Customer Success Technology

When a new discipline becomes commonplace and the practitioners come together to create departments, teams, and organizations, technology is sure to follow. This is most definitely the case with customer success. As more and more people take on CSM titles or similar responsibilities, the processes and best practices around how to execute the daily tactical duties begin to coalesce. Once that starts to happen, there's room for technology to come in with the promise of improving the processes and the productivity of the people.

Customer success, whether done in a high-touch way or a tech-touch way, is all about data. Actually, it's really about turning data into information and then turning that information into action. But it starts with data. Lots of data.

A Plethora of Customer Information

Think about what almost every B2B company, and more B2C companies every day, know about their customers:

• Demographics—industry, geography, company size, and so forth
• How long they have been a customer
• What they have purchased and when
• What they paid for every product they have purchased
• Every invoice ever sent—when, what, amount, terms
• Every payment ever received—when, amount
• Every services/support call—when, reason, severity, response time, resolution time
• Every e-mail ever sent and result (open, bounced, unsubscribed, clicked-through)
• Every event/webinar attended or registered for
• Any direct-mail marketing sent
• Website visits and source of traffic
• Support portal visits and actions taken
• Every training class taken—classroom or on-demand
• Every survey sent, received, and any responses
• How your products are being used (anecdotally or electronically)

And if you are a subscription-based or pay-as-you-go company you will also know:

• Original contract value
• Current contract value
• Growth rate of contract
• Number of renewals completed or opt-outs not exercised

And if you are a SaaS company, this, too:

• Every action ever taken in your product (pages viewed, clicks, reports run, etc.)

Over time, this becomes an amazingly rich set of data. And data fits into the world of customer success in a very logical way—the more you know about your customers, the more effective you can be in managing them. Remember Customer Success Law 4 (Chapter 8, “Relentlessly Monitor and Manage Customer Health”). That obviously cannot be done without data. A customer health score is ultimately just a predefined analysis of a discrete set of data that is then brought together into a single score.

The value that technology can bring to customer success can be encapsulated in a few key areas:

1. Optimize CSM time
2. Increase the intelligence of every customer touch
3. Drive scalability
4. Improve collaboration, communication, and visibility
5. Better team management

Let's look at each one of these in depth.

Optimize Customer Success Management Time

The first value proposition that most customer success teams are seeking is for an early-warning system. Oftentimes, it's the existence of churn that drives the need for some kind of tooling, whether internal or off-the-shelf, to provide visibility into customer health, specifically customers at-risk. In the absence of any activity-based information, the prioritization of customer interactions is often driven, in a subscription company, by two typically well-known data points: (1) renewal date and (2) ARR (or total contract value). Number 2, as a proxy for customer value, is the one that drives prioritization for companies that don't have a specific renewal, such as those with month-to-month contracts or pay-as-you-go companies. Customer value, whatever that might mean to you, is something that transcends subscriptions and is important across all types of companies. Most CEOs would have at least a general answer to the question, “Who are your most valuable customers?” That becomes the de facto prioritization if no other information exists to help with that process. In any case, anyone actively managing customers will ultimately come up with some method of prioritization in order to optimize their time. The days of just having a regular calling schedule and relying on personal relationships with all customers are in our rearview mirror. See Chapter 9, Customer Success Law 5, “You Can No Longer Build Loyalty through Personal Relationships,” for more insights on this dilemma.

The problem here is an obvious one. Customer value alone, or even value plus renewal date, is not sophisticated enough as a prioritization tool, to identify and differentiate those customers who urgently need attention, from those that are doing fine and may not need any of your time. There's a crying need for more information. This is where the quest often branches in one of two directions: (1) attempt to get product usage data or (2) get other data about other customer interactions.

• Product usage data: Everyone agrees that, if you could only tap into one source of data, this would be it. The best indicator of customer health and predictor of future buying behavior definitely lies with how each customer uses your product. But it can be challenging to get and even harder to trend.
• Other customer interactions: Customers call support, pay (or don't pay) invoices, respond (or not) to surveys, engage with your marketing messages, and so forth. These are almost always in a variety of systems that are separate and distinct. The perfect account manager would have to log into, and decipher data from, multiple other systems in order to prioritize their outreaches and maximize the value of each.

Ideally, you want all of this information, but it's often a step-by-step journey so you need to choose one battle at a time.

