Think you're ready to build an effective customer success team? When to invest in a customer success team is a big question for many growing startups. Before doing so, it is important to understand the goal of customer success management and then determine when to scale a customer success team to ultimately result in business growth.
This talk will cover when to get started with CS, why CS matters and drives value within a business, what does a CS function looks like when it starts, and finally as your CS org matures how it contributes to business growth.
Auto-generated transcript - may contain errors.
Tap a timestamp to jump the video.
Amazing. Thank you. Can everyone hear me? Alright. Yeah. I'm a loud American so I almost almost feel like I don't need a mic, but I will have one anyways. So hello, welcome. My name is Anika Zuber, I'm the vice president of customer success at Insighted and today I really wanna talk to all of you about how to scale your customer success department for business growth.
And the first question I actually wanna ask all of you here today, how many of you guys have customers? Can you give me a hand? Yeah. All of you. Amazing. Keep your hands up, please. How many of you guys have a customer success team?
Awesome. I love I love knowing what type of audience I'm speaking to. By the end of this talk, I'm hoping that you guys see the value of customer success. I know a lot of people in the room usually are pretty sales, marketing driven.
You guys know the top of the funnel. You guys know everything that comes when acquiring a customer or cost of acquiring a customer. But believe it or not, that is not the strongest part of your business. It's actually your customers and that is what I'm here to talk to you guys about is what happens post sales and how your business will ten x, a hundred x, one thousand x when you are focused on your customers.
So I wanna first start off by saying thank you for having me touring Fest, and this is my dog, ZZ. I'm a very proud dog mom. Anyone else? Dog or animal parents in the audience, you know how proud you can be. But first of all, I just want to say thank you to Brian and the team here at Touring Fest. I can say that they have been so welcoming.
And it's my first time at Touring Fest and also a speaker, I've just had a great time already. I wanna give you guys a little bit of insight into kind of what who I am and also what Insighted does. So I actually started my own community called CSM London in London, which is an organization that we get bring together customer success managers and they're able to share ideas, thoughts, knowledge, and really be able to come together and build out a community of how to do customer success the best way we know how.
And I joined Insided just earlier this year, which is a great coincidence because Insided is a community building platform. So we are a SaaS platform that helps b to b SaaS businesses actually launch customer communities. So some of the logos that you guys see on there are our lovely customers that I love to say have communities with us.
So anyone else in the audience, I'll I'll speak to the b to c side. Do you guys anyone own a Dyson by any chance or any Dyson product? Cool. Their community is run by Incited. So when you actually go on there and you engage with other customers, that's inside it powering that community.
And so our shift went from b to c to b to b in this last two years and we had over two hundred percent growth last year and we're actually ahead of schedule to do that this year as well. Again, we are focused on our customers and retaining them and growing our logos as well.
So I personally worked in startups here in the UK, in Germany and in the US and I've decided to stay here for the last ten years. As already introduced, I'm originally from California and our full focus is on the subscription based business. So that is what I will be speaking to you guys about mainly today.
So let's go ahead and jump into why does CS add strategic value to your business. So should we even care? And I was actually at Sasser in California just a month ago, which was another great conference. And I overheard Jason saying customer success is ninety percent of where your revenue comes from.
Yep. Ninety percent. I know a lot of people focus on acquiring that customer, but the success of your business is entirely dependent on the success of your customers. Imagine if your customers don't use your product. Are they gonna stay? No. They're gonna find somewhere else.
So actually all that money you spend on marketing and the top of the funnel, awesome, but it's actually just leaking out of a leaky bucket if you don't actually retain those customers. Which brings me to the next point, which is without your customers there would be no business.
Every single one of you that raised your hand said, hey, I have customers. Without those people, you would not be having your lights on or a product to sell. And then finally, if customers successfully use oops. Yep, there we go. If customers successfully use your product, they will continue to buy from you, and thus helping your business grow down the line.
