By Chad Horenfeldt
Scaling your approach to Customer Success has never been more important than it is today. There is a significant push to downsize teams and stretch the CS resources to their limits. This coincides with the trend in Customer Success to distinguish itself beyond Customer Success Management. CS is more than just CSMs. It involves leveraging different roles, processes, and technologies to achieve customer outcomes. Pooled Customer Success is a newer concept that is becoming more prevalent - especially during this time of economic turmoil.
In a year of ups and downs, we’ve seen some significant impact leveraging pooled CS at Meta (Kustomer) although it’s still early. This has included a 6% quarter over quarter increase in logo renewal rate along with an increase in adoption in key product areas that improve customer stickiness. But to build out this type of CS model requires an understanding of what pooled CS entails and some fundamental building blocks that you need to put in place. In this post, I’ll define what pooled CS is, what pooled CS does and what you need to have in place to make it work for you.
What is Pooled Customer Success?
Pooled Customer Success moves away from the idea that each customer requires a Customer Success Manager. This antiquated approach to CS, which is often referred to as “Scaled Customer Success,” assigns a CSM to a large number of customers. It’s typically leveraged with small to mid-size companies with the hopes that these CSMs figure out how to achieve a high renewal and growth rate for each of their assigned customers. This approach has its benefits; conceptually, the CSM can build strong relationships with their customers, but what typically happens is their book of business is just too large for them to handle. Customers that truly need assistance slip through the cracks and CSM burnout can ensue. A different approach is needed for the SMB segment without having to sacrifice the customer experience. Enter pooled Customer Success.
Pooled CSMs aren’t assigned to specific customers but rather to a large segment of customers. While they have the same goal of growing and retaining customers as conventional CSMs, the idea of pooled CS is for the CSM to be brought in at the right time and based on the customer’s specific need. This can be done in a few ways, but I’ve typically used a round robin approach to assign pooled CSMs based on the client’s requirements and the CSMs’ capacity.
This approach is in sharp contrast to the dedicated CSM approach that allows customers to reach out to a specific contact when they have a question or to have someone they can regularly meet with. While the trust of a traditional single point of contact no longer exists, the trust that your customer has in your organization can be strengthened if you can provide an overall better customer experience. Let’s dive into how you can accomplish this.
What does Pooled Customer Success do?
Our pooled CSMs have an ultimate outcome of achieving a high customer retention rate and uncovering upsell opportunities. To achieve these goals, they need to help understand the outcomes of our customers and to drive product adoption. We’ve identified three different components to their roles that are geared to impacting our overall Customer Success goals. There is a reactive component, a proactive component, and a one-to-many component. I’ll break these concepts down.
Reactive Tasks. Customers will often want to explore a new area of our product or may indicate that a new stakeholder has come on and has no idea how to leverage our product. These inbound inquiries often come to our Support team or from our Account Managers, who sit under Customer Success. This is a perfect opportunity to engage the pooled CS team. A task is created in our CS platform and a pooled CSM is introduced to the client. We typically set up two-meeting engagements with customers where we first understand their needs and then deliver a mini-project that provides options and a success plan for the client to follow.
Reactive engagements may involve some standard approaches we use such as a Customer Health Check, which is like a ten-point car inspection. We grade our customers on how they are leveraging our platform and then present them the results. As part of the engagement, we ask them a series of questions, so we can align the results to their business needs. Our goal here is to give the client two to three areas to focus on that align to their priorities. We provide the resources they need to accomplish the recommended tasks and will provide additional assistance such as professional services or certified partners if required.
Reactive tasks may also be ad hoc engagements where we focus on addressing a specific customer issue. As an example, if a customer has provided some indication that they are at risk of not renewing, our pooled team will spring into action and drill down into the customer’s concern. This isn’t customer support. Our goal is to operate at more of a strategic level which means understanding the root problems and not focusing on surface product issues. We put several listening posts in place along the customer journey to attempt to uncover issues early so we can address them before it’s too late.
