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Customer success

Defining, managing, and succeeding with Customer Success teams and building a culture that is committed to maximizing the lifetime value of the customer

A customer can become extremely unhappy when he/she is struggling to get value out of a product they’ve paid for and the organization that sold it doesn’t seem to care. In moments such as this, customer success can make a huge difference.

Nearly every software organization, subscription businesses such as Netflix and Amazon, and many companies in other industries have or are building a customer success team. Customer success should be used by organizations that desire long-term customer relationships to maximize their customers’ lifetime value. Customer success can maximize the likelihood that customers get more than what they paid for and understand all the ways they can use the products and services they have access to.

Photo by bruce mars on Unsplash

The fundamentals

What is it?

Customer success has its root in Silicon Valley and appeared with the rise of software as a service (Saas). A company provides access to software, rather than requiring customers to own the software, manage installations and upgrades, and deliver it from their servers. In essence, customer success teams are responsible for ensuring that customers are fully engaged in using the subscriptions that they’re paying for. They’re the front line for customer interaction, working with customers to optimize their experience.

Customer success combines elements of customer support, account management, and professional services, with a focus on making promoters in customers. In general, customer success teams have three main objectives:

  • Maximize customer retention
  • Maximize product adoption across the customer’s organization
  • Identify potential customers and convert them into promoters who are willing to act as references and make referrals

Based on the above goals, customer success teams can work a variety of workstreams including:

  • Onboarding new customers
  • Showing customers how to implement new products and services
  • Helping customers get the most value out of what they’ve paid for
  • Tracking customer behavior and following up if customers seem unengaged.
  • Solving problems through best practices.
  • Informing customers of new products and features that may enhance their experience.

Why so popular?

The biggest driver of growth in customer success adoption in organizations is a move to subscription pricing across many industries where customers opt-in every month and can cancel anytime, instead of a big payment, customization, and implementation process. This pricing model provides very little risk to customers but becomes the company’s responsibility to ensure that the customers are happy and engaged with the offering, so they don’t cancel.

Another driver of this trend is increased access to customer data and their product usage. Businesses now have access to an ample load of customer information, which helps them understand problems the customer might be experiencing, before talking to the customer. In the case of many technology companies, they are often one step ahead of the customer, as they know about the product problems before the customer does and can resolve them before the customer has experienced any inconveniences.

What to expect?

Happy and engaged customers are profitable customers and to have happily engaged customers, a customer success team is just a small piece of the overall customer excellence strategy in a company. To start with customer success efforts, a business needs to set up its requirements, including:

  • Tracking engagement and happiness. This can be an online survey or phone call if a small startup or more sophisticated tracking or surveying tools are built into the customer experience itself. The goal is to understand who the happiest customers (i.e. the promoters based on the NPS) are and what can be done for others to become just as happy as well.
  • Onboarding new customers. To make sure they understand how they can get the most value from the products and services they’ve paid for. The goal is to bring them up to speed as quickly as possible and once the customer is functional, to make sure they stay that way.
  • Troubleshooting. When customers have problems, customer success teams will provide troubleshooting resources such as mentorships, online communities, webinars, online chats, emails, live help, or even phone calls
  • Solving problems — fundamentally. If the customer success team sees the same problem reoccurring, it can work with the product team to fix the problem or develop a thoughtful response or solution that can proactively help the customer.
  • Creating additional value. The customer success team needs to go beyond helping customers who have a problem and demonstrate and deliver additional value to happy customers for the investment they’ve made, through periodical outreaches using a newsletter, online articles, and videos, or running online forums.

While the ideal scenario would be to have an intuitive product without the need to call anyone for help. But until then, for most companies, customer success is the place where the organization can learn what customers need, and how they use offerings. In short, customer success teams bridge the gap between the ideal customer experience and the reality of operating and managing a business.

What is its end?

Customers desire a solution to their problem, a personalized experience, and support, and not just a product and this requires a change in the way organizations interact with customers. Therefore, new businesses are geared toward personalization and the idea of prioritizing the long-term relationship with the customer and building a forever customer versus short-term revenues. To achieve this goal:

  • Software companies are using SaaS business models, such as or Adobe’s Creative Cloud, providing access to software without the need for ownership
  • Retailers such as Amazon are offering Prime membership, designed to change consumer behavior to start every purchase with Amazon
  • Media companies such as Netflix and Spotify are providing unlimited access to content for a fixed subscription price

In most of these cases, customers don’t become profitable until they’ve been a paying subscribers for a while, and when a business depends on the customer to return to generate profits, it needs to focus on its engagement levels and the offering has to become a habit for the customer. Therefore:

  • The KPIs in the new subscription-based business models are around customer loyalty and how the business can maximize its cohorts’ lifetime values and not the acquisition of new customers or initial transaction size
  • Furthermore, customer engagement drives loyalty

To enhance engagement levels, customer success will be the secret weapon as it is the most cost-effective way to manage the leading indicators that drive engagement such as:

  • Up-sell
  • Cross-sell
  • Retention
  • Referral

Customers want to trust that the companies they deal with have their best interests at heart for the longer term and a data-driven customer success department can do just that.