So this is why we should care. But why does retaining revenue actually make you more money? And these are some fun stats that I always like to point out, especially to my board or to any other board of directors that I've reported to, is that it's a lot less expensive to actually keep a current customer than it is to acquire a new one.
So the cost of acquiring a new customer can be five to twenty five times more than actually keeping an existing one. And then just a five percent increase in customer retention can increase a cost a company's profitability by seventy five percent. So sixty to eighty percent of your customers who actually use your product continue to buy from you, they end up actually end up spending more money with your business than you would spend going to go find a new customer.
So let's talk about oops, I think that skipped slides there. But we can try to jump ahead to see sorry, one minute. So let's just talk about core metrics everyone will care about. So the first core metric that you can probably repeat to your CEO or to your board or anyone else that is actually questioning should you have a customer success department is the lifetime value of a customer.
So it's the average purchase price times the average purchase frequency rate and then the average customer lifespan. All of that comes to your lifetime value. The next very, important business, if you're in a SaaS business or any business that is looking at revenue, your net revenue retention is super important.
And when you're pitching this to a board, to your CEO, to anyone in the business, this is where your money is. I love how when sales are like, hey, I'm carrying a one million quota. Guess what? The whole company is carrying ten millions, which is your net revenue retention dollar.
Also super important to to point out is your churn rate. This is something that I think every customer success professional is looking at. How many customers are you actually losing? How are you losing them? Why is it happening? And it's also good to report on this number.
And then finally, the customer retention cost. How much is it costing you to actually keep a customer? So again, coming back to the fact that it costs less money for you to actually keep a customer than acquire a new one. And then finally, your renewal rate.
Something super critical as well to report to your board is how often are you actually renewing your accounts? Okay. So you you acquired one hundred new customers this year. Amazing. Great. Are you actually keeping them all next year? It's a great metric to report to your board or to your senior level management about your customers.
So when and how to get started? This is a question I also get asked quite often from many startup scale ups. It's like, hey, I have customers. When should I actually have a customer success team or an org in place in order to support that?
So let's talk about the early days. So do you remember those days? This is when you maybe had five to twenty employees, you had less than a hundred customers, and you're not sure. Should I really have a customer success team? What should we have? What should we be doing?
And at that point, you're probably in the reactive support space where you're just getting tickets in, you're getting questions, you're like, hey, let me just try to answer as many questions as possible. You're probably very focused at this point on a product market fit.
You're really trying to figure out, do your customers actually use the product correctly? What's going on? And you probably don't have a budget, or your CFO is telling you, let's just try to dominate the market and get as many new customers as possible.
So at this point, when you're in the early stage, I would recommend that you have basic support in place. So at least have someone who's answering chat, phone, something along those lines. And usually, you're probably manning your customer success team using Google Docs, Google Sheets, something that's like a shared spreadsheet because we've all been there where everything's ended up in a spreadsheet.
But then you realize that you're actually growing. Woah. You've got quite a few customers now. Now what are we gonna do? So you start increasing pace on new customer acquisition, which is awesome. And now you've decided having support reps is maybe not enough.
And maybe some customer success is needed at this point. So you need some more process, you need your product is a bit more mature, and also ticketing is required as well as maybe a customer success manager. Now what's the difference between a customer success manager and having a support agent?
Well, a support agent is definitely there to debug, to maybe deal with something that's hairy as far as in the back end or something's happened or gone wrong, but a customer success manager is brought in usually at this point of a company's growth in order to really show value over time and increase that value because they are a a trusted adviser that's gonna be bring brought in to really advise on how to use your product, how to grow with your product, what are your goals with the product,
and make sure that they're getting a return on investment. Cause that return on investment ensures that your renewal is a non event. And then at this point, you're probably going to start thinking of an onboarding process. I'm a very, very big believer that onboarding is the reason someone will renew with your product, Making sure that they have a very strong understanding of how to implement, how to set up, and how to actually use your product over time is the reason why someone will likely continue to use your product.
