Research Report

Building the Business Case for Customer Success - Part 2

This report is for Customer Success members only

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TSIA published a paper in 2015 titled the "Framework for Funding Customer Success." We provided an initial set of guidance on how to fund customer success organizations. In this report, TSIA Research expands on that initial framework providing further insights into framing two key ways of accounting, funding, and scaling customer success organizations. 

This report is split into two parts. In Part 1 we covered funding customer success out of cost of services. As we have found in our research, almost 50% of customer success organizations monetize some portion customer success and directly attribute expenses based on their customers purchasing the for-fee, adoption-based offers. In Part 2 of this report, TSIA Research describes how technology companies can scale their teams by including customer success capabilities as part of the subscription. TSIA believes that when customer success is part of the subscription, it is a services motion funded by sales. This is a similar structure to the corporate marketing function, which is funded from a larger sales and marketing cost structure.

We conclude the research with a framework on attribution of sales costs, including customer acquisition costs (CAC), customer expansion costs (CEC), and customer retention costs (CEC), when customer success is part of your subscription portfolio. To provide the most efficient and scalable sales model, technology companies will need to divide these costs to yield the highest return on their sales and marketing investments.

 
 

Authored By:

Phil Nanus

VP Research, Customer Success, TSIA

Publish Date: January 17, 2017

 

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Peg Rodarmel, SVP, Worldwide, Infor Digital Sales, Infor

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