do It

Customer Success 2019-02-27T11:35:08-05:00

The What, Why, Who and How of Customer Success?

Customer Success isn’t just for SaaS businesses. Any business built on a recurring revenue model has a vested interest in retaining and growing their customer base, and is, increasingly chartering some function that is dedicated toward this outcome. As a relatively nascent business function, Customer Success is still evolving and defining itself. In some organizations, it looks a lot like account management. In others, it resembles managed services. And, still in others, it’s more of a glorified support function. The common thread is that these teams are tasked with demonstrating and delivering ongoing value to customers so that they become and remain loyal. The icing on the cake is if those loyal customers then serve as advocates by referring new business.

Want to know more? Here’s a comprehensive library of Customer Success resources that will help guide your thinking and strategic approach to chartering a success Customer Success function.

What is Customer Success?

Defining Customer Success

Ask 10 people who have a Customer Success function in their organization what Customer Success is, and you will get a wide array of answers:

  • Implementation/Onboarding
  • Account Management
  • Renewal Management
  • Concierge Support
  • Expert Services
  • Upsell/Expansion
  • Training/Adoption Facilitation
  • Customer Marketing

The reason answers vary widely is because approaches to ensuring the success of our customers vary widely. What one business must do to keep their customers from churning can be quite different from what another must do. This makes defining Customer Success a challenge.

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Consider how Hubspot defines Customer Success:

an organizational function that helps customers get maximum value out of a product or service, while working closely with sales, marketing and product to achieve that goal.

This organizational function is a pivotal evolution from traditional account management, and as this evolution takes place, the function may look and operate very differently from business to business. Regardless of how the function of Customer Success is chartered, all Customer Success professionals have the same goal of delivering value to customers so that they don’t churn and, ultimately, become advocates for your business.

As a B2B company focused on Customer Success, Bolstra is committed to understanding the full picture of Customer Success. We have researched and written extensively about how Customer Success is defined across the B2B landscape and continue to work with our own customers to modify how they deliver their services to provide value TO their customers and gain value FROM them.  

Why is Customer Success so important?

Customer Success is important because loyal customers are so valuable – literally. Just take a look at the difference in total ARR over time when you retain 10% more customers.

Total ARR Comparison

Loyalty isn’t just a catch word. In a recurring revenue business model, loyal customers are the main ingredient in growth, and Customer Success Management is the methodology of ensuring that loyalty. While there’s a lot that goes into cultivating loyalty, delivering ongoing value to your existing customers is the foundation of it all.

How Are B2B SaaS Organizations Delivering Customer Success?

There’s no single answer to this question. The truth is that many B2B SaaS organizations are still figuring out how to charter and run their Customer Success functions. That said, there’s a real case for approaching Customer Success Management in an agile fashion. The agile methodology isn’t just for development. It’s being adopted across business functions, from marketing to logistics to HR–and it’s ideal for Customer Success Management. Its iterative approach allows CSMs to have a relationship with their customers that is built on a cadence of delivering ongoing, and mutually-agreed upon value.

The Virtuous Cycle of Customer Success Management

Consider the Virtuous Cycle of Customer Success Management:

The Virtuous Cycle of Customer Success Management

Essentially, the cycles of customer interaction are designed around work prioritization that comes out of retrospective meetings with customers where they articulate their desired outcomes. The CSM then facilitates the route toward attaining those outcomes and measures how well the customer is adopting the suggested approach. Each cycle repeats the process by revisiting goals, reprioritizing work, and then facilitating, measuring and tailoring services to help customers realize value.

We have such confidence in the agile methodology for Customer Success Management that we proffered Agile Scrumban as the ideal approach. It passes the test for effective business organization, and fundamentally aligns with the way SaaS companies are working to demonstrate ongoing value to their customers to garner their loyalty.

How Customer Success Teams Are Maturing

As B2B organizations refine how they charter and manage their Customer Success functions, they are in varied states of maturity and effectiveness. Most SaaS organizations have adopted Customer Success because they know it’s important to focus on doing what’s needed to retain customers, but their efforts are Ad Hoc, at best. As human resources are trained, data is unified, technology is adopted, and processes are standardized, Customer Success functions grow toward optimization.  

Customer Success Maturity Model

5 StagesWondering where your team falls on the maturity curve? Find out which of the five stages you fall under!

Take the assessment

Who Does Customer Success Management?

