I'm a firm believer in the concept of servant leadership, which, in a nutshell, just means leading is about giving your team what they need rather than telling them what to do. And one thing all teams always need is more teammates.
When most leaders think about finding and hiring those teammates, they start with an idea of the job they want the new hire to do, match it to a title, and look for people that meet the ideal profile. But in the everything-as-a-service economy, that's the wrong order of operations, especially when it comes to hiring customer success managers.
Very few other roles are as multi-threaded as the CSM role, and almost none are as truly cross-functional. That means you're not going to do customer success on an individual level; it's going to take a complete team. And that means optimizing your search to create that complete team as opposed to finding a bunch of complete individuals. Understanding where your team is strong and weak and finding people with skillsets that bolster those weakness and augment the strengths is paramount.
Furthermore, since I've been in this business, I've seen just about every umbrella term for the customer success organization, including customer experience, customer service, customer happiness, customer joy, client outcomes, account management, services, customer delight, customers for life, and I could go on. If you're hiring based on title, there's no guarantee you're talking about the same thing when you use the word "service."
But don't let that blind you to the fact that as fragmented as CSM titles can be, customer success has solidified as the standard term for one of the fastest-growing professions in the world. What began as a siloed department focused on avoiding churn has developed into a growth engine focused on the entirety of customer journeys, from their experiences to their outcomes. Nowadays, CSMs are not only responsible for creating exceptional customer experiences, but also the company's recurring revenue and expansion.
It's clear customer success is real, vital, and here to stay, but what isn't clear for most companies is what kind of person will lead the next generation of customer success to boldly go where no company has gone before.
Here are seven tips for setting your organizational charter that will help find and develop those next-gen customer success leaders:
- From Customer Success to Customer Growth -- Customer success is less and less often being mixed up with customer support and customer service, but there's still some confusion over the ultimate mission of the movement. Just to clear it up once and for all, it's not about churn fighting. It's not about reacting to risk. And it's not about keeping customers happy" All those things are great, and they're surely a piece of the puzzle for most CS teams, but they're not the big picture. CS is all about growth. Growing and deepening relationships with customers by helping them achieve their desired outcomes with your product or service. The next generation of CS leader will be incredibly proactive about tying every datum and activity to growth. As they improve CX, they'll know it's because it's a proven driver of expansion and advocacy. As they operationalize their renewal processes, they know it's all in service of deeper, longer relationships with greater lifetime value. Quantifying the impact of activities on revenue is old news for sales and marketing, but it's the next step for customer success and the next evolution of the customer success leader.
- Rock Stars Need Not Apply -- Operationally speaking, the customer success department is a complex one. Since this is a newer role and department for many companies, there's a shorter track record in the industry even for veterans. As such, it's tempting to get too focused on finding "rock star" team members who can do it all. Like I said, that's unscalable! You need to do more to expand your pool of available candidates, not shrink it. In the past, CSMs would have been hired based on their customer service, support, or account management experience, but today's CSMs are coming from much more diverse backgrounds and professional experiences that allow them to excel in this multifaceted role.
- Hire Process-Oriented Employees -- These CSMs look at issues from a broader-picture perspective, meaning they can design a repeatable and scalable process to not only get their customers but also their teams back on track.
- Test, Don't Guess -- Hiring talented people is hard. Companies need an objective way to assess whether a candidate is truly talented as resumes only represent so much. Simulating an activity, like what to do if a customer is about to churn, puts a candidate in a position to figure out what needs to change to increase adoption; if there is something that will make the product easier to use, for example. Giving future employees a taste of what they would actually do on the job is a good way to assess if they would be the right fit.
- Get Serious About Cross-Functional Collaboration -- It takes a companywide commitment to customer centricity to deliver on the promise of customer success. A lot of companies pay lip service to customer-focus, but few take operational steps to build that culture. Take sales and customer success teams, for example. Sales teams are incentivized to hunt new logos, but not necessarily to hunt good-fit logos or to set them up for future success. Too often their job ends at the handoff. They might sell to bad-fit customers or overpromise what the team can deliver. This leads to a bad experience for the customer and teams fighting over who's to blame. Furthermore, CSM can end up firefighting by filling gaps the product team needs to be solving. If they don't have a culture of teamwork and shared data, neither side gets access to the information they need to thrive. CSMs should be bringing the customer's needs to the roadmap and product development should be freely sharing adoption and usage data with CSM.
- Support, Onboarding, Professional Services, CX, Customer Marketing -- They're all part of the same cross-functional effort, and the leaders of the future intuitively grasp the culture and cross-functional processes it takes to build a company that does more than just claim to be customer-centric.
- Help Them Focus on the Right Data, Metrics & KPIs -- Customer success exists because we finally can be proactive in understanding and delivering customers their desired outcomes. What makes that possible? Data. Customers can be unpredictable, but data gives you the insight you need to anticipate and prepare for that unpredictability. These days, your customers expect you to understand them on a deeper level. Here are just a few metrics your next-generation customer success leaders will know like the backs of their hands:
- Net renewal rate: The rate at which customers are renewing and expanding.
- Gross renewal rate: The percentage of contracts renewed in a given period.
- Expansion percentage: The number of new products a customer is purchasing as a result of upselling or cross-selling efforts.
- Logo retention: Shows retention in terms of number of customer retained instead of a dollar amount.
- Net promoter score: Evaluates customer loyalty and sorts them into three buckets based on responses: promoters, detractors, and passives.
- Cost of retention: How much you're spending on retention annually per customer
- Customer health score: A combination of the leading indicators (e.g., product usage, NPS, engagement, ROI, etc.) that help you assess whether a customer is headed toward expansion or churn.
Customer success is clearly here to stay. It's more than just a business buzzword—it's one of the fastest-growing careers and a clear differentiator among the top SaaS companies. As the CSM role continues to grow and evolve, it's essential for companies to consider how they are shaping the next wave of leaders. While organizations can look for different traits or skill sets, CEOs need to take a page out of the servant leadership handbook and empower their teams with the right leader for the next 10 years, not the last.
Nick Mehta is CEO of Gainsight.