I finished this book in March 2024. I recommend this book 8/10.
Why you should read this book:
If you are looking to enter or are already working within Customer Success, this is your leadership strategy, tactical, and operational manual. This covers the reasons why companies should invest in Customer Success, the things that should be measured, how to work with other teams within the organization, and the things a CEO should look out for.
Get your copy here.
🚀 The book in three sentences
A great rule book for someone in a CS organization
From what a CSM is to how a CEO should behave and expect towards CS.
Written by Gainshight, a CS platform vendor.
🎨 Impressions
This is a must-have book for anyone in a leadership position within Customer Success.
✍️ My favorite quotes
Steve Jobs said: "You have to start with the customer experience and work backward to the technology. You can't start with the technology and figure out where you are going to try to sell it."
📝 My notes and thoughts
Px. There is a quote from Steve Jobs that I love: "You have to start with the customer experience and work backward to the technology. You can't start with the technology and figure out where you are going to try to sell it."
P13. Customer Success is simply realizing that your company is made up of humans, and your customers are humans, and you're all just trying to win together.
P14. The Ten Laws of Customer Success:
Customer Success is a Top-Down, Company-Wide Commitment.
Sell to the Right Customer
The Natural Tendency for Customers Is Toward Churn
Your Customer Expect You to Make Them Wildly Successful
Relentlessly Monitor and Manage Customer Health
You Can No Longer Build Loyalty through Personal Relationships
Product Must Be Priority Number One
Obsessively Improve Time to Value
Deeply Understand the Details of Churn and Retention
Customer Success Teams Must Become Metrics-Driven
P22. The journey map has five stages, from the buyer's journey to the customer's journey, all the way through to outcomes. It identifies the critical steps at each of those different stages—what the customer needs and what we need to provide. Those are the deliverables. We ended up with this 3D-looking spreadsheet that outlines what's happening, when, and who's responsible for it. It's so critical to have transparent communication and an internal agreement about the client journey. That way, it would feel seamless to the client, even though there's underlying complexity.
P32. Once vendors recognize that they're in the business of driving outcomes for their clients (Customer Success in its most basic form), they realize that they don't merely have the responsibility to offer a device in a transaction—they must also shoulder the responsibility for change management. Clients of connected devices may have to change their own behaviors and operations. None of this occurs without an empowered CSM team at the vendor. CSMs take responsibility for driving client outcomes and often quarterback on the client's behalf to mobilize resources at other departments within the vendor. In other words, CSM teams function as a client's advocate inside the vendor. That cross-functional collaboration comprises the next layer of Customer Success.
P41. What do we mean when we say "Customer Success Manager"? It's a valid question since the CSM role comes in all shapes and sizes. We tend to see three types of CSMs:
CSM for Value Gaps: This type of CSM is necessary when a product is in its early stages. There is a significant "gap" between the value that the client gets out of the box and the value that clients are expecting. The CSM is there to plug that gap by proposing creating workarounds and other solutions for clients to help them achieve their goals in using the product's features. Typically, this type of CSM is very technical, coming from more product-oriented roles such as Support or Services.
CSM for Value Delivery: Once a product and its associated paid services reach a certain critical level of maturity, A CSM can free up their time to focus more on guiding clients through the journey of achieving value. This CSM typically has strong communication skills, executive presence, and the business judgement that helps them serve as a strategic advisor to clients.
CSM for Value Expansion: Some products are so well-designed (or have associated services that are so well executed) that they can automate much of the process of value delivery. In that case, A CSM can free up their time to expand the relationship with the client by expanding the deployment to more people at the client (including more business units) or by selling additional products. This type of CSM often has a sales or account management background. The CSM and Account Management roles may even be blended into one role in this scenario.
P47. Churn: How do you measure it?
Gross dollar renewal rate.
Gross dollar retention rate, including multi-year.
Logo retention rate
Net dollar retention rate
No renewals
P50. Most of us have a "churn reason" field in our Customer Relationship Management (CRM) system and we attempt to code each churn so that we can report internally why the customer left. Having sat in on loads of churn reviews of dozens of companies, we've seen some other top reasons, besides price, for customer departures. They include:
Sales expectations
Competition
Other
Sponsor change
P54. We started tracking early indicators of success. We knew that if clients used five of the 20 features in the first 60 days, then they'd be a customer for life. If they didn't, they'd churn. From there, it was extremely easy to operationalize everything from the definition of Marketing Qualified Lead (MQL) on the marketing side to how account executives were compensated on the sales side to our goals for customers during onboarding to how we evolve the roadmap and reduce friction in the product. We set up the entire company around the customer's adoption in the first 60 days.