So now let's move on to the next stage of growth. You're starting to get a lot of feedback from your customers, like a lot. And you're struggling to literally keep up with the amount of feedback and the company growth that you're at. So you want to have a bigger dedicated customer success team.
You want to make sure that you're proactively engaging with your customers. And this is again where a customer success manager does come in and have those proactive engagements. Rather than a customer submitting a ticket, you're having regular business reviews with your customers. You're going over metrics, analytics, data on how they're using your product.
You're also suggesting how you can better use the product. So again, that renewal is a non event. And your CFO is probably pretty pissed at you right now because they are saying, hey, we need to slow down on how much money we're spending because we can't keep spending this much as you grow.
But let me just say really clearly to anyone out there who's who's debating having a customer success team, the tenfold return you have on getting a customer success team that's properly equipped to grow your customers will pay back dividends. So whenever you go to your CFO or trying to debate if you need to have headcount, just go back to those stats that I was sharing again that it is cheaper to actually keep a customer than acquire a new one.
And again, unlike maybe engineering, sales, or marketing, customer success should be a linear growth with the business as well. And at this point, I would also recommend that you have some sort of operation person in place, because with this many customers, as much as you want to have a customer success team in place and a customer success manager assigned to every account, you are going to need to automate and create processes and also make sure that there is someone there to handle that in the back end side of things.
And finally, at this point, when you are starting to get so many things in place and so many processes in place, everything starts to annoy you a bit. And at this point, you're probably thinking about efficiencies and how to scale and how to actually grow and make sure all customers are engaged and able to actually use your product correctly and able to feel that they are seeing success with your tool.
So at this point, you're probably going to definitely request your CFO for more full time employees. You're gonna probably also want to make sure your onboarding is revamped and really in place. And you're probably going to notice that you need to have better segmentation with your customers as well.
So moving into what does your CS team look like, as well as what does the process look like as it grows. So the first thing I wanna point out is that planning your customer journey has to be done with outcomes in mind. Now I'm not talking about your business outcomes, because everybody wants more money for their business.
Everybody wants to grow the number of logos. I'm talking about what is it that human on the other side of that Zoom call wants from your product. Remember, you are selling to a human. I don't care if you're selling to Coca Cola. I don't care how big of an organization your customer is.
The person on the other side is a human. They want outcomes with your product. So when you look at your customer journey and you're thinking about it, the few things that you want to think about is the touch points that you want to have with your customer.
Now these are the touch points that your customer success manager is having. So they can be calls, they can be onboarding, they can be EVRs, executive business reviews, they can be product feedback calls. All of this is critical, obviously, for your customer success manager to have in order to make sure your customer is seeing a return on investment.
But the one thing I want you guys to definitely think about as you scale your customer success organization is what is your customer expecting? In this entire customer life cycle, what milestones are they looking to have with your product? Do they wanna implement a new tool?
Do they wanna showcase to their director or their executive, hey, when I implemented this new tool, we got ten x return on our on our customers. Remember and think about those things and also think about how those champions are the reason why you will continue to sell into that organization.
Not because you have a great customer success team, it's because you have a champion that believes in this process and also believes in your product. And then jumping in to an organizational chart. So scaling your business equals scaling customer success. Like I said earlier, customer success is probably one of the few departments that scales literally literally with your organization.
And another thing that in my experience, I have reported to a number of people within organizations. In the last ten years or so, customer success has sat in a very different place in a lot of different organizations. I've reported to the VP of sales, to the COO, to the CRO, and I have to say the best setup for your organization is when your customer success leader, whoever that is, head of VP, director, doesn't matter, reports to your CEO.
Because your CEO cares about your customers, right? So why shouldn't he have direct access to exactly what your customers are doing all the time with your product, which hopefully is through your VP or director of customer success. Now at Insided, we have a little bit of a different breakdown.
