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What is Customer Success


Interview with David Hare, Advisory Partner for ServTrans LLC

We recently had the opportunity and privilege of interviewing our David Hare regarding a subject that he is quite passionate about; Customer Success. David is known expert and thought leader in the Services Industry and how Customer Success is becoming a critical function in technology companies. David is currently an Advisory Partner with ServTrans LLC (a services advisory firm). David has had over 35 years of experience growing and leading world class global services organizations. Most recently he was SVP of Customer Success and Ooyala.

ServTrans: Dave, let’s get straight to the obvious question. Since Customer Success is becoming the new buzz in business today, let’s frame our discussion by how YOU define the term?

 David Hare: Customer Success is what you do within your company to advocate for your customers in order to ensure they get the value of your product or service as quickly and effortlessly as possible. Every organization in the company plays or should play a role in this.

That said, I believe that there should be a person or organization that is not only responsible for driving that kind of culture but is also the focal point for ensuring the right actions, policies and programs exist in order grow an increasingly loyal and successful customer base.

For example, Customer Success Managers typically fill in the grey areas that exist in Cloud based offerings between Sales and all Post Sales Services by following up with existing customer to ensure they are using their products or services in the most productive manner. CSM’s have access to the full customer profile so they are able to make strategic, and informed decisions instead of just having to react to problems like Customer Support.

ServTrans: Why should companies care or invest in Customer Success as you have defined it? 

 David Hare: Remember, Customer Success is a corporate attitude not a department. What I defined above is the organization typically called Customer Success Management. They are solely focused on helping customers be successful with the purchase of your product or service. They are typically measured on Customer Satisfaction, Net Promoter score, renewals, upsells and referrals.

 ServTrans: What do you see as the measurements of success for the company’s investment in Customer Success?

David Hare: Measurements of Success include but are not limited to things like increased renewal rates and greater retention of customers. You should be able to reduce churn, increase upsell / cross-sells as well as increase Customer Satisfaction and Net Promoter Scores, referrals, and references. The answer is it is all dependent on the goals of the organization. For example not all companies task their CSM to upsell. At a bare minimum it should be retention and referrals.

Having a prominent Customer Success organization will also allow and facilitate a Customer Centric mentality to develop in all organizations with in the company.

ServTrans: What does a typical Customer Success organization look like?

 David Hare: While there is no “typical” organizational structure it should at a minimum include a tiered model. You typically have your most senior and experienced CSM’s on a 1-5 ratio of your most strategic customers, second tier would be a 5-15 ratio of customers and the next tier would have a 1 to many, maybe as much as 1 -40-50 or even a pool ( not named )of CSM’s that manage 100’s of customers

ServTrans: Where should the organization fit into in technology companies?

David Hare: I believe it should be part of the larger Services organization. Remember they fill the voids between, Customer Support, Professional Services, Educational Services, and Technical Account Managers. So having them in the same organization where each organization can learn from each other, share information and best practices makes sense. They make each other better teams which helps the customer immensely. Also the CSM team should report into as high up in the company, as close to the CEO as possible. This ensures they have the appropriate “say and influence” within the company and are properly funded.

 ServTrans: What skill sets do you look for in this organization?

 David Hare: I would want to make sure that they possess the disposition and skill set to help support a strong customer service environment is important. Skills can be taught but attitude and personality cannot. It’s a sad fact but not everyone should interact with customers.

When possible hire from within the industry you are serving to have the added skill of domain and industry best practices. (If you are selling into the marketing community hire from within them)

ServTrans: Since you say the Customer Success Managers often sit between and service, how are they typically compensated

David Hare: Difficult to answer as some companies place more emphasis on up-sell and cross selling and these companies should have some variable compensation based on the cross/up sell goals. Others companies place more importance and renewals these should have a higher base salary. Another thing to consider is how much ARR are they responsible for protecting. One company I am familiar with had their lowest paid employees, as an organization, as their CSM team. In my opinion that was a short sighted investment strategy. It sets a tone that perhaps the company is not as serious about customer success as they might claim.

ServTrans: What stage in the lifecycle of a company should Customer Success be implemented?

 David Hare: There is no real hard and fast answer for this one but it is never too early to be thinking about a customer retention strategy. The earlier in the life cycle in the company that you are thinking about developing the team the easier it will be to implement and have the entire company behind it.

ServTrans: In your opinion what kinds of companies or industries benefits the most from Customer Success?

David Hare: While all types of companies and industries can benefit, by far the SaaS based product companies benefit the most due to the ease of which customers can switch vendors.

ServTrans: One final question, what are the greatest challenges of customer success in your opinion? 

David Hare: The greatest challenge is not having the entire company behind the success of the Customer Success team. Let me give you an example, Legal says “I don’t play a role with the success of our customers”. As a customer Success manager you consistently hear from your customers that their contracts are too wordy and difficult to interpret so they are very unhappy with not just legal but with the difficulty in working with your company. The IT department says the same thing and then when you bring the customer into your facility for a demo WI-FI does not work and the projectors are down. What type of an impression does that leave on the customer?

One big problem is not investing appropriately in the CSM’s, giving them the tools they need and the access to other organizations and information to be successful. Think insight into marketing campaigns, new product introduction, implementation results and support ticket information.

One other challenge is having the CSM’s reporting to far down into the organization. The higher up they report the more significance the rest of the company place on them.

ServTrans: Thank you for sharing your insights and final thoughts?

 David Hare: Yes, Thank you. I have shared my experience here and am hoping others will chose to share their Customer Success stories and experience as well. We can learn by sharing.

All rights Reserved by ServTrans LLC.

ServTrans LLC is unique advisement firm founded 2008 to help companies create new value through a laser like focus on creating customer value and success. Our globally recognized experts and partners will help to innovate, transform and optimize companies to thrive in the services economy. For more information contact us info@servtrans.com


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