June 23, 2024 | Read Online
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Welcome to your Sunday morning edition of the GrowthCurve.io newsletter. We exist to help SaaS executives level up.
It’s frustrating when the CEO asks you to take accountability for revenue without the necessary tools to be successful. Customer Success leaders ought to have technology designed from the ground up to fit their needs.
72% of revenue comes from existing customers, yet CRM tools weren't built for customer-led growth (CLG). To help you navigate this shift, we created a comprehensive checklist to evaluate CLG platforms.
Customer Success is growing up.
Last week’s topic garnered a lot of engagement on LinkedIn, and my friend Ed Powers made an interesting comparison of customer success to the evolution of manufacturing quality:
Astute observation by Ed.
Ed's comment prompted me to do a little research on the history of quality assurance in manufacturing to see if its evolution shared similarities to customer success. That research led me to one of the longest articles I’ve ever read on the Internet (only part one of a two-part series 🤯😆).
My research confirmed what Ed described.
As the world moved from a craftsman model of production (one product, one builder) to manufacturing and mass production, the concept of quality assurance was an afterthought.
From conception to design to production, the product development process resembled an assembly line. As one group completed their work they tossed the product over the proverbial wall to the next functional team who was responsible for it.
Toward the end of that line was the inspection department who, in the early days, acted like a filtering mechanism.
An excerpt from that looooong article:
In many companies, the assignment of responsibility for quality took a curious turn. If defective goods did get out to clients, it was common for the upper managers to ask the chief inspector, “Why did you let this get out?” It was less common to ask the production manager, “Why did you make it this way?” In due course, there evolved a widely held belief that quality was the responsibility of the inspection department.
This felt eerily similar to the questions that so many customer success teams face. How many times has a board or executive team asked the customer success leader why retention is so low or why a key customer cancelled?
In SaaS, we have this widely held belief that customer success is the responsibility of the customer success department (I mean…. it’s fair given the name).
But shouldn’t we ask some additional questions? Like, ”Why did we sell to this customer in the first place?” Or… “Why didn’t the product continue to meet this customer’s needs after launch?”
But I digress. Let’s go back to quality for a moment...
After WWII several macro factors converged which changed how companies thought about quality:
It was clear that the public demanded quality and rewarded the companies that offered it (e.g. Toyota). For those who cut corners and prioritized short term profits over product quality, litigation and government regulation became a backstop.
Given these pressures, quality soon became something that everyone in the company cared about. Companies with the highest reputation for quality shared many characteristics:
This focus helped the best companies reduce costs, increase productivity, shorten product development cycles, and improve customer service.
The arc of progress in manufacturing quality provides an instructive roadmap for where we go from here with customer success.
Rather than growing our customer success teams, my belief is that we need to fully adapt the culture of the company toward customer success. Much like manufacturers did with quality.
It starts with product development and marketing. Defining the problems you solve. Who you solve them for. And then designing and building purposeful solutions to addresses those specific use cases.
Then the product must be instrumented to analyze and benchmark customer results. Usage statistics don't always map one-to-one with customer results and value. But surely there are data points which are valid proxies.
Zendesk always did this so well. They sent me, my managers, and admins a monthly email summarizing our activity and comparing us to 15 similar Zendesk customers. I never had a named CSM as a Zendesk customer, but I also never needed one.
When we needed insights we went to the product. When we needed product “how-tos” we went to the knowledge base. When we needed strategic guidance, we went to their community or other peers we knew who were also running Zendesk.
Then there's customer support, a critical component of customer success. Many view support as a cost center, but it’s better to look at support as a scalable, integrated component of your customer success model. Truth be told, even providing adequate support for all types of customer inquiries, like how-tos, strategy questions, bugs, etc. is a differentiator these days.[1]
When a customer needs help, it’s a moment of truth for them. According to Matt Dixon in The Effortless Experience, most software users have tried everything before they contact your support team. They’re at the end of their rope. Your support team is their last resort.
Will you rise to the occasion or let the customer down? It only takes one mediocre experience to taint an entire relationship. And negative word of mouth travels fast.
Support is aided by offering proactive resources and guidance. Create a knowledge base of quick-start configuration guides, how-to’s, product release blog posts, common practices, etc. Treat this documentation with the same care and craftsmanship as your product and marketing content.
I'm biased, but I think Churnkey’s docs site is beautiful. And it provides proactive answers to questions we know that our customers will have.
We grow it a little each month as we encounter new customer scenarios and ship new product.
For extra credit, you can launch a peer-to-peer community around your product. Customers are often happy to jump in and help a fellow practitioner when they run into issues with your product.
As COO in an early stage startup, I am often faced with designing and establishing new processes for sales, marketing, and customer success. I consult a private RevOps community whenever a strategic questions come up. These folks understand both the products I'm using and what I’m trying to achieve. Their insights routinely prevent me from painting myself into a corner.
When communities like these spring up around your product, embrace them. If you can help create and nurture them for your customers, even better.
Customer onboarding might be one of the most important customer success capabilities. The first days of a customer relationship are critical. If your customer fails to launch within the initial onboarding period, the chance of reactivating them later diminishes significantly.
The best companies treat onboarding as a specialized customer success role. They put people on the onboarding team who are organized and can manage a pipeline of customers moving through a similar process and encountering similar problems along the way.
Nine times out of ten, a CSM that handles onboarding and ongoing account management is going to drop the ball on one or the other of these tasks across their assigned accounts. Specialize onboarding as early as you can afford to.
Customer success isn’t a department and it isn’t rocket science. It’s a set of organizational disciplines and capabilities aimed at proactively guiding our customers toward the outcomes they hired us to provide. Those capabilities come from every corner of the organization, not just one team called "customer success."
The evolution of quality as an organizational capability took nearly a century. Let’s hope customer success evolves faster.
🤘
[1] versus support teams that only handle product bugs, delegating virtually all other inquiries to the customer success team. Call them whatever you want but all these inquiries should be tracked through a standard CRM/case management system like Zendesk, Service Cloud, or Pylon.
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