Vincent: Nimesh, thank you so much for joining me today, and I truly appreciate your time. In your opinion, what is the key factor responsible for the increasing popularity of Customer Success over the last few years?

Nimesh: Thank you for inviting me, Vincent. Glad to be here. In the subscription economy, as the company grows, the contribution of recurring revenue to the total revenue increases massively and typically reaches 70% to 95% in most cases.

Without a good customer retention rate, companies won’t be able to grow or even survive for that matter. It’s like filling a bucking that is leaking heavily, which doesn’t make sense, right?

Unless you want to do business with a customer only once, it’s quite apparent that most of your revenue with a customer happens the initial first sale. It would be best if you didn’t think of your customers as resources to be harvested (for the next up-sell or cross-sell opportunity); instead, think of them as partners looking to meet their desired goals and outcomes for your product and services.

Showing customers what they can achieve on the platform is half of the battle; the other half helps customers achieve it.

Vincent: Do you see Customer Success as a competitive differentiator for companies?

Nimesh: Absolutely. A good product is necessary, but not always enough to keep and grow the customers. In this age of empowered customers, where finding alternatives is just a touch or click away, you need to ensure that the delivered value and engagement remain healthy during the entire journey from onboarding to renewal.

It’s not uncommon for competitors to copy product features and attract your customers with similar offerings at a lower price. 

Delivering measurable outcomes consistently through a proactive and consultative approach can create insanely high defensibility. That isn’t an easy aspect to mimic competition, considering it requires a complete change of business operating principles from a customer-centricity standpoint. A business promise is useful only if it’s kept, and therefore Customer Success is truly the emerging battleground of competitive differentiation.

Vincent: At what stage should companies consider hiring for the Customer Success team?

Nimesh: If your sales team has started getting paid customers, you should consider hiring someone in the Customer Success team. I find it absurd that some companies wait for the churn rate to reach ridiculous levels before investing in Customer Success. If you’re a growth-focused organization, the genesis of something as proactive as Customer Success shouldn’t be reactive.

It takes time and effort to bring all employees on board to imbibe a Customer Success-oriented business culture. To accelerate the process, make sure your top management has bought into it first.

If your CXO’s start talking about it often, the probability of trickling down through the organization increases in a humongous way.

There is no point building a Customer Success team if you don’t have a genuine emphatic interest in your customer’s success.

Vincent: You talked about helping customers meet their desired outcome. How difficult is it for Customer Success Managers to know the customer’s desired outcomes?

Nimesh: It’s a discovery process in which you gradually uncover the facts by asking the right questions. It’s important to understand why the customer decided to invest in your product/services and how the individuals you are working with are measured in their job roles (KPIs and KRAs). The answers to these questions will help you resonate with their priorities, leading to more in-depth insights into their potential desired outcomes.

The biggest mistake CSMs make at this stage is by jumping to conclusions by telling the customer what their desired outcome should be without asking them any open-ended discovery questions. Once you have the clarity on customers’ desired outcomes, work collaboratively with them on a realistic success plan – which is iterative as your customer’s priorities and challenges may not remain the same during the whole engagement cycle.

Without knowing customer’s desired outcomes and a mutually agreed success plan, tracking, and actionizing based on your health dashboard metrics won’t be efficient. We live in a world of catchy expressions and engaging tagline, but every company’s reality is the customer’s well-being and success.

Vincent: In addition to increasing the CLTV (Customer Life Time Value) of existing customers, does Customer Success play a role in acquiring new customers and collaborating with the marketing team?

Nimesh: Yes, a significant role! If you think about it, making existing customers successful should ideally turn into your brand advocates. Their success stories in the form of podcasts, videos, blogs, testimonials, case studies, references, etc., will connect incredibly well with your prospects. I see this as an excellent intersection point for Customer Success and Marketing teams to collaborate.

It’s no secret that validation from an industry peer facing similar challenges is far more credible than a creative advertisement or email subject line you expect customers to click. The insights from existing customers are mostly (and rightly so!) the most significant asset your marketing team can have.

If you don’t have it already, include a dedicated slide on Customer Success in your sales decks and marketing collaterals – tell your prospects about the value they bring. I also recommend Customer Success leaders to track the percentage of customers who signed up because of an existing customer’s referral or influence – that’s probably the best way to measure advocacy.

There is no point in having an amazing NPS score when, in reality, your customers don’t advocate or promote your product. That’s delusional.

Vincent: Continuing on Customer Success’s collaboration with other internal teams, what are your thoughts on the interesting love-hate relationship between Customer Success & the Product team?

Nimesh: Principally, product managers understand the importance of including customer insights into the product roadmap iteration process. However, CSMs need to consider that not every product feature request from customers will align with their long-term strategy and vision.

The product team should ideally act as an evangelist of the company’s long-term vision internally – that way Customer Success team will be better equipped to set the right expectations with the customer.

If you set unrealistic expectations, and your product does not evolve in the way you suggested to your customer, it makes them feel like their feedback is useless. You need to place customers at the center of your ecosystem, realizing that you cannot move forward if your customers do not feel as if they are part of a partnership.

Things typically go wrong when the Customer Success or Product team attempts to be a control freak on everything product related. When it comes to communication, it’s external, but it’s also internal with other organization functions. It’s important to have that internal transparency, trust, and mutual respect.

CSMs should learn to convert subjective feedback into data-driven insights. Data is a common language that can enable more efficient communication between Customer Success and the Product team.

Vincent: What advice would you want to give to people who recently started their careers as CSMs? 

Nimesh: Besides building expertise in the product and being empathetic, I would strongly encourage budding CSMs to understand the industry domain their customers operate in and the nitty-gritty around it. Otherwise, they will struggle to be seen as trusted advisors by their customers. 

There is a reason your point of contact has never approached you for a strategy discussion or allowed you to meet/address their leadership team—that’s because they don’t see you as sufficiently strategic. They aren’t confident if you will make a tremendous insightful conversation with a broader high-level perspective.

If your customer reaches out to you only when they need a usage report or query on some product feature – you know you need to up your game.

Vincent: That’s excellent advice. What is your favorite Customer Success quote? 

Nimesh: I love many quotes, but these two by Richard Branson and Jeff Bezos resonate well with me. Richard said, “The key is to set realistic customer expectations, and then not to just meet them, but to exceed them – preferably in unexpected and helpful ways.” 

Jeff said, “We see our customers as guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”

Vincent: Thank you for all the insightful answers, Nimesh. I learned so much during this discussion, and indeed, this will be useful for all the readers. 

Nimesh: It has been a pleasure talking to you, Vincent. Thank you again!

This article was originally published here

Vincent Manlapaz, is a Customer Success Advocate at Strikedeck. He is passionate about Customer Success and is always willing to learn more! Vincent Manlapaz

Customer Success, Strikedeck, a Medallia company