Evolution of the Customer Success Org
Understanding where you are in the evolution of your Customer Success organisation will help you identify what to prepare for next.
If you’ve ever looked at open job vacancies on LinkedIn for ‘Customer Success Manager’, or moved from one software company to another and been part of several Customer Success structures, you’ll know that the scope of the CSM role and responsibilities can vary quite a bit. Compare that to fairly well established and defined roles such as ‘Account Executive’ in Sales, or ‘Support Engineer’ in the Support org, which are homogeneous across software companies.
The variance in CSM role scope is most often attributable to the size, scale, and stage at which the software company is operating at. It’s not the ‘fault’ or error of any particular leader or executive, that the role has so much variance, more it’s a natural product of how the company is evolving. To that end, I’ve been very deliberate in not using the term ‘maturity’ as I don’t believe that the constituency of the CS organisation is necessarily connected to the maturity of the CS organisation, or company as a whole.
One factor that does contribute to the scope of the CSM role and responsibilities, is the complexity of the product or the market which the company is looking to address. Compare a solution like SurveyMonkey to the solutions offered by Qualtrics. Both companies had similar product origins, and founded just a couple of years apart, but are now addressing completely different markets, and users, and offer a different complexity of solution. As a result, the scale of organisation, and supporting functions, vary.
Customer Success Evolution
The model depicted in the graphic below, summarises the evolution of CS orgs from companies that I have either worked at, or observations and learnings from other companies through connections in my professional network. By no means is this exhaustive or based on statistically backed studies and therefore it is entirely possible there are nuances to the way your organisation works when compared.
Along the bottom of the graphic, I have identified 5 stages of a Customer Success organisation; Start-up, Early, Growth, Established, Mature. There are no defined entry and exit criteria to go from one stage to another, but I think most people as they look at their organisation would be able to categorise their CS org or company in one of those 5 terms.
Along the left side of the graphic, I have identified 8 responsibilities that after often scoped within the CSM role at one stage or another. This is not to say that there are no other functions that support or conduct this responsibility as well, they can and often do exist, but a CSM is often considered a responsible owner or steward of these activities too.
On the right side of the graphic, I have listed metrics which a CSM, with those responsibilities, would typically be measured on. That’s not to say that these are the only metrics for those responsibilities. Where those responsibilities exist as functional units or teams in their own right, such as Support, Sales or Professional Services, those units would have an array of metrics to measure the organisation on. Individual contributors and leaders of those functions will have a much broader range of metrics by which to measure the work.
👶🏻 Start Up Stage
In the start up phase everyone tends to wear multiple hats and, in many cases, the role title gives an idea of what the individual should be working on, or will be when the organisation grows.
The CSM in this phase of the company evolution could be involved as early as pre-sales as those people will likely have some of the strongest technical or product skills to assist the Sales team with calls, demos and the product side of pitches. The advantage is that involvement pre-sale gives a level of continuity as the purchaser becomes a customer. The relationship is established early.
If the company is past start-up phase, but the customer success organisation is the unit that would be considered ‘start-up’, then there’s less chance the CSM will be involved in Sales activities. The same would also be said about Support as this team and function is often one of the first to be established, alongside Sales.
The danger is when the ‘multiple’ hats of a CSM does apply to their role including Support, as this can be a difficult label to shrug off, both internally and externally. Customer Success is most definitely not Support and so if CSMs are doing Support, it’s probably more apt to call them Support.
Beyond Support and Sales, the next four responsibilities listed tend to become the staple for the CSM role throughout much of the early and growth stages of a company and CS organisation, namely; product training, onboarding or implementation, closing expansion/growth revenue, and the renewal transaction.
With everything a CSM is likely to have to do, unfortunately the one thing that the role is meant to do is the one responsibility they really don’t have the time to spend on. Adoption.
👧🏻 Early Stage
In early stage companies, functions are a little better formed than at Start-up. There are enough employees in the company to have clear delineation between Sales and post-Sales and as a result, the CSM spends much more of their time on the things they should. However, there is still a lot on the CSM’s plate and so the responsibilities are much more skewed towards onboarding and training new customer users.
