Customer support and customer success are related, but distinct practices. And customers expect both from mature companies.
Which do customers need first -- and which do they expect first: customer support or customer success? You can't build both organizational functions at the same time. So which do you build first?
Great customer support is a market force in 2018. Build great support from day one. Then, take the time to build a great success team after. I'll tell you why in this blog post -- so keep reading.
Why You Can't Avoid Building Customer Support Before Customer Success
There are patterns to how successful companies become so successful. You can read about them all day long on Hacker News for SaaS companies, watch the Sharks identify them on Shark Tank for B2C companies, or talk to your friendly neighborhood venture capitalist (you'll probably get a bunch of blockchain stuff, nowadays). For all of these businesses, regardless of the industry, there's a normative pattern of their success and growth.
If you follow this patterns, we can assume a few things about your company as it grows:
- Competition: You have competition. They were here before you, they're more mature, and likely farther along on this list than you.
- Product development: Your early product is focused, and you're learning, measuring, and building in an iterative cycle.
- A functional experience: Customers expect your product to work most of the time. A working product is imperative for customers to pay and not demand refunds.
- Help along the way: Customers expect you to be there whenever your product doesn't work, they need help, they need a refund, or they have any other inquiry. Great customer support is an expectation of doing business nowadays -- at least one of your competitors has it, and if they don't, they're getting it done with vendors they use every day, like Amazon.
- Value creation: If your product and experience work well, you deliver the expected value that your customers were looking for. This is an economic expectation.
- Value expansion: Once customers see their intended value, they'll want more from you in order to expand upon that value. This is a behavioral expectation -- we can expect customers to behave in this way.
Customer support is the key to achieving #3 and #4 above. Customer success is key to achieving #5 and #6.
In 2018, great customer support is competitive imperative and market force. If you're a new entrant into an industry, I guarantee that more than one of your competitors has a great customer support organization already -- and you can't ignore that.
If you choose to ignore it, you can be like many other companies who have loads of "Customer Success Managers" and a team labeled "Customer Success" -- the members of which are constantly sucked in to help resolve support tickets all day long, and don't focus on value delivery and value expansion the way they should. This is a confusing way to run a company -- and it's bad ROI for the customer success team to provide proactive assistance without customer support.
When Should Growing Companies Focus on Customer Success?
There are many high-leverage points as your business grows to start up a great customer success function.
Here are a few opportunities:
- After support: After you establish a great customer support function and are looking to expand the positive impact of your service team, this is the ideal time to build a customer success team. It helps keep you ahead of the demands of your customers, which is right where you want to be. Building out great support doesn't need to be complicated -- it could be done in a matter of weeks.
- After the complexity: After your product reaches a sufficient point of complexity that users require human help to gain and expand the value they see from using it, you might make it a mission to achieve "churn reduction" and provide onboarding and "goal-based" help. Metrics like activation, adoption, and churn rate become key business goals that the customer success team can focus on.
- After the fall: If you don't manage or reduce that complexity, you'll inevitably have a spike of customers canceling -- and a big mess on your hands as you grow. Establishing a team to proactively manage existing accounts is absolutely imperative at this point. Some companies can manage to avoid "the fall" -- most hyper-growth companies can't without having established a great customer success function earlier on.
- After the ROI case: Once your offerings expand sufficiently, you have an opportunity for upselling and cross-selling. At this point, a customer success team can carry an upgrade number and potentially provide a positive ROI for the business. Metrics like upgrade rate become more prominent at this point.
- After realizing you're playing the long game: After your upgrade rate has stabilized and the key opportunity becomes in keeping more customers, customer success teams again become appealing. As in #2 and #3 above, this usually comes in the form of "churn reduction" as a core metric, but this time also focuses on post-onboarding and very long-term value delivery from the get-go. NPS is a key business metric that you may start measuring, along with repeat purchase rate, customer retention, and customer lifetime value.
Not to belabor the point, but I'll do it one more time: the time for building customer success is almost always after a key event in a company's growth or after a key product milestone.
Because customer support is competitive imperative from day one, the best time to establish a great customer success function is immediately after establishing a great customer support function.
When This Will Change
I predict that in 5 years -- by 2023 -- great customer success will become a market force and a competitive imperative, just like great customer support is in 2018. The customer success industry and the progress of companies in search of customer value are simply too fast-growing for this not to happen.
Importantly, once customer success becomes table stakes like customer support is today, it'll be an exciting time -- and expose a novel challenge for startups looking to grow their customer base.
Successful, established companies will have happier customers, further raising the bar for new entrants, even as switching costs of providers decreases in the modern economy. Plus, customer success will become an imperative from day one, increasing startup costs and dipping margins for new entrants. It'll be an exciting new set of challenges to stay ahead of that curve once it arrives.
A version of this blog post originally appeared on my personal blog.
Originally published Jan 29, 2018 8:00:00 AM, updated June 15 2021