According to a 2018 study, over 22% of organizations spend more than $2,500 per person on training for their Sales team (menemshagroup.com). This investment is nearly 20% more than the average training and development investment made on other parts of the organization. (HBR)
It makes sense, you want to fully equip members of your company that are driving growth. But what doesn’t make sense is that Sales is seen as the sole growth driver for your business.
The Impact Driving the Need for Training
When we look at Customer Success, it can actually have a much more substantial impact on the growth of your business than the team focused on new sales. Let’s look at the diagram below:
Let’s say we have a company that is $1M in ARR. Let’s say your Sales team is expected to grow your revenue by 75% in the first two years, and then levels out to a general growth rate of 30%. For that same company, you are expecting a 10% churn rate, and 5% growth from your existing customers each year.
In this scenario, by year 2, the influence your Customer Success team has over company ARR is significantly larger than the impact Sales has. And the impact gap becomes larger every year.
So what does this mean? It doesn’t mean that Sales isn’t important. It means that Customer Success, whether they manage renewals and expansions or not, has an immense ability to impact your company’s growth through retaining and growing your customers. It also means that if you’re going to grow your business productively, you should invest more in the area of your company that is influencing the most growth: Customer Success.
The Skill Gap Driving the Need for Training
Now let’s take a look at the backgrounds of most Customer Success professionals. Customer Success is a relatively new field and individuals from different backgrounds like Support, Accounts and other Professional Services are exploring different roles in CS. Strikedeck’s recent survey report, is a study comprising responses from 5,600 CS professionals and 571 companies. According to the report, nearly 55% of CS professionals had a background in Sales or Support. A CSM’s role is a customer-facing one, and it demands great communication and listening skills, along with a sound understanding of the product and the industry domain.
Based on their backgrounds, the majority of your CS professionals do not have past experience in the role. Also, the role of Customer Success can vary significantly from company to company because of size, maturity, and product of an organization. This means that even when your CS team members come from having a similar title in the past, they likely had different expectations.
Now add to this that very few Customer Success professionals come from a Sales background. This is not a bad thing, but it means that they likely do not have experience with some activities that are critical to influencing customers and driving growth.
These two factors, the tenure in role and the lack of account growth experience, mean that Customer Success professionals likely need to be trained to take your customers through the right journey and to guide them to growth.
The training should not be one time training initiative but there should be a regular cadence of training that instills great practices into your team through real life application. Having an effective training program in place ensures that a company stays true to its promise of improving people, processes, and systems. Regular training not only helps in evaluating a CSM’s performance but also identifies gaps in existing skill sets. Managers can better manage and track progress based on tangible and realistic goals.
The topics below should be focused on when training your CSMs:
- Account planning and strategy
- Creating and messaging for customer ROI
- Negotiation skills
- Influencing others and change management
- Relationship building and buyer cohesion
Join us next week for Part 2, where we go into the weeds of the various types of training your CS team requires, based on the growth stage your company is at.
Sarah Doughty is a Customer Success Champion and Founder at Crescendo-Labs. Her specialties include: Customer Journey Mapping, Customer Health, Getting to Proactive, Customer ROI, Building Buyer Cohesion Within Clients, Customer Relationship Mapping, Influencing Others, Determining Client Potential, Adoption Mapping, Discovery Skills, Customer Onboarding