Customer Success, The Gift That Keeps On Giving
By: Keith Corso
Tags: Customer Success, Customer Experience, Customer Engagement

Our business is constantly evolving thanks to a deeply intentional, empathetic, and relationship-driven customer success approach — one that has evolved dramatically over the past year. Through this transformation, we’ve been surprised by the interdisciplinary benefits achieved as a result of investing in customer success from the earliest stages. I was inspired to write this article to share our learnings as we strive to build an effective customer success practice from day one.

The customer success industry is bursting at the seams as 1) companies recognize the importance of this function and 2) individuals are flourishing in this burgeoning industry. As of November 2019, close to 70,000 Customer Success Manager jobs were listed on LinkedIn, representing 176% year-over-year growth according to their jobs report (Linkedin, 2020). As more companies realize the following facts about customer success, these growth trends will accelerate further. As stated in this report by McKinsey, customer success is the growth engine of the modern business, and here is why:

It is 6–7X more expensive for companies to attract new customers than to keep existing customers.

Only 1 out of 26 unhappy customers complain — the rest churn. A lesson here is that companies should not view the absence of feedback as a sign of satisfaction.

Customer success drives company valuation by impacting a company’s customer acquisition cost ratio, lifetime value, runway, burn rate, account expansion, total addressable market, and talent acquisition.

The nascent customer success industry is constantly changing along with the meaning of this function in different companies. According to Gartner, “customer success management is the business discipline of guiding customers to recognize value through product adoption or service utilization across their life cycle” (Gartner, 2021). In my opinion, customer success is more than ensuring customers “recognize value” with your product/service. The insights captured from customer engagements support product, engineering, sales (customer loyalty and advocacy), design, and company-wide decisions. With this perspective in mind, it becomes clear how vital customer success teams are to an organization’s ongoing growth and prosperity.

In an age of engineering advancements, automated communication, and a scale-first mentality, the art of human connection is falling by the wayside as 0s and 1s take the front seat. However, a surge in customer success jobs suggests companies recognize the power of coupling human connection with computing power.

As we start to build out our customer success team at BusRight, we’ve been asking ourselves the following questions:

How do we get better at supporting our customers — where are we today and where do we want to be?

What tools, processes, and technologies should we leverage to capture customer feedback and resolve issues in a timely fashion?

How can we use feedback from the front lines/customer success to support product, sales, and company-wide decision-making?

While all these questions are worth a deep dive, in this article I will seek to understand how feedback, insights, and ideas captured by customer success leaders can support product, sales, and companies more broadly. In a tight-knit industry such as student transportation, one positive customer experience can supercharge growth in an entire region. Additionally, our product’s value increases the more it gets utilized by different stakeholders, so funneling product learnings from customer conversations can have exponential effects on all stakeholders.

Customer Success & Sales

Customer success and sales teams have a symbiotic relationship. Both are needed to create successful revenue, yet each has different goals and responsibilities. Achieving alignment between these two teams can be difficult due to their disparate methods of thinking about the business. The sales team works with prospects, closing deals, and securing contracts, while the customer success team focuses on helping existing clients run their organizations more efficiently. Below are several tips, strategies, and ideas you can put into practice to achieve alignment between sales and customer success.

Optimize for Referrals : Sonci Perez, Co-founder of Quala, said that customer success teams should optimize for referrals. Referrals are not only an avenue to quantify happy customers but also an effective growth strategy. To do so, a customer success manager asks a client early on, “What would you need to achieve with our product for you to be comfortable sharing it with your colleagues?” Salespeople often rely on happy customers for references to potential new customers. Customer success professionals are in the perfect position to help you find those loyal, high-value clients that will be your best advocates.

