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Evolving Enterprise Recap: Scaling Customer Success

April 22, 2022

A high-functioning customer success organization is critical to long-term revenue growth. As companies scale, growth comes from managing relationships with customers, adapting products to meet their needs, and helping them evolve through renewals and upsell. We recently sat down with two of the best minds in customer success Emmanuelle Skala, SVP of Customer Success at publicly-traded restaurant software company Toast, and Shwetha Shankar, VP of Customer Success at fast-growing, low-code automation company Tray.io, to get their insights into how to structure the function. Check out some top insights from the masterclass below or watch the replay here.

What are some key strategies for building a great customer success function?

  • Get out of firefighting mode as soon as possible. While early CS teams will need to put out a lot of fires, a mature CS function is proactive rather than reactive - always finding new ways to retain and upsell customers by supporting them, gathering feedback, and providing education.
  • Don’t skimp on hiring, because customer success is absolutely critical for moving your company into the next stages of growth. Out of a total headcount of 300 people, 75 are on the customer success team at Tray.io.
  • The onboarding team within the CS function should be experts in the role. A great onboarding experience leads to better retention down the road, and can really help get buy-in from all the new end-users of your product, who might initially be less-than-enthused about having to learn a new skill.

What should you measure to make sure customer success is working?

  • There are many metrics and no one right answer, but some important ones to measure are gross revenue retention (GRR), annual recurring revenue (ARR), and net dollar retention (NDR). Those are all lagging indicators and it’s also important to measure leading indicators to predict outcomes and advocate for expansion of the CS team. These include product adoption, usage metrics and NPS scores.
  • It doesn’t really matter which metrics you measure, but you must pick a few and track them comprehensively and accurately, and always be able to tie the results back to root causes in order to effect change.
  • There are four buckets of metrics: customer sentiment (NPS, CSAT); revenue metrics (GRR, NDR, churn, upsell); product usage metrics (usage, adoption, engagement); and operational (service-level agreements, or SLAs, time to respond or resolve issues, time to go live during onboarding). 

What are some ways to future-proof a customer success function?

  • At its core, customer success is about making customers happy. The best CS teams include onboarding, account management, and support, but also people focused on education and customer experience. Make sure to provide great content from onboarding all the way through the customer lifecycle to help end-users continually learn new ways to use your product.
  • An early CS team should be closely integrated with engineering so they can just walk over and ask “how does this work?” and “can we fix this or that?” But once the CS function is up and running and has moved into proactive mode, it’s important to hire “boots on the ground” in offices in different geographies. Train these CS team members on common customer problems-and-fixes, so they won’t be reliant on the engineering team to resolve issues.
  • Don’t just look at which customers are successful, but find ones who don’t really use the product effectively. A great CS team should be able to figure out how much of the issue can be solved by CS intervention, how much is a product problem, and how much is coming from the customer side.

How should customer success work with sales?

  • CS can serve a very important role: identifying the right type of customers. Even the best sales models can’t predict exactly what type of customer will be successful with the product, but that is something CS knows intimately. 
  • CS and sales should work together to decide who owns what for expansion. There is no right answer, but perhaps account execs handle sales, account managers own expansion, and CS is responsible for GRR and retention. 
  • Decide who should own upsell based on a few predefined metrics. For example, for a brand new buyer within a company, such as HR instead of marketing, then sales should take it. If it’s the same buyer, then CS should take it. If annual contract value (ACV) is higher for the new deal, then sales could take it, if it’s about the same or lower, CS could. 

How should customer success work with the product team?

  • The relationship between CS and product is absolutely critical. CS ensures that customers are heard by the product team, which in turn owns the high-level responsibility of creating software that is adopted, used, and loved by customers. CS and product should work together to define adoption and usage metrics, as well as to create educational content that addresses real customer pain points.
  • CS should bring voice-of-the-customer (VOC) feedback to the product team in a systemized way—not just a long list of complaints. One way to do this is to hire a  support engineering team that connects right into the R&D team to provide VOC feedback to engineering. Then, have a scrum team in R&D that is focused entirely on existing customers and just on addressing feature requests for fixes.

What are some mistakes to avoid?

  • When companies buy a product, they tell sales teams why they want to use it and what problem they’re hoping to fix. But how many customer success teams follow up with buyers after they’ve implemented the product to see if they got the value they expected? Customers don’t care about NDR, they care about getting value out of the product they purchased, and CS should ensure they do.
  • Don’t lump every customer problem onto the CS team. The reality is churn is not a CS problem, it’s usually a GTM, product, or sales problem. Everyone in the company is responsible for churn to some degree, and everyone should work together to ensure better customer outcomes.