P54. When you make a customer successful, you've created at least three new leads:
A lead for a renewal event.
A lead for an expansion deal.
A lead for a new logo.
P58. Why exactly does Net Retention increase when companies invest more in Customer Success? There are a few reasons:
Positive client outcomes and experiences
More retained customers to expand
Leads for expansion
Faster expansion
Evidence of value
P61. As a result, CS teams often track the number of advocacy activities that they generate. They sometimes use the metric, Customer Success Qualified Advocacy (CSQA). Examples of a CSQA include:
A client collaborates on a case study that captures a new use case for your product or service.
A client offers a written testimonial for use on your website or in your sales material.
A client speaks at an event that your prospective customers attend.
P63. The business of the future has to Always Be Renewing. Always Be Expanding, and Always Be Advocating. Companies have realized that those three growth that's well known in the B2C world—and that aspiration is motivating them to investing in Customer Success.
P66. Your clients have more power than they've ever had before. There are five reasons for that:
The cloud-enabled agile development: You can develop products in an agile way and deliver instant updates, so customers expect you to make changes quickly.
Clients dangle the carrot of subscription revenue: Clients are increasingly paying you over time, as opposed to in a one-time up front payment. They know you have to care about their success in order to guarantee your future revenue stream.
Social media amplified voices: Social media has amplified your detractors, but also the potential influence of your advocates . If a client is a detractor, they know they can take down your business. If a client is an advocate, they know they've valuable to you.
Digital channels accustomed clients to instant responses: You're interacting with customers through email, text messages, Slack, and other digital channels. They expect instant responses.
Commoditization of product features: It's easier than ever to build a product. The second you think you have an edge with your new feature, a competitor catches up. You can no longer differentiate your company based on your product or roadmap; clients know you have to differentiate based on the success you generate for them.
P66. CS=CO+CX: Customer Success=Customer Outcomes+Customer Experience.
P67. The Customer Experience is a summation of all the emotions they undergo along their journey with you, across all their touch points with different folks across your company. The Experience includes the client's interaction with our salesperson, their use of your product, their email exchange with your Support teams, their phone call with your Customer Success Manager, and their attendance at their Customer Advisory Board meeting that your Marketing team scheduled—even their feelings reading and paying your bill, to name a few examples. Those interactions may leave them feeling all sorts of emotions about your company—ranging from angry and fearful to joyful and calm. Your clients expect that you'll deliver Outcomes for them while also ensuring a wonderful Experience along the journey of getting to those Outcomes. Both are required. If you, as the vendor, don't fulfill one of those two expectations, bad things will happen.
P71. Our job at Gainsight is to help our clients progress from the early stages into the Transformational stage. To do that, we need to help clients achieve specific outcomes along the way so they can achieve progress step by step. Because we're complete geeks, we have enumerated those Outcomes as a periodic table—like chemistry—except in this case, it's a Table of Customer Success Elements. Each Element corresponds to an Outcome that the client wants to achieve.
P73. Periodic Customer Success Table.
P76. Anything to add about the client experience? While we're on the subject of CSM behaviors, we'll note that there are a few behaviors that we've found to be incredibly helpful for meeting clients' expectations for their experience. While this chapter was focused on the newer trend of clients expecting to achieve outcomes, we've written a guide to Customer Etiquette that you may find helpful for education your CSM team on behaviors that generate excellent experience. The Guide to Etiquette in Customer Interactions | Gainsight
P80. Fable Co is on track to achieve $20 million in Annual Recurring Revenue (ARR) in the current year (i.e., Year 0) (Example on the following pages of the book)
$10 million in new customer ARR
$10 million in existing customer ARR
The company has solid product and adoption with a 95% net dollar retention rate and 90% gross dollar retention rate.
Fable Co sells into a very large addressable market that is growing 10% annually.
P93. Customer Success, when approached strategically, reimagines the way companies think about product development, marketing, sales, and other functions. You can break it down with the following series of questions:
Product:
How can Products be instrumented to provide more data to inform Customer Success?
