What is Customer Success, Anyway?

​​This week, I'd like to review THE handbook for Customer Success, published by Gainsight in 2016.

Customer Success:
How Innovating Companies are Reducing Churn and Growing Recurring Revenue
​By Nick Mehta, Dan Steinman, and Lincoln Murphy

image from: http://sixteenventures.com/customer-success-definition

With any experience in a subscription economy, you probably know that "you can't...sustain real growth if customers are leaking out...at a high rate." (p. 5-6). The book begins with how Salesforce created the template for the subscription economy and what it takes for your recurring revenue business to succeed. It's a simple formula:

          new customer acquisition + high retention + positive upsell results

In other words, customers must remain your customers AND buy more stuff from you in order for your business to succeed.

This first chapter of the book also gets into the history of SaaS and why you need to manage or at least nurture the installed base of customers. It describes how Customer Success is all three of the following: an organization, a discipline, and a philosophy.

Chapter two gets into strategies, defining where Customer Success fits into a new high-level organization chart. It defines the activities of the new group and the metrics for defining success. I'm particularly interested in how training fits under the Customer Success leadership, rather than sales or support. Customer Success would have onboarding, professional services, classic customer success, customer support, and training team members reporting to the VP of Customer Success. Later in the book, there's even an argument for Sales Consulting to fall under Customer Success, because the Customer Success leader "has to live with the sales decisions" (p 196).

The rest of the chapter talks about what Customer Success is NOT, provides a thorough definition of what Customer Success IS, and explains it's cross-functional impact on the entire company.

Chapter three points out the differences between high touch, low touch, and tech touch Customer Success strategies, based on a company's customer value and number of customers. To put it simply, lower value customers (that may be more likely to scale to millions of customers) require more low- or tech-touch models for success like self-serve documentation and on demand training, while companies with higher value customers "can afford to throw some bodies at their customers..." (p. 50) and provide a higher touch strategy.

The second part of the book presents the 10 laws of Customer Success. These laws were commissioned based on Bessemer Venture Partner's success with their 2010 Ten Laws of Cloud Computing, also known as the 10 Laws of SaaS. The Customer Success laws were authored by ten different experts, and each law is graded for relevance to specific scenarios, including B2B SaaS, Subscription-based, Pay-as-You-Go, B2C, and traditional models. The chapter for each law provides the author's explanation of the law, as well as an executive summary and additional commentary on how the law applies to high touch, low touch, and tech touch models. 

The laws are:

1. Sell to the Right Customer by Ted Purcell, Senior VP of Sales and Customer Success at Clarizen
2. The Natural Tendency for Customers and Vendors is to Drift Apart by Karen Pisha, Senior VP of Customer Success, Code42
3. Customers Expect You to Make Them Wildly Successful by Nello Franco, Senior VP of Customer Success, Talend
4. Relentlessly Monitor and Manage Customer Health by Dan Steinman, Chief Customer Officer, Gainsight
5. You Can No Longer Build Loyalty Through Personal Relationships by Bernie Kasser, Senior VP of Customer Success and Services, Mixpanel
6. Product is Your Only Scalable Differentiator by Kirsten Maas Helvey, Senior VP of Client Success, Cornerstone
7. Obsessively Improve Time-to-Value by Diane Gordon, Chief Customer Officer, Brainshark
8. Deeply Understand Your Customer Metrics by Kathleen Lord, VP of Sales and Customer Success, Intacct
9. Drive Customer Success Through Hard Metrics by Jon Herstein, Senior VP of Customer Success, Box
10. It's a Top-Down Company-Wide Commitment by Nick Mehta, Chief Executive Officer, Gainsight

Part Three of the book goes into more detail on the role of the Chief Customer Officer (or other variants of the top Customer Success job) and where and how the role fits into the overall organization. It also talks about technology that can help manage the "plethora of customer information" (p. 199) and possible coming changes to this new and constantly evolving landscape.

The book is an excellent example of a company (Gainsight) providing education on the broader industry, rather than just their specific product. It talks about Gainsight as a tool very little, but the book can be an excellent guide as you restructure your organization and practices for incorporating a Customer Success philosophy.