Look Both Ways: Customer Success that Spans Enterprise & SMB

Many of the top SaaS companies, such as Zendesk, Five9, and Hubspot, have successfully moved up-market from exclusively serving SMB customers to also serving the Enterprise. A smaller number of Enterprise SaaS companies have managed to move down-market to also serve Small and Mid-sized Businesses (SMBs).

Trust me, this is VERY hard to do. It's no surprise that the needs and expectations of Enterprise and SMB customers are quite distinct. The degree that a SaaS company's culture, skillset, and DNA is tied to a particular market segment is not always obvious. Being able to span both segments — from a product, customer experience, services, competitive, and even HR perspective — often requires a high-wire act.

I've previously lived this myself, and wanted to talk with someone who seems to have mastered it from a Customer Success perspective. I was lucky enough to get Frontleaf 50 to Follow honoree Todd Eby of Five9 to share his thoughts on how to build out Customer Success practices that work for both the Enterprise and SMBs.

Tom Krackeler (Tom):

Congratulations on being recognized as a Customer Success thought leader in Frontleaf 50 to Follow. I wanted to talk with you today about something I know you have experience with at Five9, namely how to serve both Enterprise and SMB customers, without short-changing either segment. First off, do you have to design two completely different customer engagement models and build two separate teams, or are there common approaches that can apply to both segments?

Todd Eby (Todd):

Thanks, it was quite an unexpected honor to be recognized along with such notable figures in our space.

I've found that designing a Success Program that can serve two markets doesn't necessarily require two completely different approaches. Instead, I would suggest that you get the most bang for your buck by creating a reusable set of core principles and behaviors to govern the overall implementation, and then segmenting the experience and approach by market. This way, you create your core methodology and processes, and then adjust or remove portions of the supporting elements in order to specialize the experience for the two different market spaces. This modular approach enables the use of common materials and tooling, which is critical to your ability to scale.

On the team front, I favor specialization. And because of that, I recommend that a dedicated team be built for each market. If you try and take the ironman approach — one team to do it all — you'll quickly see that the expected efficiencies are not going to materialize, and that, because of the effort needed to context switch effectively between the two worlds, you're actually negatively impacting your ability to scale and deliver a streamlined experience based on the market segment of the customer.

In short, go common (but modular) with your methodology and process, but specialized and dedicated with your people.

Tom:

What's your best advice for structuring Customer Success staffing when serving two market segments? Should you have teams specialized by market expertise, or by role serving both markets? Or something else?

Todd:

People can make or break your approach. As I mentioned before, I've seen the best results occur from specializing the teams by market to start and then gradually, as both teams mature and build experience, begin to cross-pollinate in order to share best practices and lessons learned. This approach really enables you to build the critical core knowledge and competencies necessary to truly serve a given market, while enabling you to leverage the learned best practices that cross the market boundaries once they have been developed and recognized. Additionally, this approach helps you with team cohesion and morale, as it mitigates the "red-headed step child" syndrome that seems to inevitably infect the teams as one is seemingly given more attention than the other.

Tom:

What's the single biggest difference in what an Enterprise customer needs in order to get value from a SaaS product versus an SMB customer?

Todd:

When it comes to delivering value, the single biggest difference between SMB and Enterprise comes not necessarily in what they need, but in determining what they believe success or value looks like.

What I've found is that, more often than not, SMB customers require more time on the definition of success, on identifying what value they are truly looking for, than the Enterprise does. This is not because they don't know what they're doing, far from it. The problem is often that they are so busy doing it that they don't have time to stop and instrument what they're doing so that they can measure their success. It's the "go-go-go" environment and mindset that leads to the SMB accounts typically having only a general picture of success. And this is where the SMB Onboarding Team has to really work to dig in and get down to the specifics — the measures and KPIs that would usually just be there in the Enterprise simply aren't. Don't get me wrong, both teams need to do this key step effectively. However, I believe that the SMB team has to take it to the next level, as they are often working in situations where this exercise will not only dictate the long-term success of the project, but also the customer's business.

Tom:

What's your advice to a new VP of Customer Success for serving both segments well at the same time?

Todd:

I really have three pieces of advice:

1. Measure Twice, Cut Once. Be very deliberate in how you build your Success program. Don't get caught up in the need to get something in place. Instead, take a measured, deliberate approach and put the right thing in place — you won't easily find the time to go back and fix things once you really start to scale, so skip the band-aid approach and build it right the first time.

2. Divide and Conquer. You can't win with a foot in each world, so create separate teams that are focused on the markets. Build your leadership team in the same manner. In order to succeed, you need to focus on each segment and truly understand it — while they are similar on the surface, they are very different in the details. Each team needs to understand the key pain points and opportunities for the given market and size in order to be able to fully deliver on the promise of the offering.

