Success with Customer Success

Hire customer success
by: Ken Kanara

 

Growing Demand for Customer Success

One of the things I love about executive search is that we get to talk to people…pretty much all day long. We speak to clients looking to hire executives, and high caliber candidates interested in finding their next opportunity. One of the things I’ve observed overtime is the growing demand for customer success roles. In fact, the number of “Customer Success Manager” titles on LinkedIn grew 8X from 2015 to 2018, according to Gainsight, a technology company focused on optimizing customer experience and product analytics.

 

So What Is Customer Success?

According to Wikipedia, customer success is defined as “the business method ensuring customers achieve success, their desired outcomes while using your product or service. Customer Success is relationship-focused client management, that aligns client and vendor goals for mutually beneficial outcomes“…OK, but what does that actually mean? After speaking with hundreds of clients and placing dozens of CSM roles, I would boil the role down to a few key components:

  • Ensure customers understand how to use the product: this first point seems obvious, but imagine buying a car and not knowing what the gas pedal did, or what the speedometer was. The same is true in product. Most customers are using a new technology for the first time, and they need someone to help them understand various features.
  • Make sure customers are using the product: Customer churn works a lot like evolution…if you don’t use it, you lose it. If your customers aren’t using the product, they are not likely to renew their annual license. This means CSMs have to periodically check-in to identify and solve any issues their users might be experiencing that prevent them from actively using the product.
  • Demonstrate ROI: This is probably the most overlooked aspect of customer success from my perspective. That’s because the value of a product might seem obvious to a user, but not their boss (who is signing the renewal). For example, let’s say a sales person relies on a contact software on a daily basis, and they use it to generate $1M in sales annually. Their boss might not understand the percentage of sales that are supported by the software. A great CSM solves this, and helps demonstrate ROI for their users so they can build a case internally.
  • Land and expand: CEOs, entrepreneurs, and sales people love the thrill of the hunt, and get a lot of energy from opening a new account. But we all know it’s much easier to grow an account, than sign a new one. A great CSM knows this, and thinks like a salesperson. They are constantly navigating the org structure of a client, getting to know different business leaders, what their challenges are, and connecting the dots on how their product can provide solutions.

 

Who Should I Hire?

Some SaaS licenses can be in the hundreds of thousands or even million dollar price category, so retaining and growing with a client is an important thing to consider. On the other hand, some license fees can be less than a few hundred dollars annually. The background of the people you hire for your team is often correlated to the price tag. Most of our clients are hiring CSM teams for high price software, so they often look opt for former management consultants, for a few reasons:

  1. Strong Analytics: Consultants are very good at developing structured analysis in dynamic environments. With custom SaaS solutions, demonstrating ROI might require a complex analysis involving various functions of a business. Not only can consultants think about the right way to assess a problem, they have a unique ability to present it to an executive audience. This is how they spent most of their career in consulting, so it’s a natural transition when working in customer success.
  2. Excellent EQ: Being able to communicate with all levels of the organization is a critical part of customer success. For example, you might have to work with the data science team to ensure your product is being integrated correctly with a new client…and then give an update to the CEO on where things stand. Consultants from firms like McKinsey, Bain, BCG, LEK, Booz, Oliver Wyman, AT Kearney, etc. all spend most of their time leading client projects involving team members across all levels of the organization, and strong EQ is a must.
  3. Commercial Mindset: It’s instinctive for consultants to look for problems and identify solutions. In fact, many consulting projects start out as small engagements, but the partner or principal is able to identify other opportunities help their client and also navigate the org structure to work with other client team members. The same type of mentality is important with customer success roles.

 

As external technology solutions continue to be an integral part of the way business leaders run their companies, the role of the CSM will only become more and more relevant. It is no longer viewed as a “customer service rep”, but more as a strategic hire. Technology companies are investing in senior level, single contributors from top tier consulting firms to work on CSM teams, and we see no signs of this slowing down in near term.

 

 

Ken Kanara is the President & CEO of ECA. He works with investor owned technology clients on customer success and product manager roles. ECA helps clients across strategy, operations and finance for both interim / project and full time resource needs.

 

 

Ken Kanara
President & CEO

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