Many of us recall the “old days” when software was sold on a CD or DVD. Post-sale activities were managed by Account Management, “renewals” were new versions of the software, and buying roles were much simpler and easier to understand:
But as software transitioned to the cloud, and as product-led growth became a more popular way for companies to adopt new software, these definitions fell short. They failed to capture new factors in buying processes like levels of authority, influence in decision making, and product usage.
What emerged were 3 new roles:
These new names captured factors in modern buying processes, but for those of us that didn’t grow our careers through Account Management, made it harder to understand what each role means.
Clarifying what each new modern role means
To get a better understanding of what these terms mean, it’s helpful to compare them to each other. The graphic below helps visualize how the Champion, Buyer, and Power User roles are different by looking at their Influence and Authority, and their Product Importance.
Influence and Authority defined (x-axis)
Influence is the weight of a person’s opinion in the mind of the decision maker. Influence often comes from a small number of high ranking people, or a large number of low ranking people.
Authority is the power to make final decisions without approval from someone else.
Product Importance defined (y-axis)
This measures how critical the product is to accomplish the user’s job. If the product is of low importance, the user can replace or work around the product. If the product is of high importance, the user requires the product to perform their core job.
This quadrant does not include...:
We opted against using Advocacy, Budget, and Volume of Usage as factors for this quadrant because they don’t help define the difference between user types:
What you can detect using these definitions
Using these definitions with your team will allow you to:
This week's newsletter features posts on:
STRATEGY
Let's Stop Calling Churn a Customer Success Problem
Kyle Poyar, VP - Market Strategy at OpenView, with 8 things that Sales, Marketing, and Product can do, with the help of Customer Success, to move the needle on churn.
CULTURE
Customer Experience Isn't Just Tech Jargon
Emilia D’Anzica, Customer Success Consultant (former CCO at Copper), shares advice on building a customer-centric business.
LEADERSHIP
Four Ways Good Leaders Become Great Ones
Ed Batista, Executive Coach, with a concise piece on four attributes that differentiate good leaders from great ones. Of the four, I’d call out “Understand the symbolism of leadership.” He says, “People join organizations and feel committed to them to a certain extent because of the feeling of community... and because of the leader's commitment to invest in the health, development, and growth of that community… it’s important to recognize that a leader bears a unique responsibility to help the community feel a sense of collective identity and growth.”
RESEARCH
Words and Phrases That Top Sales and Success Reps Use
Gong analyzed over 500k sales calls to share the words and phrases top performers regularly use. Worth sharing this with the team to try out.
There are 3 key moments along the customer journey where it makes sense to make the introduction; Pre-Sale, Point of Sale, and Implementation or Go-Live.
None are wrong, but the best moment to make an introduction will depend on the commercial value of the customer (i.e. where they fit into your segmentation model) and what responsibilities the Customer Success Manager has in scope for their role.
The diagram below plots the ideal time for introduction based on the value of the customer on the Y-axis (typically measured in $ ARR) and time, or phase of the customer journey, measured on the X-axis. The shaded overlay represents the segmentation model, indicating the high touch segment covering the higher value customers and a low touch or tech touch segment for low value customers.
Click the link to expand the image
1. High-touch customers: Introduce the CSM Pre-Sale
In high value Sales opportunities you generally have good visibility in advance to know how and when the deal is going to close. This gives you a great opportunity to introduce the concept of Customer Success to the customer, and start to lay the foundations of understanding which will later develop into recognizing the value you offer them with the CSM role.
At a company I worked at previously, myself, or a Senior Customer Success Manager, would be brought into the Sales cycle towards the end, where there was an 80% chance or higher of closing, to position what their post-sale experience would look like. Professional Services would have their opportunity to discuss implementation, scoping and sizing the appropriate services, and Customer Success would be given an opportunity to talk about how we would help the customer achieve their desired outcomes, over the long term.
Our discussion would be accompanied by a ‘pitch deck’ where we would talk about Customer Success as a differentiated and crucial accompaniment as part of the account team.
