Scaling your customer success program: 4 goal-setting tips for Customer Success Managers

This post is a part of our Customer Success series written by Francoise Tourniaire and follows the last post about segmenting customers. You can read the first post in the series here and the post about scalable methods for customer success here.

This time, we turn to the issue of how to structure goals for customer success managers (CSMs). If you are a CSM and your manager has not set formal goals for you, keep reading! You will be able to suggest meaningful goals for yourself.

1. Match the goals to the mission of the customer success organization

Customer success has five big jobs: onboarding, monitoring customers’ health, retaining customers, upselling, and of course advocating for customers. Goals and objectives for CSMs will depend on the balance between the five.

ft_onboard-advocate

Most customer success organizations focus on onboarding, monitoring, and retention, as discussed in steps 2 and 3. If your organization owns converting prospects, or is in a situation not covered in steps 2 and 3, read step 4 as well.

(Goals for the important role of advocate are usually carried by the manager of the team rather than by the CSMs.)

2. Goals for Onboarding

Customer success teams often choose to have onboarding specialists, whose goal it is to help customers adopt the product quickly through a series of training sessions, guidance to tailor the service, and adoption campaigns. The goals of onboarding specialists usually focus on the number and speed of onboarding projects. It is even better to measure the success of the onboarding projects. Were customers satisfied with the training and coaching? Did they correctly complete the assessment instruments (if any)? Did they manage to use the product without requiring additional assists from support or the CSM?

Onboarding specialists may receive a bonus based on achievement of their goals, or sometimes a fixed compensation.

3. Goals for Retention & Expansion

The goals of CSMs that are not pure onboarding specialists are sometimes based on customer satisfaction (as measured by a periodic survey) but are almost always driven by customer retention. There are many ways to measure retention so the computation mechanism matters, a lot. It can either be:

new MRR / old MRR

or

renewed MRR / MRR up for renewal

The first formula includes upgrades (expansion revenue); the second does not. This is an important distinction. If the goals include expansion sales, CSMs may neglect smaller customers who are unlikely to expand—and that may be just what you want. If not, either use a pure retention goal (i.e. use the second formula) or set two goals, one for retention and one for expansion. Set targets based on historical data, with careful uplifts added each quarter.

Note that neither formula relies on the activities that CSMs perform (onboarding sessions, QBRs, regular updates), only the results of the activities.

CSMs’ compensation usually includes a base and a significant bonus based on retention and/or expansion. (CSMs do not normally receive a commission, which is reserved for sales reps.)

4: Special Cases

Startups

In startups with no reliable history of renewals, it’s often difficult to set meaningful individual retention targets. Instead, use a group target, with the added benefit that group targets promote teamwork. (It’s not a bad idea to give CSMs both an individual and a group target, even in established teams, as recognition of the importance of teamwork.)

When Customer Success is all about Sales

If CSMs are deployed mainly to convert prospects or to push expansion purchases, their goal should be based on conversions (and their compensation may well be in the form of commissions.)

When Account Segments Behave Differently

Large accounts tend to renew at much higher rates than smaller accounts, regardless of the industry. New accounts churn a lot more than established accounts. And “at-risk” accounts, those that demand the most effort, are much more likely to churn.

If all CSMs handle a variety of accounts, no problem: you can set the same goals and the same targets for everyone. But if they specialize the CSMs by customer segment, take the mix into consideration. For instance, the retention goal for “at risk” CSMs may be only 50% while for others the target is 90%.


Francoise Tourniaire is the founder of FT Works and co-founder of ChurnSquad.  Both companies provide consulting, training, and coaching to create and improve customer success initiatives. Her latest book, The Art of Support, provides guidance for both customer success and support executives. Contact Francoise at FT@ftworks.com or 650 559 9826 for more information.

Customer Success, Part 3: How segmentation delivers value to customers – and your business

This guest post by Francoise Tourniaire is the second in a series that takes an in-depth look into creating a successful Customer Success program. You can catch up with Part 1, Setting the stage for customer success, and Part in Part 2, Creating a Scalable Customer Success Program.


segment_support_models

In our last post on scaling customer success, we proposed many alternatives to the traditional, headcount-intensive approach to customer success. Still, customer success managers can become very knowledgeable about their customers, gain their trust, become valued advisors, and artfully uncover opportunities for revenue expansion. So how do we decide what customers receive this precious resource? By segmenting.

