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XaaS Product Management

Customer Success and Product Management Collaboration

How Product Managers Can Work More Effectively with Customer Success

4 min read
By Laura Fay
With the rise of recurring revenue models in B2B, comes the rise of customer success’ role in helping customers realize value from their technology purchases. Once their role is established and operationalized, the question then becomes: “How can product management and customer success effectively collaborate for the benefit of the customer and the business growth?”
 
While a Google search of “customer success and product management collaboration” yields 106 million results, it produces little more than tips and anecdotes. This topic is becoming increasingly popular as the business dependency on it increases. Hard data and actionable steps are needed, and is why TSIA researched this interdependent relationship across the industry.

TSIA  identified the best practices that companies are using for an effective product management/customer success handshake, with “effective” defined as correlation between increased product adoption and revenue growth.

The Roles and Goals of Product Management and Customer Success

An effective relationship between product management and customer success is critical for the viability of any recurring revenue business. To understand why this is, let’s start with defining the responsibilities and remit of these two functions.

To simplify, product management defines the promise for the customer. That promise manifests as a compelling value proposition that the customer is repeatedly willing to pay for.

The remit of customer success is to ensure that the customer is realizing the promise. They ensure the customer is effectively adopting the products and services and are realizing full value from their purchase. When this happens, the customer is very likely to renew their relationship with the vendor and spend an increasing share of their wallet with them.
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Customer Success and Product Management’s Customer Relationship

On a day-to-day basis, both teams might say they are busy “delighting the customer” through their respective activities. “Customer delight” will ultimately be measured by adoption of the company’s products and services, and both product management   and customer success have their role to play in driving up adoption.

Customer Success and Product Management Collaboration: A Symbiotic Relationship

There are many interdependencies between product management and customer success.
 
Customer success needs product management to provide a low friction product experience for customers. This makes it so time is not wasted simply helping the customer use the product, but can be spent on more strategic engagements.

The TSIA Support Services Benchmark reveals that an astonishing 36% of all customer cases are ‘how to’ use their purchased product. Customer success needs  visibility on the predictive and prescriptive analytics to know how the customer is using products and engage strategically for maximum impact. Customer success teams need to be guided by the roadmap information that customers are regularly interested in hearing.
 
On the other hand, product management needs customer success to help them share certain product roadmap information. This allows the traditionally small product management team to scale their efforts and responsibilities.

Product management also relies on customer success to solicit  customer input and feedback on key product capabilities and beta and pilot programs. Furthermore, product management often gains significant insights from engaging in customer journey mapping exercises.

Our research shows that customer success teams are more likely to conduct and facilitate customer journey mapping, providing the  product management team with invaluable insights that can dramatically advise the digital product experience.

These are just a few of the many ways that each of these teams depend on one another to fuel their core charter. Ultimately, product management and customer success have a shared destiny. The success of one is dependent on the success of the other. Conversely, if one fails there’s little likelihood that the other’s goals will be achieved.  
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The Customer Success – Product Management Collaboration Loop

While both product management and customer success teams understand their basic interdependencies, neither team is satisfied with the state of their operational handshake. A recent TSIA poll illustrates this, with both product management and customer success rating their handshake as ‘middling’ at best and rarely good.
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 Customer Success – Product Management Collaboration Survey

From the vantage point within their teams, both product management and customer success intuitively know when their supporting inter-operations are not working well. They can see the opportunity to do better for the benefit of the customer and the business.
 
Given what we know, you might find it surprising that many businesses that depend on recurring revenue have little to no shared or defined adoption goals. In the same TSIA poll cited above, just 28% of participants shared adoption goals between departments, and 33% admitted to having no defined adoption targets at all.

Collaboration becomes important when both product management and customer success teams are accountable for achieving adoption targets of key customers. Effective collaboration is necessary when both teams desire to consistently achieve (or overachieve) their adoption targets for the customer base.

Challenges For Customer Success and Product Team Collaboration

While it’s easy to recognize the importance of the product management/customer success handshake and its current shortcomings, it’s helpful to consider why that is.  

First off, effectively operationalizing the handshake is a fairly new industry practice. This is because while the product management function has been in existence for a few decades customer success is a relatively newer organization in B2B technology companies.

Product management has roots in tech going back to the 1970s at Hewlett-Packard, when there was no department called customer success with a remit of to drive adoption. As the technology industry shifted to an as-a-service world, customer success teams were established to accommodate the new model and to help customers adopt and realize the value of increasingly complex products.
 