3. Never Assume — Know Your Customer, Know Yourself. Know their definition of success, and know your definition of success. Never make assumptions based on size or market. Some of the largest, most sophisticated customers we have started with three seats and had a very complicated definition of success, but you would never have known it by just "looking" at them. Be sure to dig deeply into a customer's definition of success — often times what appears on the surface is only the tip of the iceberg.

Tom:

I've spent time with companies that had conflicts over which customer segment gets more resources directed their way, both in terms of customer-facing hires and product roadmap development capacity. Is that kind of thing avoidable, and if so, how?

Todd:

In the short-term, I think it's healthy to focus on the high-growth area. However, if you fail to balance it out for the long-term, and lose sight of where you came from, then you run the risk of having a situation where your deferred attention comes back to bite you in the form of a non-relevant product roadmap, frustrated customers, and retention issues that occur from not securing the base and business.

Avoiding this trap is not the easiest thing. My suggestion is to approach it like you might look at an investment (that is what it is after all) or an Agile planning session — assign each area an amount of points that they have at their disposal. I favor approaching it in this manner, as it forces you to be very deliberate in your choices, and enables you to gauge your "investment" in each area to see if you're skimping in either. Agree that Enterprise gets X amount of points worth of development and SMB gets Y amount. Leverage the same tactic for all relevant dimensions so that you maintain a rational approach to your investment.

Tom:

Last question: Is it easier to take an SMB-oriented product and move it up market, or to simplify an Enterprise product for the mid-market? Are there examples of companies that have done either particularly well, and if so, what role can Customer Success teams play in making it happen?

Todd:

Honestly, going in either direction is tough if you haven't built the product from the outset with that intent at the core of the offering. In the Contact Center space, I've seen multiple attempts at going in either direction, and generally they fall far short of the intended outcome. Some end in outright train wrecks as the companies come to realize that the strategy of simply bolting on or stripping off is leaving them with an imperfect offering. The most common outcome that you see in my space and others is the tale of two platforms: one for SMB and another for Enterprise.

Often this happens when a down-market player tries to push their offering up-market. They find that the simplicity the SMB market demanded prevented the measure of flexibility the Enterprise market expected, and after banging their heads on all of the catch-up they needed to do, instead opted for an inorganic approach to solving the problem. The great thing for the companies taking this approach is the likely "two-fer": they end up enlisting both people and a new version of the product, so they can "plug" both experience and product gaps in one fell swoop. Great benefit notwithstanding, this is really a two-edged sword. On the downside, you have a potentially challenging corporate integration situation. And migration for growing customers between platforms will most likely require a forklift upgrade plus maintenance and support that has to be delivered in two places. Life just got better, but more complicated. Also, you rarely find a perfect fit, so then you have the challenge of either expanding the set of features/functionality for that platform, or going back into the cycle once more and grabbing another offering with all the attendant challenges and benefits.

At Five9, we learned a great deal as we moved up-market. Our platform was designed to be very simple and flexible from the outset. However, we found that, despite our best planning, the Enterprise market still had unexpected curveballs to throw at us. What has made us successful and able to handle the curveballs coming our way as we moved up-market was the investment in Success and Product that we made at the outset.

[Click to Tweet:] Customer Success and Product really are inextricably linked in complex offerings. You cannot achieve one without delivering excellence in the other. In our case, we knew that one of our biggest challenges on the Product front was to offer flexibility while still maintaining simplicity as we went up-market. Our answer was to invest in exposing elements of the platform via APIs, so that we could keep pace with the Enterprise market's demands for customized solutions while still retaining our core offerings' simplicity. On the Success front, we recognized that we needed to aggressively pursue a more proactive approach to Success. We invested heavily in the front end of the lifecycle, building an onboarding program that focused on understanding what Success looked like to our clients and delivering that value to them from the outset. This practice, coupled with our focus on being a trusted advisor for our in-base customers, has enabled us to maintain extremely high retention rates and grow our customers to their fullest potential.

At the end of the day, the Success team at Five9 has always focused on building deep relationships with our customers from the outset. We know that our ultimate success is only achievable if our customers are successful, and we strive each and every day to deliver that success for our customers. I think it's that type of mandate, one that transcends markets, that ultimately got us where we are today and will continue to guide us as we seek to grow in both the SMB and Enterprise spaces.

Todd Eby is Vice President, Professional Services at Five9, and a seasoned leader focused on Customer Success. He understands that customers are no longer simply buying products, they're buying results. In today's market, success for a SaaS company comes through truly partnering with the customer through their entire lifecycle, their journey, and focusing on delivering the onboarding, education, and support that enable them to achieve the results that spur their adoption and keep them coming back month after month, year after year.