How to Build a Winning Customer Success Organization

Do you work at a startup that’s just establishing a scalable customer engagement process? Or perhaps at an established SaaS company that’s re-examining its approach to customer service? Well, then you may be one of a large number of SaaS practitioners in the process of creating a Customer Success practice and developing the team to make it happen.

We were lucky to get the opportunity to pick the brains of four Customer Success thought leaders (and Frontleaf 50 to Follow honorees to boot):

• Dennis Hennessey, Senior Customer Success Manager at Nasuni Corporation
• Kathleen Rouse, Director, Customer Success at Findly
• Michael Redbord, Director, Global Customer Support & Success at HubSpot
• Mike Grafham, Office 365 Customer Success Lead at Microsoft

They shared their experiences and advice around building a thriving Customer Success organization, the hurdles they had to clear, and some tips for doing it right.

After getting to know these leaders a bit, we’ll explore topics such as how to know it’s time to fully commit to a Customer Success practice and what the priorities should be for a new Customer Success team.

I can say it was a lot of fun to interact with all four of these experts, and thank them for being generous with their time. Okay, lets get started!

Frontleaf:

How did you first become involved with Customer Success?

Our leaders hit on three main themes:

1. Bringing together a natural passion for technology with a desire to help people make the most of it,
2. Being inspired by exceptional customer service practices at a previous company, and
3. Having an innate focus on customer experiences across a wide variety of settings.

Dennis:

I found my way into Customer Success through being a sales rep. I realized quickly that I wasn't great at the act of selling, but I really excelled at and had a passion for building and maintaining relationships with customers. I eventually transitioned out of sales and followed my passion for customer service. Another indicator for me that this was a career I should purse were my experiences of being a customer. Whether I’m at a restaurant, department store, buying a car, on the phone with tech support, or juggling vendors for a project, I’ve always been keenly interested in what works and what doesn’t with regards to customer service. Some people might go to a restaurant in search of the perfect steak, but I’m just as interested in the vibe the staff gives off. Generally, by the time I am ordering my drink, I’ve already drafted a pretty accurate assessment of what the experience will amount to and if I’ll be back or not.

Kathleen:

In a previous role, I had the opportunity to roll out Yammer and to work with Steve Nguyen who, as my Customer Success Manager, acted as my partner and trusted advisor. He and I partnered to shift the way my company thought about about sharing knowledge across department boundaries to answer the most pressing questions of our globally distributed professional services organization improving the quality of service we provide to our clients. The success of that roll-out and my own personal experience inspired me to guide and be the trusted advisor for others, and so I joined Yammer as a Customer Success Manager.

Michael:

Like a lot of people I’ve met in Customer Success, I just kind of fell into it right after school. Over the years, I’ve really enjoyed the unique combination of human and tech factors that Customer Success involves, and I’ve just kind of stayed in this line of work. I consider myself a technologist at heart and the interaction of tech and people is interesting in a general sense, so it’s proven a good fit.

Mike:

If I look back at the roles that I’ve done throughout my career, they’ve always been about helping businesses understand how to use technology to do things differently, focusing on what it means that the business can do. As Customer Success is all about helping customers understand what the product is for (as opposed to what the product is), it seemed like a natural transition when I made the move to Yammer a few years ago.

Frontleaf:

How does your company approach Customer Success?

Our leaders have a similar philosophy of what Customer Success means, but their companies approach it from all different angles. We found that Customer Success serves as a piece of a larger organizational mission — it's all about enabling colleagues to be more effective in their customer-facing roles, it's built around valuing customer feedback, and it's about the right way to balance high-touch and self-service engagement. Let’s find out more.

Kathleen:

Customer Success is about delivering the best customer experience in the industry that leads our clients to achieve amazing value, increase adoption of our solutions and building client success stories. We do this by driving a consultative engagement model, building thought leadership around On-Demand Talent Management and strong product expertise to inspire client advocates with compelling stories of success backed with measurable evidence of success.

Dennis:

Listening is the main driver of our Customer Success philosophy. As the saying goes, there’s a reason why we have two ears and only one mouth. At Nasuni, we’re very much interested in what our customers have to say, from how they use our product, how they’d like our product to evolve, and what aspects of our business we can improve upon. Most importantly, our minds are just as open as our ears.

Mike:

It’s been really interesting in the years following Microsoft’s Yammer acquisition to think about how the Customer Success model applies more broadly to the Office 365 product line. Microsoft has a very highly mature set of account teams working with customers every day, a great professional services organization, and this huge set of partners who are all there to help drive the success of customers, so my team’s role is to help all these people help their customers change how work gets done with Office 365. So we approach Customer Success very broadly and from a lot of different angles because we already have the scale to be able to do that.

