Customer Success Strategy

Moving from “reactive” to “proactive” is really about adopting one vector to the relationship, identifying the right direction, and guiding customers through it.

One of the most common questions I get, when talking about Customer Success (CS) and Customer Experience Management, is about how to manage the transition from the initial stages of a CS organization into a more mature one, that supports scaling up the number of customers and products, and deal with customers in a proactive way, anticipating most of customer needs. This article sums up how I think about this transition, and some of the “thinking tools” I use. It is directed to CS executives that are going through this transition – or planning to, and I hope it can help them navigate through those troubled waters. Also, I would love your comments, as the discussion around this topic could help us all of to find new solutions, and potentially evolve the framework proposed here.

I have been through this transition a number of times. It is actually fascinating to watch. It goes more or less like this: you start your CS practice to fulfill the most basic needs of your post-sales process, typically on-boarding and support. Customers are doing OK, but it feels like there is always a big fire going on. The CS organization is stretched really thin, and there seems to be no way out of the eternal firefighting. If the company is growing, new customers are acquired, and they only mean one thing: new fires are coming through the door. If the company is not growing, there is no perspective of additional resources, so the current pattern is not going to change. The big question is: how to scale the CS practice beyond simply adding bodies? There has to be a way to break the firefighting mode, and switch to something different, right?

In most companies, this is how the CS organization starts. It is, almost by definition, reactive. It “reacts” to customer support requests, to events during the on-boarding etc. It is also omnidirectional, in a sense that the signals requiring a response are coming from all directions: end users, key stakeholders, steering committees. Even more important, these signals drive reactions to all directions: product enhancements, different on-boarding strategies, creation of new roles, new processes, new tasks, new metrics, new programs… Being omnidirectional, it sometimes creates a feeling of one chasing its own tail. I usually call this the “Hero Mode” phase of the CS organization, because the only way it can possibly work is having a very specific profile “calling the shots”: a combative person, fully committed with your customers, and brave enough to do whatever it takes to make them successful. It might be not the only way to start a CS practice, but it is certainly the most common one. Also, for some time, it surely helps the whole organization to “get better”. The right CSM will not only fix the problems as they come (“now”), but also create the tools and processes to avoid the same problems to come back later (“forever”). Guided by “the hero”, your company will learn more about your customer needs, and evolve, effectively delivering better products and services.

Figure 1 CSM Organization on “Hero Mode”

It is very hard to scale this way, though. To begin with, it is almost impossible to effectively manage a big team of “heroes”, due to their own unique set of traits. Second, it becomes very chaotic to scale without one clear direction, or vector. When the number of customers grow, the omnidirectional approach becomes pretty much unsustainable.

Figure 2 CSM Organization, on “Hero Mode”, with multiple customers and omnidirectional feedback and actions

It’s more or less like Alice in Wonderland, asking the Cheshire Cat for directions.

“Alice: Would you tell me, please, which way I ought to go from here?

The Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don’t much care where.

The Cheshire Cat: Then it doesn’t much matter which way you go.

Alice: …So long as I get somewhere.

The Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.”

― Lewis Carroll, Alice in Wonderland

Picking a vector, then (and only then) moving ahead

Evolution and devolution both are opposite directions into the same axis. But you can only differentiate the former from the latter if you first establish a direction as a reference to judge. Same happens with customer success. The vector of the relationship is usually defined by the customer journey, and there is a natural tendency to adopt the arrow of time (i.e. the sequence of events along the timeline) as a measure of progress.

Unfortunately, things are not that easy, and the real direction of the relationship can be tricky to figure out, especially early into the product development journey, when product-market fit is not 100% established. Sometimes, your customers have to go through some level of transformation before they can fully capture the value you are offering with your product. Other times, they need to hire different people, to appreciate the benefits of your offerings, or establish a new process, or even a full new set of processes and practices. The point here is that what defines the direction of the relationship is not time, but rather the amount of value your customer is realizing out of your product or service. The “right” direction is the one that starts with no, or minimum, value and grows to maximum value, along the customer lifecycle.

So, in order to properly identify the direction of the relationship vector, you first need to assess what are the main value drivers on your product, from your customers stand point. Once you know this, you can move ahead, and then:

1) Define what is success for you (e.g. grow your customer base, grow your revenue, increase customer satisfaction etc.);

2) Define what would be success for a fictitious “perfect customer”, which would take full advantage of your product capabilities; and,

3) Identify what your real customers expect to achieve with your product.

