The Perpetual World

CUSTOMER SUCCESS is a relatively new term for the Indian IT product companies. Traditionally, the software licenses were sold in a perpetual model. So, the engagement of an OEM with the customer would generally taper down once the sale was achieved. There was little or no importance given to the post sales activities, customer advocacy, customer experience with the product, etc. This in no way was guaranteeing the success of the product at the customer organization. With the advent of subscription-based Software as a Service industry, there emerged a never before need for ensuring a classical ongoing deeper high touch connect with the customers, a need to have customer advocates who could build a strong bridge between the customer requirement and the product development, to deliver the best possible post sales experience, to ensure that there was adoption of the product and enough stickiness quotient to ensure that the subscription would be renewed at the end of the subscription period. SaaS model thrives on subscriptions, unlike the perpetual model where the bulk of the profit is collected at the time of sale and renewal of subscription depends on the adoption of the product by customers.

Customer Success Manager, Have I heard this term?

Every large IT product company has a typical organogram for its post sales teams, which includes members from its solution/functional consulting team, technical consulting team, Onboarding experts, customer support team, etc. Each of these teams has a very clearly defined role, deliverable and success criteria in the life cycle of a product. In majority of the cases, a crucial metric relating to the real success of the product at the customer premise, is not part of any team’s success criteria. And here arrives the CUSTOMER SUCCESS manager (CSM). The CSM’s role is to be the number one advocate for the customer within the product organisation, create an opportunity for the customer to share their voice / feedback regarding the product features, ensure that he / she builds stronger connects with various stakeholders (beyond the financial decision maker), keep identifying new use cases and increase footprint / adoption at the client organisation. The success of a CSM is always tied to the success of the company’s product at the client organisation which in turn, improves customer lifetime value (CLTV) for the company.

QUIZ: Which individual constituted the first Customer Success group, for which company and in which year? (Hint: It wasn’t Salesforce.) Teaser: No, it wasn’t a SaaS/Cloud vendor. Read further to find the answer.

COVID’s effect on the SaaS industry

The SaaS industry is majorly affected due to the ongoing COVID pandemic. The SaaS based organizations catering to the impacted industry

verticals like Travel & Hospitality, Logistics, Food, etc. are majorly impacted. Whereas productivity, conferencing & collaboration tools have emerged as the front runners. These tools have supported the education sector, work from home scenario, etc. in a big way. This has created a big disruption on both ends of the spectrum for the SaaS based organisations. Per the experts, the end of this pandemic is not near, and no government has been able to identify a full proof solution to curtail the global effect of this pandemic. This is an unprecedented societal shift, and from a purely business perspective, it’s already affecting buyer journeys, customer expectations and brands’ abilities to meet them. Customers no longer simply renew their subscriptions – they consider all their options, including evaluating cheaper competition, better service offerings and their own financial positions to decide on renewals.

CSM to the rescue

CSM’s are expected to have deeper connects with various stakeholders within the customer ecosystem. For this reason, the CSM’s should be able to keep tabs on important customer news and stay on top of their business in a scalable, actionable way. The CSM’s should also propagate news about your organization and reassure the customer about the support that you can extend to the customers. This is the time to further build relationships that will sustain after the pandemic is over.

One of the key KPI for a CSM is to predict churn accurately. CSM’s will play a crucial role in “retention” of customers who are facing a downturn. For SaaS based customer, who are at risk due to cash flow constraints, CSM’s can provide early warning so that your organization can strategise and extend help by providing options like deferred payments, free service, discounts, change in BoM, pausing the subscription for a certain period, etc. On the other hand, for customers with upward financial trends like education sector, work from home productivity tools, etc. the CSM’s should strive to convert their existing single year subscriptions to multi-year subscriptions, thus increasing your organisation’s cash flow. This would help your organization offset the losses incurred due to the customers at risk and actual churn. When you increase the Life time Value (LTV) of our customer with you, you get to show the value of your product thereby increasing the stickiness with your product.

Few of the initiatives that the CSM’s should undertake are:

1) Run a NPS survey - to gauge the loyalty in such situations. This can provide a lot of insights into the thought process of an organization and collectively of the entire customer base.

2) Health Scores – review the health scores for each of your customer. The scores will help you understand which customer are potential candidates for lower adoption and thus churn.

3) Customer Experience – CSM’s should reach out to all the customer as many times as possible during this pandemic to hear the problems that they are facing with the new normal of working from home, show due respect / empathy towards the problems being faced, help them with a resolution at the earliest possible, be there when the customer needs you the most and provide the best possible overall customer experience, which will stay with the customer even after the pandemic is over

4) Voice of customer – CSM’s can provide their customers with an opportunity to connect with the product management teams in order to get their feedbacks / suggestions across to the product management teams

5) Customer Advocate – During these times, the CSM’s should help the customers by devising unique, yet implementable out of the box solutions to address the new problems being faced by the customers during this pandemic.



Be ready for Potential Growth; post pandemic

In these difficult times, if the OEM’s utilize their CSM teams more effectively, they will be able to retain their customers, predict churn, increase adoption, communicate effectively with customer,develop a better product, strategise appropriately to address challenges in these difficult times (basis the live feeds provided by the CSM’s), etc. The CSM’s will help you ensure that the product features are well explained to the customer during this time of need, they can potentially increase the usage through the 21 day rule (if you do anything regularly and religiously for 21 days, it is bound to be ingrained in your ecosystem) and thus lead to better percentage of subscription renewals. I believe it is for many of the reason state above, that John Luongo, CEO of Vantive (it was a CRM company, later taken over by PeopleSoft) conceptualised a Customer success group in the year 1996-97.