Guest Blog Post by Mikael Blaisdell
In the course of a review with a new VP of Customer Success about the design and rollout plans for his new organization, I was asked if the name, “Customer Success,” was appropriate. “Everybody seems to be establishing CSM groups these days,” the VP commented, “and the name seems to mean a lot of different things. Isn’t there something better that we might use?”
While it’s definitely true that the number of Customer Success groups is skyrocketing all over the technology industry landscape, and there is no standard definition of the role, it still contains a key term that nonetheless sends an important signal: Success. It’s a starting point, and the definition that matters is the one that best serves your customers’ needs.
The standard driver for the creation of a Customer Success Management group is the crucial requirement for a SaaS/Cloud company to retain their customers. The bedrock reality for the subscription business model is that when the customer leaves, the money stops. If you haven’t recouped the customer acquisition cost by that point, you have a dead loss on your hands. So the first facet of the definition of “success” in the title is about customer retention, for it is vital to the sustainability of the vendor.
More and more Cloud companies are realizing that the most effective path to customer retention is to ensure that the customer is realizing measurable economic value from their use of the vendor’s application. “Realizing” is another key term, for if the Senior Management team of the customer isn’t clear about the economic value, they’ll look elsewhere — no matter how happy their employees may be with the application. There is no guarantee of retention in expressions of customer satisfaction. The metrics that matter are profitability and productivity. The second facet of “Success” is therefore the profitability gains measurably delivered to the customer.
Engagement and Beyond
A third facet of “Success” is about customer engagement with the application. A SaaS/Cloud company that does not have the ability to see in real time how the customers’ employees are actually using the specific features of the application is literally flying blind. Simple login tracking is not enough; you need to know which customers are using which features so that you can track their progression up the adoption curve. If their advancement slows or stops, loud warning bells need to go off so that the Customer Success team can smoothly respond before At-Risk turns into A Loss.
“Success” for the CSM team is about all of the above, and it can’t be left to chance. Appropriate expectations need to be clearly established and consistently achieved, beginning with the customer. The last thing a CSM needs is for the customer to think of them as only another person on the phone looking to extract more money. That’s not the way to be considered as a trusted advisor. Within the vendor’s organization, while profitability is a core metric for the CSM group, it must not become a thing of quotas and short-term revenues.
What’s in a name?
What’s in a name? A lot — and it’s up to the savvy CSM executive who wants to succeed to make sure that the definition of “Success” is clear and appropriate to everyone involved.
Mikael Blaisdell, publisher of The HotLine Magazine, brings 30+ years of experience in the strategy, process, people and technology of customer support, retention and profitability to the emerging profession of Customer Success Management. He is also the moderator of the CSM Forum on LinkedIn. For more information about The Customer Success Management Initiative, sponsored by Apptegic, please click here.