What is “Customer Success” Anyway?

I wrote earlier about how easily SaaS products get commoditized. Software features and benefits can be copied, leaving vendors with little to differentiate themselves other than price. However, deals of all sizes come down to individuals and their preferences. Trust and meaningful connections to decision-makers are strong differentiators.

Customer Success programs are a powerful tool for building those relationships. Over the years I’ve participated in buying, selling and expanding SaaS contracts, both as a customer and as a vendor. I’ve seen first-hand how those connections help both sides thrive. I’ve even been a senior CS professional. Here are a few observations on that.

What is Customer Success?

Wikipedia has a great overview:

Customer success is the business methodology of ensuring customers achieve their desired outcomes while using your product or service. Customer Success is relationship-focused client management, that aligns client and vendor goals for mutually beneficial outcomes. Effective Customer Success strategy typically results in decreased customer churn and increased up-sell opportunities. The goal of Customer Success is to make the customer as successful as possible, which in turn, improves customer lifetime value (CLTV) for the company.

A case can be made for how everyone at a company is, in fact, part of its Customer Success program. In practice, CS usually takes the shape of a department with two simple goals:

• Retain customers
• Generate expansion opportunities (for Sales to close)

In the pursuit of those goals, CS departments deploy three key capabilities:

• Support
• Relationship building
• Technical enablement

Those capabilities can be present in the department or they can be borrowed from others. Some companies have separate Support departments, others have all technical capabilities under Engineering, others employ all customer-facing technical experts under Sales. More modern companies operate with tribes rather than siloed departments and deploy cross-functional customer-facing teams with Sales, Customer Success, and even Product capabilities.

Regardless of how any given company organizes its departments, the business methodology of Customer Success involves all those roles. So let’s take a look at them.

Support Agents

The first form of Customer Success is Customer Support. Most companies offer some kind of assistance to customers, answering their questions and troubleshooting their issues. Early on, the first support agents are typically the founders themselves, gathering valuable insights from customer feedback. The software industry typically sees high turnover in the Support Agent position, which is unfortunate. As the first line of contact, their performance sets the tone for the entire relationship between customer and vendor. Knowledgeable, experienced, motivated support agents can empower customers and offer invaluable insights to the vendor.

Vendors with high volumes of customers with low lifetime value might not be able to invest in their Support staff, as quantity takes precedence over quality. But vendors with high lifetime value customers are well-advised to train, motivate and compensate their support staff, as a single interaction is enough to affect a renewal deal for better or worse.

Customer Success Managers

As the name implies, this is the core role of a Customer Success department.

Companies that sell to other businesses (B2B) often try to sign long term contracts. As soon as those contracts reach sufficiently high values (that would be mid-to-high five figures in Europe and North America), it’s time to invest in Customer Success Managers (CSM) and establish proactive relationships with customers. The work of a CSM is very different from Support (which is reactive) or Sales (which is revenue-driven).

CSMs are diplomats, whose ultimate goal is the continuation and improvement of relations between customer and vendor. Like ambassadors to foreign nations, CSMs own the relationships and are conduits for all business. From their customers’ perspective, they’re the authority on all product and service matters and they speak for the vendor. From the vendor’s perspective, they know the customers and speak for them.

As an engineer, I was trained to believe that a product lives and dies on the strength of its features and performance. As a customer and a colleague, I’ve learned the outsized importance of the relationships a product’s customers have with the company. I’ve seen colleagues adopt inferior products because they knew the team and believed in their potential. I’ve seen companies stick with underperforming vendors because they trusted their CSMs. And I’ve seen good products get adopted in entirely new ways because good CSMs were able to get buy-in from directors of new Business Units at existing customers, clearing the way for Sales to close great deals.

Good CSMs are worth their weight in gold.

Technical enablement

Reference documentation only goes so far. Software vendors who offer any kind of integration capability need, sooner or later, to offer high-quality technical enablement to their customers.

Consulting

Although CSMs own the relationships with customers overall, they’re often paired with technical experts who own the technical side. Their titles and assignments vary — Technical Solutions Engineer, Technical Architect, Solution Architect, Solution Delivery Manager, are all titles I’ve seen and the distinctions can be slim. I’ll use the title “Solution Architect”, SA for short, as it’s very flexible.

SAs strive towards much the same goals as CSMs do. They offer quality guidance and advice to customers, increasing the chances of success for the projects that implement their product. They’re experts in what the product is, what it can do and what it can’t do, and they share that expertise freely.

Pure technical skills are a hard requirement, but not enough for these roles; it’s very important to have significant experience and maturity to establish credibility, and sometimes that means being the one who says “this won’t work”. A Solution Architect who calmly tells a customer that their product can’t do something, or that a better outcome can be achieved with some other product for a specific purpose, has more credibility than someone who answers “yes” to every question. That credibility makes the SA a trusted advisor, which positions them to influence better deals in the future.

A credible and trusted CSM/SA pair is ideally placed to discover business development opportunities and in good faith persuade the customer to pursue them, clearing a path for the Sales team to expand the contract.

They are also instrumental in solving critical implementation problems before they grow into contract-threatening crises.

Training

One-on-one technical enablement doesn’t scale well. Technical documentation, while a table-stakes requirement for software vendors, is by nature only useful once a general approach has been decided. The gap between those two resources is where Training lives.

Training can take the form of white papers, tutorials, case studies, webinars, online courses, etc. Unlike pure reference documentation, these materials can cover entire stories, teaching how to go over every stage of a specific kind of implementation. They’re very useful for customers and implementation partners to get started in the right direction, packaging common architecture and design practices in a neat, easily distributable format. Customer Success’ own technical experts might be the best-placed people to produce relatable content, but there are ample opportunities for collaboration with the Marketing, Product and Engineering departments.

Remote or in-person training sessions are a popular format demanded by high-end customers. Packaging them in reusable or easily modified bundles, along with professionally designed collateral, is something the Training function of CS should also handle.

Professional Services

Technical enablement can be offered to customers for free, thrown in with contracts, or it can be a paid service. The latter is a tempting revenue generator, especially with larger enterprise customers which expect to pay for it. How to weigh those two models is highly situational, and I won’t go into it today. But I will say that running a ProServ program is an entirely different proposition to running a purely not-for-profit Customer Success program. It’s mostly a headcount sizing challenge and once you have a team of consultants you’re obligated to manage their utilization profitably. The profitability profile of a 1:1 service business is entirely different from that of a 1:many product business.

Summary

Closing a deal is only the beginning of a customer journey. Investing in your customers’ success is a proven way to increase their satisfaction, retention rate and lifetime value.

Customer Success programs, ideally in the shape of independent departments, employ a variety of roles to foster the success of their company’s customers:

• Support Agents who reactively respond to questions and solve problems
• Customer Success Managers who proactively build relations with customer stakeholders
• Technical Enablers (Solution Architects, Trainers) who solve unique problems and offer proactive guidance and training

When its CS is firing on all cylinders, properly funded and motivated, a software vendor becomes far more than a collection of features. It becomes a trusted element of its customers’ existence, something that can’t easily be replaced.