In this same vein, adoption now starts to become a topic of awareness, but is likely to be much more skewed towards onboarding adoption. Onboarding adoption is about getting names in seats (licenses) with the Potemkin facade assuming that if we have someone’s name and email address assigned to a license, then that is considered ‘adopted’. A dangerous approach, and an empty metric to follow, as it shows little to indicate a usage behaviour.
Product training remains a responsibility of the CSM and is often connected to the onboarding or implementation effort and, because of that, training tends to be done up front as a one time effort, with no real strategic thought for ongoing onboarding of new users. This, of course, is not scalable too far into the evolution of the company or CS org and, in reality, is unlikely to be where the CSM desires the career path to go. As the company grows, Training functions are built to not only scale the basic and repeatable fundamentals of a product, but also to offer more customised, in-depth, training to larger customers who would likely also be willing to pay for the service too.
As company evolution is early and responsibilities are still so varied, the level of accountability to which the CSM is held, and the ownership over specific tasks and targets is much lower. Over time this will change, and must improve, but at this stage is still very much a case of treading water to stay above water.
👩🏻 Growth Stage
The challenge of the Growth stage is volume and complexity. The company is of such a size now where the number of net new deals being closed every quarter becomes more challenging. As the new deals increase, so too does the value. Along with increased value comes increased expectation, priority and time needed to care for these larger customers.
This is the stage where segmentation of customers may start to be desirable. Inevitably that’s when CSMs start to focus on the larger customer and differentiate their engagement activities based on the segmentation model. Having different levels of engagement may create issues with lower-value customers, as well as internal stakeholders, who are used to a high level of service with greater attention.
Add into the mix that the CSMs may still also have the commercial responsibility of either a growth/expansion target or the renewal transaction, or both! Because the company has been operating for multiple years, there are several renewals to take place. This phase of the company, whilst a highly enjoyable and prosperous one, can also be where fragmentation occurs due to the sheer volume. Revenue related activities will always take precedence of a CSM’s time and attention over other responsibilities, especially when working in a quarter to quarter cadence, and where there are individual targets linked to commercials in place.
This phase of the CS org is an important time to double down on establishing, refining, and systemising processes that enable the CSM to work effectively both on three main areas; (i) onboarding or implementation, (ii) growth and renewal, (iii) adoption activities. Evolving these three things here will lay the foundation for further stages of evolution.
(i) Onboarding and implementation means different things to different people, and definitely means different things to the success of the customer depending on the complexity of the product at hand. If not already done so, automated onboarding sequences of emails and in-product messaging should already be established. Where the product complexity, or CS model established, requires a more intimate touch from the CSM, it’s important to have systems in place that communicate with one another, so as to hand off and set up the necessary next steps as soon as the sale is complete. Without this, it’s inevitable that the time will be lost and the customer experience will suffer.
(ii) Growth and renewal. In a month to month or year to year SaaS subscription model, cash is king, making the renewal important to the business sustainability. Late renewals and renewal churn impacts the business moving forwards, and slows the progression of evolving to the next stage. At this point it’s important to establish discipline, practice and process that ensures the renewal transaction happens on time or, better yet, as early as possible. An end to end audit, from both an internal and external perspective, will surface any process gaps or steps that are slowing the renewal experience. Establishing automated triggers, and even in-product experiences for the customer, can minimise the friction and noise of the commercial event.
(iii) Adoption activities. Up until this stage most of the activity has been limited to reactive work, possibly without too much telemetry and analytics to assist. Much of the telemetry for usage statistics will sit outside of Customer Success, probably lying with either Engineering or Product Management, but how the CS org uses that can be established by the CSMs and standardised across the group. Many CS platforms will surface alerts, triggers, or calls to action, accompanied by a playbook of activities and responses. It pays to spend some time planning these out, whilst also making sure not to over complicate or over-populate the playbooks.
👩🏼🦳 Established
The biggest change that occurs when moving to an established CS org is the monumental shift away from commercial to non-commercial activities. With this comes the often asked question… “but, if the Customer Success organisation isn’t involved in commercial activities… [complete the sentence with one of the following]…”
“… how do we justify their existence to the company?”
“… how will they contribute to the company revenue?”
“… what will they do now?”
