Conflict #1 – The Role of Customer Success
Customer Success started because technology vendors were losing subscription revenue from churn. Subscription pricing moved the power back to customers. If customers didn’t feel they’d had success, they could cancel. Or stagnate – keep what they had but not grow. Both cost the vendor money. So, customer success was born. The initial task – stop the bleeding.
Inside technology vendors, Customer Success was an overhead. It was a necessary evil. Its job was to fix the problem of customer churn. The vendor executives wanted this task done at the minimum cost possible. So, they kept budgets low.
Customer Success teams soon realized that churn wasn’t a problem, it was a symptom. A deeper malaise underpinned the decision of customers to cancel, reduce or stagnate their usage. The customers weren’t achieving the business outcome they needed.
And this led to the first conflict – how did CS convince the rest of the vendor’s executives that CS had to focus on business outcomes? They couldn’t reduce churn by focusing on reducing churn. Reduced churn would only occur if the customer achieved the business outcome they needed to achieve. And that’s a bigger task. But lots of vendor executives outside CS haven’t made that mental leap. And they push back on Customer Success leaders.
Conflict #2 – Revenue Generator vs Cost Centre
As the focus shifted from reducing churn to enabling business outcomes, a new conflict emerged. Was Customer Success generating revenue? The Sales team claimed credit for all sales deals. That’s how they’re measured and remunerated. So, it’s not surprising they wanted credit. But CS knew they played a major role. They’d helped enable the needed business outcome. And, as a result, the customer invested more with the vendor. But Sales got the credit.
And Customer Success continued to be a cost center. With budgets kept to a minimum. But Customer Success needed more budget to enable outcomes. And they had to go, cap in hand to those who set the budgets, and beg for more money to do what the customer needed.
And that begging bowl approach irks CS leaders who can see how much impact they’re having on revenue.
Conflict #3 – Getting the Right Skills for Customer Success
Initially, the role of Customer Success was to get the customer using the product. The theory was that if the customer used the product, they wouldn’t churn. It wasn’t seen as complex. So, junior staff often got the task.
But Customer Success leaders soon realized that churn could occur even if the customer was using the product. The churn occurred because the customer hadn’t achieved the business outcome they needed. So, Customer Success needed staff who could help the customer achieve the business outcome needed. These new staff needed to be more senior. And so they are more expensive. But Customer Success has always had a battle for budget. So, how does CS get the skills it needs?
Conflict #4 – Customer Success isn’t a Department, it’s a Culture
Customer Success leaders soon realized CS departments couldn’t enable business outcomes by themselves. CS departments often engage after the onboarding or implementation has finished. They are supposed to maximise usage. In the hope that this this will minimize churn and increase the chance for upsell and cross-sell.
But the die is cast by this stage. Marketing and Sales have created expectations on what the product will do. And the customer has interpreted this as delivering business outcomes. But onboarding/ implementation has focused on getting the products live. They haven’t ensured the business outcome has occurred. And now CS must mop up. They must somehow enable the business outcome. With a team whose budget has been limited.
CS leaders know that every customer-facing department has a role to play. And that business outcomes won’t occur without everyone playing a role.
But it’s a struggle to convince the rest of the organization they must focus on customer success.