Michael:

HubSpot’s approach to Customer Success is a hybrid of traditional enterprise software onboarding and lighter weight customer-directed / app-enabled self-service. Because we work with such a range of businesses, our installed base demands a variety of onboarding, self-service, and ongoing Customer Success offerings. Philosophically, we’re always trying to find the best spot between those two models (light & fast vs. human-heavy) and provide our customers the most value we can as fast as we can.

Frontleaf:

At what point do you think companies need to break out a separate Customer Success department? How do you know when it’s time?

Our leaders differentiated between the time when a SaaS company should start applying the principles of Customer Success (immediately!) and when it’s time to dedicate a team to it. All agreed that it depends on your product, number of customers, and customer size. Though some pointed out it may not always be necessary to form a dedicated team, if you have the right company culture.

Kathleen:

Companies need to break out a Customer Success department at a couple of points. First, they may identify a gap in the way their clients think about their work that limits the value they can gain out of the company’s solution. Second, there may be a gap in the way the company deploys its solutions and the expectations of their ideal clients that requires a more robust communication and education strategy. A company can tell it is appropriate to launch a Customer Success department when that gap is apparent based on lack of adoption and/or insight into the actual problems their solution solves across its client-base.

Michael:

At HubSpot, we don’t differentiate between “Customer Success” and “Services” or “Support”. Our approach doesn’t create a team dedicated to making customers successful with HubSpot — it’s just something everyone always does. As a SaaS business, this has been a pretty easy pill to swallow.

Dennis:

I don’t believe there’s a predefined point that is applicable across the board. Every company is different and the needs of their customers will vary. Personally, I think that there are two main drivers to pulling the trigger on a Customer Success program. First is number of customers. If your customer base is growing and your Support and Sales teams are stretched thin, it’s certainly time to carve out a Customer Success group that allows those teams to shift their focus back to their normal functions. Second is size of customers. A company might have a smaller customer base, but the customers they do have are large and have many moving parts. This is another great opportunity to bring in Customer Success to ensure the smooth sailing and the growth of these accounts.

Mike:

I think it very much depends on the organization. I see the role of a Customer Success organization in a SaaS company as filling the gap between what you’ve sold to a customer and the value they’ll need to get from it in order to renew and increase their investment with you. If your product is good enough to do that on its own (or if the core team has it covered) then you won’t need a Customer Success organization. Most organizations aren’t there yet, though.

Frontleaf:

Do you have any advice for companies interested in turning their Customer Service or Account Management group into a Customer Success team, or building one from scratch?

Our leaders almost all emphasized that you must start by putting yourself in the shoes of your customer, to fully understand their capabilities and needs, and then work backwards from there. How do you do that? Well, that’s where opinions and experiences began to differ.

Michael:

Start with the base philosophies of your frontline people — the “edge” of your organization is the center of the customer experience. And it’s highly likely your frontline people know where you’re failing your customers in the human sense — where your business processes are creating unhuman, awkward, friction-filled interactions. Spend time with those people, see how those experiences really work, and advocate for your frontline people and your customers as one.

Kathleen:

I don’t think you should convert either a Customer Service or Account Management team into a Customer Success team. To begin with, the skill-set and motivations of someone in Customer Service are often not the same as someone in Customer Success, even though both roles are important. There should also be some clear delineations between an Account Management and a Customer Success team. The Account Managers are focused on renewals and upsells for individual clients, whereas the Customer Success organization is focused on building out best practices and measures of success that are leveraged across the entire client base.

Dennis:

If you are building from scratch, don’t worry about nailing it right out of the gate. Despite your best laid plans, it’ll ultimately be your customer’s needs that dictate how your program evolves. The first step should be writing up a list of needs and an overall goal. Without a clear understanding of what the objective of the Customer Success program is, you’re setting yourself up for failure. How do you measure success if you’d haven’t yet defined it? Lastly, make sure the entire company understands this goal and is on board. Having company-wide buy-in increases your odds of success as no CSM can be effective without the support of cross-functional teams.

Mike:

Focus on what the promise is that you gave the customer when you marketed and sold the product to them. Why did they buy it in the first place? What are they hoping it’ll do for their organization? Then think about what your investment is as the product company in helping them get there. How much help is enough help? At which point should you ask for your customer to invest more with you for additional help? When should you consider partnering with other organizations instead? What do you offer today? Thinking about the answers to these questions is a great way of understanding the scope of what your Customer Success organization could cover.

