With Q1 in full swing, many Customer Success organizations will be looking into improving the organization and extending its departmental reach in 2023. Many will attempt to cure their internal needs by injecting more products into their customer success operations model. Others will try to increase headcount. But, truth be told, the savvy CS leader who’s focused on 2023s most valuable customer trends in customer success will work on the process first.
The Three P’s of organizational foundations of people, process, and product are the best ways to scale your CS organization. If you scale correctly, it can have tremendous results. Scale wrong, and it can set you back.
Depending on your customer success maturity, the importance of each organizational foundation shifts based on your position between how you initially establish and implement your CS culture and successfully grow it into a mature CS organization.
The first article of this three-part series will focus on the three P’s and early stage CS organizations.
Customer Success Foundation 1: People
When you are forming a brand new customer success team, your first priority should be the employees (read: people). Hiring your first, second, and maybe third customer success manager will be the most important decision in building a team that breeds results.
Start by taking a look at the company’s book of business and identify customers that fit the following characteristics:
- High annual recurring revenue (ARR) that keeps the lights on in the business
- High-risk accounts that have similar pain points or concerns about your service or product
- Promising logos that have the potential to grow in ARR (brand recognition that will provide solid references and social proof)
Determine the average amount of work hours that each customer account will require.
- 1 hour weekly or bi-weekly - cadence calls
- 30 minutes, 2x a week - follow-up on internal tasks related to success plans
- 30 minutes 1x a week - meeting preparation work or impromptu customer requests
- Hours per month: 8 - 10 hours a month
- 1 hour monthly - cadence call
- 30 minutes bi-weekly - follow-up on internal tasks related to success plans
- 30 minutes per month - meeting prep work or impromptu customer requests
- Hours per month: 2.5 hours per month
Internal Customer aka Department meetings:
- 1 hour weekly - Customer Success Org Meeting
- 1 hour monthly - All-hands meeting
- 1 hour monthly - CS-Product Meeting
- 1 hour bi-weekly - Team Meeting
- 1 hour bi-weekly - CS project
- Hours per month: 10 hours
Considering that there are 160 hours in the work month, we will determine that the amount of hours dedicated to external customers will be 150 hours (after subtracting the internal meetings).
Then, we will take the amount of customers that need to be covered and multiply that number by their estimated workload — to give you your total number of work hours. Divide the total work hours by the 150 hours we determined a Customer Success Manager could handle. to determine the minimum amount of Customer Success Managers needed.
- 20 High Touch Customers = 200 hours
- 100 Low Touch Customers = 250 hours
- Total hours of coverage needed = 450 hours
- 450 hours total workload / 150 hour workload capacity per CSM = 3 CSMs needed.
This process can also be used to justify personnel budgets vis-a-vis senior leadership. Once the team is hired, you can now focus on the processes of your CS organization.
Customer Success Foundation 2: Process
The processes that need to be defined and documented will be the very basics of what your customer success organization needs to facilitate for a high-performing CSM team.
The customer success manager needs to understand the customer journey and their role in each phase. So, we begin with mapping the customer journey in its simplest form. Your CS organization is just being born, so we will work on fine-tuning the customer journey and getting granular as you mature and evolve.
Pre-sales Marketing - Customer Success will communicate what features the current customers see value in and what desired outcomes the customers are achieving.
Sales - Customer Success may determine an ideal candidate profile fit and provide a first draft success plan
Implementation/Onboarding - Customer Success will monitor onboarding progress and act as the customer-facing arm of the onboarding team (for any questions or requests that need to be communicated with the customer).
Adoption - Customer Success will launch value-driven campaigns designed to engage and influence customers to perform best practices and achieve outcomes
Expansion - Customer Success will build complementing value into upsell or cross-sell products. Customer Success will influence the increase of licenses.
Renewal - -Customer Success will monitor customer’s likelihood of renewal and report to sales to execute renewal conversations or auto-renewal.
After determining the Customer Journey Mapping, you can work on common basic processes CSMs need to do to succeed — by using this article (written from the perspective of the CSM who works to understand the practices and expectations of their role in your organization).
Once those processes are defined, the CS team saves time trying to reinvent the process for common tasks and can focus on developing basic training videos or knowledge base articles to help provide customers with user-friendly educational resources.
Customer Success Foundation 3: Product
It may seem intuitive that the next step will be to acquire a customer success platform.
Actually, not yet. We need to ensure that the processes function properly before we look to scale into a customer success platform. Plus, we need to focus on the customer first.
The foundational products needed to start a CS Department will likely include:
- A company email account (preferably with included products and assets like word processors, email templates, spreadsheets, slide decks, etc)
- A communication software to speak with customers - this could be in-app like intercom or video meeting software like Zoom
- A customer relationship management software like Salesforce or Hubspot
- A shared cloud drive like Google Drive or OneDrive.
- A customer-facing knowledge base
These tech stacks will already have a pretty hefty budget, so you'll need to ensure that the team can outgrow these tools before looking into more advanced Customer Success software. This initial tech stack will be enough to get you by until you reach a more advanced need to expand and scale.
You’re all set!
Congratulations! You are now set up with the basic Three P’s. Once your department is flourishing and is ready to expand, then you will need to review the Three P’s in a new light. Stay tuned for the Emerging CS edition of the Three P’s.