Why our Customer Success departments shouldn’t be accountable for…well…Customer Success
We are asking far too much of our Customer Success departments.
And much of this is probably due to our decision to call this department “Customer Success”.
We probably screwed that one up.
By giving this department the same name as a fundamental business concept, we have created an expectation that this single department and set of professionals should be responsible for everything that goes into converting a new customer into a successful customer. We expect this group to have ALL the skills required for creating “successful customers”….at scale, no less.
Seriously…what were we thinking?!?
I know what we were thinking. From a management perspective, this made total sense. In today’s SaaS/freemium/prosumer/highly competitive/low price point/low switching cost world of B2B software…successful customers have become more and more important to the sustainability of the business. Actually, way more than important. They’ve become essential. So….
…we had to become more aggressive and proactive about getting customers to the promise land….so, we thought….
…..let’s create a department called “Customer Success.”
Nice. That has a nice ring to it actually. Done.
Now, we have a specific team dedicated to making all of our customers successful AND a place to direct blame if our customers aren’t actually successful.
“Our customers are not successful enough!”
Blame the Customer Success department!
Beautiful. Elegent, even. Problem — SOLVED!
Well…not really. While, that may have worked for a little while, I don’t think it’s sustainable for much longer. In fact, I would argue it lost is sustainability a while ago. No longer can we turn a blind eye to the diverse efforts that are required to truly achieve a successful customer base….at scale.
Let’s Stop Kidding Ourselves
I think we need to face a few realities and recalibrate what it means to build a Customer Success practice at our companies — one that is decoupled from the actual Customer Success department.
Here are the realities we need to face:
- Reality #1 — All software business are more dependent on successful customers today than they every have been before. And that’s not going to change.
- Reality #2 — Building successful customers takes more than just the efforts of a single specialized department.
- Reality #3 — Customer Success professionals have their own strengths and skills. They are not Salespeople and they are not Marketers. And that’s ok. Really…that’s ok.
Let’s take a deeper dive.
Reality #1 — Successful Customers are essential for today’s software companies
I don’t need to spend a lot of time on this one, but it’s important to mention.
As software business builders, we live in a different world than the generation that came before us. We live in a Post-Sales world which means that the value of most of our businesses comes AFTER the time of initial sale (or signup). No longer can we close a deal, collect a huge check and move on to the next one. No longer can we sign perpetual licenses and laugh our way to the bank when our software never gets implemented, breaks, or doesn’t solve a problem for customers. Those were the glory days…
TODAY, the value of a software business is generated in small chunks, over time — either monthly or annually. This means that success for these companies is really defined by a single metric — the Lifetime Value (LTV) of its customers. How much is the average customer paying and for how long?
This means we have to do whatever it takes to get paid customers to pay as much as possible for as long as possible. In today’s world, unsuccessful customers don’t pay much (maybe not at all), or for very long time.
Only customers that are generating success from your product will contribute to high LTV levels.
This is why, while successful customers have always been important…they are absolutely essential now.
Reality #2 — It takes a village to raise a successful customer
The reality is that there are MANY things that go into converting a new customer into a successful customer. This path goes through activation, engagement, retention, growth, and advocacy.
It looks a little something like this:
YOU HAVE A NEW CUSTOMER. CONGRATULATIONS!
Well not really. This is just the beginning. First thing you need to do is to get this new customer…
- Activated — your shiny new customer has to actually start using your product at some level. She has to create a post; start a project; follow a friend; upload some contacts; etc…
Shortly after which she will need to….
- See initial value — this is where he starts to see a spark of value from the product. This might be on a small scale, but she needs to start to see the possibilities.
After that, she will need to…
- Score a big win — This goes beyond just the simple initial value. This is the point when she has an experience where your product played a role in a bigger win for her business (or her personally). Maybe it was helping her land a big job candidate; maybe it was helping get a project completed under budget; maybe it was helping her land her first date in 3 years; maybe it was <whatever your product was built to do>; etc.
At which point, she needs to start to…
- See consistent value — This means she should experience multiple wins over time. Consistent & persistent endorphin shots. She needs to be consistently aware that (a) she is still subscribing to your product; and (b) it’s consistently delivering value.
But that’s not all. After this she’ll need to….
- Expand usage — this could be measured by growth in activity; an increase in the number of seats on the account; expansion to different departments; a general increase spend; etc.
At which point, your product should be.…
- Embedded in her processes or routine —your product needs to become part of her regular day (or week). It needs to be embedded in her regular flow to the point where she believes that removing your service will carry a significant cost.
Which means that she should be….
- Committed to your product/brand. So much so that she will reject any competitive product that comes along.
And not only that, but he will also need to….
- Become an advocate for your product — helping you to generate word-of-mouth and additional customers.
Now we’re talking. A successful customer. For reals….Congratulations!
Oh yeah….now scale all of that across hundreds or thousands more customers just like it.
That’s Customer Success. The concept.
Making all of this happen requires many different skills, talents, strategies, tactics, and practices.