How to launch and scale customer success?

A startup might be able to make do with its customer support or service people, handling inquiries on a one-off basis. But, in a big corporate setting with thousands or millions of users, a customer success team is needed and if it is not already there, then it will have to scale immediately. And there are two distinct phases of growth for a customer success team:

  • Initiation phase. Each customer interaction, whether inbound or outbound, and each piece of behavioral data collected, will be unique, but over time, the team needs to identify repetitive patterns and distinct clusters or segments of customer interactions and encounters. The more quickly a business can identify these patterns and then optimize its operations around those patterns, the better it can make its customers happy and manage costs. Over time, these patterns can be incorporated into scripts in the onboarding email or in-product features
  • Stabilization phase. As the team grows it will need customer success applications to manage and analyze data and specialized and focused teams will form within the customer success group or department. For example, one might use a tiered approach based on the size or importance of the customers with dedicated managers, hotlines, or freemium offerings. Specialization and focus in the customer team efforts will be critical for two reasons:
  1. Customers expect businesses to understand their needs and to be delivering a personalized experience
  2. If a team does not specialize, it will end up spending too much money on less profitable customers

Where does it sit in the organization?

Customer success sits at the intersection of the Sales, Product, and Technical Support teams

The customer success team is the customer’s best friend in the organization, is in direct contact with the customer, and sits at the intersection of the Sales, Product, and Technical Support teams. If in the natural course of a conversation the success team becomes aware of a way that it can help customers through a new product or service, it would raise the need for the product team. A good customer success team should know a lot about how to use the product and services the organization is offering, but it doesn’t have to know as much as the product team. Ideally, the success team should have direct access to the product team, both to ask for guidance and to provide feedback from the field. Similarly, the success team needs access to the technical support team to refer to offering problems and get them fixed and to the sales team to help increase sales, cross-sell, or up-sell and help customers sort issues with their deals, contracts, and agreements.

Photo by Christiann Koepke on Unsplash

Managing customer success teams

What are the required personality traits and skillsets?

As customer success is a new field, it’s rare to hire people who’ve done it before, and therefore, just like recruitment in a startup setting, we need to think creatively about the background of the candidates and how they will be evaluated. Customer success candidates need to be:

  • Service-oriented
  • Great communicators
  • Able to recognize patterns among customers

In the case of new customer success team setups, recruitment can be made internally from other departments with a focus on current team members of sales, technical support, and product departments, each having its strengths and weaknesses. For example, salespeople who tend to care too much about helping the customer, even when they don’t hit their numbers, might be a better fit for customer success.

In the case of organizations that are transitioning from customer support to customer success and want to transition their support staff to success, consider that the rep might understand how to respond to problems raised by the customer, but may not have the skills around best practices and how to optimize customer results, and since customer success is about problem-solving and consulting, we will need to train the reps-to-be-customer-success-agents reactive and proactive skills. Consider that support staff tends to be compensated for closing tickets in the shortest time, as opposed to helping customers thrive when they aren’t already complaining.

When thinking of recruiting marketers, note that marketers who love working directly with customers can be effective customer success members because they can see patterns and effectively develop communication programs and materials that answer caller needs, and improve the experience across segments. However, they’re not necessarily service-oriented and may not have the skills to respond to problems as they arise.

Another point to consider is matching the hire against the tier of customer service. For example, the top 10% of customers by-revenue might get a dedicated customer support staff. This person should be service-oriented and understand the customer’s business — in other words, be a specialized relationship manager as is used in corporate banking in the financial services sector. Perhaps they come from the industry of the customer, or maybe they know a lot about customization. Furthermore, these individuals need to have good relationships across the organization as well, so they can quickly get answers and provide feedback. While, those who are managing low-end customers need to be efficient data analyzers, process-oriented, and quick to see patterns.

What are the pros and cons of being in customer success?

The advantages of being a member of the customer success team include:

  • Customer success is in the front line of interaction with the customer. Customer success teams are solving problems and helping people achieve their goals every day, which is a gratifying endeavor.
  • Customer success teams develop a deep understanding of the people they serve. They get to know them and can provide specific examples of how customers use products and services, what they love, and what they hate
  • Customer success teams will be the first to notice trends and develop hypotheses about what’s happening in the field, and how to improve business KPIs.

