Customer success teams have long owned important metrics tied to customer satisfaction and happiness. CSAT and NPS remain important leading indicators for retention and recurring revenue. However, in a world where companies are looking to do more with less, they are increasingly selective about where they invest their time and money. Even if they’re happy with a product or partnership, they’re likely to cancel a subscription or contract if it doesn't deliver the most effective and utilized results.
It’s all coming down to value.
This shift also comes as many companies are coming up for air following the turbulence of the past few years. Profitability and growth are back in the discussion, and every inch of their tech stack must support these new goals.
As Companies Look To Enter a New Phase of Growth, the Role of a CS Team Takes on a Whole New Meaning
In a recent Hunt Club market study, which surveyed companies ranging from early-stage startups to mature enterprises, product/engineering teams ranked as the top department expected to undergo the most significant changes in budget, structure, and headcount over the next year.
This points to what we’re seeing in the market: Companies are looking to launch or innovate their product and service offerings to drive ongoing value. Supporting and driving that value at the center of it all, are Customer Success teams.
To better understand the nuances of what companies should expect and look for in building out Customer Success organizations today, we talked with Lawrence Waldman, a passionate leader with over 20 years of experience building, growing, and leading Customer Success Management teams in the SaaS, information technology, and financial services industries. He has a proven track record of transforming large, multinational teams focused on driving sales and retention and has witnessed firsthand the dynamic and evolving role of Customer Success roles. Waldman shares:
“A happy customer has always been great, but happy customers cancel if they can’t articulate and quantify the value they are receiving. Focusing on driving value and revenue is better. Customer Success teams have to be the first to drive this shift in thinking.”- Lawrence Waldman, Transformative Customer Success Executive and GTM Advisor |
- WHO you need and the ideal profile for a strong Customer Success leader today.
- HOW to set up an effective org structure that gives CS teams access to the cross-functional information they need.
- WHAT to measure them against in today’s revenue-driven business landscape.
Why Your CS Teams Might Not Be Set Up For Success — And 3 Ways To Turn It Around
“Success” in “Customer Success” used to be abstract. CS teams were focused on things like satisfaction. Happiness. Likeliness to recommend to a friend or colleague. If your CS teams are still focused on these alone, they may be missing the mark.
Waldman shares three key strategies to maximize your CS team’s impact and their ability to meet expectations around both retention and revenue.
1. Understand the right profile for a modern CS leader
Candidate profiles must now highlight a leader’s ability to drive revenue growth while maintaining customer satisfaction. The right profile for a modern CS leader is a composite of the following core qualities:
2. Set up an effective org structure that offers them the cross-functional access and information they need
Customer Success leaders are now at the nexus of the three key focuses:
- The service/product
- The customer
- How this translate into a revenue stream
Operating at the epicenter of these areas naturally brings about cross-functional challenges and potential miscommunication between teams. As a result, many organizations are grappling with how to best structure their CS teams with clear reporting lines and defined roles. The challenge becomes even greater as CS teams evolve into revenue-driving functions.
So who should CS teams report to? Which teams should they collaborate with to maximize customer value?
The way CS teams are headed, it’s less about establishing a traditional org and reporting structure, and more about finding effective cross-functional alignment with GTM teams.
“Where should all of this report to? I've led teams where we reported into a CRO, the CEO, and teams where we reported into what’s now called a Chief Customer Officer. It really doesn’t matter.What matters most is having alignment with go-to-market leaders. These are the people you’re talking to most. As long as there’s alignment with them, it doesn't matter what department they’re in, or who reports to whom. The most effective org structure I’ve seen is anywhere there’s alignment with GTM.”- Lawrence Waldman |
So who should CS teams report to? Which teams should they collaborate with to maximize customer value?
The way CS teams are headed, it’s less about establishing a traditional org and reporting structure, and more about finding effective cross-functional alignment with GTM teams.
