As businesses scale and find customer challenges becoming more complex, the instinct is often to add a customer success function. While it is the correct one, it is a move that can be full of traps as we learn from Rav Dhaliwal’s latest piece on Customer Success [The ‘Everything Department‘ by Rav Dhaliwal].
In short, if the Customer Success function has arisen from a reaction to issues, it risks ending up becoming “the everything department” – a place that owns responsibilities that either do not fit (or are not wanted) elsewhere, when it’s real purpose should be to create the conditions for new revenue by proactively delivering faster business value, thus maximizing the business’ ability to keep and grow revenue from customers forever.Rav Dhaliwal
Recently, I was able to sit down (digitally of course) with Rav and pick his brain on a few follow on questions that his article brought to mind.
- Are there any specific flags between the milestones of finding your product market fit and building your go to market engine that normally communicate a business is ready for different levels of Customer Success investment?
- Rav: The main flags that I’d recommend looking out for are when deployments or onboarding activities start to take longer or are becoming more challenging. This is normally an indication that you’re dealing with larger and/or more complex customers that need additional focused resources and time to help them see value quickly.
- How does hiring come into play as one is grappling with an increased pressure to create Customer Success function but wants desperately to avoid an “everything department”?
- Rav: Being able to clearly and concisely articulate the mission and measures of your team allows you to focus on hiring the appropriate skill set and experience that will help your customers see value quickly from your product or solution. Both of these reinforce each other in a way that helps you avoid becoming an “everything department”. For example, if your mission and measures are “to bring digital change management skills to customers in order to drive net revenue retention”, then you can be laser focused on hiring for those skills and avoid owning or inheriting anything that isn’t related to digital change management.
- Leadership and organizational alignment becomes really important when you start talking about defining the Customer Success function around the 6 principles you lay out. Is there an organizational approach for revenue management that often better aligns itself with these ideas?
- Rav: Too often the focus is on org chart alignment and reporting lines, but I think an approach that works better is to focus on aligning leaders around metrics that drive long term customer value. There’s nothing stopping a VP of Sales having a portion of their target be on Net Revenue Retention and conversely a VP of Success having a portion of their target on ACV. Whilst they may not be in the same part of the org chart, this should generate a strong incentive to work together to make customer’s successful in the long term.
- You make a great point about the need to arm Customer Success with good data, however many early stage CS teams are attempting to be as scrappy as possible for as long as possible before investing in a Data Scientist or various CS software…any advice to those teams on how to evaluate those investments?
- Rav: My main advice in those early stages would be to work closely with your product leaders to ensure they are factoring in usage telemetry into anything they are building. In the haste of shipping new updates or features, usage telemetry is often overlooked but it’s vital for CS to have visibility on things like usage frequency and feature consumption patterns so they can not only engage customers proactively before there are issues, but they can also build targeted engagements and programs that deliver material value to both the customer and their own company.