2. Medium-touch customers: Introduce the CSM Post-Sale
As part of your medium touch tier you should aim to introduce the CSM at a natural point, ideally as close to the point of sale as possible. Depending on the volume of medium touch customers you acquire, it might be possible to introduce CS in the pre-sale, however the most common time to introduce the team is post-sale.
It’s a good idea to establish an internal SLA between Sales and Success where you can ensure an internal debrief and handover takes place within 48 hours of the deal closing, and an introduction call with the customer within 5 days of the deal closing. If it is measured and tracked, it can be improved over time. Establishing this discipline at such a crucial point of the relationship, where so often the ball is dropped, will create an impactful experience at a key point in the customer journey.
The point of sale often experiences an interesting gear shift. Up until that point, the conversation has been very strategic. Following the agreement, it quickly moves into tactics and execution. The introduction of the CSM should include a mix of both strategy and tactics, but too far skewed towards tactics and execution and it will be difficult to move back to strategy.
Considerations:
3. Low-touch customers: Introduce the CSM Post-Go Live
In a high or medium touch model, waiting until after the implementation is complete is quite possibly the worst time to wait to introduce the CSM. For a customer of such high value or worth to you, why would you ever want to wait that long.
In a low touch model, it’s not uncommon, however, to introduce the CSM later in the journey. That’s because the customer is unlikely to get much time with the CSM as it is, due to the economics of your segmentation model. Your low touch model will still warrant a relationship and CS point of contact, but it is likely to be on a reactive or infrequent (perhaps quarterly) basis. Utilizing other forms of technology, like end user surveys or in-product capture of information, can be a good way to transfer the knowledge at scale from Sales to CS.
Call to action:
This week's newsletter features posts on:
LEADERSHIP
A User Guide to Working With You [Template]
At Nuffsaid, one of our core values is “we share our strengths and weaknesses openly”—which means we have these documented for the team to see. Here’s a similar approach from Julie Zhuo, author of The Making of a Manager, who makes a case for outlining “how you view success,” “what gains and loses your trust,” and more for your team.
RETENTION
Establish Your Risk Management Framework
This post breaks down the process of creating a risk management framework into four steps. Step 2 (“define your risk types”) is especially interesting as the author emphasizes the importance of determining whether risk is chronic or acute.
COMMUNICATION
A Leader's Guide to Writing Well
“The bigger your company becomes, the more writing is a skill worth having.” Here’s Dave Girouard, CEO of Upstart, with writing tips you can incorporate immediately.
INDUSTRY
Customer Success is Taking Over
Blake Bartlett, VC at OpenView, with a 20-second video illustrating the evolution of the customer journey and how Customer Success is “taking over” all stages by using customer insights to “steadily redefine each stage.”
At Box, I’d consider ourselves "lucky" in that delivering value to customers is a company-wide focus. But in truth, it’s a result of how we’ve structured our teams and created our culture.
Here are three ways we continue to build customer-centricity:
1: Success is part of the sales cycle.
There are two important parts of how our Success and Sales teams work together that help foster a customer-centric mindset: 1. Our Consulting Services team is embedded in the sales cycle, and 2. Sales owns renewals.
To the former point, since salespeople tend to want to be in control of every aspect of their deal, there can be tension when trying to bring Consulting ("Services") into the sales cycle. To navigate that, we constantly reinforce the value of bringing Consulting in the sales cycle. Our Consulting leaders frequently remind their peers in Sales about how incorporating their team in the sales cycle helps the customer feel more comfortable—when they sign the deal they’ll be in good hands—and it also brings in a perspective from someone who’s seen how different customers use our products.
And as for the latter, Sales leaders often don’t care about renewals. It’s not in their DNA. But in our company, our Sales leader sees renewals as a core part of his sales strategy—in fact, we’ve made changes to the sales compensation model to reflect that. This has also helped us bring Consulting into the sales cycle since services help renewals and renewals are part of the Sales team’s job.
