Ken Lanzel
January 24, 2024
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Table of Contents

11 Steps to Mastering Customer Success

Customer Success (CS) has evolved into a crucial business strategy over the last decade. Many industries have embraced the “SaaS-ification” approach to ensure customers achieve desired outcomes. This blog post explores the essence of Customer Success, common pitfalls, and a detailed guide on creating a successful CS program.

Similar but different to the sales motion, this is the lean process of retaining revenue. It is more expensive to acquire new revenue (Sales, Marketing, and Overhead expenses) than to retain an existing customer (CS expense).

What is Customer Success-

Customer Success is more than a buzzword; it’s a business strategy focused on ensuring customers achieve their desired outcomes by effectively using a product or service. Proactive engagement, continuous value delivery, and long-term satisfaction are at its core.

You can delve deeper into this method by exploring the insights provided in this book.

World’s Best Cup of Customer Success-

Imagine claiming success akin to the coffee shop in Elf. While not criticizing the model, the key is a smooth transition without roadblocks. This section emphasizes the importance of careful implementation to avoid hindering the newly formed Customer Success organization.

Again, this is not a dig into the model because I believe in the process. My main concern would be inundating CS with pre-built roadblocks or legacy scar tissue.

11 Biggest Mistakes to Avoid-

Multi-tasking Leadership of Customer Success: Designate a dedicated leader for CS to ensure its success.
Not Delivering the ‘Why Customer Success?’: Embed CS in your company’s culture through effective communication and training.
Customer Success is a Crock-Pot, not a Microwave: Understand that CS is a process that requires time to yield optimal results.
Mistake Customer Success for Customer Service: Differentiate between CS and Customer Service roles.
Do NOT ‘Goodhart’s Law’ Churn Mitigation ONLY: While churn is essential, focus on delivering long-term value to reduce it.
Too Many or Wrong KPI Bog Down: Define clear KPIs that showcase the larger picture beyond churn.
Not Addressing Existing Customer Experience (CX) Gaps: Resolve ongoing CX issues to enhance credibility.
No Playbooks, No Upsell Offers, No Tools, No Success: Develop strategic playbooks and tools for upsells and renewals.
Missing the Segmentation Boat: Tailor your segmentation based on customer experience needs, not just revenue.
Over-Indexing Your Managers: Optimize managerial allocation based on customer complexity.
Hesitant to Scale the Low-Touch Automation and Lean Optimization: Embrace automation where necessary for efficient resource allocation.

1. Multi-tasking Leadership of Customer Success-

Having a dedicated leader for Customer Success (CS) is paramount. The impact of leadership focused solely on CS is profound, ensuring a clear direction and commitment to the customer’s success. This segment delves into the positive outcomes that arise when there’s a leader dedicated to steering the CS ship, emphasizing the need for unwavering commitment to achieving customer success.

Note: Failure to have a specific leader over CS will result in a complete failure.

2. Not Delivering the ‘Why Customer Success?’-

Transforming business models is a challenging endeavor, and this segment uncovers the intricacies involved. Detailing the challenges in shifting from existing models to the Customer Success model, it explores the resistance, adjustments, and cultural shifts required. It highlights the crucial role of communication and training in embedding CS in the company’s culture, stressing the need for everyone, from the C-suite to individual contributors, to understand and embrace the ‘Why’ of Customer Success.

3. Customer Success is a Crock-Pot, not a Microwave-

The analogy between Customer Success and a Crock-Pot, emphasizes the importance of patience. Successful CS requires time and consistent activity to yield optimal results. Through real-world examples, it showcases successful CS programs that took time to mature, emphasizing that successful Customer Success is a gradual process that requires understanding, adjustments, and time.

4. Mistake Customer Success for Customer Service

Clarifying the distinct roles and responsibilities of Customer Success and Customer Service is crucial for a seamless customer experience. This segment navigates through the potential pitfalls of misunderstanding these roles, hindering effective customer support. By providing examples, it underscores the importance of recognizing the unique tasks, KPIs, and skill sets of both departments.

5. Do NOT ‘Goodhart’s Law’ Churn Mitigation ONLY-

Goodhart’s Law plays a pivotal role in the context of Customer Success, and this segment expands on its relevance. It explores how focusing solely on churn mitigation might lead to unintended consequences. Through case studies, it demonstrates the effectiveness of a more comprehensive approach that centers on delivering long-term value, rather than fixating on churn as the primary measure of success.

6. Too Many or Wrong KPI Bog Down-

Defining clear Key Performance Indicators (KPIs) is a critical aspect of a successful CS program. This segment guides readers on the importance of aligning KPIs with the overall goals of the CS program. It encourages a holistic view beyond churn, exploring measures that showcase the larger picture and contribute to delivering increased long-term value to the customer base.

7. Not Addressing Existing Customer Experience (CX) Gaps-

The impact of Customer Experience (CX) on the overall perception of CS cannot be overstated. This segment delves into how CX issues can magnify and affect the credibility of the entire CS team. It provides actionable steps to identify, address, and improve existing CX gaps, underlining the importance of a seamless and positive customer journey.

8. No Playbooks, No Upsell Offers, No Tools, No Success-

Strategic playbooks are the backbone of a successful CS strategy. This segment outlines their importance in guiding CS teams toward successful upselling and renewing customer spend. Exploring successful strategies provides insights into creating a streamlined process that aligns with verticals, customer segments, and product solutions.

9. Missing the Segmentation Boat-

Effective segmentation is pivotal for tailoring the customer experience. This segment explains the pitfalls of revenue-centric segmentation and provides insights into creating segmentation based on customer experience needs. By urging readers to interview current ideal customers, it encourages a customer-focused approach to segmentation.

10. Over-Indexing Your Managers-

Optimal managerial allocation is a delicate balance that impacts the success of Customer Success. This segment discusses the allocation of managers based on customer complexity, providing real-world examples to illustrate successful strategies. It emphasizes the importance of logical allocation per segment and avoiding the pitfalls of stretching resources too thin.

11. Hesitant to Scale the Low-Touch Automation and Lean Optimization-

Identifying optimal Customer Success Manager (CSM) ratios is crucial for coverage. This segment emphasizes the importance of scaling low-touch strategies and lean optimization, especially in scenarios where high-touch experiences are not necessary. It discusses practical approaches to implementing automation and lean optimization, ensuring efficient resource allocation and customer satisfaction.

My recommendation is to identify clients in harvest only with no or low upsell potential. Next, perform lean application to Customer Success mapping exercises to remove any waste. The process will do two things, optimize support of this base and start scoping automation requirements. Do not hesitate to apply the optimization to the high-touch experience as well. Lastly, migrate customers to the automation process accompanied with proper communication of how the customer can self-serve when they need service.

Conclusion-

Reiterate the significance of the CS program and its impact on the overall success of the business. Encourage ongoing discussions in the comments section for a collaborative learning experience. Emphasize the need for continuous improvement and exploration of new insights in the evolving field of Customer Success.

Sales teams must embrace the transformation and allow CS to focus on retention. The success of your CS program is integral to your business, requiring prioritized support, investment, and talent retention. When executed correctly, there’s no need for Buddy the Elf’s surprise visit!

You may also want to read our blog on business practices!! Read More