Perhaps the biggest question in Customer Success right now is, “How do we find the right people to do the job?” Considered one of the top 25 jobs of the year, CSMs are a hot commodity. Businesses are hiring for talent that can “drive usage growth””, advocate for the customer”, “balance the company’s best interest”, etc. while leading onboarding, delivering “concierge services”, and “identifying expansion opportunities”. The job requires quite the unicorn.

As the SaaS industry explodes and subscription service models abound, Customer Success Management is following suit. So, in answer to the question, “Who does Customer Success Management?” the answer is rapidly evolving, as the function becomes more clearly defined. While the goals of CSMs are pretty universal: reduce customer churn and increase customer retention and loyalty – the approaches and skillsets required vary. In some cases, the talent pool has strong technical expertise. In others, the CSMs are industry professionals who augment their solution to help their customers achieve their business outcomes, while adopting their software. In still other cases, the talent is largely relationship development, and serves as the primary point of contact for all customer needs – the concierge approach, if you will.

Customer Success : In a minute (or two) Ep.1

“Obviously I care about my customer’s success. But let’s be honest, I ultimately care about my customers being so happy that they want to renew with us, and they trust me enough to grow with us.”

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In the Trenches with CSMs

At the heart of Customer Success Management is highly effective relationship and lifecycle management. CSMs typically have several accounts and individuals they relate with daily. Their accounts may be in varied states of their lifecycles, and require different things from them at different times. Being able to juggle many tasks is a desirable skill for most CSMs.

Consider a day in the life of a CSM:

They may be Kicking Off a new customer, conducting a Retrospective or QBR for another, providing training for another, and processing a contract renewal for another. Meanwhile, they have various inbound requests that arise that they must address and manage. This requires lots of organization, as well as the expertise to conduct each of these meetings. This is the Blocking and Tackling of Customer Success, and requires great tactical resources for CSMs to use to hone the delivery of these essential building blocks of their jobs.

Because the work done by CSMs is so varied, and dependent upon the state and status of their many accounts, it is beneficial for them to use a platform that helps them manage their daily work, while having a full picture of their customer. Take a look at how the days line up for two CSMs – one working with a Customer Success platform and one without.

Day in the Life of a Customer Success Manager

We know that being a CSM is hard work, and seek to support these vital resources. While the successful attainment of their objectives is pivotal to the success of their organization, the work they do is challenging. It involves strong work management, and constant reminders about what’s important. Even if they sometimes make mistakes, CSMs remain the linchpin to providing value to customers, and that’s the key to customer loyalty.

How to Charter and Manage Customer Success

Of all the questions about Customer Success Management, how to charter it is the most hotly debated one.

  • Where does it reside in the organization?
  • How is it funded?
  • How do we measure and assess the team’s success?

In a high-touch Customer Success organization, these questions are paramount. Throwing bodies at churn mitigation is NOT the answer, but many organizations are still doing this while they seek to determine how best to organize and fund their CS charters.

Our answer to this question is to use an iterative approach to honing your delivery so that you find that “green glove” balanced approach to providing value TO your customer, while deriving optimal value FROM them. This is often easier said than done.

Our customer Coveo has done a great job of striking this balance. Establishing a profitable Customer Success charter involved iterating, failing, and fast-forwarding to hone their offerings such that they are now able to provide true value-rich offerings to their customers.

In addition to developing a meaningful menu of offerings to customers, Customer Success executives must study their team’s capacity and capabilities so that they are delivering the right services by the right resources at the right price. To do Customer Success capacity planning effectively requires accurate time-tracking and ongoing analyses of value perceptions. It’s definitely not something you can set and forget.

Customer Success is NOT Enough

Ensuring the success of our customers in adopting our solutions is the core tenet of Customer Success Management. However, it’s fast becoming table stakes in the world of subscription software and services. Customers have so many excellent choices and switching costs are so (relatively) low that being successful is the bare minimum for why customers remain loyal.

The goal must be garnering customer loyalty, which ultimately leads to customer advocacy.

Garnering customer loyalty leads to customer advocacy

Customer loyalty is dependent as much on value attainment as it is on a fully delightful experience. CSMs sit at the head of ensuring that delightful experience, but they are just one part of the overall experience. B2B organizations dependent upon recurring revenue streams are most successful in creating customer advocates when they consider the entire customer experience as they define how to charter their Customer Success function. While a designated team may take the lead in ensuring customers attain value, true Customer Success should be an enterprise-wide initiative or Big C, as Technology Services Industry Association (TSIA) refers to it. It takes a village – or an entire team – to ensure that customers increase in loyalty, and ultimately become advocates.