It takes a village to kickstart a customer success teamby
Companies should be embracing customer success as part of their company-wide strategy right from the outset instead of setting up CS as just an additional operational silo to fight customer churn. So how can organisations make CS a more strategic, cross-functional operation?
Customer success (CS) is booming with the acceleration of SaaS, subscription and any business model where customer-centricity is the center of gravity. The role of customer success is ranked with an annual growth rate of 34% according to the LinkedIn Emerging Jobs Report, 72% of which are currently in the software and IT industry.
Indeed, the historical origins go back to the very first CRMs, even before the advent of SaaS. The very first appearance of CS took place in 1996 when Vantive, A CRM on-premise company, realised that CRM systems were generally doomed for failure with a very low adoption rate, the so-called “shelfware” syndrome. Vantive consequently put into place their new department called Customer Success, the aim of which was to question their customers on what success meant and help them reach successful outcomes over time. Other CRM companies followed suit: Siebel On-Demand in 2004, again as a reaction to non-adoption of the CRM and the risk of churn, followed by Salesforce in 2005, with their “Customers For Life” department. This would rapidly become the largest CS department in the industry, mainly as a reaction to significant churn.
As a previous CRM consultant, I witnessed the above challenges of non-adopted CRMs from the late 1990s. This trend has continued and is also applicable to any other software. Having also witnessed the parallel evolution of customer success in many different software sectors, I still observe the above historical legacy: the reactive introduction of CS as a response to a negative situation such as non-adoption, shelfware, non-realised outcomes, disgruntled customers and consequent churn.
For most tech companies, CS is still introduced as an operational function far too late, as a reactive cure to a business symptom rather than a proactive approach to prevent it in the first place. Companies should be embracing CS as part of their company-wide strategy right from the outset instead of setting up CS as just an additional operational silo to fight churn. CS should be part of the go-to-market strategy where vendors already embed an “outcomes assurance policy” into their product, services, communication, and delivery. This proactive, holistic approach involves all company functions, starting with a top-down vision of CS as the key cross-functional driving force to their “Go-To-Outcomes” strategy. This go-to-outcomes strategy should start right with the very first customers (before they even show signs of churn) and be continually revisited in an agile manner as companies adapt to new outcome needs, fine-tune their promise, grow and scale.
In order for CS to become a strategic cross-functional mantra, this entails a shift in business mindset at different levels:
CS has a clear company-wide mission statement. It is the strategic and cultural driving force that determines all cross-functional behaviors, actions, reflexes, and customer engagement to achieve results and positive perceptions. From the start, all functions (not just the CS team as a reactive silo) should know the evolving customer needs of their customers and contribute to defining and delivering across customer journeys, milestones, and engagement from an outside-in customer point of view. Consequently, customers not only reach their goals but also have a positive sentiment as a result of their interactions with your product, services and company as a whole.
Top-down cross-functional empowerment
Top management is a role model in walking the talk of their customer-centric vision. They empower all functions to live and breathe CS, where each role knows the scope of their responsibility towards the success of the customer. Each role knows the expected inputs and outcomes of their actions. They are working in synchronisation to deliver expectations towards both external and internal customers. Top management knows how to incentivise, sponsor and drive such behaviors across their functional management cascade whilst also fostering bottom-up initiatives. Each function has incentives and leading indicators that contribute to the overall vision of CS-centricity and related lagging indicators, including the role of CS. In addition, this functional CS role becomes a major internal voice of the customer, feeding back to the other functions and helping to fine-tune the company-wide go-to-outcomes strategy in agile-like longevity.
Change in business mindset
For CS-centricity and its top-down cross-functional empowerment to occur, there needs to be a shift in doing “business as usual.” Recurring revenue companies (SaaS, subscription, pay as you go, or indeed any CS-centric company) can no longer maintain the hitherto short-term sell and forget mindset, hoping for the best once the product is sold. The future of business is a long-term mutual partnership (refer to our previous article) where CS-centricity permeates the whole company strategy and cross-functional operations.
This entails a rather different way of thinking about business: e.g., outcomes rather than just product, go-to-outcomes strategy rather than just go-to-market, long term retention and expansion of existing successful customers rather than just short-term acquisition of new customers, mutual success for customers and for vendors, long term investment rather than short term pricing and gains. For example, the traditional business approach of the marketing mix, the so-called 4 Ps (Product, Price, Place, and Promotion) are often applied in a rather vendor-centric way. These can be revisited with an approach such as the following 6 Ps to market and sustain a CS-centric offer: Promise, Performance, Perception, Partnership, Promotion, People:
- Promise - what are the outcomes which our product + services + engagement will deliver?
- Performance - how will the customer measure outcomes and business success?
- Perception - how will the customer experience positive sentiment towards the product, service, company?
- Partnership - what are the mutual expectations for success between vendor and customer? How do internal functions collaborate as partners to serve customers?
- Promotion - If the above promise, performance, perception and partnership elements are all playing in tune right from the outset, the promotion will be assured organically by the advocacy of successful and satisfied customers.
- People - All elements of the above success is based on the right dynamics of people: internally at the vendor, internally at the customer, mutually between the vendor and customer.
If this above CS-centric approach is adopted as soon as a company earns their first customer and not as a reaction to churn, it will ensure so many mutual benefits for customers and vendors alike, e.g.
- Partner with customers to overcome their pain points and achieve outcomes quicker, right from the outset
- All internal vendor functions learn how to collectively fine-tune the above: customers continue to benefit from updated adjustments to product, services and engagement
- Avoid unnecessary customer disappointment, churn and bad press at the beginning of a company’s existence
- Avoid the cost of trying to retain bad-fit customers (particularly early customers) via often lengthy and non-fruitful fire-fighting methods
- Empower the first CS team members to play a proactive added-value double agent role:
- Acting as a major internal voice of the customer to relay with other functions: customer sentiment, outcomes, expectations, feedback for action.
- Playing the role of “Earn Booster” and not “Churn Buster.”
While over 20 years ago, the first CRM vendors were nobly pioneering and putting CS into place to react to symptoms of churn, now is the time to start to adapt our business mindset and practices by embracing a more proactive CS strategy to prevent rather than cure the symptoms of churn. If done well and earlier in the go-to-outcomes strategy (i.e. with the very first customer), then the mindset and related best practices will naturally be dominated by the offensive acceleration of win-win outcomes and growth and less about defensive churn fighting. Offensive CS win-win growth strategies will organically empower the whole organisation to become CS-centric and tame the need for a dominant defensive churn strategy.
Voted 2021's Top Customer Success Influencer by Engati and a Top 100 Customer Success Strategist by Success Coaching. My work incorporates:
- Capitalizing on business constraints to boost customer success with the "Boomerang" and OPT-IN² frameworks.
- Creating and helping Customer Success organizations through consulting, coaching,...
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Fantastic article, Sue. I love the premise that you have to start with Customer Success as a part of your organisation, not an add on to tackle churn. And who knew CS has such a long history.
Thanks so much Michelle for your appreciation! See you again soon.