High Level Causes

    • Team needs to scale
    • Processes mature
    • Data needs become complex
    • Data Sources are many

As Customer Success (CS) teams grow and mature over time, they may find themselves moving away from a Customer Relationship Management System (CRM) as their go-to system and growing into a CS platform. A CS platform allows a Customer Success team to proactively provide value to customers at appropriate times. I’ll highlight the various growth stages that occur in a CS team that typically precede it graduating from a CRM to a CS platform below.

The Difference Between a CRM and CS Platform

A CRM and a CS platform are diverse in terms of what they offer, and the value that they bring to a CS team. A CRM tool allows for the management of relationships and interactions with customers and prospects. It provides a central system to help manage Sales activities, including storing contacts, opportunities, and revenue information. Depending on the extent that a CRM is relied on for business operations, some companies will even manage various Marketing activities out of their CRM. The most commonly recognized CRM is Salesforce.

So how does a CS platform differ from a CRM? A CRM provides a view into the sales cycle; however it is not dynamic in nature. A CS platform offers a more holistic view of the entire customer relationship by dynamically tracking all the interactions and touchpoints that will occur with customers over time. It is a living and breathing system that is continuously updating itself as new information is fed in from other systems within your organization.

From following and storing information related to the onboarding process of new customers, to tracking renewals, satisfaction levels, product usage, and escalations from customers, you gain a better understanding of the customer journey. A CS platform arms a CS team with an arsenal of data and information brought together into one powerful location. The value that is realized by such a system is extremely high since it provides an organization with insights into the health of its customers, allowing a CS team to be proactive and not reactive in their approach to Customer Success.

In addition, it can remove a lot of manual work by providing automated workflows based on the data it collects. Through various integrations with other systems throughout your organization, a CS platform can actually act on that data through automated functions that can be configured. These automated functions can be triggered based on predictable events. For example, product usage drops by a specific percentage can set off an automated activity such as sending an email to a customer with training videos to help increase adoption of the product.

Customization with a CRM can also be more challenging. One of the core functions of a CS platform is to bring disparate systems of data together so that you can have a comprehensive set of data on each of your customers. Each organization will have different requirements and systems of data, therefore the system needs to be flexible and customizable to meet each CS team’s unique needs. A CRM can be a more monolithic and requires much more effort to customize.

Team Scales

As an organization grows, there can come a point where there are too many accounts to manage and oversee without the aid of a more advanced tool. Predicting which customers may potentially cancel and churn is of paramount importance to the success of a recurring revenue business. However, simply increasing headcount to a team is not an efficient way to scale the business if we want to have a positive impact on operating margins. A CS platform allows a CS team to grow in a more cost-effective way by allowing a Customer Success Manager (CSM) to be responsible for a larger book of business by removing mundane or manual tasks from their every day plate of work. It helps identify which accounts may be at-risk and require more of a hands-on approach, while allowing other accounts to be managed and serviced through automated tasks.

Processes Mature

Another area that changes within a CS team as an organization grows is its processes. For example, a CS team that is just starting off may not be doing account reviews and instead only reaching out when there is a fire to put out. There may be few formal processes defined for how outreach to customers is to be done. In addition, customer segmentation may also not be defined, leading to an environment where everyone is doing the same type of Customer Success for every customer, regardless of size. The team may resemble a soccer match being played by toddlers, where both teams chase the ball around the field like a school of fish; where the ball goes is where the entire team follows. As the team grows and matures, it begins to understand the importance of playing positions and anticipating where the soccer ball might end up on the field – being predictive versus reactive is the way to win the game.

Over time, there may be a better understanding of which customers require more hand-holding during the onboarding process and which customer segments require different levels and types of service during critical touchpoints in the customer journey. There may even be different industries and verticals that an organization is selling into, which requires a different type of service. This stage is when the introduction of a CS platform can become more relevant, since you have begun to formalize processes for how the CS team works and have a better understanding of the type of data needed for the CS team to work more productively and help customers achieve value quickly.

With the understanding of what makes a customer successful, the CS team may have already begun developing a model for a customer health score. What are the different vital signs that should be considered in determining whether a customer is healthy or at-risk? Which vital signs will be weighted more strongly in favor of others? These are all great questions and typically precursors to graduating from a CRM to a CS platform.

Data Needs and Sources

One of the greatest challenges for a CS team as it matures is having to manage and view various data sources so that they may predictably minimize churn and increase retention. As processes may now be more advanced, it becomes increasingly important to have a system that can augment the CS process framework that has been built and developed. Having great processes will only get you so far, if you don’t have good data or the data is too difficult to obtain and search for.

A CS team may find themselves spending copious amounts of time searching through different systems to obtain a clear snapshot of a customer. The data that is extrapolated can also many times be complex, requiring extensive amounts of time spent on analysis.

An example could be a customer that has many support case, so the natural assumption may be to assume that the customer is not healthy and may be at risk. However, when you combine that data with product usage and NPS scores into a more complete picture, you find that the customer is very active in using your product and NPS scores are actually high. The customer appears to be having major issues because of the support volume they have, however this does not mean they are unsuccessful. They are a customer that is squeezing every bit of value out of the product and therefore are encountering some support problems which are being addressed by your support team in a timely manner. With a CS platform, this data can be interpreted more easily, allowing your CSMs to have more time to anticipate when to intervene.

Graduating Out of a CRM

CS teams today are at a similar stage to what Marketing teams faced in the late 1990s and early 2000s. There was an increasing need for Marketing teams to have better insight into buyer and customer behaviors. By around 2005-2007, we began to see a sharp rise in Marketing Automation tools such as Marketo, Pardot, and Hubspot being offered as an alternative to the traditional CRM. These tools did more than just your basic email marketing automation and could offer additional value such as customer segmentation and more effective campaign management. Similarly to CS platforms, these tools also allowed Marketing teams to scale and grow their teams more efficiently by offering a lot of automation capabilities.

At the end of the day, Customer Success is about understanding the needs of your customers and providing them with the desired outcomes that they expect. To do this well, an organization will eventually outgrow a CRM as its data becomes more complex, processes mature, and scaling efficiently becomes more of a top priority, as we witnessed in the world of Marketing, almost a decade ago. CS is now facing the same challenges and growing pains. Technology will help bridge that gap more and more as we see CS continue to mature and graduating from a CRM to a CS platform is a natural step in that evolution.

Alfred Diez

VP of Customer Success, Certify