Does business growth hinge on customer success? We think yes.

January 6, 2022

Welcome back to the final installment of our customer success series. You’ll find parts one and two here. 

As I have touched on in my prior posts, the customer success role has evolved in parallel with how software is adopted. Previously, the CIO era enabled CS teams to have one touchpoint at a certain company which provided insight and direction around customer sentiment. Now, the end user era has created tens, potentially even hundreds of voices within organizations that CS teams must monitor and factor into customer health, changing the dynamics as to how CS teams drive growth for their respective firms. 

Product-led growth (PLG) companies have found ways to overcome these changes and potential roadblocks through the power of data, and they’ve set a new standard for how organizations should think about building their customer success (CS) functions. 

Teams today have access to more information now than they have had at any other point in history – part of this is the amount of data that’s created on a daily basis and part of this is more flexible architecture that eliminates previously inaccessible data silos. 

Regardless, the best CS teams leverage a combination of data from product usage, customer interactions, billing and accounting teams, and other information sources to drive key decisions and surface relevant actionable insights related to their users. This data-centric mentality is essential and the first step in building a high-performance CS team, but there are several other key pillars that contribute to it as well.

Data Insights paired with calls to action

As mentioned above, data is everything and it should be. Rather than guess or predict the best way to help customers, teams can learn their jobs-to-be-done by looking at product activity, who is paying for it, or a combination of factors through customized health scoring. 

Since the product paired with CS is driving growth, teams need to create the perfect customer experience to ensure a long-term relationship, and guessing is not an effective option.

This is accomplished through a combination of three factors:

1. Prioritize leading over lagging indicators: While this seems obvious, understanding which metrics to monitor that best predict expansion, churn, or customer health more broadly can be tough.

Leading indicators, aptly named, are inherently predictive in nature, and drive behavior based on certain inputs.

Focusing on metrics around activation, time to value, NPS, and product usage give a better indication of customer ideology and put the CS rep in the best position for success. When these are prioritized, the results manifest in the form of renewals and growth.

2. Segmentation is key: While these indicators are helpful, applying them to an entire group can paint an entirely different and likely inaccurate picture. CS teams must segment users to understand how to interpret their actions, weaving in context around personas, customer journey, and most importantly, needs.

Common ways to do this can be:

    • Account level: The classic segmentation by company size, industry, plan type, etc.
    • Product usage: More granular based on activity in the application – number of features activated, frequency of usage, key actions performed, etc
    • Needs-based: Separating by jobs to be done, identified pain-points, value drivers, etc.

3. Creating a CS Command Center: CS teams must take advantage of data created with every customer touchpoint/action. Whether it is from the product, billing system, support request, etc, it’s essential to have visibility in order to maximize the likelihood of taking the next best action.

The baseline is a dashboard that connects an organization’s disparate systems to shows a holistic picture of the customer – information, customer health, product activity, etc. but the ideal scenario is the dashboard paired with automation that gives CS reps a “Gods-eye” view to have visibility and run actions or commands based on certain customer segmentations (i.e. those requiring high-touch vs low-touch vs no-touch) through the platform.

Take Vitally, for example. The product, in addition to giving teams full visibility into the customers health, it allows reps to set automations triggered by product actions or certain metric thresholds that catalyze both internal and external communication, in-app product engagement, and more. By augmenting CS reps, they’re better able to scale and be more effective in their role.

Embracing the Role as Voice of the Customer

“We are playing this immensely important role in our organization as being the voice of the customer at any time. You’re trying to get something done your organization or make a change, just elevate the voice of the customer because the customer is always right.” – Lindsey Serafin, VP of CS at Snyk

To build an effective CS team, there needs to be organizational buy-in, especially with product playing a critical role in acquiring and growing customers, which inherently involves multiple stakeholders. There needs to be close alignment and communications between sales, marketing, product, and CS and a clear understanding of one another’s roles and responsibilities.

For CS, that is the voice of the customer. CS teams are often the customer’s first human touchpoint and as a result, it’s their responsibility to be the customer’s number one champion within the organization. This means sharing customer stories, advocating for certain enterprise requirements or customer features, and prioritizing a mentality around driving value vs revenue.

“The biggest barrier to customer success is CEOs not making it an important part of the culture.” – Nick Mehta, CEO of Gainsight

For companies just beginning to roll out a CS team or ones that are very sales heavy, they must embrace the importance of CS to be effective. This means publicizing customer satisfaction as much as possible, sharing CSAT, NPS, etc, both internally and externally, and showcasing a level of pride in how much customers’ love the product. This not only publicizes people’s appreciation for the product, which likely incentivizes those in their network to buy, but also shows the importance the company places on customer satisfaction – both of these aspects are owned by CS!

Some companies have both product-led and sales-led motions, a combination becoming more and more popular as PLG businesses scale and sales-first companies implement a self-serve component, incentivizing the right behavior across departments is essential. 

This starts with compensation – often-times, sales reps will focus on hitting their quota and will actually bring in the wrong type of customers. These customers, whose behavior and tendencies likely don’t represent the target user, make life difficult for CS. They’re not a fit for the product and won’t see as much value, leading to churn regardless of attention and/or prioritization. 

One way to mitigate this occurrence is to tie sales managers to a potential churn target, incentivizing bringing in the best customers and putting the onus on CS to retain them.

Complementing High-Touch with Tech-Touch

Onboarding a new customer is a critical stage of the customer journey. This is the first opportunity for the CS rep to understand pain points, and expectations and structure the customer’s product experience. It can play a huge role in the customer’s lifetime value.

As a result, most CS team will often use a high-touch, guided approach to enhance the customer experience and increase the likelihood of future expansion. This includes demos, a dedicated CSM, recurring meetings, etc. However, companies with a self-serve or PLG motion can’t rely on this given the composition of their users–they simply don’t have the resources or time and the economics wouldn’t make sense. 

This means there needs to be a low-touch or “tech-touch” component where customers can onboard and begin using the product in a self-serve nature. This caters to the strengths of PLG companies, but it goes beyond that. 

Companies must build as much of a digital experience as possible for users to onboard themselves to reach that “aha” moment while still feeling like they are getting the white-glove treatment accustomed to high-paying customers. This entails setting up clear documentation, creating FAQs, and building in-app walkthroughs and digital journeys to provide sufficient levels of education and attention for users. 

The combination of these two models allow CS teams to target certain personas (buyers, key decision makers) that have high potential with high-touch, while leveraging their product and digital adoption aids for others, meaningfully saving time and increasing efficiency. 

Technology built for CS is growing—how meta!

Customer success is a critical function within software companies. We are seeing a refresh in the market, where CS solutions are adjusting to meet the rising expectations and preferences of customers. 

Incumbents are adding more product-oriented capabilities and features, while new entrants are building from the ground up with a data-first mentality. Either way, we’re seeing some exciting tools emerge to help CS teams better understand and serve customers and put their organizations in the best position to grow. 

If you or anyone you know is building in this space, I’d love to hear from you!

Special thanks to my Partner, Tom Holahan for the help with this post. 

Chris Gaertner head shot


Chris is a Vice President at OpenView. He is responsible for finding, evaluating, and executing B2B software investments, with a focus on PLG and the modern enterprise.