How can Customer Success strategies be built into the product?
Marketing:
How can you take learnings from Customer Success to inform your "ideal customer" to market to?
How can you use a lifecycle marketing approach to efficiently nurture existing clients toward adoption, expansion, and retention?
How can you use Customer Success to identify customer advocates and indirectly drive new logo growth?
Sales:
How can the Customer Success process more seamlessly drive upsell and cross-sell for Sales?
How can Customer Success increase perceived value to maximize renewal rates and pricing power?
How can Customer Success insights help reps sell with more authenticity and to a more targeted customer set?
Channel:
What role does your channel play in Customer Success?
How do you invest and enable partners to invest in this area?
What data do you need to expose to partners?> What do you need to get from them?
Services:
How can onboarding drive toward outcomes and value—not just project closure?
What Customer Success capabilities can be offered "for a fee" instead of "for free"?
How can Customer Success identify opportunities for Service sales?
Support:
How can the support team help to scale Customer Success by taking the lead on issue resolution? How can the support team be aware of the larger context around a case?
How can the support team use Customer Success insights to prioritize cases?
IT:
What data do you need to understand Customer Success?
How can business processes come together around Customer Success?
How do various systems align around your needs?
P95. Client meetings step-by-step.
P101. This CEO was looking at customer success industrialization across three specific vectors, which we'll align to those three principles of the Industrial Revolution: specialization, standardization, and scale.
Specialization: New teammates should ramp quickly to achieve best-practice competency.
Standardization: Clients can trust in a consistently excellent experience across the company.
Scale: Every teammate should have the full context of what's happening at the client at their fingertips.
P112. In the "CSM of the Gaps" model, you handicap your revenue in two ways. First, when CSMs are building Band-Aid solutions day in and out, they don't have time to do the things that could maximally drive growth in your recurring revenue. They don't align client stakeholders, propose a success plan, and enable change management. They don't facilitate faster expansion and convert clients to talkative advocates. Clients don't get as much value as they could. Your renewal, expansion, and advocacy rates suffer. You don't grow fast. Second, in this model, you don't build the product that will maximally drive revenue growth. When CSMs are building workarounds, they paper-ver the root causes that another team—Product Management—is better equipped to solve. They shield Products from the information they need to make better decisions. The only data point that the Product leader sees, likely in strategic planning sessions, is that the cost of CSM is too high (as discussed above_—which, to the untrained eye, looks more like an execution problem that a CS leader should solve with the CFO's active monitoring, rather than a problem that the Product team can help solve. As a result, your product quality and value don't improve fast enough. Your competition catches up. Your customers churn at higher rates. They stop expanding with you. You can't get advocates to speak at your events anymore. Word spreads that your product isn't great. Sales cycles become longer. Over time, what seemed at first glance to be a CSM execution problem has turned into a growth problem. Because you're not growing fast enough, your board tells you to become more efficient—but that's hard, because your high CSM headcount is necessary to compensate for your sub-optional product.
P115. How to work with the product teams.
P132 One simple test of whether you are establishing Customer Success as a differentiator is this: If Customer Success is not a slide in your Sales deck, you're not doing it well enough. In an ideal world, Sales is asking for this, not waiting for it.
P135. We're noticing a major paradigm shift in vendor-partner relationships, which leads directly to an ecosystem aligned around the customer's success. A world is unfolding where vendors and partners have:
A shared responsibility for positive customer outcomes.
A shared toolset and 360-degree view of the customer along their journey
Shared, trusted barometers for Customer Health (including Net Promoter Score, adoption, advocacy, and other metrics)
Better alignment on prescribed customer journeys and the playbooks that make them happen.
P144. When PS and Sales teams are functioning well together, they create a process for documenting the client's desired Outcomes in pre-sales and sharing that information systematically with the PS team. Once the contract signatures happens, clients expects to get started right away. That means that clunky PS organizations just won't cut it. PS teams need to forecast their staffing needs more accurately than ever before, because under-forecasting may generate delays in kicking off projects. In general, enterprise clients won't wait for longer than a couple of weeks to get started, and SMB clients want to start immediately.
P146. We find that the most advanced PS teams track Customer Health Scores to assess the success of the engagement on multiple dimensions:
Adoption: Per the discussion above, is the client starting to change their adoption behaviors in a way that signals they are achieving value?
