Before the recession, a lot of the tech companies were accustomed to adopting a mindset of constant growth, focused on expanding all aspects of the business. Increasing headcount was the ultimate solution for almost every problem that came up.
As we head into 2023, the tech industry is entering a new era where efficiency is being placed at the forefront of metrics for companies and their executives. This shift is especially true in the realm of customer success, where companies are being tasked with doing more with less. In order to understand how to navigate this challenge, we sat down with Asaff Zamir, Zencity COO, to dive deeper into the key pieces of the customer success puzzle and how they fit together. In this blog, we'll explore how companies can provide value at scale without necessarily growing the size of their teams, and the importance of retention and upsell in this new era of efficiency as Asaff sees it.
3 Strategies to optimizing your CS structure
Providing value at scale without growing the size of the teams is a significant challenge in 2023. The expectation is to maintain high levels of retention and upsell figures, otherwise, it would be difficult to sustain growth. To do that, companies should rally behind customer success even more than before, being customer-centric and paying close attention to their customers' needs. The following 3 strategies focus mainly on the complex challenge of scaling without increasing headcount, while still maintaining a personalized customer experience.
Double down on ICP (Ideal customer profile)
ICP means to identify the customers that have the most potential to get and provide value from your product, by analyzing different parameters like LTV, retention, usage patterns, growth potential and more.
It creates focus on scalable and repeatable strategies and tactics through segmentation, organizational structure and other key activities.
To ensure that resources are being allocated effectively, it's important to focus on "Gross retention" through segmenting the customers based on ICP, while designing different processes and value realization per segment and customer profile. By doing that, you can ensure that there will be higher correlation between the effort your team invests to the business outcome while still focusing on generating a lot of value.
ICP is super challenging to companies, especially for start-ups since it is hard to say no to a deal. Nevertheless, it is one of the biggest keys for efficiency and long-term success. It has the power to save precious time to all GTM teams by delivering faster sales cycles, higher conversion rates and greater lifetime values. Also, ICP segmentation allows organizations to tailor go-to-market plans based on expected value and focus where there is a long term ROI.
ICP is one of the bests growth engines. Once ICP is in place, two ways that can help drive value at scale:
- Personalized Content: Invest in delivering valuable data/insights through digital channels based on usage behavior patterns, proactively. It allows CS teams to provide value at scale, effectively, and respect their customers' time. Meetings don't have to be the default for generating value and we should always ask ourselves - What is in it for the customers? It can be achieved through in-product communication, ad-hoc emails, webinars, training programs and more.
- Community of users: Building a community of users is a key aspect of customer success. It is an effective way to engage with multiple customers at once and it's a valuable resource for nurturing relationships and stimulating a sense of belonging. While it may not be suitable for every segment, or company, if your target audience consists of champions and influencers, a community platform can be a great tool for creating a win-win situation for both sides.
In my view, this is the essence of doing more with less while having a sustainable ecosystem for the CSMs, will ensure they are set up for success. Doing more with less without providing the right tools and framework can also have the opposite effect.
Revamping Customer Success Structures for the New Era
The structure of existing customer success departments should be changed in order to have a high return on investment in 2023.
In today's economy, the balance between supporting functions and those that directly interact with customers is crucial for meeting the company top line metrics. There will be an increasing need for operational roles that support the team's ability to scale but each will have to demonstrate a clear ROI.
Adding a renewal manager to our team enabled us to increase multi-year renewal rates dramatically by 100% QoQ throughout 2022, Improved significantly our ability to renew on time, and allowed the customer success managers to focus on the relationship, adoption, and value.
It is a classical example for a win-win situation. We identified that the renewal process is a challenge for our teams but also for our customers. It includes a lot of bureaucracy, involving other departments and wasting a lot of time for all sides.
By building the Renewal Manager role, we created a vertical attention, defining a very clear R&R with the CSMs, leaving them the entire accountability to strategize and make decisions, and shifting the operational process to someone else.
CSM is Not a junior position, especially in 2023
The CSM position has never been a junior role and is becoming increasingly vital in the present day.
I know it might be disappointing to hear since the demand for a CSM role is at a all time high.
But, when hiring a Customer Success Manager in 2023, certain qualities and skills should be prioritized to succeed in the new reality. You are mostly looking for maturity and previous business experience, specifically the ability to move very quickly, be extremely proactive, and function well under pressure.
Moreover, there is a need to understand your customer market and ecosystem, draw the right conclusions while looking at data and translate them into actions, fast.
I think that without the above skills and experience, it will be extremely tough to survive without getting burned out.
In conclusion, it's clear that there's no perfect blueprint for a CS department. Asaff stresses the significance of understanding the value that the company offers and creating processes and structures within the customer success department to deliver that value. With the current emphasis on efficiency in the industry, there is a need for a shift in the way we plan and execute customer success. The bottom line is that many companies will need to be more efficient in order to achieve success in the customer success department. There are strategies and tools to support that so let's be proactive and creative and use these strategies to scale up while still maintaining efficiency.