Grow revenues by proactively managing the customer life cycle.

Individuals don’t win championships, teams do. Assembling the best roster of individuals is not the winning formula. Look to the Super Bowl LI Champions, the New England Patriots depicted in this victory parade celebration. Yes, they have star players, consider though that in their five championship seasons, they have received major contributions from players they selected low in the draft. Throw away picks that most teams select and cut later. They also supplement the core of their team with the right free agents.

 

The key to New England’s success is that they focus on how that player fits their team, for where they are now. They don’t care that someone is a “workout wonder” and runs the 40-yard dash. They will let other teams overpay for that player. On the flip side, they will invest in a player who lacks the measurable talents, but demonstrates “football intelligence” and has the right set of skills that complement their team. They have created and protected a culture that enables winning. 

 

How can you apply this formula to building out your customer success team? The process is more similar than you think. You need individuals that help you succeed right now, while building the core and developing them so you can have the right people on your team well into the future.

 

Why is this important? Business models are changing from transaction based revenue models to subscription based revenue models.  Companies dependent on recurring revenue must pay special attention to customer renewal rates, revenue retention, and customer life time value.  As a result, reactive customer service approaches, built to lower the cost to serve, are being replaced with proactive customer success approaches, built to increase the revenue per customer.  When your customer becomes more successful as a result of using your product, they buy more of it.  And when your customer is unaware of how you have contributed to their success, they attrit.

 

Defining the necessary competencies needs to align to your customer needs. It is driven by where your company is in its journey, as well as understanding your buyer and user personas.    Here are examples of the questions you need to assess:

 

  • Industry vs. functional knowledge. Do your Customer Success Managers (CSMs) create value for customers via industry knowledge? Are your customers willing to pay a premium for this? Is Customer Success a new department in your company, and do you need people to help you get off to a fast start?
  • Service vs. sales orientation. Are you a single product company? What are the cross-sell opportunities? Is your product simple or complex? As your company grows, you can afford to specialize, but early in your journey you will need people that can wear multiple hats.
  • Seniority level. How is your revenue and buying potential aligned by accounts? Larger customers expect, and you can afford to invest in more senior resources. Who are the buyers and users of your product? Do they value in person visits, or do they prefer someone who is available on the phone?

     

Once you have answered these vital questions, you can identify the right competencies for your Customer Success Manager hiring profile. These are the basis of job profiles and scorecards. These are the tools that will help your HR team fill your talent pipeline with the right individuals who have the comp that will drive your renewals and expansion.  

 

Of course, cultural fit is important. New England looks for grinders, people that enjoy the work.   Not just game day, but practice, weight room sessions, and meetings. They look for team players, who place the team’s needs, above their own. Does your company have a strong culture? If so, your customer success team needs to align to that? If it doesn’t, take this opportunity to role model that culture for the rest of the organization. Recruit, onboard, and reward the people that reinforce and advance your customer success culture.  

 

Learn from The Patriot Way. Build the core of your talent, and supplement it with the right external hires that will succeed in your system. This will make you a champion of customer success.

 

If you would like help with developing a Customer Success strategy and building your CSM scorecards and profiles, come see me and a hand-picked team of Customer Success experts at the The Studio in Dallas.  The Studio, SBI’s multimillion dollar, one-of-a-kind, state-of-the-art executive briefing center. A visit to The Studio typically results in getting 3 months of work done in 3 days. The immersive sessions accelerate everything, dramatically reducing the time it takes to develop a customer success solution, and create an implementation plan.

 

The Studio

Photo taken by Angelina Salcedo – Patriots quarterback Tom Brady at the 2017 Patriots Victory Parade in Boston, MA FlickR

ABOUT THE AUTHOR

Fred Penteado

Guides private equity portfolio companies in a variety of industries on how to make their number.

Prior to joining SBI, Fred held a variety of leadership positions with multinational Fortune 50 companies. He has worked in product/program/channel management, sales operations, and served as a Chief of Staff.

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