▼ Scroll to Site ▼

Customer Success Management Comes of Age

Article Featured Image

Leggett defines CSM as a strategy and a process, aided by tools, to ensure that "customers are properly 'on-boarded' and getting the maximum economic value from their purchase."

"There was a time when [everyone was concerned with] acquiring new customers," says Karl Rumelhart, vice president of products at Gainsight, a vendor of CSM technologies. But "the industry has come to realize that the management of your existing customers is somewhere you should really focus."

Guy Nirpaz, CEO of Totango, a provider of CSM technologies, estimates that for mature software-as-a-service (SaaS) businesses, an average of 65 percent of revenue comes from recurring customers.

Leggett adds that if a customer is getting the most out of a current product or service, it is much more likely that he will continue to do business with the company and invest money in its offerings.

For this reason, among others, companies "need to get a really good understanding of how customer success impacts the company as a whole," Rumelhart says.

WHAT DOES A CSM TEAM DO?

Many companies are focusing their energy on assembling personnel who are dedicated to customer success, ensuring that users of products and services are thriving. More than half of the companies Totango spoke to in its most recent annual SaaS Metrics Survey are investing more heavily in customer success staffing than on technology or programs. This suggests that they are even more interested in getting the teams in place than they are in building the infrastructure necessary to scale customer retentions.

These teams work to maintain what they refer to as customers' "health scores." To calculate these scores, they rely on data stored in CRM systems combined with billing information, customer support tickets and feedback, Net Promoter Scores, survey information, and insight on the particular ways in which products are being used by the consumer.

For instance, a typical problem with software is that those who are using it are unaware of new features and updates that are being made available by the vendor. While a marketing automation company or a provider of service desk software might send out an email to customers informing them that they are eligible for an upgrade, it means nothing if they don’t get the memo. If customers don't open the email with the release notes, they are unlikely to update their system and be able to utilize the best the company has to offer. Customers' impressions of the company are bound to drop in that case.

Keeping track of behaviors with a product or service also allows companies to tailor experiences to meet a customer’s specific needs. Maria Martinez, president of sales and customer success at Salesforce.com, notes that all of the company’s customers have a unique set of expectations, depending on the size of their business, their company's vertical or industry, and the products they use. "This means we have to focus on value on a customer-by-customer basis," Martinez says. CSM "allows us to get to know our customers in very specific ways, so that we can coordinate the right offerings to ensure the best outcomes in the shortest time possible."

The discipline, in fact, extends to sales, marketing, and customer service efforts. "I don't see a lot of companies having a customer success team that is independent of sales and service," Leggett points out.

The responsibilities of customer success managers at times appear similar to those of marketers or even service agents. CSM professionals often work to anticipate service issues before they become issues. They’ll explain how to use a product in a way that is understandable, which may prevent complications and misunderstandings later on.

CRM Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

6 Things You Should Know About Customer Success

Paying extra attention to current customers will help prevent churn—and turn them into promoters of your business.

Azuqua Releases Azuqua for Customer Success

AZuqua for Customer Success integrates data and workflows from disparate CRM, marketing automation, service, and support applications.

Badgeville Gamifies Customer Success

New Application Connectors bring digital motivation to leading collaboration, service, and CRM systems.

Cisco Offers Customer Success Manager Certification

The enhanced learning certification service aims to help sales reps take on managing customer success beyond the dotted line.