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Customer Success

Your Guide to Building Your First Customer Success Team

4 min read
By Marc Troyan

The rallying cry from investors today is: “You need a world-class customer success organization!"

Customer success (CS) has become a vital component of nearly every technology company. But where do you start with customer success? If you are new to the customer success landscape, this can be a daunting task. You have a budget to hire and a remit to build a great customer success organization.

Making great hires early on is a critical step to your ultimate success. If you hire the wrong leadership to develop your teams and grow your department, your team can be set back years, causing you to fall behind your competitors. When you hire the right leadership, you accelerate the growth of your organization and improve net retention by several points—all while increasing customer satisfaction.

So, what should you look for when hiring customer success talent, and what roles will they play in your organization?

In this blog, we will address the topics listed below and explain foundational aspects for building a successful customer success organization:

What to Look For in a Customer Success Executive 

According to TSIA benchmark data, 87% of companies now have a customer success organization as a specific department with a dedicated leader and resources.

When considering your organizational design strategy, the most critical hire is by far the first one. Whether this is a chief customer officer or a vice president of customer success, the task to design, build, and scale a new organization is a massive one. Time is always of the essence, but finding the right person can make all the difference, as the caliber of talent that you can attract sets the tone for the entire customer experience.

87%25 of companies have a CS department

What Attributes Should You Look For in a Customer Success Executive?

It probably goes without saying, but you want someone that is an experienced thought leader in customer success, as well as a strong recruiter of top customer success talent. Remember, this person will need to recruit more operational leaders, regional leaders, experienced individual contributors, and, perhaps, extended roles such as customer success operations, technical account managers, and customer success architects.

Another key attribute that any good customer success executive must have is the ability to foster cross-company collaboration. Aligning with other executives to define key customer metrics and design the customer journey is critical for this role.

The Customer success executive must be able to partner with the heads of Marketing, Sales, Product Management, Engineering, Finance, Corporate Strategy, and other groups to deliver a unified and aligned customer experience. Customer success is a team sport, and the customer success executive will need to have everyone on the same page when designing and ultimately launching their customer engagement strategy.

What Should the Customer Success Executive Do?

1. Define the charter. Once hired, the new customer success executive must first define the charters for the organization. This person will drive the charters of the customer success organization, which will include adoption, retention, and/or expansion.

88% of customer success organizations in the industry have the charter of adoption, 78% have the charter of retention, and 61% have the charter of expansion. Anything above 50% is considered common practice by TSIA, so the executive will need to have experience managing resources with skills in all three areas. Having clearly defined charters and putting plans in place to address all three will be critical to the effectiveness of the customer success program.

Customer success charter statistics

2. Define the vision. Once the charters for the organization are defined, the customer success executive must define the vision for the organization, including a company-wide customer experience program.

3. Get Buy-in. The customer success executive must also obtain buy-in from the other executives who will have customer engagement responsibilities to deliver an excellent overall customer experience. Peers from Marketing, Sales, Product Management, Product Development, etc. will likely already have their own defined customer engagement touchpoints. For this reason, it is critical to design an overall customer engagement strategy that includes all customer-facing organizations.

Hiring Your First Customer Success Manager

Now it’s time to go to work on operationalizing this strategy. In order to do so, the customer success executive will need to bring in an experienced customer success manager (CSM) that can execute this vision. This role can be a senior CSM or a similar position that reports directly to the customer success executive while the organization is in its infancy. As the team grows, they will be trained to lead. This person will focus on client success and retention, ultimately driving revenue expansion.

Before getting into revenue growth, the customer success manager will focus on laying the foundation for the new organization from an operational perspective.

This person must have:
  • Exceptional communication skills
  • Customer engagement experience at the executive level
  • An executive presence
  • Team-building experience
  • A proactive engagement style
  • Strong analytical skills  
Six qualities to look for when hiring a CSM

Therefore, this is a quite challenging role to fill, and this professional will partner closely with the customer success executive, rolling up their sleeves to get the program up and running. The executive must trust this person implicitly and delegate many of the operational tasks to the customer success manager.

