Customer Success vs. service – When customer interactions become proactive

Unless you’ve been living under a rock for the last 5 years, I’m sure you’ve heard the term “customer success” before. But what does it mean exactly? Some think it means customer service, some think it means customer support, some think it means simply being an advocate for your customers.

When subscription models became more prevalent in the tech industry, it meant the old days of “one and done” sales were over. Companies realized that once they close a deal and get a customer, that’s when the work of keeping that customer begins. There became a need for someone to make sure that the customer is constantly finding value and ROI on their purchase. Enter the “customer success manager” or “CSM”.

It’s a relatively new role in the industry and because of that, many people (incorrectly) use the term interchangeably with customer support, customer service, customer advocates, and so on. People often use customer success as a general term to describe any customer facing role.

But customer success is not quite any of those things. So let’s explore what it is…

What is “customer success”?

If I were to choose two words to describe customer success they would be: holistic and proactive. The customer success manager always needs to have a holistic view of each customer and their individual journey. They also need to proactively reach out to customers to provide guidance, such as industry best practices for that customer’s use cases/verticle, metrics, and other relevant information in order to reduce friction in the customer journey, which ultimately streamlines their path to success and a positive ROI.

Customer success managers are always aware of customer health, churn risk, and NPS (net promoter score). The CSM shepherds the customer during their lifecycle as a customer. The relationship usually begins with what is commonly referred to as the “onboarding” or “kick-off” call. This call is where the CSM educates the customer on proper use of the product or service, shares industry standards or best practices, and gathers the customers KPI’s (how they measure the success of using your product or service). It’s also important for the CSM to ensure there is limited friction in getting integrated with, or implementing, the product/service.

Once the customer is up and running smoothly, the CSM will proactively reach out during the journey to conduct QBR’s (quarterly business reviews). These reviews are critical to helping the customer see that the CSM is striving to ensure their KPI’s are being met. And if not, or if KPI’s have changed, how to ensure the new KPI’s are met. This is also the time when the CSM can share valuable insights, future roadmap, or customer specific metrics with that customer. These CSM practices help to facilitate a positive experience, renewals, and upsell/cross-sells. Ultimately, at the end of the day, the CSM owns the entire relationship with the customer.

What is Customer Success not?

A CSM is not the person to provide customer service on a transactional basis.

Things such as receiving, routing, or responding to work tickets, is not the role of customer success. This is the role of customer service. Customer service is responsible for handling the day to day tasks such as inbound work tickets, account maintenance issues, billing issues, and random one-off questions because these are reactive and transactional.

Why do companies try to bundle Customer Success and Customer Service together?

Well, to be honest, if you’re a small company or don’t have many customers, it seems logical.

And this may work in the early days of startups where “everyone wears multiple hats” as the saying goes. The logic is that since both are customer-facing roles, just have one person do everything.

Often times it’s the same logic of having developers QA/test their own code. It seems logical. However, over time, the tasks and subtasks of both developing and QA testing need to be partitioned into different roles just as customer success and customer service.

Younger startup companies have people wearing multiple hats, often don’t have many customers yet, and don’t need to worry about scalable process quite yet. This is why, especially in early-stage startups, success and service are coupled. And it can work. For a period of time.

Why is it important to decouple Customer Success from Service?

Some of you may have heard the old manufacturing adage:

“You can only have two of the following three things: cheap, fast, high quality.”

In other words, if you want an item to be both high quality and delivered fast, it won’t be cheap. If you want it to be cheap and fast, it won’t be high quality, and so on.

In my personal experience, this adage also applies to company’s who don’t decouple success and service. If the CSM’s are doing service as well as success, they can only have two of the following three things: scalability, CSM workload, and the satisfaction of all customers.

If you want reasonable workloads on the CSM’s and have a scalable process, not all customers will get the attention they need and deserve. If you want to satisfy all customers and want to have a reasonable workload on the CSM’s, it won’t be a scalable process, and so on. However, decoupling service from success will enable your company to accomplish all three.

Your sales team is out trying to bring in new business. New business means new customers. New customers mean more work tickets, billing issues, and all those little day-to-day tasks that come with having those wonderful customers.

However, if you don’t separate customer success from customer service but your sales team is still bringing in new business, the CSM’s will eventually spend their entire day servicing these customers in a transactional way, instead of providing true customer success for them. They’ll be underwater in daily tasks and not be able to fulfill the true nature of their role as a CSM: Identifying customer KPI’s and helping those customers achieve success.

There are certainly customer service related things may come up during that customer’s interactions with their CSM and the CSM can of course service those needs. However,

given that there are often thresholds to meet, in order to have a dedicated CSM (annual revenue, company size, etc), means that not all customers will meet the threshold to have a dedicated CSM. But it’s important that there are separate people to service and take care of those customers who do not meet the threshold. That’s the role of customer service.

When is the right time to decouple?

I’ll share with you four indicators that I typically look for, any of which are a sign that your company could be ready to decouple customer success and customer service:

1. When you are hitting the growth and expansion phase of your company and you need to put scalable processes into place.
2. When your customer list grows rapidly.
3. When you bring on high-value and/or flagship customers that need “white glove” treatment and the future growth of your company could be made or broken based on their success with your product or service.
4. If your CSM’s are spending more than 50% of their day on customer service tasks, because it becomes increasingly difficult to do proactive CSM when the bulk of their day is spent on reactive service.

Examples, please!

I want to highlight a real-world example of what I’m talking about. In the past, we noticed a common theme among inbound support tickets from customers, regarding higher than expected peak connections.

Since we consider “peak connections” to be anytime users are connecting to Sendbird’s servers, the best practice here is for our customer to design their app UI in a way that encourages their users to tap on a button (chat icon) in order to enter chat, at which point they will connect to our servers and can begin chatting. This means app users who are simply using the app but not intending to chat, will not be counted as a peak connection.

Having our customer success managers proactively educating customers with this seemingly simple change to their app has reduced service tickets, saved our customer’s valuable engineering time and resources, and also reduced unnecessary costs for them. Thus, ultimately increasing their chances for success. Preventing issues before they even arise is what a CSM does best!

When and how did Sendbird accomplish decoupling?

Sendbird was fortunate enough to reach the company milestone of making a clear distinction between customer success and customer service, in Q4 of 2018. We have grown our CSM team from only one person to now having four people (and continuing to grow) and in our US office, we have one dedicated person completely decoupled from customer “success” and focusing solely on inbound customer service.

Our CSM and customer service work very closely together but each has a defined set of separate tasks in ensuring the customer is ultimately happy and taken care of at the end of the day. In order to do this successfully, we utilize a clear handoff process and tools to ensure all relevant teams have clear visibility into our customer’s health and journey.

As Sendbird continues to grow and onboard more customers, our customer success team will grow in direct correlation. Our customer service team will grow as well, at a slower pace, but these two roles are equally as important and vital for any SaaS company in today’s subscription world.