Customer Success


Customer success. When you hear it, what does it call to mind? Your customers winning in the market? The warm thought that you have helped them achieve their goals? That your technology is delivering quantifiable benefits to your customer’s bottom line?

Yes. To all of this. However, there is a more formal definition that is gaining currency. But, before we get to that, let’s digress a bit and talk about Digital Transformation, and how that is causing significant disruption in the modern business world.

Digital Transformation, what is it?

If we think back to the go-go late 1990’s and early 2000’s, and the IT (Information Technology) spending, you were often selling into an IT organization who had a mission. To provide a backbone or framework that allowed organizations to work together to deliver the product to the customer. If you think about pre-computer businesses, one crucial function was the mailroom. Literally, all messages, memos, notes, and proclamations were distributed by hand to individuals in a company. The concept of inbox – where new tasks arrived – and outboxes – where tasks were routed to the next step inthe workflow – was essential.

The first major disruption was email, removing this manual process from the workflow of the organization.

It doesn’t take much head-scratching to think of other IT innovations that have had a similar impact (ERP systems, CRM tools, Document Management solutions, etc.).

Up until the mid oughts, these solutions were monolithic, and installed on premise. That is, each company built their data center, their backbone network, their own internet edge interfaces, leased lines between branches (or later MPLS solutions).

Heck, it wasn’t too long ago when it was de riguer that you had a PBX switch, and ran your own phone system (before VoIP took over the corporate world).

But, starting around 2007, a transition was beginning. Amazon began offering their AWS product, ostensibly “leasing” capacity that they built to handle the holiday crunch. This put the ability to develop and deploy complex solutions in this thing that was being called “The Cloud“.

Add to that a significant product introduction, the original iPhone, putting a convenient, truly mobile, powerful computing endpoint in the user’s hand. Suddenly, the idea of decoupling the location of getting work done from the desk was within grasp.

Finally, the advent of social media brought a perceived network connecting people in ad hoc groups. The rise of Facebook and Twitter began the changing of the zeitgeist. Instantaneous access, immediate response, and a sense of community were pervasive.

It was a matter of time until these innovations began appearing in the enterprise. Now, there are offerings across the functions in the enterprise, from human resources and benefits handling, to operations and resource/logistics planning, and increasingly the core IT functions of email and collaboration.

Easy to provision, cost effective, and safe/secure, the pressure to build out a private datacenter, to deploy and run private instances of these common applications is gone.

However, as a vendor, the easy to sign up and deploy within an organization remove one of the barriers to switching, the cost of a forklift replacement. If there is little capital expenditure to deploy, that ceases to be a reason to stick with a solution.

Ergo, if you start by deploying Google Apps, and Microsoft Office365 comes in and pitches a better solution, it is a very low cost to switch. This is but one example of the challenges in the age of digital transformation.

Enter the Customer Success Manager role

In this age of SaaS products, where the barrier to change is low, it is incumbent upon the vendor to work with their customer to ensure that the solution is meeting their needs.

During the sales process, instead of selling a “product”, a box, or a piece of software, the discussion is about selling a business outcome. What value to the business that they will achieve with the solution.

Be it a collaboration tool like Slack, or an issue tracking tool like JIRA, the business expects a certain result from their purchase.

A Customer Success Manager (CSM) enters the picture after the deal is closed, and the deployment is happening. They are charged with ensuring that the customer adopts the solution. That their individual users actually use the product.

This is often driven by built in analytics. Since these solutions are provisioned, and delivered via servers you either own, or rent from one of the major players (AWS, Rackspace, Microsoft Azure, SAP, Oracle, etc) there ought to be built in tracking of usage, feature popularity, and much more that will help the CSM identify the pick up and adoption of the software.

Beyond this, the CSM is an advocate for the customer, helping them measure the value of the outcome desired. If a customer fails to achieve their desired or promised outcome, the CSM is an active participant in rectifying it. Perhaps they weren’t sold the proper package, or a capability that is crucial is lacking, and they need to work with the product management team to rectify this. Regardless, they are in the customer’s corner to make them whole.

Metrics of Success

The goal of the CSM is to ensure that the customer renews their contract. Since the barrier to change is low, at the end of contract time, it is fairly trivial for a customer to switch loyalties and vendors.

Top goal is to get the renewal, i.e. reduce the churn. Measured by ARR (Annual Recurring Revenue) and LCV (Lifetime Customer Value)

Additionally, as the CSM is close to the customer, their needs, their pain points, and their usage trends, they are in a perfect position to identify upsell opportunities. Perhaps a new optional capability will be attractive to the customer. Or they can grow adoption within the organization, and sell more seats or licenses.

Since the death of subscription or service based products is churn, CSM is critical to reduce or prevent churn in your install base.

About the author


Product Manager in Tech. Guitar player. Bicycle Rider. Dog rescuer. Techie.

By gander


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October 2016

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