Timeline: Are we on track to achieve the client's objectives by the deadline? The goal isn't to close out the project by the deadline no matter what, since what's paramount is the achievement of the Outcome, not simply checking the box on the project. That said, meeting the client's timeline is critical to their own experience and to the achievement of the Outcome, which is inevitably time-bound.
Sentiment: What have been the client's responses to Net Promoter Scores surveys at critical junctures in the engagement? PS teams will use this information to circle back on clients' responses to gather more qualitative feedback.
Scope: Is the project remaining within scope, or is there scope creep? In a world where client expectations have risen, PS teams need to manage to those expectations but also ensure that the engagement doesn't break the bank. A health score reflecting scope creep can help the PS team navigate thoughtfully through a conversation with the client about staying on track, or formally expanding the scope of the engagement if desired.
Engagement: Is the client dedicating sufficient internal resources to the project and engaging with your team in the right way? If not, sharing this health score with the client can be a good way to initiate a conversation about the need for the client's team to dedicate certain efforts to guarantee their success.
Executive sponsorship: Has an executive from the vendor touched base with a senior person at the client recently? Even if a project seems to be going well, executives often find that if they wait to talk to the client until their team asks them to, it's typically too late—a bad situation is already underway. Frequent executive check-ins ensure continuous alignment between vendor and client on the client's objectives and the status of the project with respect to those.
Support: Is there an urgent ticket outstanding, or a high number of outstanding tickets? This health score helps PS teams make sure escalations are being resolved.
P152. Since CSMs are often friendly, customer-oriented individuals, they try to be helpful and respond to the client's questions. But since this can sidetrack the CSM from achieving their primary goals. You really want the CSMs to be focused on building their relationships with the executive clients, driving more feature adoption and upsell, and generating reference ability, which helps Sales drive new logo revenue growth. So you don't want your CSMs to be explaining how to use or fix your products.
P155. Support teams can be proactive, too: Summers has found that besides helping to mitigate the impact of negative situations. Support reps can proactively help a portfolio of clients, beyond the client that submitted the ticket. Perhaps the Support rep found a creative way to solve a problem and also realized that multiple clients may be experiencing the same problem. They can give the CSM team a heads-up about the set of clients that could benefit from the solution, and the CSMs can then reach out to the clients about it. Specialized Support SME teams are especially in a good position to suggest solutions for specific groupings of customers that have experienced a similar challenge. Support teams are also helping to accelerate the flywheel of the Helix. They're finding opportunities to sell service when the client could benefit from education of additional help on a regular basis, as we discussed in the last chapter, Support reps are also figuring out when a client is trying to solve a problem that their current contract doesn't allow them to solve, but that they could tackle if they bought an additional product or upgraded to a new level of partnership. Indeed, the world of Support is evolving just like the domain of CSM. Bill Patterson, is the executive vice president and general CRM Applications at Salesforce. He's seeing a marked change:
When you think about customer service in the broad sense, most interactions are very transactional. You're calling about a problem—I'm fixing said problem. You're calling about a question—I'm answering that question. Today's service world often begins and ends in that transaction. But businesses are starting to recognize that these moments allow us to understand the needs of our customers. These moments are a treasure trove of information for understand our customers in a way that's more personal. That's how the opportunity in customer service is changing.
P163. It shouldn't surprise you that that metric is retention. But unlike in Sales, there is a debate over which retention metric to anchor upon: Gross Retention Rate (GRR) or Net Retention Rate (NRR). Here's how John explains the difference between these two metrics. "Gross Retention means, if you had ten customers paying you $10 one year ago, how much of that $10 did you retain today? And Net Retention means, if you had ten customers paying you $10 a year ago, how much are those same ten customers paying you today? GRR takes into account churn, but doesn't benefit from expansion—hence the max is 100%. NRR includes both expansion and churn, and therefore can (and probably should for most companies) be over 100%.
P176. Fast-forward two decades, and there are we? In some sense we still strive for the elusive Customer 360, with employees hunting and pecking across many systems to understand what's happening with a client. At the same time, a senior exec at one of our large Fortune 500 clients recently said, "Our problem isn't that we don't have a Customer 360. It's that we have 48 of them!" Another client recently asked us, "What use is giving employees data if they don't know what to do with it?" A third told us, "Beautiful dashboards become beautiful parking lots."