In a perfect world, during your sales process, you would identify number 3 above, and then tie your pricing strategy to that value promise, but… we don’t live in a perfect world, do we? Many times, deals are closed for reasons different than expected value, and it is up to the CS organization to make sure that customers will, at very least, perceive value along their lifecycle.

In my experience, the best way to systematically address this third item – and clearly articulate what is “customer success” for each customer, is building what is commonly called an Account Plan. The basic components of a good account plan should give you both a vector to evolve, and a clear direction to judge (and measure) progress. It should clearly state what your customer calls “success”, articulate the steps to achieve that, and anticipate the potential blockers. The plan itself should have a lifecycle, with its inception, review and recycle. In my previous experiences, I have adopted lifecycles of one year, with partial recycling every quarter, for the sake of freshness and accuracy.

I usually start thinking about the account plan in terms of “what could go wrong”, then classifying the different potential issues into dimensions. Examples of these dimensions are “People”, for anything related with politics, power dynamics inside the customers, personalities of key stakeholders etc.; “Product”, for product fitting, number and type of enhancements necessary, bugs; “Services”, for anything unrelated with the product, but still delivered by my company, like on-boarding, support, and consulting; and, “Quality”, for data quality, that is critical for some definitions of “success”, and not always under control of one single entity. Of course, these four dimensions can vary greatly, according to your specific solution, industry, etc. Some examples of completely different dimensions are: “Network”, at times, success will only materialize if you grow the network of customers to a certain point, so you have to plan actions to purposely control the growth of the network; and, “Transformation”, some solutions are enablers to new ways of work, so the transformation actions might need to be monitored, and augmented, in order to achieve success.

Within the account plan, there should be well defined steps to increase the value for your customer. When you go through the exercise of defining account plans for your whole customer base, you are able to see emerging patterns of consolidated needs, problems, and solutions. This enables the creation of “fixes”, both for now, and forever, in a much more efficient way. Depending on the market and the product, this can provide your company a completely new strategic lever, potentially transforming customers into fans – and driving continuous joint success.

The overall method here is relatively simple, and the final result can become a solid foundation for a framework to manage progress. Here are the high-level steps:

1. Define “success” for your company, at this moment. i.e. customer validation, customer growth, revenue growth, customer base growth, brand awareness, etc. This will evolve through time.

2. Identify the key value drivers where your company can make an impact on your customer’s success. This will mature with your solution roadmap and natural evolution.

3. Define “success” for a fictitious customer. Think about it as your “model customer”.

4. Map your customer journey, and identify the vector that your customers follow through;

5. List the typical steps that will drive your customers to a successful implementation of your solution;

6. List all the potential blockers that will prevent you and your customers to follow through the steps;

7. Classify the steps and blockers on a handful dimensions. This will help you to generalize the steps and blockers allowing you to share the model with a broader audience, for validation and augmentation.

8. Apply to one customer and start to manage the lifecycle of the account plan. Identify “success”, for your real customer, and go from there. Remember to use a plan cycle that offers you some space to maneuver and fits your product evolution pace. I like twelve rolling months, with quarterly refreshes and monthly minor updates, but this might be too long for some products.

9. Make adjustments as needed, and rollout to your whole customer base.

This framework was mostly developed for B2B relationships, initially for “high-touch” customer engagements. One simple adjustment is to group customers into clusters, then apply the same framework to a much broader spectrum of B2B companies. I’ve never spent much time thinking about its potential use on B2C scenarios, so this is a potential expansion to be pursued in the future.

By the way, going back to the article top image. If that initial phase of the CS organization can be called “Hero Mode”, I like to think that the more mature version of the CS organization would be called its “Sherpa Mode”, as a reference to some of the most skilled mountaineers in the world, and their work as humble guides, helping their customers to reach impossible destinations. But this is subject for another conversation.

Clayton Costa spent his whole career in front of customers, designing, selling and delivering enterprise software solutions. Over the last 10 years, he has been working on startup companies, building and managing CS organizations, providing consulting on various CS topics, and as a speaker on CS and CX events.

Clayton Costa

Head of Customer Experience, Turvo