Facing economic challenges in Customer Success? Revisit the foundations of your program

This is a guest article by Kristen Hayer, the founder and CEO of The Success League.

During a difficult time, like an economic downturn or a financial insecurity, companies start to take a closer look at every department. They need to make sure they are operating as efficiently as possible to be ready for any kind of financial hit that the business might take.

Lately, many customer success (CS) teams have been downsized or eliminated because of global economic uncertainty. There are many reasons this is happening, but one major reason is that many CS groups haven’t set up their program with the foundations it takes to run an efficient operation. When those foundations aren’t there, it is easy for organizations to view their CS team as a cost center with poor controls and limited visibility, and in turn, a prime place to make cuts.

There are three foundational areas of CS where I see teams miss the mark: customer segmentation, journey mapping, and team structure design. As a CS leader, these tools help keep your team lean, standardize your operations, and give your C-suite visibility into decisions about headcount and tooling.

Here’s why each of these foundational areas is important to establishing the value of your CS team, and how you can start to put them in place if they aren’t currently a part of your program.

Customer segmentation

The first foundation of an efficient program is segmentation. Breaking your customer base into segments does two things: It aligns your customer journey with the needs of each customer group, and it keeps your CS costs aligned with the revenue that each group generates. Both the customer experience and cost control are key parts of a solid success program.

Customer experience: Segmenting your customer base is important once you have moved beyond the early startup phase. At that point, you’ll probably have customers who are on legacy programs that may not be part of your go-forward strategy, and customers who are a good fit. You might have customers who are more tech-savvy than others. You might have customers who are small businesses and others who are enterprises. You might have some customers who you can sell more to and others who already have your full offering. There are endless ways to split up your customers. You’ll want to choose segments that align with the needs of your customers based on a simple, easy-to-track factor. Choose the one that has the biggest impact on your customer experience.

Revenue: You also need to consider revenue. A lot of companies are hesitant to do this because they believe every customer has the same value. Thinking this way is a mistake. You can’t help any of your customers effectively if you aren’t operating efficiently. Customer experiences can be digital and fantastic, and people-driven and terrible. Moving toward digital CS for smaller customers is critical to controlling costs and ensuring that you apply your people to the accounts where they can have the biggest impact. It is OK to consider the brand value of a customer along with their revenue—sometimes you might have a really big brand, and their value as a reference boosts the revenue they bring to your company.

Journey mapping

Once you have segmentation sorted out, you need a customer journey for each segment. This roadmap focuses your team on high-priority items, keeps your costs aligned with your segmentation plan, and highlights where you need to apply resources—both people and technology. Since journeys are unique to each segment, we recommend keeping the number of segments you build a map for reasonable—three or four is typical. Mapping your customer journey also provides you with a tool you can use to give your leadership team visibility into what you’re delivering to customers and demonstrates that you are taking a systematic approach.

Journey mapping doesn’t have to be complicated. We’ve tried several different approaches at The Success League over the years and have found that a simple spreadsheet often works best. The most important part of mapping the customer journey is including every team who engages with customers in the process. If you try to design processes for other teams, they won’t buy into any changes you propose, and you’ll have a hard time getting them to adhere to the journey. Sometimes it can help to have a facilitator work with your team, especially if there is friction between groups.

Once your group is assembled, you should map the current journey and look for places where the customer experience isn’t optimal, where there are no touchpoints, and where internal processes are rocky. Using what you learn from this discussion, design a new journey that better meets the needs of the customers, fills in any journey gaps, and smooths out internal interactions. Once you’ve mapped the journey, go back over it from the perspective of a customer. Even better, ask some of your customers for feedback!

Team structure planning

When your journey mapping is complete, you’ll have a tool you can use to estimate the amount of time it takes to serve a single customer in a specific segment over a period. You can use this information to estimate the number of customers a CSM can serve in that segment, given the journey you have designed. By analyzing your journey, you can discuss tradeoffs between headcount and the customer experience with real data, which is much more effective than an emotional plea to your finance team.

Start by estimating the time each touchpoint takes to complete. Consider things like prep and follow-up work in your estimates but try to be realistic. This step doesn’t need to be perfect—it just needs to be directionally correct. Add up the amount of time it takes to serve a customer who hits all of the typical touchpoints. Decide on the amount of time that a CSM can dedicate to customer engagement (reserve some time for internal meetings, email and breaks) and divide that by the time it takes to serve a single customer. This will give you a realistic ratio of customers to CSM for that specific segment.

You’ll likely need to combine this with a top-down benchmark that your company might be using to estimate the number of CSMs needed. A typical one is $X million per CSM. If this number is very different from the ratio you arrived at when you looked at the time it takes to deliver your journey, you will need to make tradeoffs by either paring down your journey or reducing a CSM’s revenue responsibility.  Once you arrive at a ratio of customers to CSM, you have what you need to meet with your finance team to discuss budget and headcount in a data-driven way.

The foundations of a solid CS program should always be present. As a CS leader, you can use them to keep your team lean and efficient, which is important in good times and bad. However, in a financial downturn, these elements help protect your team from layoffs by ensuring they’re seen as an efficient driver of customer value. Give your leadership team visibility into the work you are doing to provide a great customer experience as efficiently as possible.

Want to learn how to lay a strong foundation for your CS team?

Join Kristen at ChurnZero’s RYG Workshop in Austin, Texas on March 23. You’ll get an inside look at the CS programs Kristen’s team have helped build, including their implementation of technology, as well as the CS maturity model used to accelerate readiness and deliver impactful results. Register today.