Scaling CS for high-growth teams
Having scaled the Customer Success function for companies like Druva, Recurly, ServiceNow, and Gainsight, Tanya is a proven leader who is passionate about CS. In this blog, we cover her strategies and playbooks to excel in her CS leadership roles.
On the more personal side, Tanya is a mom to 2 teenagers: Lucy who is almost 12 and Jonah who is 15 and just started high school. Lately, they’ve been baking AND EATING bread together. Is there anything better than freshly baked bread? 😄
#1. What’s your 30–60–90 day plan at a new company?
My 30-60-90 day plan would start by focusing on people, including meeting the team and understanding their work and processes. I would ask what’s not working and aim to show empathy and leadership to tackle those issues in the first 30 days.
In the next 60 days, I would refine the plan into an actionable one and also learn more about the product to gain credibility when talking to customers. Throughout this time, I would also use feedback from the team to find quick wins and process tweaks to improve their experience.
Ultimately, my priorities are people in the form of the team and customers. Meeting customers is important, but I would push it to the 60–90 day window to ensure that I have something meaningful to discuss.
Regarding technology, I would understand the technology stack available and plan for potential changes or improvements.
#2. What are some “quick wins” you aim for?
The objective here is not to boost my own ego but to build trust with the team to say - you have challenges, and that’s why I’ve been brought here, to make your life easier.
For example, we can rewrite the entire weighting algorithm for the health score, which could have a significant impact. However, this process takes time and requires a deep understanding of the product and its components. As a leader, I need to fully comprehend the business before making changes to the health score. So, that’s probably a little further down the road.
In the immediate term, we should focus on our QBR deck. Is there anything we can do to improve it? This doesn’t mean we can neglect the product understanding and process, but putting together a deck and understanding what data we need to include can be a quick win.
Another quick win is improving how we talk about risk. While the technology part of the process is crucial, we can provide CSMs with support via meetings and conversations and identify customers at risk by setting criteria for what risk really means.
#3. When’s the ideal time to split customer success and support?
A lot of times in an early company — and I don’t think this is a bad idea — you start with a customer success person who is kind of the jack of all trades. They’re the de facto support, and they’re also doing as much as they can from a success perspective. To me, the role of customer success is to demonstrate to a customer that we, the software vendor, are delivering on the promise of what they were sold.
So the CSM is out there trying to demonstrate what that value looks like, but I think the first CSM or CSMs in a company are kind of doing both of those things. They are inbound and outbound. They’re inbound in the sense that they’re helping customers block and tackle, or fix what’s broken and what needs configuring. They’re also a fact of technical support and professional services usually, too, where they’re helping with onboarding and making sure that you get initial value so that you can get long term value.
The evolution as to when it makes sense to split them out is when you start to realize that you’ve really exhausted those people, figuratively and literally. Those folks, and a lot of times it’s one person, so bring on a technical support person, whether that’s an individual contributor or a leader, to start to look at what technical support needs to look like, and then differentiate it.
But honestly, I’ve seen it work well where you start with a success person who really understands the product really well and has enough technical chops or knows where to go, right, to product or engineering to get things sorted. And then once that person is kind of again exhausted, then I split them out.
#4. Should CSMs handle renewals and expansion?
My experience has been that Customer success managers in early companies are responsible for renewals, including contract negotiations. Maybe they’re working alongside their AE partners.
My experience has been that CSMs can identify expansion opportunities, and then hand that over to an AE. But at larger companies, you can have a powerful team of a customer success manager and an account executive, the account executive who originally sold the deal with the customer success manager who came in and maybe was responsible for onboarding and is then kind of helping with that customer achieving their value. That’s a powerful combination, and so I think that team collectively can be responsible for renewals and expansion for quite a while. However, setting up an Account Management team may not be my biggest priority at an early stage company.
#5. CFO is a new stakeholder in today’s market. How are you tackling that?
One of the first things I would do is to make sure that my own CFO signs off on how we’re presenting/pitching the business.
Is the pitch that we’re making compelling enough for our own CFO? What do they wanna hear? What would they wanna hear if they were in the shoes of one of their customers?
The second piece, especially in the case of our largest customers, would be to invite our CEO and CFO, and ensure the EBR is a valuable use of everyone’s time by doing the right prep.
With customers who are already too far at risk, it’s a matter of leveraging the relationships and having our CFO reach out to the customer’s CFO to talk about value and to talk about what they’re seeing with other customers.
#6. What are some of the projects/initiatives that worked for you?
a. An initiative that we did at Gainsight was creating a stakeholder alignment process.
That is, we created a model persona named “Sally” with the characteristics of our ideal buyer persona, VP of Customer Success in Gainsight’s case.
Sally has specific KPIs that are important to her and they’re usually common across everyone in that role. We then looked at our most strategic accounts and asked ourselves — what is the biggest challenge for Sally here? Is it our product? Is it our the value proposition?
We then found an internal executive sponsor for their counterparts at the customer’s end (buddy). And our stakeholders would attend any meeting, EBR, etc that their buddy attends. This significantly improved our relationship with our top customers.
So now the customer has another executive within the company, apart from the CSM. And this also takes the onus of relationship building off of the CSM, to a certain degree.
#7. What’s the ideal Accounts-per-CSM ratio?
Deciding on an effective customer success strategy isn’t straightforward. While some advocate for a fixed model like assigning $5M in Annual Recurring Revenue (ARR) to each Customer Success Manager (CSM), it’s crucial to understand that not all customer accounts are equal. The distinction between handling 20 and 30 accounts can be significant, depending on their value and complexity.
My approach involves mapping out the customer journey. Initially, we need to define the desired customer experience and identify essential touchpoints. Then, we calculate the time required to adequately serve each touchpoint. For instance, how much time is needed for business review preparation, health check execution, and follow-up? We should also allocate around 20 percent of our time to address at-risk customers, recognizing that some require more attention.
Segmenting accounts by type (enterprise, mid-market, lower touch) allows for a customized approach. Starting with lower-touch accounts, we explore automation possibilities, such as instructional videos, walkthroughs, or self-service resources like checklists. This strategy aligns with a coordinated campaign approach, working collaboratively with marketing and other teams.
To optimize high-touch accounts, usually multi-million-dollar clients, we may aim for a lower account-to-CSM ratio, around 5 to 6 accounts per CSM. As we move down the value spectrum, this ratio can increase. However, there’s no one-size-fits-all solution, as it depends on factors like product complexity, CSM technical proficiency, and your company’s growth stage.
While CSMs need not be system integrators, technical products may benefit from CSMs with greater technical expertise. I envision a customer success team as a blend of subject matter experts and CSMs with customer success backgrounds. For example, in the context of legal technology, a mix of former lawyers or paralegals (subject matter experts) and customer success experts can provide a well-rounded approach.
As your company matures, you might consider adding technical account managers or technical success managers to complement the team. This cross-pollination of skills and knowledge promotes ongoing improvement, elevating the entire customer success operation. In essence, it’s about striking the right balance and adapting to the unique needs of your customer base and product offerings.
About the host and author, Keshav Ottoor:
Keshav is the co-founder of Telescope, helping leaders scale their Customer Success teams by doing more with less. To learn more or get in touch, visit: jointelescope.com
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