So, we've established that there's a need for more information in order to drive the right interactions at the right time with our customers. In addition to pure information, for which Excel or your CRM system, might suffice, there's a need for some system-driven analytics to help give context to a particular data point or set of data, and even to recommend action. This is where a customer success management solution can deliver very high value and quick wins.

Just a quick aside here. We're not doing an evaluation of any specific technology solutions nor are we even describing the specifics about what any one of them in particular can do. We're simply identifying the problems that customer success teams are experiencing and how technology can help solve those problems, whether that's an internally built solution or a third-party software purchase. And, because customer success is still in its infancy and CSM solutions came along only after the discipline of customer success came into being, the volume and sophistication of changes is very hard to predict. Suffice it to say this, the application solutions for customer success will rapidly get more robust and significantly better over the next few years.

Back to optimizing your team's time. We've laid out a pretty clear picture that is the current state for most companies—a lack of information and insights that will help with the prioritization and execution of resources against customer needs. Much of the data exists somewhere in the enterprise and more might exist externally. Bringing that data together into one place, giving one consistent view of the customer, with insights into the meaning of the information, and the recommended actions, will give any customer-centric company a huge leap forward. The old world often sounded like this:

The new world will sound more like one of these:

Consolidated, actionable information brought together into a system that triggers and tracks every customer touch, whether human or tech. That's how you prioritize customer interactions and optimize your team's time.

Increase the Intelligence of Every Customer Touch

Although this is a value proposition distinct from the first, the solution is the same one—easily accessible, high-quality information. In the absence of the right set of information, most customer interactions take the form of a check-in call.

Today, our customers have every right to bristle if we make a call like that. We should know how things are going, even to the extent of knowing if/how they are using our product. Shouldn't we? Even if we don't have that elusive usage data, we still have enough to make our call much more valuable than that one. Shouldn't it sound more like this? No usage data required for this call by the way:

It's easy to see the value of this kind of call. It's also fairly easy to understand the pain of digging all of that information up if you don't have it consolidated somewhere. What's much harder to quantify is the cost of not digging it up. Frankly, most CSMs or account managers are so busy that they just don't have time to go log in to three or four other systems and try to find the information that would help make their next call better. So they just don't do it. The result is a whole lot of check-in calls. Not because your folks don't want to do the best job they can, but because they have to prioritize how they spend their time, and, usually, the actual customer touch is higher on the priority list than the quality of that touch. Clearly, in order to make your team more productive and intelligent, whether high touch, low touch, or tech touch, you need to bring some vital set of customer-health-related information together in one easily consumable place.

The value of this solution also goes far beyond your customer success efforts. This one delivers for every single person in your company who talks to customers. Wouldn't every one of your customer conversations be better if it was more information driven? Think about a few examples:

• Customer support: Your support reps talk to customers all the time. The primary source of intelligence for them is their solution (Zendesk, ServiceCloud, Parature, etc.). They can easily access how many tickets are open, how many have been closed in the past 30 days, priority and severity of each, average time-to-close, and so on. That's good, but wouldn't they benefit from also knowing current and trended health scores, open actions (not cases), last survey results, positive/negative usage trends, and invoices overdue? Customer touches are rare and precious things. Everyone in your company needs to optimize them.
• Product Managers: They don't talk to customers as often, but wouldn't they want to know how the customer is using their product (if it's available) and how that compares to overall use of the product across the installed base? Also, what do they own, when did they purchase it, and more.
• Professional services: Your consultants are interacting on engagements all the time with customers and will benefit greatly from a more well-rounded understanding of each of those customers.
• Sales: Whether it's an enterprise representative managing her customers forever, or a renewal or upsell rep digging in on an open opportunity, the need for deep understanding of customer health is paramount. Maybe bigger is the need to never get blind-sided when they call a customer. There's nothing worse than having a sales call derailed by a high-priority support ticket that you didn't know about.
• Marketing: Who usually manages the reference program, the case study program, and the user groups? Marketing. They need to be well informed about customer health and activity in order to perform any of those responsibilities well. This is one of the reasons that the customer marketing part of marketing is getting cozier and cozier with customer success as we elaborated in the previous chapter.
• Executives: Nobody likes to get blind-sided less than your CEO. And no employee wants to be the reason his CEO got blindsided. One of the best ways to understand the value of this proposition—all the right information consolidated in one place—is to observe the scramble that takes place to prepare a CEO for a customer call. There's probably enough effort in just a couple of those situations to justify the purchase or building of a solution.

