Last week, we hosted Bill Hobbes on the Bowery Capital Startup Sales Podcast to discuss “Growth Hacking With User Behavior.” In that episode, we discussed a broad range of ways that user data can be leveraged not only for better retention and up- / cross-sell, but also…
(1) Who does the head of Customer Success report to?
The head of your CS division should report directly to the CEO. Allison believes this is very important because the most successful companies are customer oriented. Thus, having someone at the leadership table who is solely focused on the customer is necessary to keep their interests in mind at all times. Also, Allison believes that all post sales functions should report to the CS leader. Their job is to make the customer successful, so having everyone who works on anything customer success report to them is crucial to make sure the team is working together effectively and to the benefit of the customer.
(2) What are the first steps you need to take as a new head of Customer Success?
Allison discussed three main steps here: First, make sure that your CS team is up to date on upcoming renewals, and that they are doing everything they can to ensure these renewals come through. Second, you need to, as Allison put it, get on top of your risks. To do this, take a step back and look across your customer base, and evaluate which customers are at risk. Make sure the CS team is taking the appropriate steps to resolve the issues these customers have. After that, they can begin to develop a process that segments different types of risks so that they can build a CS playbook over time. Third, your CS team should begin trying to qualitatively define what it means for a customer to be getting value out of your product. This is important for developing a mission statement, and for creating a base of measurement so that you know what it means for a customer to be happy with your product. The CS team should then apply this definition to detect if a customer is getting high value out of your product.
(3) How do you know how large your Customer Success team need to be?
At an early stage company, it is important to hire a CS person relatively early on, because your first customers have the potential to become champions if they have a good enough experience with your product. At a later stage, you can begin to think about the size of your team using a cost metric, in which you spend 10-15 cents on a CS team for every dollar of ARR you generate. Allison also believes, however, that regardless of what stage your business is in, you should aim to overinvest in CS. CS provides a wide range of services, that all come together to help you generate more revenue and customers. Overall, CS is of great importance to your product and its reputation, and because the customer’s happiness is crucial for any business’s prosperity, it is important to invest significant money into it.
(4) How should your Customer Success team be divided in terms of seniority?
This depends on the complexity of your product and customer base. If you have a simple product, and your customers are small businesses that are mostly self serving, then it is ok to have mostly junior or middle level people. However, if you have a more complex product that requires more involvement with your customer, and you are selling to large enterprises, then it is a good idea to have some senior people with more experience. There are many different strategies you can employ with designing your CS team, but finding one that works for your product and company is the most important thing.
Overall, Customer Success teams help businesses grow and develop in many ways, and regardless of how you set up your CS team, it is important to know how to run one. Running a Customer Success team can be challenging without the right knowledge, so we hope that these questions and answers give you a bit of guidance. If you want to learn more about running a Customer Success team, check out this Gainsight Blog Post, check out Allison’s blog or listen to our podcast on the topic.
Special thanks to Jack Blattman for his contributions to this post!
Twitter is full steam ahead post-IPO with its announcement of a host of new targeting and reporting features that are sure to delight customers as well as shareholders. Among the new features are the ability to target users by operating system, device, and wi-fi connectivity…
Last week on the Bowery Capital Startup Sales Podcast, we hosted Sangram Vajre, the Co-Founder and CMO of Terminus. With Sangram, we explored the topic of winning strategies in account based marketing. Terminus enables B2B marketers to target accounts, engage decision-makers, and accelerate marketing and sales pipeline…