2: Customer-centricity is part of our company values.
Our first company value is “Blow our customers’ minds.” This means its a company-wide objective to create excellent products and services for our customers.
But what about the specialized roles that are internally-focused? A payroll administrator, for example, is thinking about how employees are getting paid, they’re not thinking about the customer. So one of the ways we’ve brought the customer-centric mindset to everyone in the company is to send out a weekly email to all employees that highlights one customer story. We share an example of how one customer is benefitting from our products and services. And we try to tie it to something that’s going on in the world; if there’s a big movie coming out and our products were used in the process of producing the movie, we’ll highlight that. It helps people instantly connect with the story and feel proud of what we’re doing.
3: Our CEO is constantly thinking about the customer.
For the customer to have “a seat at the table,” it matters who the CEO is. For us, our CEO deeply understands the value of Success and it's apparent in everything from our company values to he talks about the company in general. So for others, here's how to identify a CEO that values Customer Success:
This week's newsletter features posts on:
PROCESS
Designing a Sales-to-CSM Handoff That Actually Works
Here’s Lincoln Murphy with another helpful template—this time for ensuring the customer is set up for success right off the bat.
COVID-19
Clearbit's VP of Customer Success on Turning Economic Headwinds Into a Growth Opportunity
An interview with Luke Diaz on how he’s leveraging automation to protect the company’s revenue. He discusses personalization, predicting churn with data, and why his Success team holds “red account” meetings where they strategize to secure their at-risk customers.
STRUCTURE
What's an Appropriate CSM to Manager Ratio?
The rule of thumb, “7 reports to 1 manager” is used across departments, but in this post Brooke Goodbary (Manager - Customer Success at Roku) draws from various studies to show that the company’s maturity should influence the decision of how many CSMs a single manager oversees.
CULTURE
5 Ways to Encourage Feedback From Others
Kim Scott, author of Radical Candor, explains how leaders can get their team members to share open and direct feedback with each other. She says, “don’t triangulate; you’re a boss, not a diplomat. Shuttle diplomacy won’t work for you.”
Written by:
These days, buyers have more choices, are better informed, and expect a superior customer experience.
As Customer Success Managers, we have a narrow margin to bring value to a customer, or else we risk losing them. So, it’s not surprising that many Customer Success teams spend tremendous energy on keeping customers “happy” or doing whatever they can to adapt to customer desires.
The problem with this approach is that it assumes customers know what’s best. In reality, Customer Success Managers are the authority on best practices with their tool / service. If CSMs always bow to the requirements of the customer (who isn’t the product expert), the result is often a lack of success.
Have you had a customer churn because they refused to use your product in the manner that would produce the best results?
Sometimes, a customer’s habits are the biggest hurdle to their success. This is why “challenging” your customers can have a positive impact on retention and growth.
The Challenger Concept
The “challenger” concept was popularized as a sales strategy by Matthew Dixon & Brent Adamson in their book, The Challenger Sale. In their view, the sales landscape had fundamentally shifted, and prospects were now too busy, too well informed, and had too many options for a long-term relationship strategy to work. Instead, Dixon and Adamson proposed consultative selling that wasn’t afraid to challenge the customer’s assumptions.
They broke the model into three steps:
Although the challenger model was originally designed for sales, it also has a lot of application in Customer Success!
How to leverage the Challenger Concept for Customer Success
Today, customers increasingly expect that Customer Success will help them not only achieve value with a product but also impact their business as a whole.
As mentioned before, a customer’s habits can often be the roadblock to achieving success. So, if that expected impact is what customers truly want (and for the most part it is), then we need to challenge them to modify their behavior and enact true change management. Using the Challenger Sale strategies are a great place to start.
What does this mean in practice? “Challenging” the customer comes down to getting them to change. It may involve changing their processes, goals, preconceived notions, strategy, or anything you feel is currently inhibiting their success. Some examples of areas to challenge customers are:
Then, you need to convince them to change. This is the most difficult part as it requires asking tough questions or voicing concerns that may produce some friction. It’s important to conduct this part with respect and with the goal of helping them and their business.
