Thursday, March 5, 2015

Five keys to making the Customer Success function work

Getty Images

Over the course of the last two years I have had the opportunity to define and scale the Customer Success function at HireVue. Starting with a team of seven generalists (they did a little bit of everything including implementations, training, closing sales orders, support, and time permitting, account management) we grew the team to twenty-one, including true Professional Services, led by the fantastic Kara Blumberg, and best-in-class Customer Success Management. But more than just growing the team, we created a customer success-centric organization that drove significant results-- 200% increase in adoption two years in a row, industry leading Net Promoter Scores from our customers, 20% increase in enterprise logo retention and 154% average revenue retention. Through these experiences building and scaling the Customer Success function at HireVue, as well as earlier work with Mark Bissell building the SuccessFactors Customer Value function and growing that team from three to thirty, I have identified five keys to making the Customer Success function work.

Define the mission of the Customer Success team  
The Customer Success function means different things to different people. Some organizations view Customer Success as the Inside Sales Team, a group charged with selling into the customer base. Other organizations view Customer Success as a Support organization dealing with tactical and technical customer challenges. My personal view is that Customer Success should be a standalone function, partnered closely with Professional Services and Support. It is the foundation of a successful customer lifecyle. It is also my view that Customer Success should not directly own customer revenue expansion. It is difficult to be a trusted advisor driving successful adoption and net promoter scores while also negotiating financial transactions with your sponsor.

Hire people who are passionate about driving Customer Success 
When I hired Customer Success Managers at SuccessFactors and HireVue I looked for five key characteristics. 

A passion for customer success  And a willingness to do whatever it takes to earn it. If a candidate can’t tell a compelling story about how they went above and beyond to satisfy a customer’s needs they don’t have what it takes. 

Excellent communication skills  The ability to tell a value story in a way that resonates with different audiences.

Executive presence  The ability to engage C-level executives with confidence and poise.

Account Management experience  The ability to keep all the plates spinning while moving multiple customers in the right direction.

Subject matter expertise  Whether in HR or Recruiting, possessing a strong foundation in our industry provides them with a fast start to engaging customers as a trusted advisor.

Define the measures of success 
At HireVue, my first step in driving our results was defining clear measures of success with the team. Not only did we define the measures of success but we provided the tools for each Customer Success Manager to measure their progress against those goals. The objectives naturally evolved over time, but by establishing transparent and consistent quarterly objectives each Customer Success Manager had a clear understanding of what they were being held accountable for and how to measure their own progress against those goals. Our measures of success included:

Product Adoption  We used this as a proxy for whether the customer was getting value from our partnership

Net Promoter Score  We measured and incentivized the team both on User NPS (our customers and sponsors) and Candidate NPS (the customers of our customers)

Logo Retention  This is a fundamental measure of the health of a SaaS organization

Revenue Retention  Customer Success Managers have an MBO against customer growth, and while they do not own the upsell/expansion or the transaction sales, they own setting up the customer and the sales rep to be successful

Maintain a customer first focus 
Whether you are building and scaling a customer success team in a large organization like SuccessFactors (several thousand people at the time we were scaling the team) or building a foundation in a small fast growing company like HireVue (I was employee 101), it is critical to maintain a focus on the customer amidst the distractions of defining internal processes, establishing programs, rapid product evolution, and pivots, not to mention satisfying marketing requests along the way. For Customer Success to be effective each member of the team, as well as the leadership team, needs to prioritize doing the right thing for the customer first, and figuring out how to scale, define the program and build and scale the team second.

Measure success 
As noted, Customer Success means different things to different people and measuring and benchmarking success can be difficult. Early in my role at HireVue we established clear measures of success, which is what we based the team’s MBOs on, to ensure that we could articulate the contribution of the team to leadership and the board. Beyond these simple measures we evolved the team, with the fantastic work of Dave Andreasen, to develop a deeper understanding of our customers and what success looked like. This work took the form of weekly adoption reporting, net promoter score analysis, renewals reporting, customer health analysis and index and other deep dives into what was happening with the business. 

Building and scaling a Customer Success team is a necessary step in the evolution of any successful SaaS company. The basic building blocks are relatively simple but require focus, wise hiring, consistent accountability, and a clear strategy to ensure that customers are successful.