You lean back, whistling a sigh of satisfaction. That email that just came back with the signed agreement was your tenth customer. It’s not a lot to some people but to you, it’s a huge deal. That’s 10 different people who have agreed to pay you, month after month because you’re able to deliver them something of value that – for the time being – they’ve decided only you can deliver for them right now.
Just as you’re about to get up to tell your business partner, another email comes in. You really shouldn’t open it. You’ve been working crazy hours, treading the fine line of burn out and putting in the extra yards. It’s from customer #2, your first “legit” customer. Legit because you went through the entire sales cycle yourself, from making that initial cold call, to demoing your app to closing the deal. The subject line is just two words:
You smile. Probably should get to that testimonial page soon, you think as you click open the email. That smile fades faster than the celebration you had plans for tonight. Your eyebrows furrow, as your eyes beneath dart left and right across the screen, devouring the rest of the email. They settle at the end of the paragraph.
“Once you’ve fixed that bit of the app up, I’d be happy to try it again.”
Outside, a bus hisses and rumbles as it rises and falls over the hill. You press your lips together and sigh, this time in disappointment.
Let’s look at 3 reasons that you might want to hire your first Customer Success Manager, starting with the result of our little story up above.
- You’re Starting to See Churn
Every founder remembers their first churn. In a way it’s a good thing – you’re not able to please everyone – but in another way, it’s something that should be managed and minimised. Churn is a company-wide responsibility but for the purposes of simplicity, let’s go with the common belief that it’s the CSM’s job to minimise and stop it altogether if possible.
The CSM’s most important job is to be the custodian of the customer relationship. The currency CSMs deal with is trust. No matter if the problem is:
- usability issues,
the client should feel comfortable enough to talk to the CSM about whatever’s on their mind. Any one of those four issues above could be the reason for churn. It might be something else entirely. But a good CSM will be able to spot the signs early, reassure the customer that they’ll take ownership of it and flag it with the department responsible. They then have to clearly articulate their interpretation of the issue, backed up by supporting evidence wherever possible, so that they can get cross-functional back up.
Simple, common example: a customer experiences a bug when using your app. They might have tried to reach tech support and couldn’t get a speedy resolution. They tell the CSM. The CSM attempts to duplicate the bug. If they can’t they document the issue in a ticketing system, e.g. Jira, and escalate it to tech support. They then own the issue and the communication of it until it has been resolved.
2. Your SaaS is (getting more) complex
This point is worth mentioning if you’re new to the idea of customer success. Not every SaaS business is going to have a really straight-forward user experience (UX). In general, the simple interactions we’re aware of in apps like swiping left/right on Tinder, searching for things on Google and (endlessly) scrolling through a feed like on Instagram target a demographic which is at the consumer level.
SaaS that would benefit from having a CSM are more likely to be Business-to-Business (B2B). That means that they buy and sell with other businesses. The nature of their interactions tend to be more complicated, their Customer Experience possibly spanning multiple touchpoints and mediums. Any Software as a Service that tries to capture and condense these interactions into an app or website is bound to be more complex.
While UX Design does play its part in making the customer’s digital experience more pleasant, it is unlikely that it would entirely replace the existence of the CSM in the first place. More likely, the CSM would be responsible for closing the loop between customer and product to allow for the consistent, continuous improvement of the user experience, thereby creating more value for them, which may be in the form of time saved on specific workflows or otherwise.
3. You’re trying to grow existing accounts
I want to be careful here, since this point is heading into territory that suggests that Customer Success Managers and Account Managers (AM) are interchangeable – they’re not. In fact, they’re two separate roles. In an ideal world, CSMs shouldn’t do (too much of) the job of the AM. In the real world though, I know that this isn’t always the case. Anyway, I’m going to talk about the importance of the CSM in growing existing accounts.
It’s a commonly held belief that it’s something like 8x more expensive to gain a new customer than it is to sell to an existing one. Sticking to this belief is the difference between those rare start ups that hit unicorn status or ring the bell when they list on the stock exchange and those that start strong but ultimately fizzle out.
The CSM, being the custodian of the customer relationship, should definitely be the one the customer talks to about:
- additional projects,
- interstate expansion,
- additional licences,
In an ideal world, this is where the CSM’s involvement with growth of the account stops. The moment the customer mentions anything that have implications for revenue expansion, it becomes a conversation that the AM should own. There should be a clear handover of the client from the CSM to the AM with any details the CSM can provide which might give some context.
Again, I understand that resources don’t always allow for an AM and a CSM, but it’s worth reiterating that these are often two full-time roles in of themselves. Having a CSM do both can adversely affect the quality of customer success that the CSM delivers, which is what creates the account expansion opportunity in the first place.
If you’re wondering whether it’s time to hire your Customer Success Manager, consider the reasons above. It could be the difference between your start up stalling or taking off.