Some examples of the types of questions or statements you can use are:
While it isn’t easy, “challenging” customers is a powerful tool in a CSMs arsenal to help customers whose biggest hurdle is their own behavior.
Note: Alex also runs a newsletter for Success leaders. Check it out.
This week's newsletter features posts on:
REMOTE WORK
Remote Happiness, How to Create It
“Humans need 4 things to feel mentally balanced: connection to nature, connection to tribe, blood flow, and uninterrupted work space. Pre-COVID, we could each achieve these to some degree simply by going to an office.” It’s challenging for some of us to adjust to remote working. Matt Mochary (CEO coach to companies like Coinbase, Opendoor, Clearbit, and more) offers some tips on how we can achieve those four elements, and encourage others to do so, in a work-from-home environment.
PROCESS
The Key to Slick B2B SaaS Onboarding and Fantastic User Adoption
Where Alex Bakula-Davis (above) explains how to use the “Challenging” concept to get a customer to change, Dean Colegate (Customer Success Consultant) offers a high-level blueprint for creating a Change Management Plan in this post.
CAREER
How to Take Personal Development Off the Backburner
Here’s a compilation of sound advice on how to approach personal development, meaning the ongoing work of up-leveling yourself in pursuit of your longer-term goals.
COMMUNICATION
21 Questions to Help You Understand Your Customer
Here’s a solid list of questions you can use to unpack your customers’ wants and needs, while increasing buy-in. Some examples include, “What’s working well right now?” and “What might happen if you do x/don’t do x?”
From an interview with:
Where Sales reps have traditionally been resistant to recording their calls, we've created a customer base that are not just “bought in” to the idea. They love it. They bring our product with them wherever they go.
A significant part of the reason for that is due to one of our company’s operating principles, which is to “create raving fans.” That company-wide goal filters into every department. But it also has to do with how we’ve oriented our Customer Success team’s structure, metrics, and culture around the customer.
So for others looking to borrow ideas on setting up a customer-centric organization, here’s how ours works:
Structure:
Metrics:
Culture:
This week's newsletter features posts on:
GO-TO-MARKET
There's No Such Thing As Post-Sales
Rav Dhaliwal, Venture Partner at Crane (and former Head of Customer Success at Slack), highlights three patterns seen amongst their portfolio companies in how they’re retaining customers. The most important, he says, is they believe that “success is everyone’s business.” “There is the first sale with a customer, the next sale with them and so on, and in order to maximize the conditions for this, Customer Success has to begin in the sales cycle.”
WORKFLOW
Avoiding Burnout on Your Customer Success Team
Brooke Goodbary, Manager of Customer Success at Roku, explains how Success teams can decrease the chances of burnout during this time. She says, “Customer Success burnout in particular is tied to two factors: unrealistic expectations and an inability to imagine a time when things will improve.”
LEADERSHIP
The Best Three Pages on Leadership I've Come Across
Zack Kanter, Founder/CEO at Stedi, pulls pages out of the book One From Many by Dee Hock, including this one: “True leaders are those who enable the unconscious values and beliefs of every member of the community to emerge.”
COMMUNICATION
Feedback is Not a Gift
An insightful piece by Ed Batista (Executive Coach) that argues against thinking about feedback as a “gift,” and instead framing it as “data.” For one, feedback is filtered through the giver’s perceptions of reality—it should not necessarily be accepted as the truth (although we shouldn’t reject feedback outhand). He says the framing, “feedback is data allows us to be more judicious and intentional about whether and how we respond to it.”
From an interview with:
For many teams, the initial shock of moving to remote work is over. But, in the words of Fast Company, “remote work isn’t going away anytime soon,” and teams now need to invest in the systems, processes, and culture required to work remotely for the longterm.
