Customer Success Obsession – Disruption Or Disruptor?

March 19, 2019

With the popularity of SAAS, customer success is now a more well-known industry buzz word. Most importantly, it is a must-have function in any technology company.

Furthermore, Forrester report stated that successful customer success leaders have contributed to compound average revenue growth of 17% as opposed to 3% laggards.

Let’s face it, CEOs, investors and customer success leaders, it is a lot more fun to be a disruptor than being pulled into disruption in the early stage of customer success revolution.This is my first of the series of blogs dedicated to this topic.

What is customer success?

At a recent conference that attracted many startup CEOs, I was surprised that majority of leaders erroneously boil down customer success to mean “customer retention”. They associate it with a combination of functions such as account management, professional services, customer on-boarding and technical support. While, customer success is all of these, it does not stop there. In reality, customer success is the byproduct of the combined efforts of sales, marketing, product and customer success. It encompasses professional service, account management, technical support, technical account management plus managed services, training, education and certification.

Most can agree that every interaction with customers plays a critical role in driving customer satisfaction. What differentiates top performing companies from mediocre performers is how well they integrate their customers’ feedback with their product roadmap prioritization, Go To Market (“GTM”) strategy and operations. Their “re-earn customers’ business every day” attitude sets them apart from their competition. Top performing companies track business impact to customers, establish voice of the customer programs to understand how to improve customer experiences, gain visibility on how well customers have adopted their solution and prioritize their product roadmap accordingly. And they set up processes to advance customers to higher levels of sophistication and maturity. Top performing companies have common metrics in place to drive cross-functional alignment among sales, marketing, product and customer success teams.

Where does customer success belong?

There are two schools of thought on how customer success team should be organized and who should own customer retention. One is to bury it under the sales/GTM team; the other is to have them as a peer function of product and GTM. Burying customer success and retention under Sales/GTM typically treats customer success as a function of revenue/cost, whereas customer success as a peer function of GTM and product allows customer success to play a more strategic role in driving customer adoption and better aligning customer feedback with product roadmap prioritization. Companies with highly transactional businesses or in the very early stages can get by without separating customer success from sales but rapidly scaling and larger organizations are best served with customer retention residing with the customer success team. This is primarily due to the high touch interaction required to drive adoption success and deliver measurable value. Hunting (sales) and farming (CS) are two distinct skillsets. Expecting a hunter to farm or a farmer to hunt will have negative impact on the customer experience and result in suboptimal retention. Hiring leaders with low egos will be critical, as organization structure is in flux at early growth stage and collaboration is a must regardless of where customer success team resides.

Multiple touch points produce a better pulse on your customers

Having gone through trials and errors at multiple companies, I have found that the following three processes can be implemented with minimal effort, and produce big, positive impact.

A post sales Customer Welcome Call to introduce the team to establish the swim lanes of the team members and escalation paths to the customer. This is the perfect time to validate your understanding of what “success” means to your customer and how it will be measured.

Quarterly Business Reviews with customers provides an opportunity to understand what other strategic initiatives the customer has and how you can set your customer up to achieve them. It allows you to validate upcoming milestones, adjust course and set greater goals with your customers. It allows you to focus on elevating their game through interaction with their executives.

Post engagement check ins allow you to validate that the delivered outcome is aligned with customer expectations and solicit feedback on where to improve and focus on what’s next. It establishes partnership and gives you an opportunity to understand if the customer is willing to be your reference.

The real secret of success

As companies reach beyond 300 customers, they start feeling overwhelmed and risk of losing the intimate relationship with their customers as they find it challenging to scale at the accelerated pace they’re used to. The teams end up spending more time on tactical renewal discussions rather than proactive outreach to understand what really matters to their customers. To scale, companies should be obsessed with their customer’s lifetime value and have a dedicated customer success team focusing on driving customer adoption.

The real secret sauce of growth is to become obsessed with your customers. Inspired customer success leaders think of customer success as a strategic function and collaborate with cross-functional leaders to evolve execution strategy based on the only feedback that really matters – customer feedback.

Source: https://tigonadvisory.com/customer-success-obsession-disruption-or-disruptor/

About the author

Helen Yu (@YuHelenYu) is a Global Customer Success Executive and Board Advisor who generates global growth and profitability through scaling business models, laser customer focus and innovative digital transformation.

https://www.linkedin.com/in/tigonhyu/