Therefore most executives are starved for customer success data and the stories and the specifics they bring to the table. This makes customer success teams a valuable asset and in demand by company leadership, which will lead to the customer success team filling duties that are not in their job descriptions, placing additional pressure on the team, and bringing burnout.

Considering the pressure levels on the customer success teams, it’s important to understand the organization’s overarching strategy and track and align the customer success team’s efforts so that members are less exhausted. Additionally, there may be a need to have specific team members dedicated to engaging with internal stakeholders and not just interacting with customers all day, protecting the team against burnout while representing the customer’s needs across the organization.

When to specialize efforts?

As with any part of the organization, once you start having multiple people with the same job title, you face the question of keeping them all as generalists or having them specialized, going deeper into a narrower area of focus.

While playing football/soccer with friends you can all clump around the ball to have fun and pass time, a more sophisticated approach in professional sports would be to have different team members specialize in different skills such as defense, attack, midfield, or taking set-pieces. The same rule applies to any team setting including a customer success team.

One signal to specialize comes when the team has managed to pick up on customer patterns that it can operationalize upon. For example, when 20% of all inquiries are from new customers who aren’t sure how to get started, and therefore, the team needs to create a better process for onboarding new customers and onboarding can become an area of focus. Other areas of specialized efforts can be dedicated campaign designers and writers, most valuable customers (e.g. top 10–20% of revenues), and/or training.

There are trade-offs with specialization too. While there may be deeper learning and greater efficiencies with specialization and focus, it may be harder to manage staffing and/or deal with employee turnover, and if areas of focus are broken down too much, there is the of risk creating a disjointed experience for the customers. The most important thing in customer success is making sure that customers get the most out of the products and services that they pay for, so they’re happy, loyal, and referenceable. Being flexible and looking for ways to always improve, preferably in small bites and gradually, is key.

Day in the Life of a Customer Success Manager | Microsoft Sales Insider
Photo by Nathan Dumlao on Unsplash

Succeeding with customer success teams

Align on objectives, then build a workplan

A big part of making sure customers are engaged, happy, and promoters is to be responsive to their inbound inquiries but also to be proactive through outbound communication. And for this, the customer success team needs to have a workplan that is days, months, and even years at a time, outward-looking. To build a plan, it is critical to know where the team needs to go — or what the goal is.

KPIs are often handed down from managers as fixed, inflexible targets such as being asked to do a certain number of calls or shortening the average call duration. But both of these targets should feedback into the ultimate goal of delivering engaged, happy, loyal, and promoting customers. Customer success teams need to remember that they are the voice of the customer in the organization and not the voice of the senior leadership in front of customers. The end goal of a customer success team is to maximize the creation of value for customers and not the organization, and customer success teams need to assure that their goals and processes align with the best interests of the people they serve; the customers.

Once the higher-level vision and objectives are agreed upon, the work plan can be set accordingly. For example, if the goal is to increase retention rates among a specific segment by 1% over Q3, then the team can develop a tactical work plan that breaks the quarterly goal down into months, weeks, and days that uses the tactical tools and channels available to the team to deliver results while also addressing other operational duties such as onboarding, troubleshooting, and problem-solving.

Gain internal support

There’s a big difference between being ‘committed to the successful customer’ and ‘committed to customer success’. Customer success is a department in an organization, like marketing or finance, but committing to the success of your customers is an organization-wide effort. It’s about the culture, not the role. You can have a customer success department, but if the organization prioritizes achieving set financial goals every quarter over long-term decisions that maximize the customer lifetime value, the ultimate drive of profits, then customers might not be as successful as we may desire. If an organization loves its products more than its customers, then customers will be able to tell and retention rates will plummet. Successful organizations need to love and appreciate their customers more than their offerings and features and try to make them happy, otherwise, there is no need for a customer success team.

But in most cases, the sales, product, support, and marketing teams are preoccupied with their targets and KPIs. Therefore it is important to tie these departments’ KPIs and OKRs together in matters related to customer success. Furthermore, a customer success team’s best tool is making sure that the rest of the organization hears the actual voice of the customer. It might even be helpful to invite team members from across the organization to sit in on, or even answer customer calls. In essence, customer success teams need to network, present, and communicate internally to bring about the change that the customer demands.

