Customer success organizations are under great pressure to grow and expand their capabilities but are also under guidance to control costs. How do customer success organizations scale to meet these demands while being economical and cost-effective?

While executives know that they need to grow their customer success team to meet their business's needs, many are unsure where to start or, in some cases, they make investments in areas that do not provide value.

Scaling customer success is one of the most complex topics we address with our members. When thinking about scaling customer success, it’s important to use a holistic view, as scaling may mean different things to different organizations based on their unique journey, the complexity of their offerings, the complexity of their internal processes, their level of maturity, and their capabilities.

However, one thing is clear for all organizations: As the organization grows, so does the customer base—and along with that, the complexity of protecting those customer relationships to ensure they stay and grow with you. Your customer success team needs to be ready to meet these growing needs every step of the way.

There are key strategies organizations can utilize to scale customer success for longevity, which ultimately come down to three key areas of focus: people, processes, and technology.

If you haven’t started thinking about scaling your customer success team, the time to do so is now. The best place to begin is by evaluating the success of your current customer success team and the design of your customer success organization.

Things to Consider Before Scaling Customer Success

It’s important to ensure that the foundation of customer success has been properly laid before attempting to scale. This foundation has three of four areas that make up what we refer to as the building blocks of customer success.

You want to define and build out the capabilities your team will need to grow, face challenges, find solutions, plan work, and ultimately deliver results for your customers. However, the priorities for developing these capabilities will be different for each customer success organization depending on their level of maturity and the charters that you align to support them.

Define Your Customer Success Organizational Structure

Believe it or not, where customer success resides in the organization matters–it matters a lot! We have extensive research showing that the leader that customer success reports into will help determine your company’s revenue and growth strategy.

Do not just place customer success anywhere. Where you align your customer success organization has deterministic value on how it can and will be funded to grow.

Then, once customer success is in place within your company, understanding what charters you take on makes all of the difference. Are you going to make customer success responsible for adoption, expansion, and/or retention? Perhaps all of the above? That decision will drive the number of resources, tools, and processes you employ.

Defining the Charters of Customer Success

Securing recurring revenue streams is a common objective of customer success organizations. However, many of these organizations are being tasked with additional responsibilities, most commonly:

• Adoption: Activities involved in making sure the customer is using the technology solution or services and delivery that ultimately helps the customer to realize value from the technology or service that was implemented.
• Expansion: Activities required in helping current customers expand their use of your technology and services which requires them to spend more with your company.
• Renewal: Activities required to ensure the customer renews their full value with the company.

Make no mistake, these are incredibly important charters when it comes to the overall company performance. But to scale effectively, the direct and indirect responsibilities of customer success must be established and clearly understood.

An organization taking on one or more of the above charters will impact scalability. Much thought has to be given to the amount of work that can be performed. The vast majority of the work should focus on adoption. When adoption is performed well, renewals and expansions are the outcomes. Therefore, before you agree to take on more responsibilities, think about how you will scale to support these motions of adoption, expansion, and renewals.

Funding

The next question that organizations should ask themselves when scaling customer success is: Where will funding come from? Funding typically comes from one of four places.  

• Traditional funding sources: This can be sales and marketing budgets, cost of goods sold, or even general and administrative budgets.
• Monetizing customer success: Offer programs to include monetizing customer success to help scale.
• Fiscal funding: Improvements made in expansion and retention by customer success that is redirected back to customer success.
• Efficiencies in sales: Sales efficiencies are now performed by customer success teams rather than the sales team.

Ask yourself: Are there other tasks your customer success team is responsible for beyond traditional adoption, retention, and expansion activities that could impact funding?

Consider the following questions as you start to build a customer success funding model that works best for scaling your organization:

1. What is the target financial model your company is attempting to achieve?
2. Will the customer success organization have responsibilities for traditional services and support activities upon scaling?
3. Will the customer success organization be responsible for renewing the customer subscription upon scaling?
4. Will the customer success organization now be responsible for lead generation, cross-selling, and upselling existing customers?
5. Does your scaling include behind-the-scenes teams like customer experience and customer success operations?

Once you’ve answered these key questions, your company can document your model for funding customer success at scale. By establishing a funding framework, businesses at any stage in their customer success journey can start making rational decisions regarding the future of this function as they scale.

Customer Segmentation

Often, when an organization begins to think about scaling its customer success team, it will first focus on people. However, scaling customer success correctly will mean more than hiring additional customer success managers. Focusing on the processes and technology that can bring you higher levels of efficiency is key, as this will allow you to do more with the same amount of resources.

Every company has limited resources. As a result, how these resources are deployed
will significantly define the level of success your customers will achieve. Customer segmentation can be implemented to help you streamline your resources by looking at when, where, and how to best engage with the customer.

Segmentation strategies include:

• Revenue (either existing or future)
• Geography
• Product
• Customer line of business

It is then critical to align an engagement strategy defined by touch, whether high-touch, medium-touch, low-touch, or digital-touch. We also recommend that digital touch be included in all segmentation levels.

The Five Efficiencies of Scaling Customer Success

Scaling customer success can be a challenging task, but there are five key efficiencies that can help organizations effectively align and grow their customer success operations for a greater customer experience:

1. Analytics: This starts with an adoption framework. Knowing the right data and metrics to measure will help your organization capture the right descriptive analytics so that you know who is using your technology. Descriptive analytics allow you to know if the customer is becoming dependent. In addition, tracking outcome analytics lets you know if the customer is going to receive value and achieve their stated outcome. This helps source the size of your teams so you know when and where to engage.
2. Digital customer success: This should be implemented across all segments so that your customers can feel as though they are a high-touch customer without requiring human interaction. This will help your organization scale while allowing your customer success managers to carry more accounts for human coverage.
3. Operationalize the journey: This requires the development of customer journey maps, success plans, and playbooks. Complemented by the adoption framework, this scientific approach leverages data to know when and where to engage in the customer journey for greater efficiency. Gone are the days of having resources available to react when you can now become prescriptive.
4. Effective sales growth: This involves leveraging customer success managers to field three possible areas including lead generation development, upsell, and cross-sell. The extent to which your CSMs will take on these sales-related activities will determine how much revenue and growth you can drive from your existing team. It will also allow you to determine how much you will need to invest in other members to help with this increasingly commercial responsibility.
5. Partners: This is the most effective team to leverage. Partners don’t get paid until your organization gets paid. It’s important to know what charters the partners will be responsible for and then ensure that they are trained and equipped to engage the customer at the right time in the customer journey.

By leveraging these five efficiencies, organizations can scale their customer success operations while maintaining a high level of service and support for their customers.

The Journey to Monetizing Customer Success for Scale

For many technology vendors, finding and maintaining recurring revenue streams has always been top of mind. Whether you sell hardware, software, subscriptions, or services, the best way to secure a solid recurring revenue stream is to ensure your customers achieve their desired business outcomes.

The primary goal of customer success is to enable the effective adoption of technology, leading to high renewal rates and expansion, making it a vital department to scale within your organization.

It’s important to scale on top of the customer success building blocks outlined here to ensure that you have the right people, processes, and technology in place, supported by the right metrics and funding model to see long-term success.

We know that cost-effectively scaling customer success is a challenge, as is monetizing customer success for scale, and that’s why we are taking on this topic in our first-ever Customer Success Research Journey. Subscribe to this journey to better understand how your organization is operating when it comes to monetizing customer success.