: Sonci Perez, Co-founder of Quala, said that customer success teams should optimize for referrals. Referrals are not only an avenue to quantify happy customers but also an effective growth strategy. To do so, a customer success manager asks a client early on, “What would you need to achieve with our product for you to be comfortable sharing it with your colleagues?” Salespeople often rely on happy customers for references to potential new customers. Customer success professionals are in the perfect position to help you find those loyal, high-value clients that will be your best advocates. Leveraging Sales Insight : The sales team gathers critical insight about a customer during the sales process, such as their desired outcome from using the product, the essential features for their success, internal organization dynamics, and more. Having this information documented, likely in a CRM, can support the customer success manager. For example, the buyer might not be the ultimate user of your product. A buyer might purchase your solution to support a colleague on their team. With this context, a customer success manager can focus their onboarding and training efforts on the end-user — knowing that their success equates to the buyer’s success. Furthermore, the “handoff” between sales and customer success needs to be consistent and clear to the customer. If they have a question about the product, you want them to contact customer success and not sales. After the handoff, customer success will now build, nurture, and own that relationship moving forward. In doing so, sales leaders can continue forging new relationships with potential customers. Additionally, various buyers and users can engage with the product, some of who might not have been involved in sales conversations. As a result, you can develop multiple champions at your customer site which can 1) help in the event there is turnover in the organization and 2) bring your product to future organizations.

: The sales team gathers critical insight about a customer during the sales process, such as their desired outcome from using the product, the essential features for their success, internal organization dynamics, and more. Having this information documented, likely in a CRM, can support the customer success manager. For example, the buyer might not be the ultimate user of your product. A buyer might purchase your solution to support a colleague on their team. With this context, a customer success manager can focus their onboarding and training efforts on the end-user — knowing that their success equates to the buyer’s success. Furthermore, the “handoff” between sales and customer success needs to be consistent and clear to the customer. If they have a question about the product, you want them to contact customer success and not sales. After the handoff, customer success will now build, nurture, and own that relationship moving forward. In doing so, sales leaders can continue forging new relationships with potential customers. Additionally, various buyers and users can engage with the product, some of who might not have been involved in sales conversations. As a result, you can develop multiple champions at your customer site which can 1) help in the event there is turnover in the organization and 2) bring your product to future organizations. Replicate Successful Customers : Julie Hogan, Head of Customer Success at Toast, suggested we study the characteristics of a successful customer and not just focus on the customers we are constantly firefighting for. Companies like ours end up spending a majority of customer success resources on unsuccessful customers. Julie’s approach is the inverse; by identifying key characteristics of happy customers, sales teams can prospect more effectively. For example, if your successful customers are all migrating from pen and paper, you might share that trend with your sales team so they can adjust their outreach and qualifying questions accordingly.

: Julie Hogan, Head of Customer Success at Toast, suggested we study the characteristics of a successful customer and not just focus on the customers we are constantly firefighting for. Companies like ours end up spending a majority of customer success resources on unsuccessful customers. Julie’s approach is the inverse; by identifying key characteristics of happy customers, sales teams can prospect more effectively. For example, if your successful customers are all migrating from pen and paper, you might share that trend with your sales team so they can adjust their outreach and qualifying questions accordingly. Effective Customer Segmentation : Mark Roberge, former CRO at HubSpot who grew the company from $0 to $100M in revenue, describes the power of customer segmentation on growth. “We stopped selling to segments that churned at too high a rate….We knew that if clients used five of the 20 features in the first 60 days, then they’d be a customer for life. If they didn’t, they’d churn.” Finding repeatability in your initial market segment can compound sales, customer success, product, design, and engineering efforts. When you’re building for a customer group with similar needs that’s willing to pay for your solution, you’ve likely reached product market fit.

