A discussion around the types of value that well executed customer success principles and practices can generate, and around who receives this value.


Is Customer Success Management Worthwhile?

Why bother?

Customer success management is a lot of effort, so why take all the trouble? Would it not be simpler and cheaper not to provide customer success management services? After all, we survived for years without the need for a formal customer success management role, and the important stuff is already being done by our customer services staff, right?

I hear the above questions fairly often, both from those outside and inside the customer success management profession. In all honesty the answer is not an unequivocal “Yes” for every situation. It really does depend upon the company in terms of what it sells, how it sells it and who it sells it to. The main factors that will dictate the level of return on investment that a company can expect to attain from owning and operating a customer success management team are provided below in order of importance:

  1. Amount of revenue coming from renewals of as-a-service contracts

Customer success management provides an excellent way to reduce churn and increase both renewal rates (the percentage of customer that renew their contracts) and renewal levels (the value of each contract that gets renewed). If the amount of revenue from renewals of as-a-service contracts is sufficiently high, and especially where this amount is a significant proportion of all revenues and/or where the company’s strategy is to grow as-a-service contract revenues, then owning and operating a customer success management team is likely to make financial sense.

  1. Complexity of products, services and/or solutions sold

If the company sells complex products, services and/or solutions that require a high level of planning and activity to implement (for example customization, installation, configuration, integration with other corporate systems, training and support of end users, changes to business capabilities and processes) then customers will have a higher need for the type of onboarding, adoption and value realization-related assistance that customer success managers can provide.

  1. Customer loyalty and lifetime customer value

If customer loyalty is important to the company in terms of expectations of a high total revenue value coming from multiple sales of products, services and solutions sold to an average customer over the customer’s entire lifetime as opposed to a relatively few number of sales to any one customer, then the company may desire to put more effort into customer success management activities as a part of an overall customer experience strategy aimed at maximizing customer retention.

  1. Average deal size

If the customer’s investment in the company’s products, services and/or solutions then customers will be likely to have a higher expectation as to the value returned by their purchases, and an equally higher expectation as to the type and level of post-sales support they receive from the supplier.


Summary of Benefits to the Customer

The benefits that customers might expect from being provided with a CSM from their supplier are many and varied, however the most common items on the list might include:

Improved onboarding experienceCustomers are likely to receive a better onboarding experience when CSMs with both product and customer knowledge are involved, and when the CSM is able to consult with the customer to understand their organization’s specific onboarding requirements. This enables the customer to “get going” with adopting and using the solution faster and more effectively
Access to useful assets and resourcesCSMs with a good knowledge of both their own company’s and third parties’ assets and resources (such as for example generic training content, user guides, installation instructions, etc) can act as a useful conduit for recommending and providing access to these assets and resources based upon their understanding of the customer’s needs
Access to technical (and other) expertiseCSMs with a good knowledge of both their own company’s and third parties’ human resources (including not just those with technical expertise but also subject matter experts in topics such as business consulting, change management, project management, training and so on) can act as a useful conduit for recommending and providing access to these human resources
Increased and enhanced solution adoption and utilizationCSMs can help customers increase solution adoption by providing the benefit if their experience of other customers’ adoption of the same or similar solutions, and by recommending best practice processes and tools for both planning and implementing an adoption plan that enables solution users to utilize the solution to its maximum potential
Improved understanding of ROICSMs help their customers to better understand the return on their investment by assisting them to determine appropriate KPIs and by helping with analyzing and reporting on the measurements in ways that make sense to business decision makers
Better management of changeCSMs can use their solution knowledge to help customers manage both change coming from within their own organization (such as strategic direction changes for example) but also changes to the products and services they have purchased (such as a “dot x” upgrade for example)



Summary of Benefits to the CSM’s Company

The benefits that the CSM’s own company might expect from deploying CSMs to work with and assist their customers to realize value from the solution they have purchased are also many and varied, and the most common items on this list might include:

Increased renewal ratesCustomers who are helped to generate and then realize (ie understand) the greatest possible value from the solutions they have purchased are more likely to renew their service contracts, and are also more likely to renew at an increased level
Increased renewal levelsCustomers who are helped to understand how they can attain additional value from the solutions they have purchased are more likely to renew their service contracts at an increased level to enable this additional value to occur
Improved customer understandingBy working closely with the customer in a post-sales role to help the customer with onboarding, adoption and value realization, the CSM learns much information about the customer that can help their company to understand how to become more useful to the customer
Improved customer stakeholder relationshipsAgain, by working closely with the customer in a post-sales role to help the customer with onboarding, adoption and value realization, the CSM helps to strengthen and deepen relationships with key stakeholders that can in turn lead to increased sales and longer total customer lifetimes
Enhanced product/service R&DBecause the CSM is on the ground with the customer observing and learning how the CSM’s company’s solutions are adopted and utilized, they can provide valuable feedback to the R&D team about how to improve future iterations of products and services to make them more applicable to customers’ true needs
Increased advocacy from customersBecause CSMs extend the relationship past sales and on into adoption and ultimately into value realization, they are ideally placed to request advocacy from the customer at this later stage when value has been measured and realized, including for example requests to act as a reference, provide referrals and be used in a written-up case study.
Additional sales opportunitiesIn addition to maximizing renewal rates and levels for the existing solution, the CSM can gain sufficient knowledge of the customer’s business challenges, opportunities, initiatives and needs that they can potentially spot additional “expand” opportunities for selling further solutions to the same customer



What Have I Missed?

Did I miss anything? Is there another key benefit to either customers or suppliers that ought to be included on my lists? If so please let me know – I’m always interested to hear from fellow CS professionals and always keen to learn new ideas as well.



About the Author

Rick Adams is an independent author, trainer and consultant, specializing in helping technology companies deliver measurable business value for their customers. Adams has over 25 years’ experience of working in the IT industry, including owning his own startup software-as-a-service business which he sold in 2012 to focus on writing, training and consulting. Having delivering training and consultancy to many hundreds of businesses and thousands of technology professionals in over 30 countries across four continents, Adams is now based in the rural west coast of Ireland where he lives with his two dogs Zeus and Terri.

Adams’ recent work includes the development and delivery of a global certification program on customer success management for Cisco Systems Inc. His book titled Practical Customer Success Management: A best practice framework for managers and professionals is now available at all retailers including Amazon. His current interests includes helping individuals and companies develop best practices in customer success management and in business outcomes focused selling.

He can be contacted via LinkedIn at https://www.linkedin.com/in/rickadams01/, via Twitter at https://twitter.com/RickAda84728077 or by email at rick.adams@practicalcsm.com.