How to Create a Customer Success Organization

In Part One of this blog series, I talked about how to set up an enterprise software adoption up for success. In this installment, I’ll talk about how to go about creating a customer success organization.

The critical question to ask yourself before embarking on this mission is “What problem am I trying to solve?” Is it a struggle with customer churn? Is the sales team failing to achieve growth goals because they are managing all aspects of the current customer relationship? These answers will help identify the gaps in the current processes and decide if Customer Success is how to fill them.

It’s likely that the creation of the Customer Success organization will need to be justified on many levels within the company, particularly at the board level. To help overcome this hurdle, the first compelling data point should be the illustration of the total lifetime value of a customer base with 100% retention versus 95%, 80% and so on. The net present value of these accumulated churn scenarios can be staggering.

Trial it

Maybe the chart was effective, but the company isn’t quite ready to invest. Consider launching a six-month pilot program of one or two Customer Success Managers (CSM) in your organization to demonstrate value.

Assign the CSMs to new customers who represent important segments and personas, but not to the highest revenue generating customers.

Decide the right metrics to track. Do you receive higher CSAT ratings? Higher NPS? Were fewer support tickets opened for the customers with a CSM?

Closely guide and monitor, and expect to modify as you go. Of course, there isn’t the prescience to prevent all failures, so adaptability is essential.

Design It

Build the Customer Success organization for your customers, not for someone else’s. There are best practices across most Customer Success organizations, such as using high-touch and low-touch models based on your customer segmentation. Most of it should be bespoke to the business. Customer Success in SaaS is different from Customer Success for on-premise solution providers. It varies from B2B to B2C. The technical expertise requirements are different for a security solution provider versus a data storage provider. Some CSMs are responsible for gathering renewals, but most are not; and they do not reside in sales.

Design the CSM role to fit the company culture, your customer organizations and end users. If the software is fairly simple and easy-to-use, a less technical CSM may do nicely. If the solution is seemingly esoteric or complicated, CSMs with deep discipline-related knowledge are required.

In addition, determine your own success metrics so that the efficacy of the organization can be validated as well as the ability to recognize gaps.

Customer Success is directly related to retention. Will it be measured by retention revenue or by logos/accounts retained? How will CSMs be measured: by support tickets deflected? How closely they follow the engagement schedule? By team or individual logos retained?

Answering and addressing these questions up front will go a long way towards setting up a successful program that can then be implemented, which I will cover in the third and final post of this series.