As the CEO of Custify, Philipp Wolf helps SaaS businesses deliver great results for customers. After seeing companies spend big money with no systematic approach to customer success, Philipp knew something had to change. He founded Custify to provide a tool that lets agents spend time with clients—instead of organizing CRM data.
Customer success is vital to a company’s growth because customers are the ones that bring revenue. Although more popular in high-tech sectors, like SaaS product development or cloud services, the customer success manager (CSM) role is gaining more and more popularity in other businesses as well.
But you may be asking, what does a customer success manager even do?
A CSM’s role revolves around making sure customers get their desired outcomes while using the service/product, thus prolonging their life cycles.
In this Process Street article, I will walk you through a customer success manager’s tasks, from onboarding and training the customers, to reducing churn, dealing with critical events, getting and analyzing feedback from customers, and so on.
Read on to get a full 360-view of what the CSM role entails and why it’s so important for a company:
- CSM responsibilities: Customer onboarding
- CSM responsibilities: Collecting & analyzing customer feedback
- CSM responsibilities: Maintaining customer success
- CSM responsibilities: Customer offboarding
CSM responsibilities: Customer onboarding
1. CSMs onboard and train new customers
Each customer is assigned a CSM once they buy the service and one of the most important tasks of a customer success manager is onboarding and training the customer.
The onboarding process is crucial because it builds a trusting relationship between the customer and the CSM, and it sets the tone for what the customer can expect from their time with the company. If done properly, onboarding can increase retention while decreasing or eliminating the risk of churn.
CSMs must teach the customer how to best use the product to quickly get good ROI so that they realize the value of the service early on. In doing this, CSMs should focus only on educating the customer on how to use those features that help the customer achieve his goals.
To do this, the CSM must design a strategy to take the customer from stage 0 to the stage where they see the benefits of the service. Getting to know the customer’s needs and goals is pivotal for this task.
CSMs spend much of their time onboarding, training, or even retraining customers because this is the main method of driving product adoption. This process can be standardized by using a customer success tool.
However, if there is a small number of customers, onboarding and training should be done manually because they are the first meeting point between customer and CSM and an opportunity to build trust.
CSM responsibilities: Collecting & analyzing customer feedback
2. CSMs gather customer feedback
Customer feedback reflects the level of customer satisfaction with the service/product and can point out opportunities for innovation and improvement.
CSMs collect and analyze feedback from customers and identify recurring negative feedback that might point to features in need of improvement. CSMs must share this with the company management and relevant departments (like product, engineering, and customer support) so they can work on possible issues the customer might have.
The feedback collecting and analyzing process can be done manually; however, it is usually automated via a customer success tool. Beyond this, customer success managers must interpret the data and make use of their attention to detail.
Customers may not always provide straightforward feedback, so CSMs must also pick up on subtle clues, such as tone, mood, or engagement to determine the actual level of customer satisfaction.
Whether the customer feedback collecting process is automated or done manually, it should be an easy one to support the CSM’s work. This way customers will be much more inclined to give feedback and the CSM will have more available data to analyze.
3. CSMs must closely monitor Customer Health Scores
The Customer Health Score is a way of keeping record of customers based on certain metrics that are important to the business.
It can be measured:
- In colors (Red, Amber, and Green);
- On a numeric scale (1 to 100);
- Or on an alphabetical scale (A to F).
Some examples of metrics that can be used for calculating Customer Health Scores are:
- Overall usage of the service;
- Growth of the account;
- Number of completed upsells;
- Service feedback;
- And so on.
Many things influence Customer Health, so it’s up to each CSM to define Customer Health Scores based on the metrics that are most relevant to their business (tip: start with your pricing page).
Customer Health Scoring can be done manually by the CSM for the top customers or for all customers if there isn’t a large number of them, but the process can also be automated with the help of a CS tool. Customer Health Scoring is not just a way of monitoring customer happiness, but also a method to predict further developments for each customer. This score can fluctuate and change rapidly, pointing out issues or potential threats to customer retention.
CSM responsibilities: Maintaining customer success
4. CSMs act on account alerts based upon contingency plans
Most companies have implemented automated alerts and triggers so CSMs can stay notified in real-time about the activity on their customers’ accounts.
These alerts may include:
- Health scores;
- MRR (monthly recurring revenue);
The alerts point out issues with customers’ scores on metrics that are important to the business, the likelihood of the customers to renew the service subscription, the revenue that customers bring to the company each month, and the rate at which customers cancel their recurring revenue subscriptions respectively.
Any event on an account can be crucial for the customer’s relationship with the service, so CSMs must waste no time and act upon carefully devised contingency plans meant to protect current revenue and minimize customer inconvenience.
In order to be prepared when an issue concerning a customer’s account arises, CSMs should create contingency plans for multiple possible scenarios.