Designing For Operational Excellence

Once the vision for the organization is clearly defined, the CSM will need to assist with developing, refining, and standardizing customer success practices to improve customer outcomes and improve operational efficiency.

This includes:
  • Designing a customer journey map along with partners from other groups in the organization such as Marketing, Sales, Product Management, Engineering, Partners, and even a small sample of customers. 
  • Assisting with the design and implementation of tactical customer success program elements. These include playbooks and success plans that align with other customer experience collateral such as sales account plans, professional services project plans, customer support knowledge bases, customer enablement, and onboarding programs.
  • Mentoring/coaching any new team members to align with the vision outlined above. This person will assist with attracting and retaining top talent, with a commitment and passion for growing and developing the new hires. 

There must be a strong talent management plan in place. The initial customer success manager has a great opportunity to help design that plan. By working closely with Education Services (or a similar team) to identify and develop a CSM training program, the CSM will be able to guide new CSMs through successful onboarding. They can help to design a growth path that all future CSMs can leverage for years to come in order to grow with the business.

Tracking Customer Success Performance

Once the customer success executive has the initial customer success manager on board and has designed a program that will scale with the business, they will need to report on the success of the new team and their customer base.  

To accomplish this initially, the customer success executive will need to design and implement an initial set of reports and analytics for customer success. This includes tracking fiscal metrics, customer health, and team performance.

One of the first things to get a handle on are key fiscal metrics, such as dollar retention rate, net retention rate, volume churn rate, and growth opportunities. These metrics can generally be obtained by collaborating with the sales/revenue operations team and the finance team. Once there is a baseline for these metrics, the customer success organization can implement the proper plays to improve or increase them as necessary.

Next, the customer success executive will want to begin tracking customer health metrics and create a customer health score. Based on the available metrics, they can develop an algorithm for tracking customer health, typically on a scale from 1 to 100 and represented by utilizing a color scheme such as the stoplight colors: red, yellow, and green. This is a relatively objective way to compare all customers against one another in terms of customer adoption and satisfaction. These health scorecards generally contain:

  • Elements of fiscal metrics
  • Customer satisfaction metrics
  • Product usage metrics
  • Adoption/consumption metrics 
  • Subjective input from various account team members

The final category of metrics that customer success executives need to define and track are team performance metrics. Although there may only be one individual customer success manager on the team at this point, it is important to be able to track the metrics that align with the stated charters.

Using Technology to Scale

While tracking metrics and creating dashboards are a great way to determine the health of your customers and identify any potential downward trends in your account base, they are time-consuming to design, develop, and deploy.

Also, most customer success executives will not have the time and/or skills to do the development and deployment themselves. They will need assistance, and that will have to come from a number of different teams that could include Sales/Revenue Operations, Product, Finance, etc. Information on appropriate data and metrics needed to run the customer success program should exist in a digestible format that can be presented at a moment’s notice.

Therefore, the third hire in a customer success organization may very well need to be technology rather than a human. 

Consider taking the budget for the next CSM hire and instead applying it to a technology solution. For example, having a customer success platform that can house your playbooks, success plans, and customer marketing lists can be great tools for a customer success executive. Working to surface downward customer trends before they become real issues can also provide great results. In addition, customer success platforms can typically integrate directly with existing systems such as customer relationship management (CRM), enterprise resource planning (ERP), and marketing automation solutions that you are already using to run the business.

To sum it up…

As you can see, there are many considerations when starting up a customer success organization. The most critical foundational elements are:

  • Hiring a strong executive
  • Hiring an effective customer success manager
  • Designing the program for operational excellence 
  • Adopting technology to enable that excellence

 December 15, 2022

Marc Troyan

About Author Marc Troyan

Marc Troyan is the director of customer success research for TSIA. In this role, he works closely with member companies to deliver research and advisory programs focused on helping them optimize their customer success organizations and effectively deliver positive and successful customer outcomes. In total, Marc has over 25 years of experience working for professional services and technology providers including Ernst & Young, Salesforce.com, and Adobe prior to joining Gigya. Since 2007, he has led Customer Success organizations of varying shapes and sizes.