GitLab is 100% remote, and the company has been iterating and documenting how to work remotely for years. So for others who are now building a foundation for effective remote teams, here are the key elements of what makes our setup successful:
This week's newsletter features posts on:
EDUCATION
Your Guide to Successfully Training Customers Remotely
Kyle Poyar, VP of Growth at OpenView, shares “six things that can move the needle on churn” that tend to involve teams outside Customer Success.
PROCESS
Measuring Customer Success Relationships
Here’s a list of ideas for recognizing team members from Claire Lew (CEO at Know Your Team). Among the list, she recommends recognizing team members by sharing customer reviews—“use their words, not yours.”
HIRING
(Unstructured) Job Interviews Don't Work
Ujval Bucha, Sr. Product Manager at Cornerstone OnDemand, makes the case that Customer Success should do more of the legwork in helping Product organize and triage customer feature requests.
TEAM BUILDING
The Secrets to Our (Customer) Success
A recap of a “CS Leadership Office Hours” discussion with a list of tips and advice from various Success leaders on how they measure and manage contacts within an account.
From an interview with:
In many companies, “Customer Marketing” is a new concept. Even Marketing teams don’t always get it right, which may be because they tend to be more oriented around acquisition and conversion rather than retention and expansion. That’s why at Typeform we have a Customer Marketing team that lives within Customer Success (it’s called “Lifecycle Marketing”).
Because the Success group is closest to the customer and is entirely focused on helping customers achieve their desired outcomes, having a Customer Marketing team sit within our organization ensures that the campaigns that team creates are centered around engagement and retention.
For others interested in building Customer Marketing within their Success group, here are a few key elements of our structure:
This week's newsletter features posts on:
EDUCATION
Your Guide to Successfully Training Customers Remotely
Customer Success consultants Donna Weber and Lauren Thibodeau share a step-by-step plan for designing and implementing an online training program.
PROCESS
Measuring Customer Success Relationships
“There’s not enough clarity about how valuable relationships are, for any SaaS company.” Here’s Ziv Peled, CCO at AppsFlyer, with a presentation on his high-level vision for measuring customer relationships.
HIRING
(Unstructured) Job Interviews Don't Work
This piece names some of the issues with unstructured job interviews and offers ways to make interviews more effective. For example, I’ve heard of interviewers over-emphasizing activities like “whether the interviewee followed-up on LinkedIn,” and this piece calls that out directly, saying this “is not a representative situation in terms of how the person will perform in the actual interview.” Some better approaches: blind auditions, competency-related evaluations, and more.
TEAM BUILDING
The Secrets to Our (Customer) Success
Daphe Saragosti, Global VP of Customer Success at Centrical, breaks down some key changes they’ve made to their team’s processes and culture that helped reduce churn and drive growth.
From an interview with
Directors and VPs in Customer Success tend to quickly learn how important it is to coach and develop their CSMs. In some companies, Success manages less budget and therefore needs to hire ambitious, junior CSMs and then grow them into senior CSMs. But another major reason why this pattern exists is that companies don’t tend to clearly define the Customer Success Manager role. It can serve as a catchall bucket, which forces the CSM role to play second fiddle to other functions.
The best way for Directors and VPs to up-level their CSMs is to clarify the role of the CSM. And the best way to do that is to answer these five questions:
This week's newsletter features posts on:
COVID-19
6 Ways to Drive Revenue Performance in a Downturn
Here’s a list from Brex’s CCO Roli Saxena and Operator Collective Founder Mallun Yen with ways to drive revenue in the midst of an economic recession. Here’s some of the advice they share: 1. Make sure you’re aligning your product to areas of immediate customer need, 2. “Creating champions is more difficult in a virtual environment,” so strive for executive alignment early in the sales cycle, and 3. Track an updated set of leading indicators. “Understand the outcomes your customers strive for, and measure your team’s success against those goals.”
STRUCTURE
Evolution of the Customer Success Org
Russ Drury, Manager - Strategic Customer Success at InVision, offers a model to help visualize how the responsibilities of CSMs change as a company moves through the stages of maturity.
