Customer Success

"Customer Success" is the modern term for what used to be called either customer support and/or professional services.

As defined in an article by Hubspot,

Customer success teams are dedicated to helping customers achieve their goals. They optimize their company's value in the eyes of the customer by providing them with useful resources and reliable support. When successful, customer success teams foster and develop a mutually beneficial relationship between their company and the customers they work with.

The stages of customer success

Customer Success (CS) teams play a role along almost the entire customer journey and are therefore essential for how customers perceive a product and company.

In particular, the CS team operates at the following stages:

  1. Sales: Often sales engineers are located in the CS team. They help prospects understand the product deeply and answer in-depth questions, including how to apply the product on a prospect's specific situation. Good sales engineers are essential for sales success particularly in higher-end products.
  2. Onboarding: Bringing a new customer on board is one of the main tasks of a CS team. It has to work with new customers to understand their requirements and particular situation; walks them through the first steps with the product; customizes the product as far as needed and possible; and takes customer feedback about additional needs and concerns.
  3. Ongoing support: Most customers will have questions about a product from time to time, and CS is responsible for answering these questions. Typically CS is responsible for the first two layers of support (initial questions and drill-down) and will hand off third-level issues (tough technical problems) to engineering.
  4. Upselling: Since the CS team is in the closest relationship with existing customers, it will often be in a position to upsell customers to a higher level of the product, introduce new features and promote extensions. This is a tricky balance since CS should be the trusted partner of customers and not come across as being to "salesy". The best CS teams cooperate closely with the sales team for upsells.
  5. Check-ins: Some customs are proactive and will contact CS teams all the time, but others are more passive and sometimes end up churning due to frustration with the product that they never communicated. CS teams should therefore establish periodic check-ins with customers where they solicit feedback, concerns, and ideas. A quarterly rhythm (particularly for lager accoutns) is often best, particularly in earlier stages of a customer relationship.
  6. Offboarding: Customers churn for all kinds of reasons, and it is CS's responsibility to make this undesired event feel positive. Churned customers sometimes come back, or they might give a positive referral to others who might find the product to be a better fit for their problems. In any case, CS should be supportive even when customers leave.

Along all these steps, great CS teams make it a priority to create resources such as a knowledge base, training documentation and demos to make its own work more scalable and help customers access product information without having to arrange calls. This is beneficial for both sides.

Organizational aspects

CS teams typically report either to the head of product (CPO, maybe CTO) or to a Chief Revenue Officer who manages all customer-facing departments (including sales and marketing). Both approaches have advantages.

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A CS team that reports to a product function will work better for rapid iterations of the product, so it is a more typical pattern for earlier startups that still change the product frequently. More mature organizations often shift CS to the business side of the house because CS becomes instrumental in keeping customers happy and upselling them.

CS roles are very often a great starting point for other career paths. Since CS people are intimately familiar with the product, they can develop into great product managers, and since they communicate with customers frequently and develop a lot of customer empathy, they often make the best sales people in their next career step.

Typical roles in a CS organization include:

  • Account managers (AMs): They own and manage the customer relationship, making sure that the customers get the most value out of the product. They also identify upsell opportunities and conduct business reviews with customers.
  • Customer Success Managers: CSMs handle the more tactical aspects of the customer relationship, such as answering support questions, helping with onboarding and feature roll-outs. They support AMs in detecting customer satisfaction issues and upsell opportunities.
  • Onboarding Experts: Some companies have dedicated experts for the onboarding process
  • Technical support experts: Particularly for more technical products, there is often a 2nd level technical support team that deals with issues that CSMs can't resolve on their own.

KPIs and Pitfalls

Customer Success is a complex task with many soft factors and nuances, since it's all about interacting with customers and their changing needs.

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A frequent pitfall is that CS teams get overly captured by the needs of their customers, neglecting other business goals such as providing cost-effective customer service and upselling accounts.

Managing a CS team is therefore a question of finding the right balance between stellar customer service and hitting the right KPIs for the business.

Typical KPIs for CS teams are:

  • Free-to-paid conversion: If the CS team is involved in onboarding new customers who use a free version of the product, this is an important KPI
  • Time to issue resolution: How long it takes for a customer support request from receiving it to providing a complete solution.
  • Churn/ logo retention: How many customers stayed on board
  • Net revenue retention: While not owned by CS alone, account expansion and therefore positive net revenue retention is strongly driven by CS interactions.
  • Upsell percentage/ARPU increase: How many accounts upgraded to a higher (more expensive) version of the product.
  • Net promoter score: Also a function of multiple aspects, but CS often has a major influence. See details here
  • Customer health score: Some more advanced CS organizations define their own blended score of customer satisfaction metrics. Components can include frequency and depth of product usage, expansion of the internal user base in accounts, number of support requests, etc.
  • Customer Lifetime Value: The longer a customer stays and the more they spend, the higher their value.

Obviously many of these KPIs are not owned by CS alone, but certainly influenced significantly. CS should therefore collaborate closely with product, sales and marketing to plan how these metrics can be improved.

Useful Resources