: Mark Roberge, former CRO at HubSpot who grew the company from $0 to $100M in revenue, describes the power of customer segmentation on growth. “We stopped selling to segments that churned at too high a rate….We knew that if clients used five of the 20 features in the first 60 days, then they’d be a customer for life. If they didn’t, they’d churn.” Finding repeatability in your initial market segment can compound sales, customer success, product, design, and engineering efforts. When you’re building for a customer group with similar needs that’s willing to pay for your solution, you’ve likely reached product market fit. Exponential Growth: The book, The Customer Success Economy, written by Nick Mehta, founder & CEO of Gainsight, describes the compounding effects of happy customers. “If you make your customers successful, you can turn one new lead into 3+ leads. And in turn, those 3 incremental leads result in 3 × 3 = 9+ new leads.” Here is how a single lead results in 3 new leads: 1) A lead for a renewal event, 2) A lead for an expansion deal, 3) A lead for a new logo (referral). Nick describes that with “…these smaller, fractured markets, you can have above-average economics by leveraging a sales force that is ten times your size and more than ten times less expensive — namely your clients. Why hire ten reps when you can “hire” 10,000 happy customers to sell for you?”

In conclusion, an integrated customer success and sales team can deliver a seamless customer experience, supercharge growth, and help refine your customer segmentation strategy. This flywheel only works if you have a product that is effective, reliable, and constantly evolving to meet your customer’s needs — which leads us to the following discussion regarding customer success and product alignment.

Customer Success & Product Alignment

“Both customer success and product teams are bound by similar goals: incentivize customers to use their features so they continue to get value. Product teams can’t do this without a customer-facing counterpart, but they also shouldn’t rely solely on customer success teams to drive adoption.”- Travis Kaufman, VP Product Growth, Gainsight

If you create and sell a B2B SaaS product, the underlying assumption of this article is that the bulk of customer interactions are happening inside your product. This can be either conscious or by circumstance, but most customers in their day-to-day lives are interacting with your company through the product or service you deliver. Email channels, social channels, phone calls, and other interactions make up only a fraction of their engagement with your company. More specifically, it’s not only how we act and react to our customers that drive the overall experience, but the login process itself (the first impression), loading screens, button images, color schemes — everything in between can significantly affect customer satisfaction as outlined below.

KPI Synergies : Customer success and product teams understand the KPI of customer adoption, but in different ways. Product teams look at adoption rates across the entire base of customers, while customer success looks at each unique customer that has adopted your product. The anecdotes and broader qualitative data captured from customer success can provide context into overall product usage metrics. Similarly, general product usage metrics can give context for customer success managers in helping them better understand how individual customers are using your solution compared to the average customer.

: Customer success and product teams understand the KPI of customer adoption, but in different ways. Product teams look at adoption rates across the entire base of customers, while customer success looks at each unique customer that has adopted your product. The anecdotes and broader qualitative data captured from customer success can provide context into overall product usage metrics. Similarly, general product usage metrics can give context for customer success managers in helping them better understand how individual customers are using your solution compared to the average customer. Balancing Qualitative & Quantitative Data : Nate Munger, Head of Customer Success at Courier, said that “The goal of leveraging technology in customer success is to make sure problems, feature requests, and more aren’t strictly anecdotal.” In an early-stage startup, product decisions can be driven by anecdotes, emotion, and subjective information. By definition, you’re doing something no one has done before which requires a level of qualitative information that leads to heightened ambiguity. As your customer base grows, the data you collect from customer interactions can act as a balance against instinctual decision-making.

: Nate Munger, Head of Customer Success at Courier, said that “The goal of leveraging technology in customer success is to make sure problems, feature requests, and more aren’t strictly anecdotal.” In an early-stage startup, product decisions can be driven by anecdotes, emotion, and subjective information. By definition, you’re doing something no one has done before which requires a level of qualitative information that leads to heightened ambiguity. As your customer base grows, the data you collect from customer interactions can act as a balance against instinctual decision-making. In-app Support : Customer Success teams are increasingly leveraging onboarding and in-app messaging tools (Intercom, Appcues, etc.) to provide necessary guidance in their product to scale their Customer Success operations. Part of the product offering is the in-app support and part of the support is an intuitive product.

