5 Pillar Customer Success Strategy Stack
There’s nothing quite like the promise of a new year to get your customer success team invigorated and rejuvenated. While end-of-year planning is the perfect place to rethink game plans and ensure your strategy is in line with your company’s corporate goals, it’s also a time of opportunity and forward-thinking.
The beginning of a new quarter and a new year is the perfect time to nail down parts of your customer success strategy that might have been difficult or confusing in the past. Here are five customer success strategy stack pillars that will help take your customer success to world-class standards.
5 Pillars of the Customer Success Strategy Stack
1. Compensation Plans
Compensation plans are always a tricky subject and are often one of the most frequently asked questions by customer success leaders and their teams. While there are a few structures and customer success compensation models available in the industry, it comes down to your unique team structure and goals to determine which one is right for you. Generally, there are three main ‘buckets’ of CSM compensation plans: base only, base + bonus, and base + variable. The base + variable option is typically more beneficial to growth-based customer teams because it embraces accountability and rewards hitting clear targets such as growth, renewals, and account expansion. But again, depending on your team structure and your overall corporate initiatives, your compensation plans will vary.
Article: 3 Customer Success Compensation Models
2. Performance Metrics
Just as every customer success team has different types of compensation guidelines, so too do these teams rely on different metrics to track and guide department, team, and individual success. For the average SaaS-focused customer success teams, there are four main buckets of metrics to consider: financial metrics, customer health metrics, usage metrics, and team performance metrics. When it comes to customer success as a pillar of growth in your business, the financial metrics will most likely take center stage. The top five SaaS customer financial metrics are:
- Revenue Retention Rate (Gross and Net)
- Revenue Churn Rate (Gross and Net)
- Customer Retention Rate/Customer Churn Rate
- Renewal Rate (Gross and Net)
- Quick Ratio
To learn the formulas and definitions from above download our eBook called The Ultimate Guide to Customer Success Metrics. Compiled from feedback of the top customer success leaders in SaaS.
Download: The Ultimate Guide to Customer Success Metrics
3. Customer Lifecycle/Journey Mapping
Customer success professionals love to talk about the customer journey as some mythical overarching concept that influences the day-to-day decisions of a team, but it’s actually more than that. The customer journey is a real workflow of how a customer engages and interacts with your team from the very first sales cold call to an ongoing, mutually beneficial partnership that last years. This being said, the actual logistics of a customer journey is constantly changing and adapting based on the internal operation of your team.
The journey for customers of a startup, on one hand, is completely different than that of a customer of an enterprise corporation. The start of a new year is the perfect time to take a step back, map out your current customer journey process, and identify any areas of potential opportunity or optimization. Now is also your chance to change anything that isn’t working correctly or to ‘reroute’ your customers to avoid areas that are rocky or still being developed.
Article: 5 Best Practices to Build a Customer Success Journey Map
4. Renewal Ownership
This is one of the biggest questions in the customer success industry and it’s not going away any time soon. As long as there are sales and customer success teams, there will always be the question about who actually owns the responsibility of account renewals and growth. Similarly to compensation plans, renewal models are largely dictated by the overarching growth goals of an organization. There are a few different renewal ownership models that can guide your team during 2019 planning:
- Sales is responsible for new logos, account expansion, and renewals while customer success is responsible for customer satisfaction, usage, and adoption.
- Sales is responsible for new logos while customer success is responsible for customer satisfaction, usage, adoption, expansion, and renewals.
- Sales is responsible for new logos, customer success is responsible for customer satisfaction, usage, and adoption, and a dedicated account manager is responsible for renewals and expansion.
Whichever model your team decides on, it should be a joint decision between sales and customer success leaders that prioritize the success of the team as a whole.
Article: Who Owns the Renewal? – 3 Models to Consider
5. Retention and Growth Goals
While this is probably the most important part of customer success strategy planning, it can also be the most complicated. Getting clear direction on your actual growth goals, whether it’s through retention or expansion, is not easy, especially if your executive team is swamped with yearly planning across an entire organization. But, before the new year, your team should know exactly what your 2019 numbers are and be able to break these goals down by quarter and month. That way, you’ll be on top of your goals right out of the gate in January, instead of having to wait a few weeks to catch up.
Ultimate Guide to SaaS Customer Success Metrics
Customer Success as a Culture: Customer Success Leaders Edition
Customer Success in the C-Suite—Aligning the Board and Exec Team
The Four Fold Mission of Customer Success
Learn more about how ClientSuccess can help your company develop a strong Customer Success methodology and strategy with easy-to-use customer success software by requesting a 30-minute demo.