Customer Success is the new industry focus for almost all companies that have a subscription or re-occurring revenue model these days. One only has to look at the job listing online, they number in the thousands every day for companies looking for good Customer Success Managers. But what should they focus on? I don’t mean the job description, I am talking about the “how” of getting the job done.
We all know in order to see if something is successful you must measure it. The challenge for the discipline of Customer Success is that some leaders and managers may lose their appreciation of tasks that do not have an immediate impact on the metrics being measured. I firmly believe it can be to the detriment of the program they are responsible for.
Metrics should be long-term measurements and not short-term litmus tests to actions. To illustrate 2 different approaches we will take a close look at 2 example scenarios.
As a SaaS (Software as a Service) company, ABC Company has a metric and goal for their CSM’s to have a 109% Net Revenue Retention. This means that if my responsibility today for 20 accounts is $3m in Annual Recurring Revenue, My goal at the end of the year is for that same group of accounts to be paying $3,270,000.
As a CSM, I have a choice how I do my job. I can go into each interaction considering what I can “sell” this customer. This can be a module or add-on in which case, the CSM starts to become more of a sales representative. Acting in this way would be using the increase in revenue to decide what each interaction with the client should look like. The secondary approach would be to understand the customers business goals and objectives. When there is a roadblock
to them achieving that objective, helping to remove it even when the result of such doesn’t immediately result in an “order”. Instead, the result is a stronger partnership invested in the customer’s business outcome. When done over time, the customer forms a bond and trust level with their CSM.
This allows the CSM to suggest solutions at times that do have additional cost as well. It will often be well received due to the strength of the partnership. There is a realization from both parties that the suggestion was based on the impact on the business outcome and not the additional “order.”
The company has a Customer Satisfaction score that the CSM’s are held accountable for maintaining and improving upon. There may be a situation where the customer has a dispute on an invoice for something and the details appear to be unclear as to whether it is due. The short-term thinking that only factors in an action based on the immediate impact to the metric may issue the credit for the customer. The alternate approach would be to do the research and have an open discussion with the customer on why they are making the request. You can share your companies reason why the charges appear valid. Having an open dialogue and settling on a resolution that works for both parties strengthens the relationship. It demonstrates your willingness to listen as well as do what is right, as opposed to easiest.
In both examples, we can see that there is some “art” in how our CSM’s approach a situation as well as how they resolve or bring the situation to a conclusion. There is science, and there is art; both have a place and both can be enjoyed equally in our personal life as well as our business life. Too much of one versus the other leads to an imbalance between the benefit that the customer and company each receive in the customer success relationship.