How to Start Your B2B Customer Success Solution (Not Team) — An Interview
This is an interview with one product leader on how he ended up running the customer success effort. Most recently from LivePerson and Wyng (formerly Offerpop), Amir Shub ran product organizations, but platform adoption and usage led him on the cross-team path to a customer success strategy.
When we’re hired, B2B marketers are often asked to focus on new business — “the most important relationship for you will be with our Head of Sales.” But it doesn’t take long in a subscription business to shift at least some of the focus to the lion’s share of revenue impact — usage, satisfaction, and renewals. Getting started addressing existing business necessarily shifts resources from other, more immediately measurable areas like sales — and the integrated solution to drive renewals is more difficult to track and to implement.
Q: Seems like there is a significant amount of information for customer success teams — and there are so many potential solutions. Where are people still seeing problems?
There’s so much material — and some useful software — but very little is operational at this point. Teams will subscribe to one piece of software with no access to the rest of the company’s systems and data. They believe that they will be able to address the problem, but they won’t.
B2B companies can be sloppy about customer engagement and success strategies because they usually start with a bunch of account managers. The opportunity to get both the efficiency of scale and an effective customer experience only comes with an integrated solution — but that solution is expensive, requires a 360 view of the prospect/customer, and is rarely the focus of external investors.
Q: How did we get here?
When customer software was proprietary and desktop, the sale moment was everything — once you were sold in, you would hand over to the account management organization. Tracking primarily to sales is still both less complicated and easy to measure.
Q: When does a company, especially a SaaS company, begin to look for a customer success strategy?
The pessimistic view is that most begin investing in a success strategy when the business hits a wall. You start a company with a product, and you are focused on sales and generating new business. Let’s say you get to 10 or 20 customers; you can handle them with the sellers servicing them or all-hands-on-deck with the product team. One day you get to 40 or 50 customers and you realize you need someone on them, but you don’t want to spend too much on it.
That’s when the grind starts. You hire someone junior — and pay them significantly lower than the Sales team — because you’re still focused primarily on new customers. It’s not really important to you yet and because you don’t think it’s as important, you aren’t willing to pay for a full solution.
Q: I’ve hear a target benchmark for a scaled customer resource is around $2M in ARR. I assume you can’t handle that with just people?
You start with a small account management team, and maybe a piece of software. But without the integrations and customer visibility, you will hire more and more account managers, and the revenue per head can not improve.
Obviously relationships are important, you need people — they create stickiness in B2B. But people don’t have to do everything, and unless the product experience is perfect, there’s no way for a customer success team succeed without an integrated system.
Q: Who is the ideal executive sponsor to get things going?
Well, in the subscription economy, the difference in revenue of 3% to 5% in renewal rate is often the difference between success and failure. So instead of focusing on new business, all of the leaders should be looking at usage, renewals, and customer success.
From my most recent experience, we initiated the effort from the product team. My success — and my team’s success — is based on adoption and usage. The old way of building products and a joint roadmap is to focus on pre-sale messaging and the sale, but in a subscription business, it’s all about customers getting value out of the product so they renew.
Working together with the product team, a customer success effort can apply product thinking, scale thinking — both on the user experience to make adoption easier, but also on usage with onboarding, education, and triggered engagement.
Q: What’s the biggest limitation to getting started?
One of the primary reasons software businesses have shied away from true customer success solutions is the number of integrations needed — application data, CRM, billing, automation tools, customer support software, social plug-ins, etc. You have to be able to see the customer 360 to surface insight. It not only requires effort, it’s daunting.
That’s why in order to get a true solution off the ground, you have to find a way to dress the project up to make it compelling. If the need is just bottoms-up from your account managers, you won’t get the resources.
Q: What are the steps to getting started?
The steps are like those for any other part of the strategy:
1) Articulate the impact to revenue and an outline of the solution to get buy-in. You need an actual business case — in powerpoint or whatever form works — that has been approved by both your business and finance leader to move forward. It’s just too easy for this important but longer-term work to be subsumed by the urgent, by the fire drills.
2) Agree on the metrics and reporting with a time horizon.
3) Architect the basic processes and technology architecture to start with, based on the metrics that will be the most impactful and build momentum.
4) Hire a mid-level person with experience and potential, but only if you have a responsible executive sponsor. Navigating a new function with a new hire requires both direction and consistently clearing the path. If you don’t have a dedicated exec and resources, don’t bother.
5) Start bringing in your first level of software and processes, based on the first metrics you want to address. This is where many start with a Gainsight or a Totango for tracking and/or a Zendesk, Freshdesk, or Desk.com for communication. They need to be integrated with other data and software and to have a technical owner to be useful.
6) Connect marketing assets and strategies to your first, post-sale processes. The marketing resources — automation and email, content, design, etc.– may have been built for the sales funnel, but you need the same for customer success. An easy example here is the feature and benefit product marketing that may only have been built for pre-sale materials. Success stories and case studies are also valuable to consistently share and to build value with current customers.
7) Plug people in only where it makes sense.
Q: What metrics and reporting do you begin with? Product usage? NPS?
There are a set of both metrics and tools for tracking that success leaders contribute. I use a list of several metrics and resources to map out the first actionable steps. There are indicators to watch, programs to build out, and cross-team owners that need to be involved. For some businesses, it’s mapping the stages of maturity and where their customers lie at that time. For others, it’s the leading indicators that precede renewals, like usage of specific features or activity metrics.
Many companies use a happiness or satisfaction metric, but you will see the effectiveness in how it’s used. Both positive and negative NPS should drive action. Positive scores should trigger additional feature information to solidify usage and referral conversations; negative conversations call for direct outreach, account analysis, and troubleshooting.
Q: Who’s the best first hire?
The people who really get both proactive and reactive customer success strategies are B2C companies. It’s all about scale, and it’s not just reactive customer support. At Wyng, I started with someone with B2C loyalty experience — she thought about usage, scale and loyalty from an individual perspective, not just an account perspective.
How does a Board support a customer success focus?
Well, the Board is obviously going to be looking at renewals in the plan, but it’s helpful if they go a step deeper, as they would with sales.
Boards often ask and track closely the sales funnel, not the customer funnel. There are so many discussions on the efficiency of account executives or the opportunities in the pipeline, but the ideal situation is when they look at leading indicators on renewals — both quantitative usage metrics and qualitative satisfaction scores.