- Some of it will happen through high-touch training and account management.
- Some of it will happen through great, responsive customer support.
- Some will happen through smart, scalable, persistent marketing messaging.
- Some of it will come through tremendous usability and expansion in the product.
- Some will happen via conferences and community events; and
- Some will happen through strategic account mapping and dedicated sales.
Among other things. And that’s Customer Success — the practice.
The reality is that it takes a village to raise a successful customer. Customer Success departments of today do tremendous work. Their skills and talents are a hugely important part of this mix — but they aren’t the only part. It takes all of these things to make success happen in a big way.
It’s shortsighted to think that all of this can be handled by a single group.
Reality #3 — Customer Success pros are not Salespeople. And they’re not Marketers. And that’s ok.
When we make our Customer Success teams accountable for creating successful customers at scale, we make an assumption that they have all the necessary skills and motivations to execute on all the things that requires.
And that just doesn’t make sense.
Like all humans, Customer Success professionals have the own strengths, their own motivations, their own specialized skills.
Customer Success professionals are helpers
Good Customer Success pros are helpers by nature. They are highly motivated to help customers become happy and successful — and they will generally do whatever it takes to make this happen. Because they care. They really care. And this is a good thing.
They are good at creating long-term relationships, empathizing with customers, understanding needs, and creating plans for success. They are also very proactive in their approach to working with their customers.
Customer Success professionals are customer advocates that excel at high-touch, proactive support.
They are great at “hand-to-hand” combat and working with customers one at a time — acting as their guardian angels, guiding them toward success.
But they are not Salespeople…
Salespeople — Masters of the conversion
Many B2B SaaS companies today make Customer Success accountable for Post-Sales revenue. A lot of times they are compensated on some combination of renewals, account growth (upgrades) and/or net churn. Most of the time, this requires them to spend a lot of their time “selling” into accounts.
But here’s the reality — if you ask 100 Customer Success professionals if they want to “do sales”, 90+ will say they don’t. I have spent a lot of time in my life trying to teach Customer Success pros (good ones) how to “sell”. How to approach and map an account. How to run a demo for prospects vs train users. How to get an intro to decision maker. How to categorize and prioritize sales accounts. How to manage a follow-up process on a growth account. How to structure a sales proposal. How to….close a deal.
And most of this time was wasted time. Because what I eventually realized was — Customer Success pros are not Salespeople. They’re just different.
Unlike Customer Success pros, Salespeople are driven by conversion.
Like Customer Success pros, Salespeople are good are creating relationships and understanding customer needs. But unlike Customer Success pros, Salespeople are driven by very clear, binary endpoints.
A sale. A closed deal. A signed contract. A ringing of the Gong. Many of the best salespeople are empathetic and do want to see their customers succeed…but it’s not their main motivation. They are primarily driven by the conversion.
Customer Success pros don’t have this motivation. They don’t see accounts as conversion opportunities. They have a much more long-term, altruistic approach to customer management. They are not Salespeople.
At the same time…they are not Marketers….
The Marketer — Driving action
Many of us also expect our Customer Success reps to be Marketers. We expect them to create scalable communication and messaging programs to help activate and drive consistent engagement. We expect them to promote new products, run webinars, create content, and build advocacy programs.
But this is not what they are good at. This is what Marketers do.
Marketers specialize in driving desired actions at scale.
Marketers are good at manufacturing emotional responses that trigger actions. They are good at creating an itch and getting people to scratch it — at scale.
Unlike Customer Success pros, Marketers aren’t interested in one-off interactions with a single customer. They aren’t interested in diving deep into a specific need or problem. They are interested in creating more generalized messaging, assets and processes that can generate action across an entire customer base.
Customer Success pros will spend hours with a single customer to insure that he/she is successful. They don’t spend their time thinking about scale. They don’t think about how to create messaging that will drive a specific behavior.
That’s what Marketers do. Let’s let them do it.
Organizing around Customer Success — the concept
So…where does this all get us?
I recently spoke with the CEO of a large SaaS company that had just reorganized his organization around the broader practice of Customer Success. He created a new division — called Customer Operations — that was responsible for all Post-Sales activities. This division is led by a Chief Customer Officer and has dedicated Customer Support, Customer Success, Customer Marketing, and Strategic Sales teams. This division is in charge of activating and converting self-serve customers, growing those accounts, servicing and expanding large enterprise customers, and building advocacy programs.
They are basically charged with with increasing Lifetime Value across their broad customer base.
And this is how all B2B software companies need to start organizing. We need to recognize that:
- the concept of “Customer Success” is essential to the success of their business;
- it takes a mix of different strategies, tactics and activities to make this happen at scale; and
- we need to release our Customer Success teams from the burden of being responsible for EVERYTHING related to Customer Success.
We need to attack this battle with the right resources — from Customer Support to Customer Success to Marketing and strategic Sales. We need more than a partial effort here — it’s just too important.
We also might want to rethink the name of that department. I know it’s not going to happen…but it wouldn’t be terrible if it did :)
