Sasi Yajamanyam has spent the last ten years of his career in Customer Success, working in a variety of roles. He set up a CS function at CEB for their first SaaS product, he has worked in Professional Services implementing ServiceNow products, and has built scalable programs to arm CS teams with knowledge and skills to implement ServiceNow best practices.
His experience of seeing how different teams work together to deliver CS has shaped his interest and ideas presented in his new book Reimagine Customer Success: Designing Organizations Around Customer Value. “I realized that defining a model for CS is a challenging problem that a lot of smart people at a lot of companies are working on. I wanted to do my share by investigating, learning, and sharing what the next generation of customer success should look like.”
Below you’ll find a lightly edited excerpt from his book where he shares why Customer Success needs to be reimagined and offers an outline for a new model of CS.
Why do we need to reimagine Customer Success?
Industrial age—Quality management. Automation age—Process reengineering. Digital age—??
Every major economic era gave rise to new management disciplines—a collection of practices, processes, and systems adopted by organizations to support the era’s technological
In the Industrial age, organizations focused on manufacturing products of consistent quality. The focus in the Automation age was on the efficiency of business processes, or how work gets done. The focus of the Digital age is the consumer (yes, that’s all of us) of digital technologies, as the innovations impact every walk of life. A more specific focus is on the relationship between the consumer of technologies and the companies that provide these products and services.
"Customer Success can be the new management discipline, a new way to organize and run companies, for the Digital age if we approach it the right way."
Just as digital transformation became a boardroom topic at many orgs, CS became a board-level topic at technology vendors. In the Digital age, the relationship between customers and technology vendors has evolved from being centered around transactions to becoming a more long-term partnership focused on customer outcomes.
As Customer Success grew into a function, many organizations and leaders realized that success of the customer takes more than just one function. Most companies claim Customer Success to be a core value and a top strategic priority, but their actions often don’t reflect their words. These leaders lack the right frameworks to embed CS in all functions. Instead, they default to doing what they know how to do well—building, managing, and improving functions, the silos within the organizations.
CS has become one such silo. Unlike Sales, Marketing, and other functions, Customer Success is an outcome and a function. To date, too much focus has gone into building the function without a clear pathway to the outcome. In fact, focusing on Customer Success as a function alone will not help us realize the potential for it to be the management discipline for the Digital age. In short, what got us here will not get us where we need to be.
"Customer Success is an outcome and a function. To date, too much focus has gone into building the function without a clear pathway to the outcome."
Let me be clear. There are many challenges to setting up the function of CS. My intent for this book is not to provide solutions to “here and now” challenges. My goal is to look ahead a few years and paint a vision of what CS could be as a management discipline. We need to reimagine CS as a discipline that informs how we build organizations centered around a common understanding of the customer and success by everyone in the organization.
A new model for Customer Success
How can we turn the intuitive knowledge that CS is the growth engine into action? I believe the next generation of CS starts by going back to the basics. If we can clearly identify who our customers are and understand their motivations for investing in our product, we will be able to define a more holistic model for Customer Success.
The principles in this model apply to the entire company, not just a single function. We need a new way to organize and align the entire company, where every department is working toward the overall success of the customer. The first step of this model starts with establishing a broad perspective of CS.
Some companies talk about these broader perspectives and measures, like customer lifetime value, which are good starting points, but I am yet to see any company organize their internal operating model to maximize customer lifetime value. Many processes in place today tend to overemphasize individual transactions like a sale, product implementation, renewals, etc. Internal operating models have not evolved to support a customer’s entire journey and maximize value over a longer term.
One school of thought that I prefer is that every customer interaction with the brand—marketing, selling, onboarding, and support—is an opportunity to work toward CS. One of the common terms for this end-to-end view is “customer experience,” which has a lot of different connotations.
Unfortunately, these terms become marketing slogans and stop short of implementing real changes to how different teams operate. It is my goal to offer a framework to build a more customer-centric operating model that brings all teams together.
This new model will help us reimagine CS as a model that will help us keep promises. To do this, we need to look at three types of changes:
1) Rethink the foundations of Customer Success
a. Define the customer. When asked to name who the customer is, the first instinct at many companies is to think of the person who “writes the check.” Post-sales teams, like CS or Professional Services, typically think of the product’s users as their customers. Neither approach is wrong, but lack of alignment contributes to the sense of confusion. Internal teams within the vendor organizations must start with a common definition of “customer,” which is the foundation of CS.
b. Understand success. Once we know who the customer is, we can define what success means to them. It is important, but often overlooked, to define success in customer terms. Many CS teams measure renewal rate as the ultimate measure of success. The thinking goes, “If the customer renews our product, they must be successful.”
This thinking can create blind spots and focus on false positive signals. It is worth asking, “Do we really know and understand customers’ motivations for using our product? Do we understand the definition of success for the full spectrum of customers?” Customer value has multiple facets—functional and emotional. Using a Jobs to be Done framework, we can truly understand success for each individual customer.
c. Define common language. There are different definitions of value a company is offering. Each department has their own perspective on what value we offer and how we deliver that value. Beware! On the surface, it seems like all the departments are in sync, but peel back a layer or two, and it becomes obvious that they are not speaking the same language. This disconnect results in issues like poor adoption, renewal, and customer satisfaction.
This element of the model will show what a common language looks like, how it can be used across the different teams, and most importantly, what it takes to create and foster the common language.
2) Define “best fit” services model
a. Define portfolio of services. A deep understanding of both customer and success will make it clear that we need a portfolio of services to deliver CS. Many companies develop different services as a natural part of their evolution. As their products mature and their customer profile changes, they realize customer needs evolve, and in reaction, they build different capabilities.
b. Deliver across channels. It is common to think of a company website or a knowledge base on a support site as channels. A Customer Success Manager (CSM) or an implementation team are also channels to deliver different aspects of success to the customer.
These are different channels that customers interact with to get the help they need to succeed. However, there is often confusion between services and channels. Once we separate the services from channels, we can be smart about optimizing the right elements of customer experience and help them succeed.
c. Change incentives and processes. It is not enough to set up a common language, and top-down mandates are often ineffective. The problem is misaligned incentives and established ways of working. Imagine if the Sales team gets paid when the customer renews their contract rather than at the initial sale, or the Marketing team gets paid based on product adoption, or the Customer Success team gets paid based on sales leads. How would these teams’ activities change?
I realize those are radical proposals, and to be honest, they are too disruptive in one fell swoop. The point is that incentives drive action, and tactics can be used to drive different behaviors among teams.
3) Next gen capabilities
a. Unified customer data. Use of customer data to drive higher revenues and deliver a better customer experience is table stakes in the consumer product space. Think about the ads we see on social media or product placement in grocery stores; they are all based on insights derived from customer data. In the enterprise technology space, use of customer data is in the nascent stages.
b. Next gen engagement platform. The biggest challenge for CS, beyond solid foundations and breaking down silos, is scaling the model across the broad spectrum of customers and their needs. It’s not just that it is hard to scale; we also need to change the model as products and companies mature and customer needs change. Using customer data and delivering CS in a digital medium is the next major leap companies need to take.
Order your copy of Sasi Yajamanyam’s new book today: Reimagine Customer Success: Designing Organizations Around Customer Value
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