: Customer Success teams are increasingly leveraging onboarding and in-app messaging tools (Intercom, Appcues, etc.) to provide necessary guidance in their product to scale their Customer Success operations. Part of the product offering is the in-app support and part of the support is an intuitive product. Product Inspiration: The data and insights captured from close customer relationships enable companies to grow their business in new ways and expand their market opportunity. For example, we started developing school bus routing technology and then realized that our customers also had a challenge communicating routing information to drivers. As a result, we developed route-to-tablet driver navigation designed specifically for school bus drivers — a core differentiator of ours. With this level of customer engagement, you can quickly launch and iterate on new products. This takes a clear understanding of how your customers interact with your product (usage metrics) and a clear idea of the underlying problems they need to solve.

“CSMs are your number-one source of what’s the next best thing to build, because they’re your number-one source of information on how your product is being adopted and whether or not it’s working as intended in the marketplace.” — The Customer Success Economy

Driving Feature Awareness : Customer success drives awareness of recently released features by sending email announcements, sharing the news across social channels, and writing case studies announcing the feature’s impact on select customers. They might follow up with guides that are personalized for each individual user based on product usage analytics. Personalization here is key as a customer success manager might know that Customer X doesn’t ever want to use Feature Y so sharing an announcement on Feature Y with them might be counterproductive.

: Customer success drives awareness of recently released features by sending email announcements, sharing the news across social channels, and writing case studies announcing the feature’s impact on select customers. They might follow up with guides that are personalized for each individual user based on product usage analytics. Personalization here is key as a customer success manager might know that Customer X doesn’t ever want to use Feature Y so sharing an announcement on Feature Y with them might be counterproductive. Incorporating Industry Expertise: At BusRight, we have monthly Design Partner calls. For over a year, a group of 6–8 transportation directors across the country gather virtually and provide feedback on new product designs, recent functionality we’ve launched, and discuss how technology can power safe and efficient student transportation. Customer success is the glue that connects our customers to our product and engineering team, as seen below.

Decreasing Churn: According to UserIQ, “Companies with aligned [customer success and product] teams experience less churn. 87% of respondents with a churn rate of less than 1% said their Customer Success and Product Management teams are either fully or somewhat aligned” (UserIQ, 2019). Alignment can come in the form of targeted communication. For example, following a customer training session, Neil, BusRight’s Head of Operations, shared this feedback with the product team.

Achieving alignment between customer success and product, however, is not as easy as it sounds. Product managers and customer success leaders need to collaborate with each other in order for the process to work seamlessly. Each team needs a shared understanding of what “success” looks like from their department’s perspective — and integrating these perspectives will create sustainable value over time. However, It’s not just the product that gets customers to stay, it’s the relationships they have with the company, the support they get, the feeling that they’re listened to, and that their needs are validated.

The benefits of aligning product and customer success efforts extend far beyond decreasing churn, driving feature awareness, or finding product inspiration. As Nick Mehta, the Founder & CEO of Gainsight who raised over $150M from world-class investors, explains, “Whether VCs are looking for evidence of product-market fit, the longevity of the business, client expansion potential, or a strong long term product strategy, they believe that CS is a primary indicator of the health of a business.”

In conclusion, customer success is oxygen for your business. Over 50% of our product has been built from recommendations, ideas, and feedback from our customers — of which ~20% have come from referrals. Our Chief Product Officer has also served as a Chief Information Officer of some of the top 10 largest school districts in the country. With a practitioner at the helm of product decisions and product direction, we can be confident we are designing a solution that meets the needs of transportation directors nationwide.

The insights captured at the front lines, and how companies manage and act on those insights set the precedence for your organization’s information architecture — whether early stage or not. When you’re considering how much resource to allocate to customer support or other departments in your organization, ask yourself “What’s my vision?” If you want a company where customers are always happy and engaged with your product (and therefore recommend it), then consider allocating additional resources towards Customer Success. What’s been the most successful way you’ve seen organizations manage this delicate balance?

While we don’t have all the answers to the questions outlined above, we do have a team that’s committed to serving our customers, elevating their voices, and making them feel like the heroes they are.