P179. The CSM job can be super-challenging for six common reasons:
The "Glass-Half Empty" Phenomenon: Whereas Sales reps start at zero bookings every quarter—with a fresh canvas—and need to buildup to 100% of quota from there, CSMs start at an assumed 100% default gross retention rate, and then only possible direction is down. When Sales closes a deal, we ring the gong, but a renewal seems more like a save—with sights of relief and brow-wiping—than a victory to celebrate.
The "Downstream" Phenomenon: CSMs are downstream from other departments, inheriting the consequences of those department's decisions. When Engineering's quality assurance processes lapse, CSMs hear about it from their clients. When Product Management releases a new feature that doesn't deliver sufficient value, CSMs hear about it. When Sales sets the wrong expectations in the sales cycle, or sells to a customer that isn't within the target market, CSMs hear about it.
The "Buck-Stop-Here" Phenomenon: CSMs handle the worst of the escalations. Your Support rep may be in the details of troubleshooting the ticket, but your client will hold your CSM accountable for their overall success and, therefore, for whether the ticket gets resolved.
The " Helper" Phenomenon: CSMs often feel your company's challenges in a very personal way because they're often the kind of people who, by nature, love to help others. When they can't help their clients in the way they want to, it's really tough on them.
The "Cost Constrains" Phenomenon: CSM teams have to stay within budget even as their environment is changing at a dramatic pace due to frequent product releases, the market changing, and your go-to-market team making new decisions about who is the target customer. Keeping up with those changes while managing ever more accounts per CSM is very hard.
The " Is anyone Out There?" Phenomenon: All of these issues are compounded by the fact that many CSMs, especially those who serve enterprise clients, work remotely from their homes or from small offices separate from "headquarters." When they finish that tough call, they may not have anyone nearby to confide in.
P183. Servant leadership is the idea that leaders serve their teams rather than teams serving their leaders. Leaders don't sit at the top of the pyramid; they invert the pyramid, empowering everyone else. (The concept was created by Robert Greenleaf, who also founded Greenleaf Center for Servant Leadership) Although we're not perfect at Gainsight, we've witnessed and heard many stories of servant leadership among our managers. Among them:
Whenever Nadav, our former director of Enterprise CSM, wanted his team members to try out a new motion to help our clients, he performed the motion himself first. this showed his team that's possible and trained them on how to do it. Nadav traveled literally around the world (multiple times) to support his team in this way.
Allison was in a meeting with Daniel, our manager of Solution Architects, where we were discussing work-life balance for the team, which at the time wasn't great. Daniel took a stand in saying that he believes managers should formally take responsibility for their team's work-life balance in the same way they are responsible for operation results.
Elaine, a thought leader in our Education team, led a session to document how to thoughtfully manage our team through change, a permanent aspect of our lives at a growth-stage company.
P184. Servant leaders have these skills
Transparency: Share more rather than less.
Growth mindset: Be a role model to your team by showing them that even leaders need to grow.
Calm: Reduce stress or create joy.
Purpose: Grow with a purpose in mind.
Energy: Help your teammates thrive.
Self-compassion: Be there for yourself so you can be there for your team.
Vulnerability: Bring your full self to work, inspiring your team members to do the same.
Geographic inclusion: Have a "no-headquarters" culture.
P188. We take pride in the "no-email Saturdays" concept. We educate new teammates, and especially leaders, on it. The intention is that if one person sends an email on Saturday, others feel accountable to have to respond. Nick modes this himself by disabling email and other working apps from his phone on Friday night, only turning them back on again on Sunday night to catch up on the coming week. We spend our days trying to empower others—through coaching, persuading, confronting, reconciling, aligning—which, when effective, requires a great deal of emotional energy. To take care of others, we need to take care of ourselves.
204. Data is at once the greatest opportunity and greatest challenge for most large companies. Businesses are awash in data but often struggle to leverage it. For the CSM pilot, you need to define a practical and achievable list:
CRM
Customer name: Parent or subsidiary names.
CSM: Who is this?
Spend:
Renewal date:
Tier:
Entitlements: Product and services under contract.
Support: What open tickets?
Community: Are they part of one of your online communities?
Surveys:
Professional services: How can you see which client projects are on time and which are running over?
