As customer success continues to evolve, we’ve shared the foundational aspects to help you build a strong customer success organization through this five-part blog series:
Finally, to wrap up our series, here’s the fifth installment around scaling customer success.
Whether you’re just growing an existing customer success operation as your business grows, or you’re expanding the offerings and capabilities your team provides to your clients, the question of how to scale the operation will inevitably come up. Scaling an operation is NOT the same as growing an organization:
Here’s a set of common questions often facing growing companies about scaling Customer Success (CS) teams:
If I add new services, do I have the same team of CS managers manage the account or add separate dedicated CS managers?
First, these are all good problems to have when you have growth, and second, there’s no one right answer. Today I’ll share thoughts around scaling your operation and things to consider.
Key Principle: Know the difference between replication and leverage and when to choose which one.
Knowing the difference between replicating what works (duplicating the same process, approach, and structure as you grow) and leveraging what you’ve done is critical as you scale. In some situations, replication may be appropriate and yield significant scale benefits. Leverage is reusing parts of a process, structure, or platform to reduce “reinventing the wheel” and not starting from scratch when you expand a business. Leverage may be the better choice in other situations, and it will give scale benefits but perhaps not as much as replication. These concepts come into play whether you use a high-touch or low-touch/tech-touch model.
High Touch – Key factors in order of importance:
Relationship: When scaling a high-touch customer success model, the presumption is you’re adding more accounts to manage, and along with that, more resources (people) to manage those relationships. That’s why Relationship is first on this list—What are you replicating in the relationship? Do you know what key expectations, deliverables, and activities drive the value in the relationship?
People Skills: Identifying what to scale, first, then picking the right people to populate the expanding team with the right training and onboarding is critical to bring the relationship to life.
Process: Core processes that define the regular high-touch activities need to be replicated, ideally, as much as possible and if not, certainly leveraged with minor adaptation to meet unique customer requirements, culture, or needs.
Platform: The platform that tracks, manages, reports the activity is important yet listed last because it should, by definition, be scalable and secondly, won’t matter if the first three factors are underperforming. There’s no platform that’ll repair a broken relationship between two people/organizations that expect trust in a high-touch relationship.
Additionally, over time in high touch, you also want to consider adding low-/tech-touch capabilities to increase scale capacity. Activities that you did manually when starting out may lend themselves to automation or simplification so you can reserve the truly high-touch actions for your expanding team, and relegate less critical items to automation or lower touch methods. Examples could include simple things like:
Finally, as the CS teams grow, things done as part of someone’s job on an ad hoc basis may be better centralized in a “SWAT” team or focused support team who does the work once (internal training, process documentation, playbook updates, renewal proposals) rather than having each CS manager do it themselves. Once you’re large enough, these costs can be spread across the entire organization and the specialization will drive more consistent results. With more dedicated skill sets, this frees up CS managers to focus on their customer account responsibilities.
Low Touch – Key factors in order of importance:
In a low-touch or tech-touch model, things change. Here, process consistency and ability to scale and having platform capacity that supports an increased volume of accounts, activities, and users are first and foremost. A robust process running on a solid platform will be resilient and less dependent on who you put into place to manage low-touch interactions and relationships, while important, comes next. That is because low-touch/tech touch presumes a level of consistency already exists so that people are not a gating factor or critical bottleneck in the business operation. You should be able to “plug and play” as people come and go.
Additionally, as you scale, some activities could be fully automated (onboarding, self-service training, etc.) and keep costs lower per account as you add accounts without adding headcount.
Back to Basics: Scaling is easier with a strong foundation.
In Blog Post #2: Getting the Process Right and Blog Post #3: How to Implement the Right Platform, we described characteristics and considerations for setting up key processes and platforms as well as testing for scalability and flexibility. When you start to grow, this is where that early effort really pays off! Go back to your notes on process and flexibility as your starting point – decide what to replicate or leverage so you’re getting results faster without reinventing core processes. And, if you’ve documented things well, it’s easier sharing the information across geographies, new leadership in other locations, and moving quickly to get results you desire.
Metrics that Matter: What’s been really delivering value?
If you’ve put good metrics in place for both activities (inputs) and results (outcomes) of your customer success team, those measurements play a big part in validating scaling strategies. In short, you want to double down on what’s been working, delivering measurable results, and avoiding replication or leveraging activities that haven’t yielded high value. This is when you “lean out” your processes as you grow, as well as use the growth stage activities as a way to pause, look, reflect, and adjust your core activities to truly scale the operation. Metrics to review before scaling include:
Now decide which metrics trigger adding headcount or resources justified by economics, customer demand, or some combination of both.
Scaling from Pilot to Full Operation (High-touch) [Pre- SaaS Era]
At HP, when I started a value management office that included “customer success” roles, we began with a pilot to prove the concept of account-focused success management: Could we show that adding a platform that supported the customer experience conversation (in our case, called account delivery management) generate higher retention, renewal rates, or margin/revenue from the accounts using the platform? We set up the platform, identified two key accounts that were worth the effort (at-risk, large revenue, upcoming renewals) and ran the program for a year. At the end, we measured customer satisfaction, margin, and renewal rates, and the results were encouraging.
We then expanded to 17 accounts (top large accounts) and then finally to 30 major accounts. During the second year with the 17 accounts, we matured our processes for managing the team, the platform, the onboarding, and the measurement/management of outcomes. Only then did we really “scale”—we replicated the processes and approach for 30 accounts (i.e. the remaining 13). We had clear criteria on when to add clients to the platform, the account delivery teams were no longer unaware, and the managers knew what to expect. The expansion to more accounts went smoothly because we didn’t have to start from scratch, and with consistency in processes, we could do comparisons (apples to apples) on customer satisfaction, renewal rates, and revenue generation with limited manual work. This was an example of pure replication: “lather, rinse, repeat.”
Scaling “down” to smaller accounts (Low-touch)
As our success grew with the value management office, we had more account teams and sales managers wanting their accounts added onto the platform. In particular, smaller accounts wanted what the large accounts had, yet the economics didn’t warrant the same level of investment. At that time we had not monetized the incremental costs of platform onboarding, account management processes related to the value management office. We did charge for the labor component of account delivery (customer success management).
After careful review, we moved to a remote model to add smaller accounts to the platform. Here’s where we replicated the platform and its processes and leveraged the account delivery processes for client success. We were moving to a lower touch model. There was NO change to the platform or core onboarding, but we adapted the tools we used for remote conversations (not face-to-face) and we used loading measurements to make the economics work (more accounts per account delivery manager, semi-annual reviews vs. quarterly as contracted, etc.) Service levels and expectations were modified to the client, and these differences also allowed us to make it clear to clients what they could expect if they grew in size, comparable to major accounts, we could offer them a different experience (face-to-face quarterly reviews) with a consistent platform (no transition from one model to another) because we had replicated at the platform level.
The Bigger Picture: Growing the business, not just a function
A note on scalability – the Five Conditions Research
If you appreciate the research and what really drives scaling a business, particularly for companies above $2M USD in revenue looking to grow from post-startup to a sustainable company, recent research by TrueSpace and Gallup identified five conditions for companies to scale.
Their research identified five conditions necessary to drive scalable, sustainable, and profitable growth:
I encourage you to explore the research; in particular, as it relates to discipline and predictability which line up nicely with what we’ve discussed in this blog series about using metrics to drive performance, continuous learning, and an overall focus on performance.
As I hope you have come to appreciate in this series, there are some common themes that keep repeating themselves:
There’s no sure-fire “one size fits all” solution to managing customer success and scaling your operations, but if you keep those themes in mind, you’ll increase your chances of winning!
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.