This solution is often referred to as the 360 degree view of a customer, and CSM technology actually makes that dream a reality for the first time. CRM systems used to claim that same phrase, but it has turned out to be far from true unless there's enormous effort expended to push information into the CRM solution that doesn't really have another proper home. The value of solving this problem is massive and far-reaching, and the opportunity cost of not solving it is also huge but, more dangerously, it's hidden.

Drive Scalability

If there's a word in the business lexicon more often used than scalability, I can't imagine what it is. And when someone is talking about scalability, technology almost always has to be part of the answer. This is certainly true for customer success in which there are really only two ways to manage an ever-increasing customer base:

1. More people
2. Technology

Of course, the right answer is actually number 3—a combination of 1 and 2. Customer success, for most B2B companies, is, at least in part, a people-driven effort, and that will likely always be true. And people are always the most expensive part of any business operation. In order to improve profitability, you can't scale people linearly with customer growth, at least not for those organizations who aren't charging separately for their efforts. Not charging is usually the case for standard customer support and customer success. Both are necessary for high rates of retention and customer satisfaction, so the baseline delivery of each is typically bundled with the SaaS contract or provided to every customer in a traditional business or the on-premise software community.

Given that reality, technology must be applied to the discipline in order to improve productivity and profitability. Customer success solutions should enable a 25 percent to 30 percent improvement in productivity at a minimum. That is usually measured by the number of accounts managed per person or by the number of dollars managed per person. If I'm a high-touch CSM and have access to a great CSM solution, I should be able to increase the number of customers I can manage with the same quality, from 25 to 30 or maybe even 35. If I'm a tech-touch CSM managing 1,000 customers, the right technology could literally double that number or much more. If it's all about tech, the number of customers almost doesn't matter. Do you think Verizon worries about their customer e-mail campaigns not scaling when they add a million customers a month? Of course not. They just send more e-mails.

The aspects of a technology solution that allow for the productivity increase are pretty obvious, and we've talked about several of them already:

• Prioritization—not touching customers who don't need to be touched, which is a huge plus
• Effectiveness—information-driven insights make each call more effective
• Collaboration—we'll talk more about this shortly but making the sharing of information easier is a big plus
• Accessibility—key information is no longer hidden in e-mail but available to all
• Proactivity—the amount of effort required to be proactive is exponentially smaller than firefighting

Perhaps nothing is more important to business viability than scalability. It's why so much money is spent on technology. There are usually manual ways of doing almost everything, but technology brings efficiency, accuracy, and scalability to virtually every part of a business to which it is intelligently applied.

Improve Collaboration, Communication, and Visibility

As your customer base grows, so, too, does the size of the teams managing them. Even if you scale efficiently, you still have to scale adequately with people. More customers, more people touching customers, more layers of management, more separation of departments/responsibilities, more challenges. There's simply no way around it. When scale happens, the need to be better at collaboration and communication can equal, perhaps even exceed, the need to become more productive. That's another perfect application of technology. Systems, by definition, can bring things together. Those “things” can be the people who are doing similar jobs, the information needed to do those jobs, the status of each task, and the relevant management insights and results. All things that should be legitimately systematized.

Workflow might be an overused word, a bit like scalability. But it's used often for good reason. It's important. In the early days of customer success technology, there was an almost exclusive focus on analytics. It was all about, and only about, the data. Vendors had the word analytics in their company names (later changed) because they felt it was the end game. But the market always has the last say, not the vendors. And the market originally bought into the idea that it was all about analytics. The only thing better than talking about analytics was talking about predictive analytics. But that turned out to be a bit of a red herring. It's true that analytics were important and still are. It's also true that predictive analytics is a legitimate pursuit and will provide tremendous value to customer success efforts over time. But it should have never been the focal point of a company or a product, and that also applies to those creating their own solutions internally. The core problem that needs solving in customer success is not an analytics problem. If that were true, it would have been solved long ago. There's no shortage of amazing analytics solutions, from Business Objects to Birst to Good Data to Tableau. Wonderful products, all of them. And there's a place for every one of them in virtually every company but not instead of role-specific solutions alongside them. The core problem that needs to be solved, just as it is with CRM, is a collaboration and communication problem, which is solved by developing a workflow solution that addresses the daily lives of customer success people.

