In my last post, I started outlining a framework that you could use to design your customer success team. The framework is based on this excellent post by Omid Razavi about the four traits of customer success management. It includes two internal factors (company and product) that I covered at length, and two external factors (business domain and marketplace/competition) which I will cover in this concluding post.
3. Business Domain
Moving on to the external factors, I would like to start with the domain in which the company is operating. In this post, I will consider three specific aspects:
- The stage in the domain’s lifecycle
- The complexity of the domain
- The pace of change in the domain
The stage in the domain’s lifecycle: In some ways, the effect of the domain lifecycle is similar to the effect of the product lifecycle (which I discussed in the previous post), with one important difference. If the domain is itself new, the customer success team will need a heady dose of business knowledge in the early phases to effectively evangelize the domain.
The complexity of the domain: As the complexity in the domain increases, so does the need to invest in all four skills. Special emphasis will need to be placed on the business knowledge factor though, so that your customer success professionals can serve as effective evangelists as well. The importance of data science skills is proportional to its complexity because it will enable the team to develop benchmarks and metrics to measure their customer success operations, and monitor their progress against these metrics.
The pace of change in the domain: Sometimes, the pace of change in the domain is quite frenetic. This usually happens because of external events like regulations, but it could also occur because of technological advancements. As the pace picks up, companies will need to increase their investment in relationship skills – so that they can better engage/handhold their customers – and business knowledge – so that they can enable their customers to keep pace with these changes. Data science becomes more important as well, but in this case, the priority is monitoring what customers are doing, rather than enabling prescriptive/proactive actions.
The fourth factor you need to consider when assembling your team is the marketplace in which you operate. This is the one that you have least control over, so you will see quite a bit of fluctuation over time. I will focus on three aspects:
- Market size
- Customer expectations
Market size: In a small marketplace, such as telecom carriers around the world, in which the total number of customers is small and their customer lifetime value is large, the customer success team becomes the key to business success. Companies will need to invest in business knowledge and relationship skills, as well as technical expertise.
On the other hand, in a large market, data science becomes important because it will tell you which customer to focus on at any given time. Business knowledge is still important, but in this case, only because it will give you a competitive advantage over your competition.
Competitiveness: To state the obvious, as marketplace competition increases, the need for each skill increases. However, I would like to point out the relative lack of importance for the technical expertise function, which has nothing to do with the customer success team. In this day and age, software is supposed to be easy to deploy, use, extend and maintain. Competition drives every vendor to distinguish themselves from, or ensure parity with, other vendors, making it less important to invest in technical expertise.
Customer expectations: This is another facet of competitiveness , but I think it is sufficiently interesting to merit an analysis on its own. Customer expectations are a function of other factors. For example, customers in a small market will expect quite a bit from their vendors. A startup, or a product in a new domain, both of which require evangelization, increase the emphasis on the customer, but this time from within the company.
As these customer expectations increase, companies will need to invest heavily into their relationships skills – to engage with customers at the expected level of intensity – and their business knowledge – so that they can become the trusted advisor that their customers seek. Technical expertise is another area that may require investment depending on the product/domain.
Every business will have its own unique set of parameters that influence the design of its customer success team. While they will fit into these four factors (company, product, domain, marketplace), the specific aspects will vary. My objective in this post was to introduce these factors, and explain how you could apply it to your business.
The internal factors are inherently more predictable and you have a good chance of your team adapting to them. However, the external factors are not under your control, and likely to fluctuate quite a bit. This means that your team will have to continuously adapt to varying conditions.
The key to adapting to these factors is to first analyze each one as an independent variable to understand how they affect the needs of, and your ability to serve, your customers. This will allow you to filter out the noise, so that you can focus on what really matters to you. Once you identify the parameters that truly matter to your business, you can factor in the interdependencies to develop a comprehensive model that will stand the test of time.
You may not get it right on the first try, but rest assured; the pursuit of perfection will put you on the path to excellence. Let me conclude by quoting Gen. Colin Powell.
“If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude.”
Gen. Colin Powell