Learning:
Marketing: Can you see which clients have engaged in events?
Billing
Telemetry: Can you see your client's usages?
P207. At Gainshight, we try to distinguish lagging indicators—the financial outcomes of Customer Success like renewals, retention, and upsell—from leading indicators that can be moved more quickly. Leading indicators can include:
A score measuring client adoption volume (e.g., Daily active users)
A score measuring client sophistication (how well they use your product or service)
A customer satisfaction metric like CSAT or Net Promoter Score
The percentage of clients that are reference-able
The number of upsell leads sent to sales
The number of at-risk accounts that were moved back to health
A health score that aggregates several of the above into an overall indicator
P208. It's especially important to articulate the specific benefits of a CS transformation to the leaders of other functional areas. The following is a cheat sheet on talking points by department:
Product Management:
Prioritize customers's request for enhancements: Product teams are often overwhelmed by client feedback. CSMs can help them figure out which enhancement would benefit clients most.
Set up focus groups: CSMs can advise on which clients would be most helpful in Product Advisory Councils and other groups that the Product team relies on for feedback.
Announce product releases: CSMs can promote the Product team's latest release.
Marketing:
Proactively identify advocates: You often spend a lot of time hunting down happy clients who can speak in favor of the product. With CSMs as your partners, you'll find it easier to identify clients willing to speak at an event, five testimonials, or participate in a case study.
Capture the narrative about how we drive an Outcome for a customer: Even if you're able to get a client to agree to advocate, you often find it difficult to document in detail how the client got value. The CSM can be a partner in explaining the history of the client: how they got from point A to point B, and how we helped.
Sales:
Get visibility: It's utterly painful when you call a customer and get blindsided by an issue that's troubling them. Having a CSM as your partner can help you have a 360-degree understanding of client health.
Learn about new opportunities: When an executive sponsor at your client leaves the company, it's a risk to the relationship. On the bright side, the new company that the sponsor joins is now a prospective customer. With CS effort to identify these departures you can now track your "alumni network" and find advocates whom you can sell to at a new company.
Learn where to focus prospecting efforts: A CS initiative can make it clear what types of clients—by industry, location, or other attribute—are successful and which are not, which can help you with territory planning.
Manage at-risk renewals: Spend less time on escalations. That's the CSM team's job.
Find more upsell opportunities: Instead of hunting for upsell opportunities by crunching the data in a silo without customer context, collaborate with your CSM team to find them. The CSM team may even have a target for upsell leads that they pass over to you.
Profesional Services
Identify opportunities for selling new services: CSM teams know what gaps in value the client is experiencing. So they can advise Services on which clients may be prime for purchasing education, managed services, advisory services, or other offerings.
Scope projects more effectively: The CSM is an ongoing point of contact with the customer, so they can help you identify the client's strategic goals and map the project plan to those.
Support:
Avoid being blindsided: Get knowledge of the customer context from the CSM so you can resolve more effectively, faster.
Prioritize tickets: Focus on the right tickets based on the CSM's advice on which tickets are more relevant to a client's success so as to maximize C-SAT.
Finance:
Drive collections: When the Accounts Receivable team isn't getting a response from the customer, get help from the CSM, who likely knows someone who can push the payment along. The CSM can also inform you as to when it's better to hold off on the collection, or else risk a major escalation from a client who has refused to pay because they aren't getting value.
Get visibility into cash flow: CSM teams know more about the predictability of your revenue and cash than any other function in the business besides Finance because they forecast retention rates based on an intimate understanding of the client base.
P211. We assembled a cross-functional group of leaders and mapped out what should the customer go through across the entire life cycle, all the way from being a prospect to post-sale. It forced leaders across every part of the organization to look at the business and the relationship with the customer differently and see where the gaps are in the customer journey. It also prompts leaders to think beyond a particular silo and look at the journey through the customer lens. We defined a step-by-step guide called Tableau Blueprint to help customers become data-driven organizations, which is our goal at Tableau. It's really an opportunity to document the best practices that clients are hoping to receive from us. We do an interactive assessment of the client to help them see where they are strong and where they have gaps. Coming out of that assessment we set joint priorities and capture them in a Success Plan. Then, all client-facing team members can act in harmony within that roadmap.
