What If Customer Success Isn’t Necessary?
Have you ever thought about what the world might look like if Customer Success (CS) was something that you didn’t need? I certainly had not considered this, and while it is a theoretical extreme, it’s an interesting construct to think about.
- … Software products were intuitive and easy to use and brought immediate value to all customers who bought them?
- … Marketing teams understood the exact prospect to engage with in order to develop appropriate leads that will be successful with your product and achieve strong value?
- … Sales teams only closed deals that were a perfect fit for your product and every customer who bought your product understood exactly what to expect?
- … Products were easy to use and implemented themselves with no need for a deployment or integration teams or any post sale support or training?
- … Customers adopted every feature exactly as designed and magically grew their usage and value without any involvement from your company?
It might just be utopia, and in that case, you might not need CS, but this doesn’t represent today’s business reality. To Ashu Garg, a General Partner at Foundation Capital and a board member of many SaaS companies, this idea might just be the ultimate goal. However, how do we reconcile this hypothesis with the current fact that today’s subscription based companies lean heavily on their CS Teams to ensure that all of these things do happen effectively?
Last month, in Strikedeck’s ongoing quarterly series that brings together CS Executives and Venture Capitalists for lively, in-depth conversations, Ashu and I had a provocative discussion exploring the boundaries of CS with Marketing teams and other departments. We also had an extended discussion that included input from the room full of CS Executives. It became clear that when you think about customers, organizational lines are blurry. Marketing, Sales, and CS all have important customer interactions that are distinct from one another. In today’s business climate, in which we relate to our customers through multiple channels of communication, managing these interactions can be especially challenging.
As companies grow-up, and functional areas form, it’s common for mixed messages to be sent to customers. Product teams, Marketing, and Sales all have legitimate reasons to communicate with customers, but often no one is managing the overall messaging and schedule. Don’t you hate it when you get multiple conflicting messages from a company at the same time?
A friendly email about your upcoming renewal from sales, a request for a meeting to understand how you are using the product from a product manager, a terse termination notice from finance because of a payment mix up, and a call from your CSM to schedule your next QBR can all hit at the same time. Needless to say, these mixed messages create a negative customer experience. Lack of management of your many communication channels complicates matters. Having a CS Team headed by an executive with a seat at the table can help mitigate the problem.
There is no one right answer to this important question. It depends, and it is likely to vary based on the type of product, the industry, the go-to-market strategy, and the stage of the company. Customer ownership within a company can differ dramatically across all these dimensions.
Let’s consider the stage of your company. Initially, the product team might own the customer. They define what they think the customer needs as they build the product. Once the product is ready to sell, it is usually Sales and Marketing who “own” the customer. In this phase, acquiring customers or new logos is what is critical. During a company’s growth phase is when the blurry challenge of who owns the customer usually appears. Many internal teams have valid reasons to work directly with customers and each believes they should “own” the relationship. This can result in internal team agendas prevailing – suddenly you are managing customers from the inside out, and it’s easy to lose track of them and create mixed messages.
Many companies don’t invest in their CS Team at an early stage. They often decide to make the investment only after they have a churn issue. If you don’t set a customer-centric strategy, and define and manage customer communication early, by the time you figure out you need this, it’s too late. While some companies do start early because they know they need CS, they often build their team with direct practitioners and no one owns the overall strategy and interdepartmental messaging. The result is churn, poor customer fit, and lack of advocacy in your customer relations. It is much harder to correct these kinds of entrenched problems than it is to organize to avoid them in the first place. Having a strong CS Group with a seat at the table and an executive that is able to set the proper strategy and manage customers internally across functions is critical.
While there are multiple groups within a company who need to have customer interaction, considering the multi-channel communication we use today, someone or some team is required to focus on managing the overall customer experience. Having a CS organization that can help organize your overall customer interaction is a positive game changer.
When you create a CS team that manages the customer ownership across your company, things come into focus from the customer perspective. CS can be the central hub of the customer information and facilitate the go-to-market fit, product feature fit, post-sale engagement, and referral for advocacy. They help to coordinate the lines of communication from multiple departments so that you can avoid the mixed messages that result in churn and poor customer experience.
CS helps to bring the focus by building and managing the engagement model, and making sure everyone in the company understands the boundaries, and where they fit into the customer’s journey. The CS team can help all the customer points of contact understand who has ownership based on defined interactions with customers. This provides a clear view of what is needed and when, and helps to focus each organization and most importantly, provides a coordinated experience and a consistent approach for your customers.
Since we don’t live in the utopian world that I described at the beginning of this article, Customer Success is very necessary. Based on our conversation, here are a handful of things to focus on:
- Think about your engagement model early. When CS is brought in at the executive level and early, it raises the quality of the customer experience. You will get improved feedback on how customers are using the product and it will help you find your best product/market fit faster.
- Focus on how you bring value to your customers. If you build a value based customer-centric culture, you won’t have to worry as much about organizational boundaries because everyone will understand the value that the customer gets and how they link to it.
- Measure both financial metrics and engagement metrics. In addition to measuring renewals, churn, and revenue, consider adding NPS, CSAT, and Customer Health/Engagement Scoring. Finding the appropriate balance between creating value through CS, and making profitable business decisions for your company hinges on understanding your true cost to retain a customer and how you engage with them.
- Link your systems – Marketing Automation, CSM, CRM, etc. Everything serves its purpose, but they need to fit together to serve the customer. Disassociated information inside your company can drive a poor customer experience.
- As a CS Executive, don’t get too caught up in the details. Counting QBRs, for example, may be important, but are you sure that the QBR itself is bringing your customer value? Ask yourself how your particular processes are contributing to your customer’s value. Is it possible that you would have the same results if you did fewer QBRs?
I enjoyed the spirited conversation with Ashu, who comes from a strong marketing background, and definitely has his perspective. He believes that this customer-centric and balanced approach has already cemented itself in most marketing organizations. They are now focused on outcomes instead of activities. He shared with us all that CS is early and still needs to get to this level of maturity as a function. Others in the room, mostly from a CS background, also had their perspectives. CS doesn’t always get the airplay it needs in Board Meetings, and the investment in customer initiatives can often be low. Overall, it was a provocative conversation, and I am grateful to all who participated. I look forward to hearing your thoughts and comments.