Proactive Tasks. To ensure our customers are on the right path, we set up a few points along the customer journey where our pooled team will proactively reach out to clients. We leverage some of the standard engagements we’ve created, including the health check as well as something we call a customer shadow session where we observe how our clients are using our product and then provide them feedback.
We prioritize this type of reachout based on certain client health indicators from our CS platform. We try to streamline this process as much as possible by automating communication.
One to Many. The third component of pooled CS is probably the most exciting as it allows us to experiment and reach many more customers at once. There are many different components of a one to many approach but the areas we’ve focused on include customer webinars on specific product areas and virtual group customer meetings (office hours) where we discuss certain topics with groups of customers. These approaches are perfect for the pooled model as these CSMs can prioritize these initiatives as they aren’t tied to specific clients. This also provides opportunities to develop customer relationships at scale.
What do you need for a pooled CS model to work?
There are several foundational elements you need in place before you implement a pooled CS model in your organization. The first component involves some sort of customer segmentation where you designate a segment of your customer base for your pooled model. Pooled CS is mostly used for your smaller customers where it’s cost-prohibitive to assign them a dedicated CSM.
The second component that is needed is a kick-ass support team. You can’t introduce a pooled CS approach successfully if you have a support team that has a poor first response time and low CSAT scores. If your support team is in bad shape or non-existent, your pooled CSMs will become glorified support agents and you will negate their main roles - to take a more strategic approach to assisting customers at scale. Without a solid Support team, pooled CSMs will get mired in break-fix issues and their impact will be minimal.
The next building block required for a successful pooled model is to have an Account Management team that will handle client contractual issues. While a pooled CS model removes a named CSM, clients should still have an account owner who can step in when a client has account issues. Theoretically you could also create a pool of account managers but when someone is needed to help them track down a billing contract it helps to have a named person tied to a specific customer. Regardless, you need to split the contractual responsibilities apart from the product adoption responsibilities for a pooled model to have a greater chance of success. You don’t want to bog the pooled CS team down with renewal tasks.
For pooled CS to be successful, it’s also important to have a strong supporting cast of options that customers can go to connect with other customers and to gain the knowledge they need to achieve their outcomes. This includes providing your clients with live and on-demand training, an online community that allows them to engage others that use your product(s), and virtual and in-person events that provide opportunities to learn more about your product and the vision of your company.
Last but not least, you need the right type of technology. It’s highly recommended that you have a CS Platform in place such as Gainsight, Totango, Catalyst, ChurnZero, Client Success or Vitally in place to help you manage and measure your pooled CS efforts. Other types of technology that include email templates, online communities, in-app communication and automated email tools can also help.
This is a marathon - not a sprint
You can’t just implement a pooled CS approach overnight. It’s important to ensure that you have most of the foundational components in place before you begin your journey. I started with a team of two that quickly expanded to a team of four. This includes two Customer Account Managers to handle contractual items and two pooled CSMs.
Once we observed some common trends from our proactive and reactive pooled CS customer engagements, we expanded into one-to-many approaches. We measured what was and wasn’t working based on client engagement and product adoption, and continued to iterate. We know we won’t get everything right at first, but we’ll keep experimenting and fine tune our approaches. Customer Success continues to evolve, and pooled CS is part of that evolution. It’s time to move beyond the one-to-one CS approach and look for ways to scale up your CS efforts.
The Success League is a customer success consulting firm that offers classes that focus on selling, including Customer Success Health Checks and even CS Consulting packages to help your team through the recession. For our full list of offerings, please visit TheSuccessLeague.io
Chad Horenfeldt is a customer success executive with 15+ years of experience building and developing high performing teams. Currently, he is the Head of Customer Success at Kustomer. Prior to Kustomer, Chad held CS leadership positions at Updater, Bluecore, Influitive, and Oracle (Eloqua). In addition to writing for The Success League, he also writes regularly on the topic of customer success on his blog The Enlightened Customer.