What is segmenting?

Segmenting is a strategy that divides the customer base into subsets of customers with similar needs, so that you can supply services that are most appropriate to each segment. For instance, high-value customers may be assigned a permanent customer success manager, while others may receive only automated updates.

Is segmenting for customer success all about revenue?

In a word, no. Segmenting by revenue is common, of course, and indeed revenue is almost always a part of the segmentation strategy. But there are many other factors that may make sense in your particular context:

Revenue potential

A customer may have a small MRR (Monthly Recurring Revenue) today, but have the potential for a much higher contribution. For instance, if a large organization starts with a small pilot project, revenue is likely to grow. Assessing revenue potential is not easy, but all other things being equal, it makes sense to prioritize customers who are likely to grow in time over those whose size will remain stable.

Reference accounts

A customer may not be particularly large nor likely to grow, but still serve as an important reference account, for instance because it is a beachhead in a new territory or a new industry. Coddling reference accounts may be an excellent investment.

Lifecycle stage

Customers usually need more assistance at the beginning of the lifecycle, during onboarding. Many vendors assign onboarding representatives during the initial training period, but withdraw them afterwards.

Industry

If your product of service is used very differently in different industries, providing different customer success deliverables may make sense, above and beyond the question of size. For instance, the K-12 education market may be offered regularly scheduled online meetups to boost community exchanges, while business customers instead receive quarterly business reviews.

Troubled accounts

Most vendors assign additional resources to troubled accounts, although they rarely make that explicit to customers. The hope is that troubled accounts will work themselves out of the crisis after a period of focused care.

This is far from an exhaustive list. Think about your customers’ unique requirements and how you can best allocate resources to them. I’ve had clients separate their customers into franchisers and independents, for instance. It all depends on what makes sense for your customer base.

Are customer success segments the same as marketing segments?

Perhaps. Remember that marketing segments direct the acquisition of customers, whereas customer success focuses on retention. Just because two customers were in different marketing segments does not imply that their ongoing needs are different. For instance, you may market differently to healthcare and technology companies, but once the customers are no longer prospects it may be more important to segment by size than by industry – or vice versa.

Consider the marketing segments as one possible way to segment for customer success, but don’t feel limited by them.

How many segments do I need?

It all depends on the specifics of your customer base, as well as your size. It is the rare vendor who can use a one-size-fits-all approach, although it is possible. For instance, if your customers are consumers, all using a fixed-price service, one segment may be just the ticket. (And you will be unlikely to deploy expensive customer success managers in this situation.) But most vendors find that they can easily distinguish between key and non-key customers, creating two segments, and often more.

Don’t go crazy with multiple segments. If you have a tiny customer success group, two segments are probably the most you should have.

Can you give me an example?

Here is an example using two segments: one for enterprise customers, who receive personalized service from start to end through an assigned CSM, the other for other customers, who get less, and less personalized help.

Onboarding Retention
All Online videos & 1:1 check-ins with onboarding specialist Monthly check-ins with CSM from pool
Enterprise 1:1 sessions with the CSM Weekly check-ins with assigned CSMQuarterly onsite business reviews
Onboarding Retention
All Online videos & 1:1 check-ins with onboarding specialist Monthly check-ins with CSM from pool
Enterprise 1:1 sessions with the CSM Weekly check-ins with assigned CSMQuarterly onsite business reviews

Here is another example, with three segments, showing a possible progression from self-service to completely personalized service.

Onboarding Retention
S Videos and group webinars Automated outreach
M Videos + 1:1 check-ins with an onboarding specialist Monthly check-ins with a CSM
L Customized 1:1 training sessions Weekly check-ins with assigned CSMQuarterly onsite business reviews

This last example is segmented by industry rather than by revenue or by size, to illustrate the idea that offerings need not be organized in a Russian-doll manner.

Onboarding Retention
K-12 K-12 online videosHelp with school adoption campaigns Dedicated online community3 check-ins with the CSM during the school year
Commercial 1:1 sessions with an onboarding specialist Monthly check-ins with the CSM

Remember to adapt the examples to your specific circumstances and customer requirements. The best customer segmentation strategy is one that delivers value both to your customers and your organization. Regularly evaluate the success of your segmentation strategy and revise it as needed.


