If you’ve spent any time in the SaaS world within the past few years, you’ve experienced the rise of the Customer Success department.
But while the term “Customer Success” is meant to indicate a proactive approach to product adoption, the reality is that many companies use it as a fancy new name for Customer Support (a crucial team, but not a revolutionary addition to the customer lifecycle).
Brooke Goodbary, Customer Success Manager at Intercom, differentiates customer success from customer support in two key ways:
“Customer success means providing each new client with a roadmap to product success, based on how similar clients have achieved success in the past,” she says.
“It also means identifying ways clients could use your product more effectively, or spotting red flags — before someone reaches out for help.”
But what does this mean for your team day to day? From a tactical standpoint, how can a company truly embrace customer success?
In this interview, Brooke shares best practices she and the Intercom team use to help you get started.
Pressed for time? Here are the 3 key takeaways:
- A customer success team needs space in the workday to step back and identify which behaviors have repeatedly made past clients successful, so they can guide new clients toward those same behaviors.
- To make time for this analysis, evaluate which touchpoints in the customer lifecycle bring the lowest value, and employ tools to accelerate or eliminate them.
- When deciding whether to expand your customer success team, consider three things: the experience you want your brand to be known for, the potential for small accounts to expand over time, and the bandwidth required to pursue new markets.
How Customer Success is more than crisis managemen
“Customer success” is a buzzword by now, and Brooke knows this. “The biggest thing to remember,” she says, “is that if you’re purely reactionary, you’re really a support team.”
Of course, this is no slight against the importance of high-quality support.
“Support has great value,” she says. “But customer success means identifying ways and times customers may need your help, even if they haven’t stepped forward yet. So the real difference is being strategic about how you identify people who would benefit from some assistance.”
To do this, a customer success team needs time to step back and identify which behaviors have repeatedly made users successful.
For example, Intercom has found that clients who import custom data into the platform are much more likely to have a higher ACV, and to stay with the product longer. Armed with this information, their customer success team can guide clients to import that data at the outset of the relationship.
“We can ensure each new customer reaches those key ‘aha’ moments that much faster,” says Brooke, “and that they continue to move toward the right success metrics.”
An added bonus? Painting a picture of other clients’ success “begins every new relationship with a sense of optimism,” she says. “It can be a really motivating conversation for that new customer; they begin to view the relationship with you as a true partnership. So you lay the groundwork for long-term product usage and for a strong emotional connection to your company.”
How to make time for both proactive AND reactive support
Understanding success indicators, regularly checking in with clients to track these indicators, and conducting proactive outreach when clients stray from the right path: that’s a time-consuming to-do list.
How can customer success teams accomplish it all, while also handling the inevitable reactive work that’s standard of account management?
Brooke suggests an analytical approach: evaluating each touchpoint in the customer lifecycle, and using tools to speed up or eliminate the low-value touchpoints.
“You want to identify where you can have the most impact, and find tools that amplify your impact or remove low-impact work,” she says.
Calendly and Intercom are two key components of her customer success toolbox. “You’re not adding a lot of value sending emails back and forth to schedule a meeting,” she says, “which is why it’s so important that Calendly eliminates that work for me. Then I’m able to be more personal where it matters.”
Similarly, using Intercom itself to manage her ever-growing account roster allows her to segment communication to different types of clients, so each group only receives messages that drive value and product success.
“As much as we’d like for every touch to be 1:1, you have to automate some of your messaging to scale,” she says. “But if you’re going to spend time sending a message, it has to meet a need they have. That’s really the only way to lead someone toward success, so targeting and segmentation are extremely important for saving time and being an effective CSM.”
Understanding when to grow the team & when to stay lean
At some point, embracing customer success means expanding the department, and potentially even segmenting the team into specialized groups (e.g., implementation, training, ongoing management).
But this is a hefty investment of time and finances — so at what point can a company be sure it’s the right move?
Jason Lemkin advises scaling the team by bringing on one customer success manager per $2M in ARR. His chart below illustrates how the amount each client pays influences how proactive or reactive your team should be:
However, Brooke recognizes that Jason’s recommendation may sound unrealistic to an early-stage team focused on lean growth.
“The first salesperson isn’t worth anything until they start selling to people,” she says, “and it’s pretty similar with customer success. So making that investment to expand may seem like a premature move.”
She recommends evaluating the following three criteria when deciding whether to expand the customer success team:
What type of service do you want your brand to be known for?
“Do you want each customer to receive a personalized onboarding experience, or are you comfortable relegating some of your users to self-service?” Brooke asks.
She estimates one customer success manager being able to hold 10 calls per day, tops — if they’re really good.
“So if you have one CSM and they’re managing 500 accounts, they’re just not going to be able to give that personal attention to each client,” she says.
“You need to define your standards of a ‘good experience’ for each type of client. The more users can help themselves, the fewer CSMs you’ll need. The more your customers need that ‘partnership’ relationship, the more of an investment you’ll want to make up front.”
Do you expect your low-ACV customers to expand over time?
“One thing that isn’t immediately apparent in Jason’s analysis,” says Brooke, “is that good CSMs won’t just be retaining their account base; they’ll begrowing it.”
Does your model allow for client expansion — and do you intend to capitalize on this channel of growth? If so, “you may want to consider scaling your team ahead of that $2M/CSM curve, in order to successfully nurture and increase the ACV of those accounts.”
Do you plan to go after new markets
“At Intercom, we look at where we are today, and where we want to go,” Brooke says. “For example, moving toward a new market will, at first, require CSMs to spend more time hand-holding smallish accounts than makes sense on paper. They’re learning these new customers’ needs, they’re sharing that information with the other teams (product, marketing, demand gen, etc) — and that takes a lot of someone’s time.
“Ultimately, though, these accounts will prove to be a very smart investment. They’ll ideally expand, or at least attract other, bigger clients like them.”
Customer success and a healthier balance of power
While the idea of customer success is still relatively new, Brooke ties its rapid ascent to software’s transition away from the top-down buying process.
“Traditionally with software sales, all the information a prospective customer needed was behind an iron fence,” she says. “So the salesperson had all the power.”
As land-and-expand strategies become more common, so has the focus on providing value as quickly as possible, rather than safeguarding the product until after a negotiation.
“This is a great shift in the industry,” says Brooke. She cites Calendly and Slack as examples of this bottoms-up approach, where “individuals can sign up as soon as they want, and eventually the company makes the larger purchase because it’s been such a great experience for their team.”
“I’m really excited to see how the success-focused model continues to evolve. How great will it be when my cable company takes this approach? When I can only pay for the channels I need? This is a really human, positive direction to move in.”