Did we really do those things?  I know hindsight is 20:20 vision but looking back at how we used to think about and practice customer success seems quaint and somewhat crude compared to how we now operate.  I am old enough to remember the days when setting up a CS capability was focused on adding a team of people to work with customers to help them achieve their goals and generate a return on what they spent on our product.   I’m embarrassed to say I did it myself and it worked – at a cost!  

When I look back, it seems wrong that we didn’t get to the root of the issue sooner – a product that should deliver what customers buy it for out-of-the-box.  Just like today, they only wanted, needed, to achieve their goals and deliver a positive ROI.  The old people-led approach worked, sometimes, but at a significant cost to both margins and customer satisfaction.  Customers thought they were buying a product that delivered what our sales folks had promised – a benefit, a desired outcome, a return on their investment.  It seems odd now that the only way we thought that could be done was by constantly phoning and emailing the customer, not really thinking they just wanted to get on with their job.   We all too often confused our need to contact the customer with what they really wanted.  Just think of all the work we have saved, for the customer and us, by building the success process into the product.  

Do you remember those playbooks everybody spent ages developing?  How arrogant we were to think that we could guide customers based on sketchy or non-existent research into their challenges and needs.  We even described customer journeys with phrases like ‘Land, Adopt, Expand, Renew’ – confusing what we wanted a customer to do with what they needed to do.  The basic idea of expert guidance was sound it’s just that we were lazy in how we implemented it.  Instead of putting the time and money into building a real 360, single view of the customer and researching in depth the work they do and the challenges they faced, we pushed customers down a path of our design.   At least now we drive next best actions in context, using a very rich customer data set and the role of customer research means we know far more about them than we did back in the day.  It might not be perfect but our advice is much closer to the customer’s current context.  And we do most of it in the product.   

Given the number of times it has happened, we again underestimated the impact technology would have, particularly AI. Building meaningful CS processes into the product gave us access to stacks of data on customers’ goals and how effective they have been in changing their processes and organisation.  Without this, AI and machine learning, which is so central to what we do struggled to identify the patterns behind real success practices.  No longer are we limited to looking just at product usage, although that is a still a very important piece of the jigsaw.  The ideal of software that learns how to achieve outcomes and automatically corrects itself, without human intervention is getting closer.

Fewer still saw how technology developments would lead to Google and AWS becoming the dominant players in the customer success software market.  We should have seen it coming; it had happened many times before.  For example, the first AI applications were built from scratch by developers as part of a specific application before becoming libraries that anyone could use and then services embedded in hosting infrastructure.  Customer success as an infrastructure service that you plug-in and configure is still in its infancy but I only see it growing.  

It is strange that at the time that Google were introducing Edge TPU, AI on a chip, we were still thinking that the success process could only be delivered by people.   Of course people still matter and play a vital role but the success coaches we now employ are a far cry from the product-centric CSM’s of old.  We have developed the role into a high level, high-skill change coaches whose focus is often around the psychology of change.  Whilst we have fewer of them, CS coaches are highly paid and highly valued by their employees and, more importantly, by customers.

What next?  I’m the wrong person to ask: I’m a historian not a futurist but try this if you want to know what I think about product-led customer success

This blog is a summary of an upcoming e-book “Product-led Customer Success”.

As CEO of Clicktools, one of the UK’s first SaaS companies, I was always seeking better ways to deliver profitable growth.  I have been an advocate of customer focus since the late 80’s: actions therefore were always based on the premise that what we did had to be good for customers AND the company.  We appointed our first customer success manager in 2004, following the lead taken by Salesforce and went on to build a very successful team of CSMs. Gross revenue retention was mid-90s and net revenue retention well over 100%.  Given that success, would I do the same if I was building a SaaS business today?

No: let me explain.

A B2B SaaS company sells a product that helps the customer achieve a goal; to deliver benefits. These benefits are the focus of the marketing and sales process and delivering those promised benefits, the customer’s desired outcome, is the whole premise behind the philosophy of customer success.

As a product company, it should therefore be an inherent part of the product.  Unfortunately, most B2B SaaS products don’t deliver.  Instead, CEOs build a team of people to fill gaps in the product’s capability.  Worse still, this knee-jerk response is seen as the best practice.  Think that through: so called best practice is to add recurring cost to your business and constant interruptions to your customer to address a failure to deliver on your value proposition – a product that helps customers achieve their goal.

If I were starting out again, my first response would be to look at how the delivering customer success can be built into the product.  Here’s why.

• Helping to achieve the customer’s goal is a B2B SaaS company’s raison d’etre. It must therefore be the primary goal of the product itself.
• We are approaching the point where contacts and notifications swamp our attention and reduce productivity.B2B customers are using an increasing number of apps, the suppliers of which each want time.  A buyer just wants a product that helps deliver their goals. A backlash to the interruption economy is coming.
• Technology to deliver self-service customer success has come on leaps and bounds. The development of applied AI and machine learning, will further enhance the ability to deliver contextually rich guidance.  The companies that build success processes into the product will use these technologies to enhance their understanding of what drives success, furthering their advantage.
• The basis of self-service customer success is a deep understanding of customer’s objectives and the changes they have to make to achieve them. The depth of understanding required to deliver self-service CS is itself a source of advantage.
• Done well, it is a path to scale at higher margins. Recent researchby Notion Capital and Frontline  shows that many (but not all) self-service based SaaS companies are delivering leading financial performance.

What does it take to embed customer success into the product?  The starting point is a deep understanding of what the customer is trying to achieve (their desired outcome), the challenges they face in achieving their goal and how the best players overcome these challenges to achieve their goals. This of course includes the role your product plays in their work.  This understanding is the basis of customer success, however it is delivered.

Not helping the customer address the changes they have to make is essential to delivering customer success and thereby the retention, revenue and referrals business growth needs.

Deep customer understanding is the basis for building four capabilities into the product:

• Discovery: Building a picture of how the customer currently operates
• Goal setting: What the customer is trying to achieve, including guidance on     achievable and stretch goals.
• Success plan:  The steps the customer needs to take and how the product is best configured to help the customer achieve their goal.
• Working space:  A simple goal and activity tracking capability supported by delivery of contextually rich advice and guidance.
• Success reporting: A dashboard showing progress towards the desired outcome, highlighting out of norm activities.

People tell me this is too complex.  I disagree.  I readily admit it will take work and some trial and error.  I think the problem is that much of what we describe as customer success is in fact supplier success; meeting our own retention and revenue goals, irrespective of the success the customer achieves.  It also seems that we can afford people to do this important task but we lack the vision productise it.

The sub-title of the blog is ‘Balancing people and technology to deliver customer success’.  I do not see product-led customer success as the end of the CSM. I do however see a change in the number required and what they do.  Much of the basic work of customer success; guiding product use, setting goals, process change advice will become part of the product.  CSMs will focus on the higher order challenges of change: helping customers build the case for change, shoring up their courage and providing examples of success.  It sounds a bit airy fairy but they become change counsellors more than process experts.

I am not saying no to people delivering CS; just don’t make it your first and only response. When your CEO comes to you at the next budget cycle and asks you how many more CSMs you need, say ‘None but I would like a small development team please!’