Alignment Over Structure, As Told By Waldman
The Problem“We had a really challenging book of business with multiple products that took a long time to integrate. Because of this, we had a lot of churn. This also made it incredibly difficult for the sales team to sell. Our teams had different views on how to solve this. The CS team's view was: We need to focus on what we can control to fix churn. The sales team's view was: We just need to sell as much as possible to compensate. The product team's view was: How can we know how to structure the roadmap? Every single issue can’t be ‘the most important thing to work on!’ In the end, we knew we needed to make the best out of a challenging situation. We weren't in the same reporting structure at all; we just both happened to deal with the same book of business. We needed to start partnering together.” |
The Solution“We started having joint team meetings. We did joint forecasting of both growth and risk areas. And we started taking all of this unstructured anecdotal data, analyzing and prepping it, and involving the product team so we can all clearly outline our revenue-driving and high-risk priorities. This partnership was organic between all three teams.” |
The Results“We weren't in the same structure. We didn’t report to the same people, but the challenge required us to make a new structure based on alignment. We were able to focus our product teams on the areas that had the largest impact on revenue: either through growth and expansion or by mitigating and minimizing churn. It made all our teams more successful.” |
3. CSAT or ARR? Revisit and revise metrics for your CS team
Previously, Customer Success leaders had a clear end goal. “We were looking to make customers happy, because if a customer's happy, they're gonna stay with us,” Waldman shares. “That's great. But, how do you translate that when you're talking to a board or to your CEO, or to your CRO? We have to reframe the conversation.”
Customer Success Metrics Then & Now
Classic Customer Success Metrics Before |
Nuanced Customer Success Metrics Now |
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It’s not that the traditional metrics of successful CS teams are disappearing; rather, they’ve evolved and must now additionally reflect the team’s direct impact on revenue and business growth.
“Customer Success leaders and teams need to realize that when the CEO talks about growth and retention, he's talking about the work that the CS team does on a daily, weekly, monthly basis. It’s a matter of reconnecting the work CS teams do, to what they’re measured against, to how we even inspire them to keep driving value,” says Waldman.
What teams are now measured against will also depend on several key factors such as:
- The stage of your organization. “For example, when you’re a series A or B is vastly different from when you're a public company because you're in a different stage of your growth and there’s a massive sliding scale as to what you can and cannot do,” shares Waldman.
- The complexity of your offering. “As your product suite expands or becomes more specialized, the more nuanced metrics become to capture success accurately.”
- How aligned your Sales, Marketing, Product, and GTM teams are. “When these teams are aligned, your Customer Success team's metrics will reflect true customer value and satisfaction, as they are working within a cohesive strategy.”
“The last and probably, by far the hardest thing to measure is how aligned your teams are internally. Because that in and of itself also has a huge effect on what is the right measure for success.”- Lawrence Waldman |
Ultimately, success in this new landscape requires a holistic approach where Customer Success efforts are directly linked to driving growth. As the business world charts a new course toward prosperity, CS teams become a strategic imperative, a linchpin in the machinery of growth.
Customer Success: The Road Behind & The Road Ahead
The role of Customer Success has transformed from merely ensuring customers are happy to actively contributing to business growth by enhancing product adoption, owning their own book of business, and, ultimately, adding the value customers are looking for in every business engagement.
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What got you here, may not be the same things that get you where you need to go next. Your Customer Success team might have gotten your company 10s across the board in satisfaction, but to reach the next level of growth, they need to adapt along with the market they are serving.
This means shifting the profile of a CS leader, the way your teams may be organized, and the very metrics they’re measured against. Change is rarely easy, but as we’ve seen, it’s necessary to keep pace with the way the market is going — all toward the bottom line. Customer Success teams are at the forefront of this shift.
Lawrence Out Of Office🦸♂️ If I could have one superpower it would be: The ability to give myself (and family/friends) the greatest, most limited, and most finite commodity in the world: More Time. 📙 The one book I always recommend to other leaders: I love the discipline and actionability of James Clear’s Atomic Habits, and although OKRs get abused and misused all the time, the underlying idea of John Doerr’s Measure What Matters is substantial and necessary. ⛰️ 🧗♂️ The next place on my travel wishlist: My son and I are in the very beginning stages of trying to plan out a trip to summit Mount Kilimanjaro. It may not happen, but we are going to try! 🎤 My go-to karaoke song: "Just Like Heaven” by The Cure may be one of the greatest love songs ever written, and given how dark Robert Smith’s songs were in the 70s and early 80s, it is astonishing. 📱 The most-used app on my phone: Probably either Strava and/or Apple Health. I am in love with fitness, exercise, and well-being, and I love being able to combine that with data, metrics, and sharing and supporting with friends! |
Learn How Lawrence Waldman Can Help Your Org Define the Right Customer Success Leader Profile
Lawrence Waldman is a Customer Success leader in the Hunt Club ExpertAccess Program, which puts first-string operators in your back pocket for all things talent so you can hire better, smarter, and faster.