I mentioned CRM because it's such a great analogy for this value proposition. I'm going to expand on it a bit because everyone understands how sales works so it always makes for a good comparative. I'll use Salesforce as a proxy here for all CRM systems because I'm most familiar with it. Is Salesforce an analytics tool? For those who don't know the answer, it's “no.” Or, maybe more accurately, “NO!” Is there an analytics component to Salesforce? Absolutely. Is it being refined and advanced as we speak? Absolutely. Does anyone buy Salesforce purely to do analytics? No way. There are lots of different ways of deriving value from Salesforce, especially now that it's become an amazing platform upon which thousands of other applications have been built. But the original value proposition was what was once called SFA, or sales force automation. Automating the Sales function. Salesforce, and all CRMs, create a way for Sales teams to manage and track all aspects of their world, which is all about closing deals. In Salesforce, that comes down to four buckets (objects): (1) leads, (2) contacts, (3) accounts, and (4) opportunities. In other words, everything needed to understand and manage the sales funnel. Sales is ultimately about managing opportunities to get deals closed. This has been done since the dawn of time without a CRM system. The CRM system simply puts some structure and discipline around that process. This creates four massively valuable results for the company:

1. Predictability
2. Forecastability
3. Repeatability
4. Visibility

The results don't come without some level of pain. Ask a sales rep whose company religiously uses a CRM system. They probably spend more time than they'd like putting data into the system and then managing all of their processes there, too. But it's a necessary part of the process for the greater good of the company. Plus, if they don't do it, their VP might threaten to not pay their commissions.

These same four characteristics are needed in customer success. The only difference is that it's about existing customers, not prospects. How do these apply in the post-sales world?

• Predictability: A system that has all the data and tracks the workflow of the tasks associated with CSM role creates the ability for future results to become predictable.
• Forecastability: As with sales, customer success must forecast renewals, upsell, and churn. Only a system using the right information and applying historical results appropriately can help codify and refine accurate forecasts.
• Repeatability: Only if the workflow of the individuals is tracked (think pipeline management) can a system then be used to determine what worked and what didn't so you can repeat what worked and throw away what didn't.
• Visibility: CRM systems are especially good at providing management visibility into individual deals or company-wide pipeline and forecasts. A great CSM solution will provide the same insights for customers.

I mention visibility, which is the third of the pillars of this value proposition. The other two are collaboration and communication, which we danced around and touched on but didn't address explicitly. Simply put, collaboration and communication go hand-in-hand with workflow. A complete workflow engine will include a communication function that allows for the free flow of information and commentary designed to keep all parties in sync. An example of this is Salesforce's Chatter product, which enables in-product communication so that it can be captured in context and does not get buried in an individual's e-mail. CSM systems will typically take advantage of existing technology such as Chatter or Yammer but could certainly build their own, too. Proper, in-product communication is the way to keep your CEO from asking, “What's the latest on Acme?” when he's thinking about them. The aforementioned 360-degree view of the customer addresses some of that question, but specific commentary from those who have recently touched that customer will put the period at the end of the sentence. In-product communication can be done, and often is, through comment fields, but most would agree that has too many shortcomings to be a great long-term solution.

Collaboration, though similar, is distinct from communication. Collaboration is not just commentary but also a way to share, to distribute, and to cooperate on specific tasks and activities. In a CRM system, that might include a way to create and store a quote or a proposal that your boss can then edit and refine. A CSM system will need that same capability, perhaps even more so because of the need to delegate tasks and actions to others. Customer success, by its nature, will involve people outside the team in order to solve customer challenges. Sales is more self-contained. Although your CEO and other execs may get involved in specific sales deals, specific tasks are not as often delegated to someone outside of sales. It's not that this never happens; it's just less common than in customer success. CSMs are constantly in need of assistance to drive success for their customers. That could mean involving a product manager to talk about the intricacies of how a part of the product works or to talk about a future feature. It might mean involving a support rep to troubleshoot a particular issue. It could mean delegating an executive outreach up to their VP or CEO. And, of course, it will often involve temporary involvement on the part of engineering. In any case, the CSM solution must allow for the necessary sharing, delegating, and general collaboration around any given task or activity.

As teams and companies grow, collaboration and communication become more and more important. It's not so much that they surpass productivity in importance, it's that they become necessary in order to improve productivity.

Better Team Management

It's true that the primary purpose of CSM technology is to help teams manage their customers more effectively. However, it's equally true that if the solution is robust and includes workflow as described in the previous section, you'll have a system with the potential to be just as effective at helping you manage your team.

