Customer Success is Eating the World: 5 Themes

By Aarthi Rayapura June 24, 2015

Last week, I had the pleasure of being a fly on the wall of recently acquired Frontleaf’s Customer Success Radio podcast hosted by Rachel England and Tom Krackeler with special guest, Nick Mehta, CEO of Gainsight.

You can access the podcast, Customer Success is Eating the World, immediately below.

Tune in to hear Nick’s take on what it takes to build a customer success culture, a CEO’s do’s and don’ts when it comes to empowering their customer success teams, the prevalence of this org broadening across industries, and of course his allegiance to the Pittsburgh Steelers.

But in the meantime I’d like to highlight 5 themes Nick sees as big trends for 2015.

Theme 1: The Importance of Segmentation

“Not every customer needs or wants the same customer success approach and not every business model merits the same customer success approach.” – Nick Mehta

Customer success is not the same thing when you have a million dollar customer relationship versus a thousand dollar customer relationship. In fact, Nick references a popular slide that Gainsight uses often — a pyramid where you have your large number of small customers at the bottom and your small number of large customers at the top. While this appears to be just a triangle with a line through it, this image allows companies to take the burden off their shoulders that they need to leverage all the same  customer success strategies possible for every customers.

But in reality not every customer needs or wants the same customer success approach. Nor does every business model merit the same customer success approach. This trend has given people permission to create different best practices for different types of customers.

Theme 2: The marketing approach to customer success

“Don’t wait for your marketing team to create a customer marketing role.” – Nick Mehta

Nick believes that the innovative customer success teams are ones that are applying a more marketing-like approach to their smaller customers. Customer success teams should not be tied to purely one-to-one activities but leverage more “one-to-many” activities — a series of automated actions with the objective to move a cohort of customers through a phase of your customer lifecycle versus a series of individual high-touch and manual customer actions.

This one-to-many concept is actually driving customer success teams to have a function on their team that doesn’t own individual customers but owns the one-to-many engagement strategies. Similar to a marketing nurture. However, marketing teams are often focused on new business so the trend is customer success teams creating roles that leverage a marketing approach but solely focused on applying a one-to-many approach to their customer base.

Theme 3: Customer success operations

“In our recent Customer Success Index we found that 40% of survey respondents of already had a customer ops person on their team.” – Nick Mehta

Given the newness of this organization we call Customer Success, many companies launch these teams as an offshoot begging, borrowing and stealing from the sales ops team to help them with things like analytics, reporting, and processes.

Similar to marketing functions, at the end of the day, sales ops teams are going to prioritize new business. But now that customer success teams have become mainstream, Gainsight’s recent survey finds that many of these teams have their own operations person to help customer success managers be more effective.

Theme 4: CSM hires are a hot ticket

“If you only restrict yourself to people that are only CSMs you kind have to have a fist fight to have any pull.” – Nick Mehta

Nick mentioned it was clear at Gainsight’s Pulse conference this year that the entire audience was  looking for Customer Success Managers.  Understandable. This is a fairly new role. And teams are growing rapidly at companies of all sizes. But don’t just hire other Customer Success Managers because that pool is going to be quite small. It’s up to the customer success community to grow this profession by training people from different backgrounds and appreciating the value add former account managers, marketers or even recent graduates can bring to the team.

Theme 5: Connecting customer success and revenue

“The connection to revenue is much stronger than people give it credit for it.” – Nick Mehta

It’s not necessarily a new topic around understanding the customer success org’s impact on revenue. But it’s an important discussion to have in order to understand the value in investing in this function.

To say that the connection is merely revenue from renewals is too pedestrian.

Nick’s theory is spot on. He asserts we live in a much broader economy. That there’s a much lower cost to start companies than there’s ever been. The result is that there’s more competition in every single category. New competitors are continuing to disrupt the incumbents by lowering the barriers to entry and lowering the barriers to exit for customers by introducing pricing models that are less lock-in oriented often delivered via subscription. And this is giving what modern customers not only flexibility but the ability to pay for outcomes and benefits.

What that means is that customers now are paying for success, not physical goods. And it’s up to the customer success team to drive the success of their customers which inevitably drives revenue through renewals, upsells and advocacy.

Nick was truly entertaining in the most intelligent way. I hope he’ll join us again soon to continue the entertainment.

Like I said this is just a snippet of the conversation we had. To get the full effect, listen to the podcast or read the transcript on the Academy.