P240. I'm a big believer in CS owning renewals because it helps create the focus on retaining customers and not just landing them, which is what Sales is typically focused on. Also, those are two different skill sets. I spent 15 years at SalesForce and CSM-owned renewals there. When I joined the company, Salesforce was around $20 million in revenue. When I left, we were close to $10 billion. Having that focused team on renewals was fundamental to driving that growth. The renewal dollars in my last two years superseded the new sales. It was so important that there was that infrastructure and cultural focus on retaining revenue so that when we hit that massive scale we were in a really good spot to handle our enormous installed base.
P254. No business case to support your budget. Customer Success is not a cost center—it's a growth driver. That's easy to say, but what's your business case? How much evidance do you have to prove to your CFO that this has impact?
Break down a cohort of clients into a "test" (A) and "control" (B) group to compare results when you intervene versus when you don't.
Track the key growth drivers from your team—namely:
Renewals: At-risk accounts saved.
Expansion: Upsell/cross-sell leads sent to Sales.
Advocacy: Case studies and references sent to Marketing
Identify early indicators of churn or expansion with statistical validity that your team can act on.
P254. Bad PowerPoint to Support your budget. Even if your CFO lives in Excel, your executive counterpart will eventually pitch their plans to the CEO in slides. While it may be trivial, great slides make people feel like the strategy is sound and well thought out. Do you have a Customer Success pitch deck? We'd recommend including:
Your charter from your team
Looking backward
Results from last year
Learnings from last year
Looking forward
Targets for next year
Strategy for next year
Budget for next year
P256. Do you quick time study how much time your CSM team spends on COGS-related activities versus S&M-related? Share this with your CFO
P257. Get an early view of your sales and marketing plan for next year now.
P266. Camacho from PTC recommends not charging for a CSM specifically, but rather charging for a holistic program, or Success Plan, that includes the CSM (who could be dedicated to the account or shared across many accounts, depending on the package) as well as other resources that will help the client get to an outcome. PTC offers a "digital currency that allows the customer to get access to training, specialized experts, and all types of other services that the customer would require. The high-end bundle also includes access to a Technical Account Manager." In summary, she explains, "It's not about monetizing your CSMs. It's about monetizing that whole support infrastructure for your customer so that you can help them get to the business outcome faster."
P267. How should you roll out monetized CS Plans?
Involve your clients
Define the target
Clarify the products
Get smart on pricing
Create a beta program
Decide who is selling
Educate your team
Focus on new clients
Offer a grace period
Make it an upgrade
Align contracts
Introduce it early
Make it agile
Track outcomes and deliverables
P271. Razavi recommends tracking several metrics to determine the success of your CS offering besides the sheer bookings and revenue:
Attach rate: % of new target accounts that purchase the offering
Upsell rate: % of existing target accounts that upgrade to the offering
Renewal rate: % of dollars of sold CS offering that actually renew when eligible for renewal
ROI to the client: A measure of Outcomes that shows the impact to the client from purchasing the offering.
P276. In our clients, we see seven common types of views on Customer Health:
Vendor Outcomes: Track the overall ROI of Customer Success to your business.
Vendor risk: Get an early warning on risk in accounts.
Vendor: Expansion: View how the Sales team is expanding accounts.
Client Outcomes: Track your impact on customers.
Client Experience: Voice of the Customer team wants visibility.
Client Engagement: Marketing team driving Customer Success.
Client Maturity: Company effort to get clients at higher levels of sophistication.
P296. This problem is particularly acute for companies trying to hit the "Rule of 40." as context, the Rule of 40 is a financial concept in SaaS that's all about balancing growth and profitability. Simplistically, the Rule of 40 is a calculation of your revenue growth minus your loss as a percentage of revenue, the idea being that number should be greater than 40. So if you grow 100%, you can lose 60% of revenue. If you grow 40%, you should be breakeven. If you grow 20%, you should make 20% margin on your business. As companies mature and their growth goes from 100% or more to 20-40%, the math starts getting intense.
P308. Functionality in CSM Platform:
Health
Workflow
Communication
Analytics
Surveys
Apps
P342. If you're a CS Leader:
Conduct an offsite with your team about what customers expect of you.
Hire a consulting form to design your customer journey
Training for your team around new skills for CS
Participate in events
Join the CS Community on LinkedIn
Assess and benchmark your customer success maturity and capabilities
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