What often ends up happening is a tentative step away from commercials with a hokey cokey dance of keeping one foot in and one foot out, keeping the renewal transaction or a growth revenue contribution target, whilst passing the responsibility of the other to the Sales team. This is certainly one step better than having both commercial activities, but until the CSM is freed from both, they will always have the eye on a much more short term, or transactional, goal.
In an established organisation the profile, experience and ability of the people you hire into a Customer Success Manager role will be very different to those hired into a Sales role. You want your best salespeople running the commercial engagement and activities, allowing your CSMs to focus on the analytical, data-driven, product-led, nurturing, and value activities that they are so well suited to doing.
With less responsibility for commercials, the CSM has more time to exhibit the creativity, ingenuity, and customer-centric problem solving skills that they are so naturally adept at. In an Established Customer Success organisation the CSM delivers value that is not dependent on, or pivot around, the customer’s sole use of the product. They are able to advise and help the customer with actions which relate to the development of their people, practice or discipline, and become experts in their craft.
Executives and champions come to expect value-led activities and outcome based consultancy and advice, based on your prescription of what is the way of doing something. The CSM is therefore seen by the customer as a trusted advisor because of their industry knowledge, experience, and is confidently able to answer the perennial questions… “How do your other customers solve this problem? What does good look like?”
With greater specialism comes the increased need for greater refinement and excellence in the role. Companies will often hire to the stage they are in and that time but, as an organisation grows, specialisation can create uncertainty for CSMs who have been around for some time. Providing playbooks isn’t enough to change the skills required to execute, however these individuals have detailed product and customer knowledge which makes them valuable.
New CSMs joining the business will likely have more varied experience than new-joiners in previous stages, having held the position on multiple occasions elsewhere. These tenured and seasoned CSMs are brought into the business to help add diversity and experience to operational practices and ways of working that can help the organisation evolve into the next stage of being a Mature organisation. Having a career structure and enablement programme will help retain both the value of existing CSMs and help integrate and invest in new joiners.
👵🏼 Mature
In the ‘Mature’ stage of evolution, the CS organisation is at its most refined, optimal and structured. If not already established by now, its likely the organisation will have a Chief Customer Officer, responsible for Customer Success, and having a seat at the Executive table, reporting directly to the CEO, independent of a reporting line through the Chief Revenue Office.
The segmentation model focuses a lot more of its time and resources on its highest commercial value customers, by reducing the ratio of customers per CSM to an extremely high touch model. It’s highly likely that monetisation of the Customer Success offering exists and at the top end of the value pyramid, a CSM may have stewardship over one large account.
Adoption activities are proactive, where initiatives and programs of work are delivered as a prescription to the customer on a consistent and repeatable basis. Product usage data is of such detail that it enables a CSM to tell a story to the customer which ties back to business metrics, value statements and outcomes. At the most advanced end of this stage, success criteria and commercial arrangements are tied to business outcomes, which are identifiable and achieved.
CSM’s in a ‘mature’ stage may come from a consultancy background and have more experience in advisory services and guiding a customer. This is possible because the CSM role is complemented by other roles and functions in the organisation, making up an account team of specialists, all of whom understand that customer success is much more a philosophy than a function.
CALL TO ACTION
👉 Identify the stage your organisation is currently operating in and look for ways to automate, programise and repeat at speed activities associated with training, onboarding, or commercials.
👉 Proactively look at patterns in usage data and endeavour to tell a story that leads you to take action. At that point, seek out solutions from peers that have addressed that problem. If none exists, work with peers to innovate and create a new solution, with a goal to create a new standard of excellence which is repeatable for your peers.
👉 In understanding your customer, their problems, the industry or discipline you are most commonly engaged in, deliver an activity, recommendation or insight which is not linked to the product. Focus on delivering something that will make your champion or sponsor look like a hero, and enable them to deliver value to their organisation.
Thank you to Shirley Chapman, who contributed to this article. I first met Shirley when we were asked by Gainsight to speak on the main stage at Gainsight Pulse Europe in 2018. Shirley is the Senior Director, Customer Success, EMEA for Pluralsight. Her long career has been all about helping individuals — students, customers, colleagues, CS professionals — be the best they can be. Passionate about how technology and education can bring about positive outcomes for individuals, companies and society. She loves to “chew the cud” on all Customer Success related topics, with a particular interest in growing CS teams and diversity within the profession.