Francoise Tourniaire is the founder of FT Works and co-founder of ChurnSquad. Both companies provide consulting, training, and coaching to create and improve customer success initiatives. Her most recent book, The Art of Support: A Blueprint for Customer Success and Support Organizations, is now available on Amazon. Contact Francoise at FT@ftworks.com or 650 559 9826 for more information.

Customer Success, Part 2: 4 Methods for creating a scalable Customer Success program

This guest post by Francoise Tourniaire is the second in a series that takes an in-depth look into creating a successful Customer Success program. You can catch up with Part 1, Setting the stage for customer success, and Part 3, How segmentation delivers value to customers – and your business


high-touch_low-touchThe traditional idea of customer success is the ever-friendly customer success manager who gets customers set up and comfortable with the tool and checks that all is well on a regular basis, bringing interesting suggestions to improve the customer experience. Sounds lovely, right? But it’s expensive.

It’s expensive because it is a high-touch process: the customer interacts with a human being (the customer success manager), in a 1:1 interaction. In contrast, a low-touch process uses alternatives that allow customers to get what they need with fewer 1:1 human interactions, instead using self-service or group interactions for most of the activities.

Clearly a low-touch customer success process is less expensive, and easier to scale, but can it deliver equivalent results for customer retention? This second blog post of our customer success series shows how low-touch, low-cost alternatives to the high-touch, high-cost, traditional model of customer success can deliver results both for onboarding customers and for ongoing retention efforts.

Leveraging Self-Service

It would be difficult to conceive of a customer success process that is purely self-service, but it is very effective to mix self-service activities with personalized check-ins. Here are three ways to make use of self-service:

  • Online training. This can be short videos, recorded webinars, or full-blown computer-based training if you can provide it.
  • Onboarding plan. Giving customers a list of steps and activities to set up the system minimizes confusion and suggests a firm schedule. It can be delivered in self-service, group settings, and also
  • Just-in-time hints. Customers usually follow a predictable path, which makes it possible to deliver helpful hints, ideally in product, as they start using new features for instance.

Leveraging Group Delivery

Many customer success activities can be done with a group of customers rather than with just one customer. Customers get the warmth of a human interaction but at a much lower cost to the organization.

  • Welcome call. The welcome call introduces customers to the onboarding process and can be a small-group affair, scheduled a few times a week to accommodate several customers at once.
  • Live webinars are great training tools and perfectly appropriate if customers all use the system in a similar manner. They can apply to product training or best practices sharing.
  • Online communities. Communities are helpful for all customers. Consider maintaining a separate forum just for new customers, whose concerns may not match established customers’.

Leveraging Big Data

Mining customer data can help you understand patterns so you can deploy better tools and specific customer success strategies as needed to rescue at-risk customers.

  • Health monitoring. Although not foolproof, customer usage is a telling sign of successful adoption. Customers that are not using the tool at all, or using it lightly or incompletely can be flagged for intervention.
  • Churn analysis. While health monitoring focuses mostly on usage patterns, churn analysis evaluates a holistic set of data across customers to detect patterns of defection – which become opportunities for action. Don’t delay churn analysis until your data is “perfect”: start with what you have, and build up over time.

Leveraging Repeatable Processes

Even when you must use a high-touch approach, a repeatable process improves efficiency and consistency.

  • Scripted onboarding. Rather than asking the onboarding specialists to create a custom program for each customer, script the sequence, ideally by customer segment.
  • Adoption campaign kits. Help customers train and motivate their internal users with pre-packaged materials and suggestions. This can be a pure self-service item, or be a part of a program driven by a customer service manager.
  • Responsive support. What is support doing in a customer success checklist? Well, we would not want customer success to be nothing more than an escalation channel, would we?
  • Business environment tracking. Just like support organizations capture their customers’ technical environments to expedite troubleshooting, customer success organizations should have a structured method to capture relevant features of their customers’ business environments.
  • Targeted, scripted check-ins. Equip the customer success managers with a reason and script to contact customers. Use the outcome of health monitoring data (see next paragraph) to trigger the contacts rather the calendar, at least for lower-value customers.