SERVICES
Why You Should Eliminate the Title "Implementation Consultant" From Your Startup
Dave Kellogg, enterprise software startup consultant, makes the case for eliminating the job title implementation consultant in favor of consultant. He says, “What do implementation consultants think they do? Well, implementations.” And “what customer equates implementation with success? None.”
COMPENSATION
Policy: How to Structure Compensation for a Customer Success Team
Here’s an example compensation plan from Tomasz Tunguz (Partner at Redpoint Ventures). While I don’t agree with the objectives he’s selected to evaluate CSMs on (e.g., Product Adoption is a lagging metric, so we should measure the leading indicators of that outcome), I like the format—outlining the comp plan in this way can help set expectations and drive focus.
An excerpt from:
Everyone says they value customer success. These 9 questions verify if it's true
Customer Success understands the customer better than any other function in the organization. And yet, in many companies, the team doesn’t have the strategic influence to help customers be truly successful.
One of my greatest frustrations is when a company says they value their customers, but their actions say otherwise.
So we created a scorecard that Success leaders can use to see how much their companies really value their customers—and the Customer Success function specifically. The “poor, average, excellent” scales provide a path for leaders to advocate for their group and to put the customer at the center of the business.
Click on the image to expand in a new window
Here’s the TL;DR on 3 of the 9 questions:
1. Who does the top Success leader report to?
If the top Success leader is a VP (or below VP in smaller companies), if they report to anyone but the CEO, or if the role doesn’t exist at all, this is the first indication that a company might not prize the opinion of the customer to the fullest extent.
In excellent companies, the top Success leader reports to the CEO and is equal to their peers on the executive team. Here, these leaders can bring their deep insights about the customer to influence strategic decisions across the company.
2. Who is responsible for retention?
The best SaaS companies are documenting the customer’s desired outcomes, and there are company-level, department-level, and team-level goals to help the customer achieve those outcomes.
In contrast, many organizations have a company-level retention goal but only Customer Success is expected to deliver the results. When the customer journey includes touchpoints across Marketing, Sales, and Product, but these groups aren’t being held accountable for the experience they’re providing, that indicates the company isn’t focused on investing in their customers.
3. How often is feedback reviewed by execs?
Executive team culture around customer feedback is often a defining characteristic of a company’s culture and whether or not they follow through on their “Customer comes first” core value.
Poor companies have a leadership team that reviews feedback every 3-6 months. In great companies, they review customer feedback daily.
You can read the full framework here. Many thanks to Jay Nathan and Jeff Breunsbach of Customer Imperative for collaborating on this piece.
This week's newsletter features posts on:
COVID-19
Tales & Trends of Startup Resilience
Here’s a report based on interviews with 60+ founders and VCs on the strategies they’ve employed to survive and grow during this time. One of the takeaways: “Customers are now dictating the Product roadmap.” Product teams need to “move from ‘push’ to ‘pull’” and “respond to the highest need first.”
If you enjoyed reading the report from Will Reed, see Openview’s annual SaaS Product Benchmarks Report which was released this week.
STRUCTURE
Where's the Best Place for Upsells to Live?
A LinkedIn post from the Gain Grow Retain team that offers starting points for creating engagement models for SMB, mixed, and enterprise customer tiers.
WORKFLOW
4 Laws of Customer Success
Russ Drury, Manager - Strategic Customer Success at InVision, explains how four well-known theories apply to Customer Success. He calls out Miller’s Law, for example, which suggests that the average person can only keep ~7 items in their working memory at a time—and then explains how CSMs ought to prioritize their time with that in mind.
MANAGEMENT
The Manager's Guide to Inclusive Leadership—Small Habits That Make a Big Impact
“You can’t just assume inclusion will sprout organically once you’ve introduced more diversity.” This piece breaks down the “four essential habits” of inclusive leadership. It’s packed with immediately-actionable advice and tactics, like encouraging team members who are remote or more introverted to participate in discussion by 1. creating thinking time, 2. doing a timed round-robin, and 3. ending meetings with ritual questions.