At the industry level, this new interdependency created new needs to operationalize. It was a newly added motion over traditional ways of working for product management as they adapted to designing for subscription and consumption business models.

While B2B product management learned a lot from B2C methods, that did not include how to work with customer success organizations. After all, what B2C tech company has a customer success team?

So the question remains, how does product management  effectively engage with  customer success to realize high product adoption and growth?

The Industy's First Product Management – Customer Success Operational Maturity Model

How do we know what a good partnership between product management and customer success looks like? TSIA researched this interdependent relationship across the industry to identify the practices that companies are engaging with for an effective product management – customer success handshake. We’ve defined ‘effective’ as a correlation between increased product adoption and revenue growth.  

Four main phases of maturity were identified:
  • Reactive  - The product management and customer success teams operate in relative silos with no adoption targets. Their engagement tends to be tactical and sporadic in response to customer escalations. This phase is characterized by relatively low levels of adoption and lower revenue growth rates.
  • Informed – The product management and customer success  teams recognize some inter-dependencies, however their engagement is characterized by only a few targeted initiatives. When it comes to adoption targets, their handshake is unbalanced–product management defines these targets and customer success is accountable to achieve them.
  • Aligned – Product management and customer success leaders set the stage with shared accountability for adoption, which forces the teams to collaborate to achieve the goals. The term ‘delighting the customer’ takes hold in the form of strong adoption. They begin to formalize their practices and engagements to drive adoption. This maturity phase is characterized by higher levels of product adoption and revenue growth.
  • Optimized – Pacesetter product management – customer success handshakes are characterized by a complete joint ownership of the customer adoption life cycle. This comes with a high degree of mutual trust and support. Adoption as a strategic imperative is embraced, not only by product management and customer success, but also by adjacent functions. Customer success is deeply engaged during the digital customer experience (DCX) design and creation phases of the product life cycle.
The chart below depicts 3 of the 6 attributes of the product management and customer success operational maturity model.
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Product Management – Customer Success Operational Maturity Model

This operational model is an industry first and something that will only continue to grow in importance as the product management–customer success relationship becomes more critical to your success. 

The State of the Industry

So, where does the tech industry currently land on this operational maturity continuum?

A recent poll shows where the industry believes their companies are on the “Informed” stage. Product management and customer success teams are increasingly aware of the mutual destiny and interdependencies for success.
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Product Management – Customer Success Maturity Rating

This data represents the sentiment of the personnel on both teams that is reflected in the effectiveness rating illustrated in the survey data above. For businesses that are in the “Aligned” and “Optimized” maturity phases, their product management and customer success teams tend to rate the handshake as good or excellent.  Conversely, those who identify as being in the “Informed” or “Reactive” phases rate the handshake as fair or poor. 

How to Improve Collaboration Between Customer Success and Product Teams

If you find yourself rating your product management – customer success handshake as fair or poor, now is the time to act. While companies with lower handshake ratings might be able to get by for now, this won’t last for long.

The digital transformation is not just coming to the tech industry, it’s already here. And that means a higher importance on inter-departmental collaboration and a seamless working relationship for customer success and product management.

Here are two ways to “move up the ladder” and improve your collaboration:
  1. Embody the traits of the next maturity phase. Whether you find yourself in the “Reactive,” “Informed,” or “Aligned” phases, our operational model provides a roadmap for how to advance on the continuum. Look at the practices, goals, and organizational set up of the phase above where you’re currently at and brainstorm what practical steps you can take to get there.
  2. Share this with your product management/customer success counterparts. Whether you’re reading this as a product or customer success manager, it does no good to keep this information within your own team. Sit down with both of your teams and map out how you might enact changes to ensure your effective collaboration. You both hold two halves of a map that only works when you come together.  
We’ve demonstrated that improving this operational handshake is good for top line growth. If that’s not motivation enough to move up this maturity curve, then consider this:

The tech industry is facing a time of talent wars, when employee motivation and commitment is all important. Moving up this maturity curve may be just what’s needed to help the product management and customer success teams feel more supported by their leadership and more empowered to achieve their goals. That’s golden!
 

 August 11, 2022

Laura Fay

About Author Laura Fay

Laura Fay is the vice president and managing director of offers research and advisory for TSIA. She also serves as TSIA’s vice president of XaaS product management research. Laura is a technology industry veteran with over 30 years' experience driving business growth in the enterprise technology industry via leadership roles in product management, general management, product development, and customer success.

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