As you guys can see, we have a customer success management team that reports to me, as well as a support organization reports to me. Onboarding, like I said, very critical on implementing your product correctly. We also have a community and education team. Again, we are a community platform, so of course, we're gonna drink our own champagne, as we like to say it.
And then I have a CS operations team as well. Like I said, the most key thing I can recommend to anyone who is looking to start in customer success or scaling a customer success organization is you're gonna wanna make sure you have direct access to your CEO and also it definitely deserves a seat at the table because when I started, it was very hard to to justify why customer success brings value into every business.
So let's talk about maturing your CS team and how this contributes to the business as well. So one thing that has come out throughout the pandemic that I think is really interesting is this notion of digital customer success. So what is digital customer success?
We just talked for the last fifteen minutes or so about one to one engagement, meaning your customer success manager reaching out to your client and talking to you all about, hey, this is the business value you're gonna get from using our product. But digital led is when you are scaling and growing to a space where you're unable to have that one to one interaction.
Some of you guys might have hundreds, others might have tens of thousands, if not hundreds of thousands of customers. That's a lot of endpoints to hit, that's a lot of people to hit. And at the end of the day, they still want the same experience with your product.
They still wanna feel like they got something out of it, that they're guided, that they're taught about your product. And that's where digital customer success comes in, and it is a mix of all three of those things. It's people, process, and tools all coming together in order to give you that experience as an end user.
So it doesn't have to be human led. It can be automation. It can be using a tool. It can be using emails, webinars, you name it. All of that is a digital customer success program. So there are so many names for this, by the way.
So in my experience, it's like everyone's calling it something different. You can be a digital CSM, you can be a scaled CSM, you can be one to many, which in my early days, I was a customer success coach. That was one of my first titles as well because I was coaching so many customers.
So all the names aside, that's that's all fun and games. What it is not, which I wanna be really clear about, is a way to only segment your lower ACV customers. Remember that everybody is looking for the same outcome with your product, so it doesn't only have to be for the customers that are paying you the lesser amount and your higher paying customers get a one to one approach.
Remember that it can apply to both levels there. And then it is not a way to mass communicate with your customers. I'm not talking about marketing, spamming, sending everyone an email, it is not that at all. And it's not a way to also automate everything.
Remember, there is a different experience that you're gonna that's a one to one human led approach, and there is gonna be an experience where you wanna have a digital led approach as well. And also, just wanna be clear, it's not a replacement for a customer success manager because I think a lot of people get worried that, hey, all these automations or all this digital led talk is gonna mean I'm out of a job.
It's not that at all. I think customer success has been the most pandemic proof job throughout that I've ever heard of. But like I said, it's not adding to, it's not replacing, it's adding to. So this was a journey that we were talking about before, and as you can see at the bottom, that's the one to one journey that I'm talking about.
This is the one to one engagement with a customer success manager. When you bring in digital, you then are able to have those different levels of engagement. Remember, it's not just let's have a a one to one call. It's like, let me have a one to one call with you as well as refer you to this webinar or refer you to our online education course that's able to further the conversation and the product usage.
And then finally, what I do want to talk about, it's all about data and behavior driven outcomes. So when you are scaling a customer success team and you are thinking about thousands, if not hundreds of thousands of customers, you have to make sure that you're driving a positive net revenue and a positive net retention for all of these customers.
So it is all data and behavior driven. You don't want to start just randomly sending emails or randomly setting up webinars or anything like that. You do have to be mindful of, hey, my customer logged in at this time or they use this type of feature functionality within my product.
Awesome. Let me then trigger something that tells them to do this once they've turned on that feature functionality. You don't want to just spam everyone or anything like that, but once you start to understand the data and the behavior of how your customers are using your product, you're able to then do that at scale by using some sort of automation and process as well.
So that brings me to the end today. I just want to say thanks again for for being here. If you guys do have any questions, think there's a q and a later, but also feel free to reach out. I'm more than happy to talk endlessly about this topic.
So please please come and chat with me afterwards. But yes, thank you so much for having me.