The high-touch model of customer success is wonderful – for key customers. By leveraging self-service, group delivery, big data, and repeatable processes, you can deliver excellent low-touch services to most customers so you can lavish high-touch services on key or at-risk customers. Tell us how you deploy low-touch programs.


Francoise Tourniaire is the founder of FT Works and co-founder of ChurnSquad. Both companies provide consulting, training, and coaching to create and improve customer success initiatives. Her most recent book, The Art of Support: A Blueprint for Customer Success and Support Organizations, is now available on Amazon. Contact Francoise at FT@ftworks.com or 650 559 9826 for more information.

Customer Success, Part 1: Setting the Stage for Customer Success

This guest post by Francoise Tourniaire is the first in a series that takes an in-depth look into creating a successful Customer Success program. The series continues in Part 2, Creating a Scalable Customer Success Program, and Part 3, How segmentation delivers value to customers – and your business

What is Customer Success?

The idea of customer success is that appropriate nurturing yields loyal customers, which in turn yield profits. Customer success aims to:

  • Increase customer adoption, which leads to
  • Increase customer retention, which leads to
  • Reduce customer churn and
  • Increase expansion revenue

Customer success is the brainchild of SaaS vendors, but the approach and techniques can apply to all organizations.

What Does Customer Success Consist Of?

Customer success organizations provide a range of services, which can be organized in five categories:

  • Onboarding to help customers get started with the vendor’s product or service. Onboarding is more than pure training: it also helps customers navigate the setup and customization of the tool. Onboarding occurs at the beginning of the customer lifecycle, but it can continue as customer usage expands, new users are added, and existing users discover more sophisticated uses of the product or service.
  • Customer health monitoring. This includes monitoring the usage of the tool as well as ongoing communications with customers.
  • Retention. If a customer is determined to be at risk, specific initiatives may be deployed to rescue the relationship, from a simple conversation to touch base with the customer to offering additional training or adoption assistance.
  • Lead generation. Customer success organizations diligently cultivate leads from existing customers, usually passing them on to the sales team, but sometimes closing them themselves. Some customer success organizations also own the renewals of subscriptions and maintenance contracts.
  • Customer advocacy. Providing structured feedback from customers to internal teams is an important function of customer success organizations.

Are All Customer Success Organizations Alike?

No! Customer success organizations have a variety of roles. Differences are common in these four areas:

  • Whether they own the onboarding This is usually the case, sometimes through a specialized subgroup. For complex products and services that require a professional services team, onboarding may still exist in the form of encouraging users to engage with the platforms.
  • Whether they are responsible for technical support. Usually not, especially for more complex products: a separate team handles technical questions. But customer success managers are sometimes asked to provide first-level support.
  • Whether they are directly responsible for renewals. Usually, a dedicated renewals team or the sales team itself takes responsibility for renewals (assuming renewals are not automated), although the customer success organization is often measured by the renewals percentage.
  • How much selling they do. Most influence and suggest, but do not have a sales quota, so as to minimize conflicts of interest with customers and channel conflicts with the sales team.

How Do I Get Started With Customer Success?

If you are starting from scratch, the first step is to identify your main issue: do customers never start to use your products? Do they start, but then lose interest? Do they fail to renew? Fail to expand? Or do you simply not track any metrics?

Focus your initial efforts to resolving your main issue. Perhaps it’s simply starting to measure retention (or its mirror image, churn).  Or it may be putting in place a robust onboarding program so customers can get started in an orderly manner. Or analyzing the reasons why customers fail to renew.

Make sure that the initial efforts are proactive, not just aimed at preventing customer escalations. Escalation management is important, but it is a support function, not a customer success function.

In our follow-up posts, we will show you how to segment customers and how to define reusable processes for onboarding and retention.


Francoise Tourniaire is the founder of FT Works and co-founder of ChurnSquad. Both companies provide consulting, training, and coaching to create and improve customer success initiatives. Her most recent book, The Art of Support: A Blueprint for Customer Success and Support Organizations, is now available on Amazon. Contact Francoise at FT@ftworks.com or 650 559 9826 for more information.