Customer Success Management, Part II: Value and Adoption
In Part I of this series on Customer Success Management we covered what CSM is, the value it can bring to an organisation, and how and why we decided to pilot a new CSM program at Personio. If you haven’t read that yet, check it out here. Today we’ll dive into the evolution of our Customer Success program, how we began scaling to meet our user’s needs, and shifted our focus from piloting to value and adoption.
Scaling from Pilot to Program
The pilot Customer Success program we first devised was focused around a single point of contact providing white glove service on every single topic a customer could come up with. While having that single point of contact was incredibly valuable for the customer, the job quickly became too much for one person to handle. Especially as our customers and product suite expanded, the scope grew to an unmanageable degree and CSMs became overburdened. Commercial topics like renewal, expansion, upsells in particular became tough to manage when product or support-related customer requests carried more importance in the day-to-day handling.
And so, even though the all-in-one CS approach was pivotal to strengthening relationships with our largest customers, it was time to make a change.
Interestingly enough, our CS journey looked similar to the Evolution of Customer Success outlined by Ross Drury, Senior Director of Solutions and Success at Zeplin (cp. Image xyz):
When we launched our CS team, the average company we served with the Customer Success Management offering was based in Germany and had 300 to 500 employees. Implementing Personio for organizations of that size took about three months, especially in a market we had plenty of experience with. As Personio’s product offering and customer base grew in size, and we continued to expand into various markets across Europe, we knew we needed to refocus. We doubled down on tailoring our service to the needs of our customers and establishing a service that was both scalable and uncompromising in quality. To make this happen, we made two important changes:
- Defining customer segments by region, industry, size, and complexity
- Refocusing the CS team’s scope to maximize customer value and forge long-term relationships
We needed to free up capacity in order to accomplish these new focus areas, so we handed over commercial topics and other contractual tasks to our Customer Growth team and started collaborating with our Customer Support team on technical support topics.
Identifying and Sharing Best Practices
In the beginning, we assigned new customers based on the team’s available capacity rather than on the characteristics of each customer. While this approach makes sense from an efficiency and operational standpoint, especially for small teams, it doesn’t necessarily provide the maximum value for customers. But through it, our CSMs were learning a lot from their customers — and we immediately saw huge value in converting their insights into best practices, and sharing those back to customers with similar characteristics. And while our customer base is still too small to fully verticalize portfolios, there are certain clusters we could build.
To get there, it was essential to understand the HR and market specifics of our customers to create meaningful business acumen. To facilitate this process, we decided to create more customer focus in the CSM organization by splitting teams according to customer-relevant characteristics, such as regional markets. We began to hire CSMs locally for the DACH market, and other CSMs for markets like Spain, UK and Ireland, and beyond. A cool side-effect of this was that we could start serving our customers in local languages, and better adapt to their ways of working and legal frameworks. It not only improved the experience for the customer, but it also helped us understand the challenges and opportunities of our product in less-explored markets.
Dueling Interests: Outsourcing Commercial Topics
While commercial topics were obviously key to Personio’s growth, they weren’t the highest priority for the customer. We felt torn by dueling interests: our customer’s success on one hand, and the short-term commercial impact of Personio on the other. We wanted our CSMs to be fully focused on both creating customer value and upselling targets, but also realized how uncomfortable it must be for CSMs to negotiate their own services as part of a customer’s renewal.
Instead, we quickly decided to form a Large Business Customer Growth team to focus on all commercial topics, removing those commercial responsibilities from the CSM role entirely. This doesn’t mean that CSMs were no longer incentivized to grow their portfolios, but that they could now do so by focusing on the satisfaction and retention of their customers. After all, retention is the cheapest form of growth, and having happy customers aligns perfectly with our company value of #CustomerEmpathy.
Ensuring Fast Response Times
Another element of the high-touch CSM model that didn’t scale well was technical support. Our CSMs spent their days talking to their customers, providing best practices, running workshops on HR optimization, conducting Adoption Reviews and Executive Business Reviews, and being onsite for real-time support. This meant they were simply not in a position to respond to technical issues or bugs in a timely manner.
Because of this, we began asking our customers to reach out to Customer Support for urgent inquiries that didn’t need the in-depth account knowledge of their Customer Success Manager. The CSMs would always monitor incoming support tickets and share their insights with the Customer Service Representative in order to speed up time to resolution, but CSRs would become the first point of contact and cover while CSMs were on site or in meetings with their customers.
We had also noticed that it was difficult for CSMs to position themselves as trusted partners at the table when they were also involved in more operational problem and support functions. In order to establish the long-term strategic relationships we wanted to build with our customers, framing the CSM role as an on-call support agent was actually setting us back.
Separating Implementation and Customer Success
And, of course, as Personio’s product offering and customer base increased in size the implementation of each customer also increased in complexity. Implementing Personio’s largest and most complex customers became a big portion of a CSM’s role. No matter how relatively fast and simple the implementation was — especially when compared to a lot of other HR SaaS providers in the market — it still required a lot of focus and energy.
While CSMs truly enjoyed project managing and implementing their customers, carrying out that implementation while also managing a portfolio of 10 to12 onboarded customers was too much for one person. So we created another new team, the Large Business Implementation Team, to drive the implementation of our customers jointly with the CSM. The Implementation Manager in this partnership was focused on the success of the implementation project, which improved our rates of on-time and on-scope delivery and allowed the CSMs to focus on the customer’s long term success with Personio.
Today, the resulting team is one with a highly-focused mission, where other teams help us to implement, support and grow our biggest customers so that we can help them derive the most value from Personio. In part III of this series we’ll take a close look at the Customer Success team of today, how we define and measure success, and what the future holds for CSM at Personio.
Sound like a team you could be interested in? Check out our open roles on the careers page!