An interview with:
When advocating for budget with your peer in Finance, the data should speak for itself. Finance doesn’t care about your stories; you have to come with a work breakdown structure and capacity plan.
Here’s an overview on how to do that:
And a final note: People often talk about the difference between Customer Success and Sales—they say Sales has a methodology, they have funnels, the revenue engine is defined and mature... But Customer Success is no different. There are frameworks we can use in Customer Success for journey mapping, breaking down experience tiers, creating capacity plans, and measuring the velocity of how customers move from one phase to the next. I expect we’ll see more and more Customer Success leaders think this way in the next few years.
This week's newsletter features posts on:
CULTURE
Lucidworks' CCO on Building Teams, Processes, and Culture Around the Customer
Jess Jurva, CCO at Lucidworks, shares the changes she made to help the Customer Excellence group provide world-class experiences—and how she grew her organization's prominence in the company as a whole.
HIRING
9 Questions to Ask Candidates for Your First Head of Customer Success
A list of questions that can be used to understand how a candidate thinks about the role of a top Customer Success leader in a company. Two of my favorites include “How do you think Customer Success should work with the Sales and Product teams?” and “If we are on a tight budget, how should we staff the CS team?”
LEADERSHIP
Marc Andreesen on Productivity, Goals, and Motivation
Here’s an interview with Marc Andreesen highlighting his perspective on a wide range of topics. I found the section on “process, outcomes, and bets” especially interesting: “The craft of investing [or in many cases, strategic decision making] is a process of separating process and outcome.”
SCALING
Why Efficiency, Not Just Effectiveness, is Key to Scaling Customer Success
Nicole Rashied, Customer Success Manager at Intercom, with 5 tips to increase efficiency in Customer Success (or “getting customers to their desired outcome without wasting effort or resources”). Among the list, she suggests “streamlining the pre-sale to post-sale handoff” and “focus on providing solutions, not explaining features.”
An excerpt from:
Why aren’t we measuring if customers are successful?
Our customers don’t come to us because they want a “product.” They want a solution to their problem. But many companies don’t try to measure whether or not the customer problem has been solved, and the ones that do typically focus on how frequently the product is used (an internal metric that has nothing to do with the customer’s success).
Success teams go through several phases of getting more sophisticated in how they track and measure the value received by customers. Here’s a summary of those phases and how Success teams can move from one level to the next (you can read the full post for more):
Level 1: Pitch features and use cases
The Success team solely focuses their time with customers on explaining features and use cases. The company is essentially saying, “here’s the product! Go use it.” The customer is “on their own” to figure out how to adopt the product in a way that fits their needs.
Level 2: Incorporate usage metrics
Here, the Success team still focuses on pitching features and use cases (level 1) but they’re also leveraging product usage metrics to evaluate whether customers are getting value out of the product. They’re saying, “Here’s the product, go use it,” and then tracking usage data to see whether customers are receiving value.
Most companies land here, at level 2. They can move up to level 3 by connecting usage data to an outcome that matters to customers.
Level 3: Connect usage to the customer's goals
Instead of focusing on features and use cases, Success teams at Level 3 anticipate 3-4 high-level objectives that customers will have when buying their product and then create playbooks for helping customers achieve those goals with their product.
Teams at level 3 are still using product usage as the main indicator of whether the customer received value. They can move to the next level by 1. acknowledging that their product alone won’t help customers reach their goals, and then map out what role their product plays in the ecosystem, and by 2. using more sophisticated metrics to understand whether customers are getting value out of the product.
Level 4: Understand the ecosystem of products required to achieve customer goals
There are no products that own the entire ecosystem of people, tools, and services required to hit a company’s objective. If your customer wants to increase revenue by 3%, your product is only one part of that story. The key to moving to level 4 is understanding where the product fits in that ecosystem and then being able to coach customers to leverage all the moving parts required to hit the customer’s goal.