CSMs are part of the general account management, whose entire purpose is to retain customers and generate revenue for the company. CSMs should work closely with account managers because they can help each other reach their mutual goals: to have satisfied, successful customers with long life cycles. However, whether these two roles co-exist or collaborate depends solely on how a company is structured.
5. CSMs must use an optimized CS tool to segment & simplify their activity
CS tools offer a complete view on customers through a set of different features such as:
- Collecting and analyzing customer feedback;
- Customer segmentation;
- Customer engagement analytics;
- User profiling;
- Real-time insights;
- Or even standardized onboarding and customer education.
The customer segmentation feature is particularly useful to CSMs because it helps them divide their customers into large groups so they can easily observe how these different groups engage with the product/service. However, all features that CS tools have to offer will make it easier for CSMs to do their job and help them drive results faster.
CSMs should choose the CS tool that best suits their company’s needs and optimize it to make full use of its functionality to increase company revenue. Using CS tools can help CSMs identify upselling opportunities or even issues that could lead to customers leaving, where time is of the essence.
In addition to this, CS tools can standardize processes – like onboarding and customer training – which allows CSMs to spend more time on other tasks that require them to use the full extent of their know-how.
6. CSMs identify upsell opportunities and reach out
The role of a Customer Success Manager includes monitoring customers’ activity from product implementation and acting as a guide for the customer during their lifecycle.
While doing this, they can identify upsell opportunities that arise along the way and reach out to the customers to persuade them to either renew their current plan, upgrade to a higher one, or consider complementary products or services offered by the company.
A good CSM should be able to identify upsell opportunities and set renewal paths (a structured and detailed strategy to get the customer to a renewal point) for their customers. Chances for an upsell are the highest when the upgrade offer matches the customer’s needs. The CSM should always be aware of the customer’s needs and try to meet them while also focusing on expansion revenue and growing the account.
CSMs are in the perfect position: they can accurately estimate the upsell potential of a customer, so they can invest their time efficiently and explain why the additional purchase will be useful so the customers are more likely to actually make a purchase.
7. CSMs implement tactics that reduce voluntary & involuntary customer churn
Voluntary churn means customers give up on a service by choice, while involuntary churn refers to customers leaving due to reasons that could be prevented (such as failing to update payment information or server errors).
CSMs should monitor churn rate at all times and address any changes in that number. There are many tools that CSMs can use to calculate customer churn for their business and then proceed to analyze why churn occurs and identify customers with high risk of churn.
In order to prevent voluntary churn, CSMs should:
- Take steps to simplify the onboarding process;
- Improve service quality;
- Add new features;
- And improve customer support.
As far as involuntary customer churn is concerned, CSMs can:
- Implement a dunning strategy (communicating with the customer to ensure that payment is received);
- Or use an account updater (a tool that automatically requests updates for vaulted payment methods such as expired or re-issued cards).
Defining who the most valuable customers are is also important, especially when there is an increase in churn. CSMs that separate their most important customers from the rest can go out of their way to make sure those top customers are extremely satisfied with the service and have a very low risk of churn.
CSM responsibilities: Customer offboarding
8. CSMs offboard and attempt to recover leaving customers
Churn is a natural part of business and sometimes customers decide to leave because the product is not a good fit for them. When this happens, the CSMs must analyze the situation and persuade the customer to stay by proposing alternatives (like a downgrade) that might appeal to them.
Other times customers cancel their subscription for reasons unrelated to the product, such as their project just ended and they have no use for the product/service anymore, or their company is shutting down and they are cancelling all subscriptions. In such cases, there is not much CSMs can do besides offboard the user in the best of ways.
Furthermore, if the customer is satisfied with the product and is leaving because of reasons unrelated to the company, they qualify as non-regrettable churn.
Offboarding should be an easy process for the customer and it should be preceded by a discussion regarding the reasons for leaving. Whether it’s via a survey or a phone call with a support or sales agent, leaving customers can provide valuable feedback that can prevent other customers from leaving or present opportunities to improve the product.
A satisfying offboarding experience makes customers more likely to consider coming back in the future or recommend the product to other people.
Many more tasks pending!
I hope this article shed some light into this fairly new role and made you understand the importance of maximizing customer success within the company.
Committing to customer success and adopting strategies that will make customers achieve their goals by using your product will definitely grow your business.
CSMs play a huge part in achieving this goal as they juggle many different responsibilities meant to increase customer satisfaction and customer retention. They support the customer throughout their entire journey with the company while building a long-term relationship with them. From onboarding and training to attempted recovery of leaving customers, CSMs use every tool – automated or not – to ensure the customer is satisfied with the product.
If you want to read more about customer success tactics and the CSM role, check out Custify’s blog!
What tips do you have for other customer success managers out there? Are there any essential responsibilities we missed? Let us know in the comments below!