Customer Success: How to Be Effective While Growing, Scaling, and Managing Your Team

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:

Blog Post #2: Getting the Process Right: Before putting people to work and using an effective platform to demonstrate, enhance, and capture value, you need clarity on what core processes deliver value to your customers.

Blog Post #3: Getting the Platform Right: We all use tools and technology to enable customer success managers to work with clients every day. What is needed in the short and long term to get a platform working in support of your value-added processes?

Blog Post #4: Getting the People Right: What to hire for, what to train for, and how to manage people. (And some challenges we all still might face.)

Blog Post #5: Getting the Scaling Right: If you’ve got a working CS team, what are the key areas that need to be considered when the business and team grows?

Customer Success – It Works Best When It Works First for Your Customer.

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. Why? 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.).

What drives the need for Customer Success? (From the vendor perspective)

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.)

#1: KEEPING CUSTOMERS: Switching costs from one SaaS platform to another are lower now than ever so you need the customer to adopt and use the product intensely so they won’t switch.

#2: MAINTAINING REVENUE: Revenue is at risk if customers don’t use the product regularly and decide to decommission use or find other ways to solve their business challenge.

#3: ASSIGNING AN OWNER: Customers demand accountability (large, contractual-enterprise engagements) and hence someone has to be identified as point person for the client (account retention) – particularly if they are paying for the Customer Success Manager (CSM).

#4: LEARNING AND BUILDING REFERENCE ACCOUNTS: Keeping close tabs on how customers use our products can help us improve the product, get reference accounts, and sell more stuff to others.

What drives the need for Customer Success? (From the customer perspective)

Conversely, what are the reasons to have a CSM from a customer viewpoint?

#1: GAINING VALUE FOR MONEY PAID: They’ve made a commitment to your application or service and need it to be successful so they can be successful (personally and for the company) (They need to get the value out of what was promised.)

#2: HOLDING VENDOR ACCOUNTABLE: They want a neck to choke, someone to hold accountable, or more often, they want an advocate INSIDE your company who really cares about their needs. (Who do I call, who really cares?)

#3: RECEIVING GUIDANCE AND TRAINING: They don’t know what they are doing and need someone’s expertise to guide them (adoption, usage, action).

#4: GETTING USE—THEY PAID FOR THE CSM: You convinced them to pay for the role, so they need to understand it to feel like they’re getting their money’s worth.

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, and the Role it Plays in Customer Success

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:

Others within the company might not “go the extra mile” for an account they perceive as untrustworthy (“Are they taking advantage of us?”)
The client might not be forthcoming with all the information needed to deliver value (“Are you taking advantage of me?”), and may be reconsidering the relationship if trust was broken without any repairs attempted. (Reconciliation, etc.)

Photo by energepic.com from Pexels

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.)

Building trust is a simple process:

Meet your commitments.
Learn to admit your mistakes, say “I was wrong” and move on to fix it.
Communicate clearly and without confusion – be direct and specific, be willing to say, “I don’t know,” when you don’t, and then go find out the answer.
Communicate in the customer’s language to relate best to them on their terms, not yours.
Take actions that serve your client first, they’ll notice. Seek win-win.
Say no when you need to, so you can meet commitments you’ve already made.

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.

Key Takeaways:

Start with the customer first in all you do; first ask: What do they value?
The CS manager is uniquely positioned to be THE advocate for a customer within a company.
Building trust is foundational to make the relationship work.

Customer focus: What it looks like when it’s not working

“What’s in it for us” is top of mind.
Customer input comes in randomly and inconsistently.
Decisions are made without customer input even when they affect customers.
Policies sound more like control (cost, security, information, etc.) than guidelines to empower CS to serve the customer.

Customer focus: What it looks like when it’s working

CS managers demonstrate constant curiosity about their clients; they follow their business results.
People inside your company ask first: “How will our customer benefit from this change or initiative?” Then, discuss to how make it work internally.
Your conversations with customers start with questions and ends with, “Is there anything else I can do to help?” rather than starting with presentations with, “Here’s what’s new. You need to hear about…”
Ultimately, you get intrinsic reward when your customer succeeds.
Decisions are always balanced between what’s right for the customer, good for the company, and ultimately good for employees.

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.