What does it really mean to be customer focused in the Customer Success (CS) arena? How do you start an effective CS function, grow it, scale it, and manage it well? In this five-part series, we’ll tackle those areas and more with a structured approach post-by-post.
We’ll start today with an understanding of what it means to be customer focused, and then we will take a deeper dive into these key areas in following posts:
Let me start with a polite warning: If you and your team don’t first measure your success based on key outcomes defined by your customers, with other metrics like revenue, margin, retention rate, renewal rates, upsell rates, etc. as secondary, this blog post series might not be for you.
Because the cornerstone of well-managed Customer Success programs are clear and measurable outcomes based on customer value: what your customers value in their business and how your products contribute to that success.
Without that clarity, you will often find yourself out of alignment with your own customers’ needs, which can lead to all sorts of downstream challenges. If you’re open to rethinking this fundamental assumption, read on.
Many readers are aware that Customer Success is a widely used term in SaaS, and other contractual-driven businesses, usually implying someone on the vendor/supplier side is accountable for keeping the customer “satisfied” to ensure that the customer is effectively using the product so that they will continue being a paying customer (annuity/revenue stream protection). In short, make the customer successful so the company can be successful (and ultimately grow revenue, margin, installed base, etc.).
In any business model, whether the function is paid for out of customer funds (monetized as a separate offering) or as a cost of operations/sales/delivery (vendor funded), let’s consider what drives the need for Customer Success and hence the need to manage it (these all from a vendor perspective.)
Conversely, what are the reasons to have a CSM from a customer viewpoint?
Advocates and Agents for Customers—CSMs are uniquely positioned to deliver explicit value from within and why CSMs should start with the customer need first.
One overlooked dimension of CS and the role a CSM plays, is that even in companies that are very customer focused, where many roles might seem like they aligned with the customer, the CSM is uniquely positioned working at the interface of the customer and the company as an “agent” or advocate on behalf of the customer. This role differs from sales (often incented to close business and move on), delivery (often pressured to managed costs and variation, keeping both to a minimum) and finance (who want to see financial results for the company). Defined well, a CSM can be THE advocate for the customer, pushing for new features, meeting unmet needs, solutions, and resolution of issues WITHIN their role as the designated owner of the customer relationship, all to the betterment of the customer and the company. This can only happen if the needs of the customer are the starting point for the CSM and their action plans.
Trust forms the basis for all constructive business relationships, and nowhere is that more needed and relevant than in CS. When trust is nurtured and developed over time between the client/customer and the CSM, there’s a deeper and stronger level of transparency, communication, and ultimately engagement. In many ways, I’d argue that it is THE foundation upon which all other activities are built upon, to ensure a positive outcome that delivers value. When trust is gone (in the extreme) it’s harder for the CSM to be a strong advocate for the customer within their own company:
I’ve seen customers accept all kinds of mistakes and be super-forgiving when trust is there, and others who were ruthless when it wasn’t.
Another rationale for building trust through CSM roles is that often, the most frequent contact a key customer receives is from their customer success manager. This frequency of contact, and deep trusting relationship, can make some contract renewals go much faster, at a much lower cost of sales, than involving two teams (sales and CS), artificially. (We’ll discuss role clarity and teamwork in Blog Post #4.)
Note to Reader: One of my pet peeves are CS managers who introduce themselves to new customers as their “trusted advisor.” You can certainly call yourself their advisor. Only THEY can really say if you are their trusted advisor and so I would recommend you avoid calling yourself a “trusted advisor.” There’s a “Zen-like” issue here: Once you say it, you haven’t earned it. Let your customer be the one to say it because you earned it, not because you claimed it to be so.
Check out our next post in this series on getting the process right for customer success.
About the Author: Morris Wallack is currently an active mentor, teacher and advisor with over 36 years in high technology executive roles. Skilled in business planning, marketing, sales and services operations he held executive roles at Hewlett Packard and 3D Systems, with experience with new business startups, global management, service (XaaS) management, remote team management, customer success management and sales operations. He currently serves as a mentor with SCORE, CED VMS (Venture Mentoring Service) and NC State (BUS501/Poole School of Mgmt). Morris holds a BSEE from Cornell University and an MBA from the Tuck School of Business at Dartmouth College. He lives in Durham, North Carolina.