Motivating members with promotions and/or raise

There are three goals that a customer success team should be striving towards:

  • Building happy customers. So they will continue to stay customers. Happiness can be measured by a net promoter score, or NPS, which assesses willingness to recommend the offering or even a simple survey
  • Delivering high retention rates. This can be measured by renewal rates, either as a percent of total customers or in dollars generated
  • Driving promoters who bring in other customers. This can be tracked by a survey, the willingness to be a referral when asked, or the number of new leads brought in by each existing customer

And it should build its internal promotion and reward hierarchy based on these three metrics. The seniors in the customer success team should also make it their priority to communicate and align senior managers on the importance of having a long-term outlook of rewarding members based on these metrics rather than short-term outcomes such as bottom-line profits. A simple solution here can be to show the direct relationship between happy and promoting customers and the growth of the bottom line and its margins. This method of communication can also help the customer success team better position itself to compete for organizational resources (e.g. headcount) with other functional areas.

Photo by Joshua Rodriguez on Unsplash

Merging into the organization

Build transparency

Since setting up a customer success team is a recent trend, it’s not obvious how it fits in with other parts of the organization, and therefore companies leave these departments as silos and not a core part of the organization’s culture. But the commitment to the success of the customer and having a culture built around customer excellence is key to value creation and everyone and every department need to be committed to this end.

To avoid becoming a silo, build a transparent department. Make sure that others can see into the customer success team. Share stats, have internal newsletters, put them up on boards, in visible places around the building, invite colleagues to sit in on customer calls, and add new colleagues to internal distribution lists for the emails sent to customers. Furthermore, transparency builds trust and will allow the success team to have access to other departments’ data and insights. And this access will propel the power of the success team and the voice of the customer within the organization.

Working with other departments: build an understanding with sales

Successful customer success teams need to have a good relationship and understanding with the sales department. In most cases what happens is that sales teams over-promise or over-sell an offering and leave the customer support to success teams to clean up the mess with an irate customer. Or at times sales team closes deals through agents or distributors with improper training and the irate end user will have to vent at the customer success teams.

The problem here is that the KPIs of these two departments have none to very little overlap. Sales teams are rewarded for bringing in new customers with big values of transactions, while success teams are measured based on customer value maximization and retention rates. Based on these KPIs, the sales team’s work is finished when they cash the check, while it is only the beginning for the customer success team. And sometimes the customer being thrown over the wall by sales is unprepared for the challenges of onboarding or, even worse, didn’t realize that the product had been purchased at all.

To solve this problem, it is best to advocate for sales to have retention as a core KPI and have customer success work closely with sales by participating in onboarding meetings or listening in on customer calls. There will also need to be a cross-functional collaborative environment with seniors of more experienced backgrounds to be monitoring and managing the teamwork. With joint KPIs, the salesperson can sell the right solution, and the customer success team can ensure that the customer knows how to get the most out of the solution that was purchased.

If the customer success team experiences any similar collaboration issues with the product or support teams, the same solution of having shared/joint KPIs, and building cross-functional collaborative teams is advised.

The Chief Customer Officer

The Chief Customer Officer (CCO) or the Chief Experience Officer (CXO), is a relatively new title, that is seen more often in all kinds of companies. The idea is to have a senior person who is focused on the overall customer experience, leading the voice of the customer activities internally. Based on customer insights, the Chief Customer Officer can help ensure great customer support, provide feedback on product direction, and even determine pricing and terms for new offerings.

However, the challenge to making the case for having Chief Customer Officer in an organization is that every department and special interest group has a new Chief Officer that they want to add to the leadership team. Chief revenue officer, chief product officer, chief diversity officer, chief innovation officer, chief information officer, etc. While these are all important elements of a successful company, what makes the Chief Customer Officer more worthy of a seat at the leadership table is that the organization exists to serve the customer, and happy customers are more profitable and create referrals. To justify this the customer success team will need to connect its KPIs of customer lifetime value, retention, referrals, and upsell to the organizational objectives and bottom line.

And when a Chief Customer Officer (CCO) role is defined, they will want to make sure that the role has an impact on the organization. An impact-driven CCO should have lots of people reporting to them, including members from Customer Success, Sales, Marketing, Retail, and Professional Services for example. This will be a sign that all departments are looking at how to connect more closely to the customer in the work they do. This means the organization’s leadership is tieing all corporate goals back to knowing customers and making them happy.

Photo by Brooke Cagle on Unsplash

Customers drive profits, and therefore, successful organizations should be maximizing the delivery of value and customer excellence. To this end, organizations need to build a culture committed to the success of the customer it serves, across the organization and not just within the customer success team, and make the case for customer success at the senior levels. Customer success is a new field of organizational development, so keep learning and check some of the best conferences and webinars put on by vendors such as Gainsight, Totango, and Zuora on the subject matter.




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