Insight: SaaS (10) CSM

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We emphasized the significance of the Marketing team and its duty throughout the SaaS companies in the previous article ‘Insight: SaaS (9) Marketing’. The contribution of CSM in SaaS companies would be discussed.

What is CSM?

CSM(Customer Success Management) is a department set for customers. CSMs are directly to blame for the success that SaaS customers can achieve, thereby successfully renewing the contract. The essence of a SaaS company is continuous subscription fees, and the CSM part is responsible for those retained customers who can renew, upgrade, and cross-sell other products. The CSM is the one that can discern the difference between traditional software companies and SaaS companies. The CSM department was established by adopting the SaaS business model. It’s fair to assume that it wouldn’t be a successful SaaS company without CSM.

The indicator for which CSM is accountable is Net Dollar Retention, which refers to the company’s customer retention. It is the obligation of CSM. The CSM funnel is the bottom of the overall funnel. CSM will start participating after WIN, completing RENEWAL, UPSELL, and even CROSS-SELL.

Responsibilities of CSM Department

1. Renewal

CSM’s key focus is to renew. The CSM could handle renewal, but perhaps a sales professional (AE/FAE/AM) may be alerted to assist the client with the purchasing process. Recurring use is achieved and with it, MRR is secured.

2. Understand the customer’s situation, help customers experience the value of SaaS, and answer customer questions.

CSM requires to oversee the service’s integration, installation, and launch in order to achieve first use (LIVE) on time and within budget. Work on a daily basis is monitoring the service’s performance (usage). Implement important triggers when abnormal situations are discovered, such as health alerts, upsell alerts, cross-sell alerts, renewal alerts, and so on. Ensures that the service is used frequently and that new value points are identified and communicated.

3. Communicate with customers’ various positions (Key Persons).

CSMs must understand that SaaS customers are not a single person, but rather a company as a whole. Different roles in the customer company necessitate CSM keeping the contract. They’re broken down into three groups: SaaS users, managers, and purchase decision-makers. CSMs must communicate with SaaS users and managers on a regular basis, as well as decision-making purchasers, to let them know who is serving their company. Builds a community of advocates inside the account.

4. Communicate at an interval.

CSM work begins when you make the first contact with the customer, not when you submit a renewal request. At this point, it’s too late. When a customer purchases your SaaS annual service, CSM has a full year to work with them in-depth. Schedules a kick-off meeting and establishes a communication strategy.

5. Case studies of customers’ success stories

Summarize the customer’s journey into a customer success story for Marketing & Sales and collect customer feedback to improve products with Research & Development. The capabilities of a CSM involve product mastery, industry knowledge, and solution capabilities. Customer success stories can be summarized into specific stories, which can help to strengthen or expand customer portraits. This is the most potent marketing weapon.

6. Expectation management

All expectations, goals, and objectives should be reaffirmed. CSM should lead customers to use products. Customer usage monitoring is a basic skill, and managing customer expectations is a more advanced skill.

Customers who do not use a product well do not always mean the product or service is bad; rather, there is a separation between the customer’s expectations of “success” and the percentage to which the final product can meet those expectations. CSM’s services frequently compensate for this discrepancy. As a result, one of CSM’s most major duties will be to manage the customer’s expectations of “success.”

7. Up-sell and cross-sell

There will often be opportunities for up-sell and cross-sell after handling the user’s habits and understanding their needs. When expansion opportunities arise, the CSM determines the best approach. CSM can complete the up-sell by themselves, or set up an AM position to complete the deal while delegating transactions to the Sales team.

The following are the most important points that CSM should emphasize, as well as a typical misunderstanding that many people would make:

1. Tier the customer group.

Different customer tiers require different service levels. One Customer Success Manager is usually in charge of renewing 1–2 million ARR. It can be responsible for the maintenance of 100 customers if it has an ACV of $20,000. He only needs to serve 4 major customers if the ACV is $500,000. When customers upgrade and pay, they also expect better after-sales service and response. Why should customers buy the enterprise plan if your major customers receive services via email as free customers?

2. Follow up by customer journey

From the customer’s perspective, there is also a process from raw to cooked. CSM needs to prepare for the next stage based on customers’ position in the journey. For example, the customer has just experienced function A, and function B is the next step. Customers will be able to reap the first successful AHA moment after completing the continuous use of functions A and B. Our CSM’s job then becomes to observe this process and encourage customers to use function B. Proceed to the next function C, D, and so on after the customer has gained proficiency. In this way, the customer has had a complete SaaS experience, and Customer Success has been achieved.

CSM is the main force responsible for customer success, but the overall customer success is shared by all departments of the company. The CSM work should be handed over to the CEO in the early stage, and a complete CSM team support in the later stage.

The next article ‘Insight: SaaS (11) Talent persona and induction training’ is published. Simply send me some claps and feedback if you enjoyed my article.