Frontleaf:

What are some challenges associated with the process of building a new Customer Success department? Any tips for avoiding or overcoming them?

When it came to advice on building out a Customer Success deparment, our leaders tended to gravitate first to people and communication issues. Having clear role definitions, clear expectation setting, and a clear understanding of the value a Customer Success practice can deliver were all paramount.

Mike:

I think a key challenge lots of organizations will face early on is being very clear about the value you add and how you engage with the other parts of the business. Customer Success is still a relatively new discipline, and so there’s a risk of overlap with other teams and roles — being very crisp about where you bring something different to the table is a huge help in that regard. That’s challenging in a startup environment where everyone’s just pitching in to get the job done, so the trick is noticing the point that your organization has started to scale enough that getting clear on what you do really matters.

Michael:

If you build a new department dedicated to Customer Success alongside traditional service and support organizations, an issue that will come up is that you start to generate employee experiences that include “that’s not my job” as part of their vernacular. At HubSpot, we’ve been very careful to make Customer Success everyone’s job — and no one can ever look at the org and say “not my job” with regard to advocating for customers. That employee experience is important for Customer Success and for the growth of our business — as we grow, we’ll want to always be adding responsibility to every employee’s plate, not removing it.

Dennis:

Finding the right people. Don’t settle for someone that you’re not 100% sold on. Remember, CSM’s are the ambassadors to the company and how they are perceived by the customer will reflect back on your entire organization.

Kathleen:

Remember that Customer Success is still very new for both your company and your clients so be sure to:

1. Clearly state the purpose and value-add of the Customer Success manager with everyone you meet.
2. Get access to usage data tying back to KPIs the client cares about on Day 0 to ground every conversation in tangible measures of success.
3. Double-down on building out communication and education best practices and guides for your clients.
4. Share your knowledge and learnings with everyone in your organization.
5. Connect your clients with as many resources (in the form of thought-leaders, people, and content) as you possibly can.

Frontleaf:

For companies interested in forming Customer Success departments, what should their priorities be out of the gate?

Our leaders touched on a variety of initiatives that could top a priority list for a new Customer Success group, including establishing customer metrics, finding the right people to staff the team, establishing company-wide buy-in to the Customer Success team’s mission, and building a culture that addresses root causes of customer problems rather than applies superficial fixes.

Michael:

Here is the #1 priority: Do the right thing. This is so simple, but so hard at scale! Start off by not cutting corners, but doing things right, and by fixing the root cause of systemic issues that create negative customer experiences. Over time, the business will force you to cut corners (budget, customer attention, channel, other needs); start off doing things as right as you can and hold on to that for as long as you can.

Kathleen:

The top three priorities should be:

1. Data: usage data, industry trends, KPIs the client cares about (i.e. the bottom line) and how the solution helps them to meet their goals.
2. Clearly define how they will allocate the Customer Success team’s time from a client perspective. (Will you start with strategic clients only or will you go after all at once?)
3. What their current and ideal client base looks like and the specific strategies taken by the Customer Success team to bridge the gap.

Dennis:

Initial priorities can be simple. Start with a clearly defined goal, get the company on board and believing in this goal, and then don’t compromise on the hiring process.

Mike:

Top priority is understanding the gap that you currently have between what you’ve promised the customer they will be able to do with your product and their ability to achieve it. Then work out how much you’re prepared to invest as an organization in closing that gap. (It should probably be roughly enough to get the customer to the level of usage at which point they would renew.) That investment is what your Customer Success organization should look like.

Frontleaf:

Are there any other best practices companies should adopt as they build their Customer Success teams?

Our leaders raised a few new topics here, including the relationship between customer experience and employee experience, alignment with Product, Sales, and Marketing teams, and the importance of building a customer community. A great set of thoughts to leave us with.

Michael:

For HubSpot, at least, a big part of what makes us us is how we treat each other and how managers pay keen attention to each employee’s experience. Sometimes in service environments you can create great customer experiences but awful employee experiences, and that’s just not sustainable. Employee experience and happiness has economic value that you can’t ignore long-term.

Kathleen:

Quickly develop, test, and iterate on the ways you educate, guide and measure success across your clients. Be open and collaborative as an organization with your Customer Success team. Ensure there is strong buy-in and alignment across your Product, Implementation, Sales and Marketing teams for Customer Success otherwise it will be hard to be effective.

Mike:

We’ve been sharing what we’ve been learning as a team (and what others have been writing about their experiences in the field) at www.medium.com/customer-success. One key topic we cover there is the importance of forming a customer community that’s more than just lip service. Your customers often have the solutions to one another’s problems, so bringing them together is a great opportunity for everyone to learn.