The Right Profile for your SaaS startup matters
The importance of building out your Customer Success team to ensure the success of your SaaS business is now well-recognized. Currently most SaaS companies do not recoup acquisition and service costs to break even and make any profit until year 2 or 3 of a customer’s lifetime* Renewals are not a nice-to-have but a must-have for your SaaS business to succeed. Sales, charged with new business quotas cannot (and should not!) do this alone so Customer Success must be responsible for retention and expansion. Sales lands, Customer Success expands. In my experience building out CS teams at Google, we grew a team of 15, focused on support, to 50 focused on a broader definition of Customer Success to serve Product Search (formerly Froogle) and Google News in the hyper-growth environment at Google in 2005. We succeeded in improving retention and renewals by 90% and decreased cost to serve by 40%. Key to our success was hiring the right profile for the team.
So, what should you look for in building out your Customer Success team? The day to day work of a CSM is detail-oriented work, first focused on successful on-boarding and then on support and deepened engagement: a life of project management and ticket queues. What makes a CSM successful? Well, Customer Advocacy of course. Unfortunately, that’s now a term that is bandied about without much depth. For sure, customer advocacy is the key characteristic of a successful CSM but what does that translate to in real terms? If we think about it, when is Customer advocacy not a key characteristic of success in any role, whether in product, marketing or sales? So, the term has lost much of its meaning unless understood on a more granular level. In reality, “Customer advocate” is akin to a candidate being a “people person” — it’s become no more than a cliche. Can we imagine an interview situation where anyone would declare they were anything but? “Nah, not really a customer advocate (or a people person), but I do resonate with your disruptive value proposition! When do I start?” So, understanding what customer advocacy translates to in real terms is essential to give the term back the meaning it deserves.
Customer Advocacy translated into a few very specific qualities that my team leads and I sought out while building out our team at Google:
• Is this person a technology laggard? Why? Because, in my experience, the answer to this question is the same answer to this key question: Does this person have a natural empathy towards users and their issues? In the tech bubbles that we often live in, it is too easy to assume a level of tech literacy of our users that is unrealistic. This is because even us non-technical types in tech bubbles have a tech literacy level that is greater by far than the average user and realizing that is the first step in building out a team of true customer advocates. So, if we have, let’s call it an “unconscious bias” towards tech literacy, how do we correct for it? Hire tech laggards. Who is a tech laggard? Essentially, a tech laggard in this context is someone who is not at all enamored with technology. Someone who is unmoved by the “whizz bang” element of technology. The tech laggard does not look at an app or website and think “how cool!” Instead, their natural reaction is “what does this help me do?” And they recognize the distinction and own it, proudly. This distinction is possibly the most important quality to seek out in your CSM hire. Why? Because understanding that most users are intimidated by technology is a fact lost to most of us operating in the bubble. This harkens back to the basics of human-factors research: to state it boldly: no one wants to be spending their time using the technology that we created ~ they would rather be doing the things that they most enjoy: spending time away from a screen with people and activities that they love. So let’s make it quick, easy, intuitive. Having that lens through which the team on the frontlines of customer interaction and feedback views your product is invaluable. It provides an important and much-needed balance to the world of hard-charging product managers, designers and engineers building products that appeal to and are “easy to use”…by other product managers, designers and engineers. A tech laggard feels the pain of your user at an intrinsic level. They do not need to “take the customer/user view” because that is their own view. The power of that voice on the larger team cannot be overstated. It’s akin to building in a permanent user-testing group on your team — on the frontline with your customers.
Adopting a mindset of hiring tech laggards is also a great way to do away with the “natural” intimidation that CSMs often feel by product folks. It builds a company culture where their trajectory of understanding the product and reactions to the product is recognized as an important feedback mechanism on the ease of use and value of the product. Based on my experience building and leading customer success teams in the SaaS analytics world, this is key feedback to build into your team structure.
• Do they enjoy being “in the weeds”? e.g., do they enjoy doing a deep dive into the nitty gritty of data quality issues? Do they enjoy understanding exactly where things got confusing for the user and helping them in a step-by-step manner? Coaching on how to “pull up” or not miss the forest for the trees will be an expected professional development need for a CSM. It is far easier to coach your CSM team on how to distill insights from their day-to-day work rather than teach them how to be detail-oriented.
• Is this a “checklist person”? Trouble-shooting or fighting fires, whether during or post onboarding requires a person who thrives by working through an ever-changing list of many, discrete tasks. On the other end of the spectrum would be someone who enjoys large, unstructured problems that are tackled over a set period of time whether a month or a quarter. Seeking a candidate with a natural bent towards organized, methodical to-do lists, focused on the immediate, is key to their being successful in the role.
• Are they a “teacher or people pleaser”? The CSM role is a role centered around and beholden to the needs and happiness of the user. A successful CSM naturally embraces this role of external affirmation dependence much like students who are naturally “teacher pleasers”: they gain professional satisfaction from making users happy and exceeding their expectations. They intrinsically enjoy capturing moments of delight and recording and sharing customer success stories.
Investing early and often in Customer Success is essential to keeping a fast-growing SaaS business’s momentum. Building a Customer Success team with the right profile is essential to team success.
*Redpoint: Avg public SaaS co has 3% month revenue churn on a 2 year lifetime and a sales efficiency of 0.8 => 5 quarter pay back on cost-of-sales and cost-to-serve.
Next Up: Why QBR templates are Bogus