As Customer Success practitioners, we know that everyone would love a how-to manual with all the best ways to implement and grow their CS organizations. From the beginning, we’ve been dedicated to helping businesses navigate this emerging discipline. What we’ve learned is that there is no one “right” way to do Customer Success. But there are ways to make the process of building and expanding your CS practice much easier on everybody. It’s the work smart not hard strategy, and we’ve been busy perfecting it for Customer Success teams across the spectrum – whether they are in the early stages of developing this function, at the jumping-off point for major growth, or ready to truly take their CS game to the next level.
To properly assess the characteristics and capacity of Customer Success organizations in this ever-evolving field, we’ve aggregated findings from interviews with over 100 CS leaders, best-in-class research firms like TSIA, and our work with dozens of CS friends, consultants, and customers to build an industry standard for Customer Success maturity – the ESG Customer Success Maturity Model.
What is the ESG Customer Success Maturity Model?
If you’re scratching your head at this point wondering what on earth I’m talking about, the Customer Success Maturity Model is a proven, comprehensive framework used to define, organize, and benchmark the capabilities every CS organization needs to build a CS practice, operationalize its foundation, and transform its critical function to scale. In other words, it’s a frame of reference to gauge your Customer Success development against your peers.
At its core, Customer Success is about delivering on the promises you’ve made to your customers in a way that brings them value. But, when you dig deeper, adding CS to your company’s org structure is not a simple or straightforward undertaking. Missions like perfecting the adoption journey or deciding who owns renewals can quickly add up to a seemingly insurmountable list of tasks and operational challenges that will have your head spinning. At ESG, we’ve taken everything there is to know about thriving Customer Success organizations and distilled it down into one data-driven approach for mapping your most important CS capabilities.
The ESG Customer Success Maturity Model is not about telling you what you already know. It is a deep dive assessment with 150+ data points mapped across three distinct categories: Build, Operationalize, and Transform. We’ve identified 17 fundamental CS capabilities and sorted them into each category for a big picture view of the functional maturity of your CS organization, which then allows for the creation of a prescriptive plan for achieving tangible results.
Focusing your time and energy in the right places
What do you gain when you have this 360-degree view of your Customer Success maturity? Well, we’ve already mentioned performance benchmarking – your ability to measure your CS abilities against other businesses like yours. This isn’t meant to be a game of ‘keeping up with the Joneses,’ but rather a way to validate your competitive advantage alongside your peers. Not necessarily direct competitors, but this means global Enterprises can see how they stack up against other global Enterprises, and one high-growth startup compared to others in that same category. This frame of reference helps you see if your CS strategy is ahead of the pack…or if you’re lagging behind.
Customer Success is also notoriously difficult to track via hard revenue numbers. It can take a year or longer to really see the impact of the right CS strategy across an organization. The leading indicators of Customer Success can be difficult to measure, and lagging indicators take time to gather. The objective results of a maturity evaluation give you a concrete baseline to demonstrate your progress and predict your long-term performance in the interim.
But finally, and perhaps most significantly, this comprehensive evaluation helps you identify all the critical components of Customer Success, where your gaps are, and where to concentrate your limited time, energy, and resources to make the most impact in the shortest amount of time.
The capabilities you need to build the foundation of Customer Success
The first category of the Customer Success Maturity Model is all about laying the groundwork of your CS practice. There are five key capabilities broken out under this Build category that all revolve around the building blocks of Customer Success. When you have these basic fundamentals in place, it means that your organization is established and ready to grow.
1. Segmentation
Customer segmentation is the first capability on our list because the downstream effects of poor segmentation can be so far-reaching. Customer segmentation influences everything from how well you allocate your CS resources to whether or not your customers renew. If your customers are properly categorized, Customer Success costs actually go down and, over time, sales and marketing costs will decrease as well.
2. Engagement Model
Your CS engagement model is the structured process by which CSMs engage with your customers. Each customer segment will have their own engagement procedures, delineated by factors like high touch and tech touch (though these pathways of communication are no longer mutually exclusive). As your maturity grows, you might take on a more dynamic approach to customer engagement – a trend TSIA has recently called out as one to watch in 2021.
3. Organizational Design and Structure
Where does your Customer Success team sit within your larger organizational structure? Hint: the higher, the better. Fewer organizational layers between your CS leader and top brass mean more efficient delivery of CS to your customers. And TSIA agrees that a fundamental building block of Customer Success is having a proactive CS leader reporting to a higher-level executive team, ideally one in charge of customer growth like a Chief Customer Officer.
4. Metrics
I’m sure it comes as no surprise to anyone that formulating Customer Success-based metrics is a critical component of effective CS. By tracking lagging metrics like NPS and churn and leading indicators like engagement and usage, you gain critical visibility into the health of your customer relationships and the ability to drive focused results. You’ll really feel the momentum of this capability when you can utilize these leading indicators to predict the performance of your lagging ones.
5. Reporting
The final Build capability has to do with everyone’s favorite thing – data! It’s not just me, right? Who else loves to dig into a juicy financial report or sit down for a long look at a colorful dashboard or pie chart? Even if you don’t love data like I do (impossible!), you’ll love the deep insights you gain from having access to reports and data on the effectiveness of your CS organization.
This is part one of our three-part series taking a closer look at the ESG Customer Success Maturity Model. Go ahead and check out part two on Operationalize capabilities or skip to part three on Transform capabilities (you, rascal, you).