Every year in March, America becomes obsessed with the NCAA college basketball tournament.
For many college teams and their fans, simply making it into the tournament is considered a success. They are just happy to be there.
Similarly, many enterprise organizations feel a sense of accomplishment once they have established a customer success team. And why not? After metric-based customer success strategies have been put in place, companies typically enjoy a meaningful increase in their net retention rate (NRR). They are finally in the game!
The problem is that as customer success matures, the benefits of “showing up” begin to fade. Just like basketball teams that never make it out of the first round, customer success teams find that their business impact plateaus and their NRR stagnates.
For customer success to truly mature, companies need to find ways to achieve continuous NRR increases. And while it is tempting to simply hire more customer success managers (CSMs), that approach can actually create more problems than it solves.
Attempting to scale a customer success team with headcount alone can end up being a disaster. More people means more data and more complexity. And without a consistent structure, individual CSMs often create inconsistent, go-it-alone processes that end up fragmenting CS efforts. Even worse, CSMs end up tackling a lot of time-consuming operational duties that steal time from what should be their core focus: helping customers thrive with the company’s product.
When a customer success team is starting to mature, it is probably time to create a customer success operations (CS Ops) function—sooner rather than later. Operationalizing customer success is a must-have for organizations that want to scale to handle a growing customer base, especially across multiple products or regions. Perhaps more important, CS Ops acts as a force multiplier for CSMs, enabling them to be more effective in the field.
Why CS Ops Matters
To be clear, the building block functions of CS Ops are not just administrative duties that support CSMs. They are actually vital components of customer success that require dedicated resources. CS Ops professionals, especially at the leadership level, are big picture thinkers who are intimately familiar with customer data and patterns, which they then turn into strategic ideas. Here are the three building blocks of CS Ops:
- Program management and process development. In less mature customer success teams, CSMs are often left to their own devices in terms of process. CS Ops can standardize processes so that efforts are modular and more efficient. This goes hand in hand with effective CSM onboarding, resource management, and even content creation. A standardized process also leads to standard success metrics for the CSMs so that the team knows where to dedicate resources.
- Data management, analytics, and reporting. Customer success teams often deal with data from a variety of different sources, from specialized customer success platforms to CRM software to Excel documents. A primary value add for CS Ops is to establish a single source of truth for customer success data. CS Ops can clean the data, aggregate it, perform analytics, and output actionable reports. This systematized approach will help CSMs perform their duties more effectively and support strategic decision-making within the organization.
- Systems and tools. Managing the tech stack is a core competency for CS Ops, including configuring software to align with the needs of the CSM team. However, this doesn’t mean CS Ops needs a software engineer; the best way to manage customer success tech is with a problem-solver who has excellent communication with the team. CS Ops should solve complexity, not create it.
Is the Organization Ready for CS Ops?
There are several signs that it is time to operationalize. Usually, once a team has grown to 5 CSMs, inefficiencies will start to appear and there may even be negative impacts on customers that are perceptible in metrics. CSMs will probably feel overworked because they are managing data, troubleshooting tech, and essentially reinventing the process wheel with every new customer. All this means they aren’t focused on their primary value, which is helping customers thrive. The strain will become especially apparent when a company expands to new regions or new customer targets.
Key warning signs that indicate a need for CS Ops include:
- Data that is disorganized, scattered, and dirty, which leads to a lack of confidence in the team’s analysis and even the reported results
- A mix of systems that don’t sync with each other and require manual workarounds from CSMs
- When new CSM is hired, they must start from scratch with process because standards have not been established
- Lack of trust from stakeholders within the organization, like Sales and Finance, because results are either opaque or fall short of estimates
While these warning signs are important, many customer success organizations would do well to get out in front of these issues by creating a CS Ops function before problems arise. The earlier standardized processes and systems optimization are implemented, the fewer problems there will be down the road. One way to consider this question is to ask, how many total hours a week are CSMs spending on operational tasks? Often the financial justification for adding CS Ops staff already exists. And the investment will quickly pay for itself in terms of efficiency and better performance.
Assembling the Right Tech Stack
As a new customer success team forms and grows, they often begin with a legacy tech stack that may or may not be optimal for supporting customer success strategies. And while CSMs should all be proficient with managing data from any platform, it is not necessarily a good use of their time to be configuring software. The first task for CS Ops will be to assess the systems in place.
Ideally, the customer success tech stack is a suite of well-integrated software focusing on improving NRR. For example, this could be a customer success management platform, a CRM, a marketing system, and survey software. The challenge in today’s tech landscape is that there is an abundance of choice. For example, there are more than a dozen firms that provide surveys—despite the fact that surveying is a feature of most customer success management platforms.
Ultimately, the exact stack for any given organization will be unique. For maturing customer success teams, the key is to empower CS Ops to evaluate and optimize tech based on strategic goals. These goals could include:
- Understanding the customer journey to track value milestones
- Identifying customers who could be leads for expansion to new products
- Launching digital-led customer success with robust automation capabilities
The most straightforward way to manage customer success is a dedicated platform. A good platform should give you a 360-degree view of the customer journey. It should have built-in automation tied into a wide range of customer metrics. And it should integrate with other systems while having the capability of being the single source of truth.
CS Ops Makes the Whole Team Better
Creating a CS Ops function for your customer success team is a lot like recruiting a point guard for a college basketball team. A point guard sees the whole court, understands the role of everyone on the team, and passes the ball to whoever is in the best position to score. CS Ops does the same for the customer success team.