Let's again look at a CRM system as an example. CRM systems, at least when they were exclusively SFA, were designed to help manage the sales process. They provide structure and enforce discipline with regard to keeping deals in the pipeline and moving them through the pipeline. The VP of sales relies on the CRM system to tell him when to squeeze marketing for more leads (as if there's ever a day when that doesn't happen), let the CEO know where the risks are, and generally manage to his forecast. This is why CRM is so sticky; it's ultimately invaluable to both the CEO and the CFO.

Although that was the original design and intent, an ancillary value was quickly discovered. The CRM system helped manage the team. It's almost unfair to use the word helped in that sentence. The CRM system has become the primary management tool for the VP of sales. All of the activities and results that can tell the VP if an individual sales rep is on the right track, aside from just closing deals, will be found in the CRM system:

• Calls made
• Meetings completed
• Pipeline growth
• Proposals created
• Pipeline movement
• Stuck deals
• Deals/dollars closed
• Days-to-close
• Average selling price (ASP)

That information is gold if you're running a sales team. Each one of those data points tells you something really important. And, then, even more valuable is comparing those data points across all members of the team. That allows you to benchmark, to create competition, and to focus your coaching. It also allows the VP to take advantage of the specific areas of expertise of each individual rep and use their skills to upgrade everyone else on the team. Every team is made up of various strengths and weaknesses. The job of the leader is to maximize the strengths and minimize the weaknesses. His CRM system is his best friend in this process, and it will be a rare one-on-one in which it's not at the forefront of the discussion.

I know I'm belaboring the analogy between CRM and CSM, but it's so clear that a great CSM solution will accomplish many of the same successes in much the same way as a CRM system. It all revolves around the central value proposition derived from workflow. Giving a CSM a system that becomes their workspace, their to-do list, their activity tracker, their prioritization engine, and their communication and collaboration vehicle also means that everything needed to measure their effectiveness and coach them up is in that same system. The ability to track the important activities is the same as with a CRM—the activities themselves are the only variable:

• Calls made
• Meetings completed
• Actions triggered
• Actions closed (by category)
• QBRs completed
• Other milestones completed
• Renewals/upsell results
• Customer health score
• Customer satisfaction score
• E-mails sent/opened/clicked-on
• Account plans created/updated

For most of customer success's short history, CSM one-on-ones have been pretty fluffy. Questions such as “Are all your customers happy?” “Any customers at risk?” “How can I help?” were predominant. But a great CSM solution changes all that and makes life significantly better for both the individual CSM and the VP. After all, great employees want clear and measurable targets for which they are held accountable and for which they are rewarded when they meet and exceed them. And great leaders want the same for themselves and for their teams so they can justify and reward the proper behavior. And, like the sales VP, they want to identify the strengths and weaknesses across their team that they can then manage accordingly. There's much more on customer success becoming metrics focused in Chapter 13, Customer Success Law 9, “Drive Customer Success through Hard Metrics.”

Another aspect of managing a team effectively is to clearly understand the capacity of the team and to staff for maximum effectiveness within the expense constraints of the company. The CSM solution will be an invaluable part of that process. As we've mentioned previously, customer success is a revenue-driving organization just like sales. That means that the justification for additional headcount comes from revenue or bookings. “Everyone on the team is really busy” will no longer work with your CEO. You'll need to clearly articulate the bottom line value derived from each additional CSM, and only the insights provided by a CSM solution that is helping you track all of the measurables that matter can assist you in that task.

Those are the key value propositions that CSM technology can bring to a team, but that list is far from exhaustive. We didn't mention reporting, dashboards, surveys, data integration, visualization, e-mail functionality, cohort analysis, account planning, CRM integration, external data tracking, and many other functions that are necessary parts of a full-function solution. And remember, this journey is only three to four years along. What's available today is truly just the tip of the iceberg.

There's one last benefit that comes from a great customer success technology solution. Because customer success is such a young organization, one struggle has been to truly have a seat at the executive table. Most of those seats exist because of the traditional value they've provided over the years. They belong to VPs of sales, CMOs, CFOs, CTOs, VPs of engineering, COOs, VPs of operations, CIOs, and so forth. As we discussed at length in the previous chapter, the power shift happening at many companies and the rise of the CCO is changing this. But technology that enables the customer success leader to quantify his value and present objective results to that end is a valuable participant in that endeavor. It's not a new idea. Virtually every other major organization has a domain-specific application, which helps them manage their business and their teams, quantify their results, and justify their additional needs. Customer success is simply the latest entry into that game. The bottom line is that major organizations require empowered leaders, and empowered leaders need technology assistance. That's happening rapidly in the new world of customer success.