Success teams in Level 4 have also moved beyond relying on product usage as the main indicator that the customer is receiving value, and are now tracking earlier indicators of customer health.
Here’s what’s missing in Level 4. Level 4 assumes the question of whether the customer “received value” is binary: either the customer received value, or they didn’t. But in reality that’s rarely the case. Customers can realize some value from a product, but not get everything they were expecting. Companies at Level 5 are able to detect and record when customers have received partial value.
Level 5: Total focus on customer goals and value received
Level 5 is where the Customer Success team not only understands the customer’s goal, the ecosystem of products required to meet that goal, and is tracking early indicators of customer health, but they’re also able to record and detect whether the customer received partial value.
.
This week's newsletter features posts on:
PROCESS
Creating a Feature Request Process for B2B Product and Customer Success Teams
Nuffsaid’s Co-founder and VP of Product, Nick Paranomos, explains why Success should play a much larger role in how feature requests are prioritized and breaks down the core elements of a feedback process.
RETENTION
You Aren't Doing Enough Customer Marketing
If Customer Success doesn’t own Customer Marketing in your company, consider making a case with the group that does own that responsibility to set goals around advocacy or retention. As Jason Lempkin says in this post, “If you don’t come up with clear quantitative goals for Customer Marketing, it will never get enough attention.”
GOALS
Why Isn't the Entire Company Measured on Retention?
Chris Walker, CEO at Refine Labs, points out (in a 37-second audio clip) that in order to retain customers, everyone in the organization should be held accountable for a retention metric. Here’s the quick audio clip, or listen to the full episode here.
ALLYSHIP
What Does Sponsorship Look Like?
Here’s a timeless piece from Lara Hogan, Leadership coach at Wherewithall, on how we can be better sponsors and mentors of minoritized people.
From an interview with:
I fundamentally believe that a product is nothing without the users and customers who are willing to pay for it. Therefore, the group that’s the closest to the customer—most often Customer Success—should hold an equal level of power at the executive level to Sales, Product, and Marketing.
I’ve seen too many organizations make the mistake of moving their Customer Success unit where it doesn’t have a voice at the executive level. Or, they turn it into something of a servant of the Sales team or a servant of the Product team. It’s such a mistake, particularly in SaaS: leaders in tech have a plethora of products with overlapping features to choose from, and they’re under great pressure to pick the right products and make sure they’re not overpaying or double paying. Companies need to make sure their products are being used by their customers and are being seen as valuable in order to survive.
Customer Success is the “how”—and it needs to report to the CEO in order for the CEO to have a pulse on the experience customers are receiving.
But if you’re not yet convinced, here are a few other reasons why Success should be reporting to the CEO:
This week's newsletter features posts on:
SELF-REFLECTION
Anti-Racist Management Practices
“Holding structural power means you have an opportunity to make sure that those structures are supporting your current and future employees equitably.” This piece gives a concise explanation of what it means to be an anti-racist, specifically at work, and how to get started.
COMMUNICATION
How to Talk About Racism at Work
Valerie Williams, former Global Head of Diversity & Inclusion at Stripe, shares a guide to having a virtual team discussion around social justice and human rights. It includes an email script and meeting agenda you can copy and paste. Note: This piece is published on Almanac. You may need an account to read the piece (it’s free).
SOCIAL JUSTICE
How to Be an Ally if You Are a Person With Privilege
“One of the most effective ways to use our privilege is to become the ally of those on the other side of the privilege seesaw.” Here’s an insightful and thorough explanation on what it looks like to be an ally.
LEGISLATION
Check the Police
This resource was particularly eye-opening. It shows how police union contracts protect officers from being held accountable for misconduct. I shared this resource in our company all-hands as a place to learn more.
TheySaid recommends questions, delivers via your existing channels, engages your audience, and summarizes results through AI surveys and interviews.
.svg)
