We’re in an era where most smart SaaS customers know that they have to invest in Customer Success but the natural next question is: How can you invest in Customer Success effectively? When should I hire my first Customer Success Manager? What should the Customer Success Manager own compared to Support, Services or even Sales? As you grow the customer base, how can I scale out my Customer Success department?
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The topic of structure and organizational design also yields the most vibrant discussions and at times the most heated debates in Customer Success Communities, especially when you talk about whether this department should own revenue. It makes sense why. There is no standard blueprint or set of rules we must follow in order to build a proper Customer Success organization. And even if we wanted to, there is too much diversity in our products, services, and our business processes for one size to fit all.

In the hundreds of conversations I’ve had with leaders over the past few years, there are typical patterns around when and how they are adding resources when it comes to Customer Success. While there may not be one organizational chart we can follow, a framework is emerging that can help you guide your decisions around investing in Customer Success.

Company Stage & Implementation Complexity

Investment in post-sales resources like Customer Success looks quite different depending on what stage your company is in its growth. A Customer Success department at an organization with 15 people will look vastly different than one with 150 people. Likewise, the day-to-day responsibilities for the Customer Success Managers will vary depending on what stage of growth the company is in. For simplicity’s sake, we’ll classify the growth stages as the following:

  • Early Stage: You’re finally out of beta & funded.
  • Mid Stage: You’ve completed your B or C round.
  • Late Stage: You’re filing the S-1.

Expectedly, early stage organizations have fewer roles and titles than more mature companies. In the early stages, the Customer Success Manager may handle the entire lifecycle of the account (onboarding to renewal) but as the customer count grows and the company matures, Customer Success Leaders may look to hire specialists to handle these actions. Additionally, later stage companies may monetize aspects of customer relationships like training or implementation, which requires specialized resources to manage those aspects of the customer journey.

But company stage doesn’t tell the whole story. In determining how to invest in Customer Success, you also need to consider your product implementation complexity.

  • Low Implementation Complexity: An admin or end user can self-provision.
  • High Implementation Complexity: Resources are required to implement.

When your product requires high-touch implementations processes, the investment model will look vastly different than processes where the customer self-provision. For the former, the first hires in Customer Success are generally skilled at leading implementation projects. In the latter, the more traditional Customer Success Managers may be the initial hires. In companies where the implementation process is complex, the initial dollars are dedicated to getting the customer live as quickly as possible. This explains why many businesses do not hire Customer Success Managers until they are well into their C round of funding.

Another consideration is the customers you’re selling to. In some Customer Success departments, you will find evidence of teams that fit into the Low Implementation Complexity model as well as the High Implementation Complexity model. This is typically depicted by the presence of Customer Tier.

Said another way, you may have strategic customers (Tier 1) who demand specialized resources to enable, support, and renew the relationship. At the same time, you may have customers who do not require this same level of touch (Tier 2 or 3). Determining which bucket your customers fall in to (Low to High) is key because you will need to make the right resource investment.

Lifecycle Stages

A Customer Success Leader may manage the programs and resources that correspond to every lifecycle stage of the customer journey. This may vary a bit by the organizational setup but the head of Customer Success must weigh in on the resources needed for the entire customer lifecycle.

  • Onboarding: From customer close to go-live.
  • Reviews: Checking in on adoption, business value, and expansion opportunities.
  • Escalations: Managing and resolving at-risk accounts.
  • Advocacy: Identify, grow, and manage advocates.
  • Renew & Grow: Renewing & expanding customer contracts.

As you consider each lifecycle phase, you will want to consider how your organization will scale. Will the same resource be needed in the early stage of our company versus late, or will you need to split apart roles? As mentioned above, you will also need to consider implementation complexity. You may start with a high-touch model and develop your product to go down market, thus requiring fewer resources to manage these relationships. Or the reverse could be true.

Either way, you will want to make certain resources are clearly mapped out for each lifecycle stage, as well as what is needed as you grow your organization.

And then there’s revenue

The great debate on revenue ownership rages on. The question of who should own the renewal or even growth certainly makes its way into the resource investment framework. Perhaps it even helps explain why we have such differences of option.

Consider the early or even mid-stage company that sells a product that is easy to implement. The Customer Success Manager doesn’t need to spend hours on implementation calls or managing a complex project plan. Rather, his or her efforts can be spent on driving adoption, sharing best practices, addressing escalations that pop up, and uncovering areas for further growth. And to the extent that the contracting process is pretty straight forward and doesn’t require hours of babysitting and negotiating red lines, he or she may also be well equipped to manage the renewal.

But the same isn’t true when your product takes a lot of time and resources to implement. In the early days, you need that highly-skilled resource to lead the implementation project. They may be able to extend beyond go-live and support early customer success and adoption … but not for long. And you may not have the option to hire an Implementation Specialist and Customer Success. Thus, in a lot of these organizations I’ve seen Sales continue to own revenue until a Customer Success Manager or Account Manager can be hired.

Revenue philosophy aside, you will need to determine the time and skills required in terms of renewal and up-sell / cross-sell ownership. If your Customer Success resource is stretched too thin, you will need to consider assigning this work to a revenue specialist. There are multiple variables to this including: the complexity of your product, the customers you sell to or even your internal processes.

Implementing the framework

The resource investment framework is a guide that can help you determine your early hires in Customer Success as well as provide insights on how others are scaling their respective organizations. From here, you can start to build resource models around key ratios (CSM to Customer by Tier) and tie them to Departmental metrics (Churn, Revenue at Risk, Advocacy).

This framework is aimed at being the “how” piece but please don’t forget about the “why.” An investment in Customer Success is one of the best ways that SaaS companies can be proactive about growing their revenue and fighting churn before it becomes a company-crippling issue. The 11 Pillars of Customer Success will also provide you with a strong, foundational framework for maximizing your Customer Success efforts.

(Main image via Simon Cunningham.)