By Russell Bourne
The 2023 economy hasn’t turned our field of Customer Success upside down as much as we sometimes hear about. Customer-facing teams everywhere are asked to “turn from reactive to proactive,” yet conversely “do more with less,” and “operate for scale”. For you readers who have been in Customer Success for years, you know those terms are not unique to tough economic times; they’ve been around as long as CS has.
At The Success League, our consulting client base is full of companies of all sizes who have been asked to do one or more of the above and are trying to figure out how their specific situation should go. Sometimes, mature organizations realize their large, specialized teams are misaligned with shifting markets, lack clear responsibilities and swimlanes, or are otherwise inefficient.
Other times, smaller companies are in a situation where they’re growing out of their startup phase. At a company level, they’re often looking for their second round of funding or to become profitable so they don’t need funding. At a department level, they’re often realizing the organic, manual ways they manage customers, a necessity during the startup phase, isn’t going to work anymore. In today’s article, I want to zoom in on the latter case and offer insights to help those with limited resources.
Start with Segmentation
As you exit startup phase with a proven idea of your ideal customer profile and use case, it’s time to start by segmenting your customers. Our blog archive has plenty of great content on segmentation including a recent article by our CEO Kristen Hayer.
Typically, following our segmentation model will yield somewhere between 3-5 customer segments. After segmentation, you create a different customer journey map for each segment, and as a best practice you assign your CSMs such that each CSM only operates within one segment; this ensures they become automatic at delivering a consistent customer journey and customer experience.
Specific to this article is this: If you’re a smaller company and you only have 1-2 CSMs, you’re probably wondering how you’re going to deliver 3-5 different customer journeys.
Which Segments Need Manual Help Today?
Here’s where you can start to design yourself for both scalability and flexibility. When you segment, there’s usually a “Strategic”-type segment full of your highest-ARR customers, and when you complete customer journey mapping, the Strategic segment is usually the one with the most manual touchpoints. If you have 1 CSM, there’s little doubt this is the segment they need to be assigned to.
If you’re fortunate enough to have 2 CSMs, you have 3 choices.
Double down on Strategic. Assign both CSMs to the Strategic segment. If you have enough strategic customers, and delivering the strategic journey to all of them is more than one full-time job, this is your best bet.
Use your last CSM on the next Segment. Look at your remaining customer segments, find the one that has the next-highest manual journey, and assign the second CSM to it. The remaining segments then need to have essentially 100% digitally-delivered touchpoints, but the upside is you can still maintain different journeys for those different segments. Have a listen to our Innovations in Leadership podcast episode with Lauren Costella-Reber for a fantastic guide on how to build a digital program.
Digital Program Pool. Temporarily consolidate the rest of the segments. Look at your remaining customer journeys and take a hard look at how different they really are. Are 80% of the touchpoints the same? More? If you believe these journeys are close enough to each other, your best play might be to temporarily combine the segments. Maintain the 80%+ of touchpoints they have in common; temporarily pause the others or design a middle ground where the touchpoints apply to all the included segments. The second CSM can now assume the role of being a digital program manager; you also have the option to have them act as a pooled CSM for customers in these segments. This is a great option if you believe your Strategic CSM is great at relationship management while your second CSM is great at program management, because it offers both people a clear career path and a role where they get to use their best strengths.
Bottom line here: assign CSMs to segments until you have 1 CSM left; then either assign them to the next segment and put the remaining segments on all-digital journeys, or turn the CSM into a digital manager for the remaining segments.
Continued Scaling
One of the biggest fears of CS leaders and CSMs is changing account assignments. People spend valuable time and effort creating genuine customer relationships, not to mention developing pipeline for renewal and expansion. Naturally, there is great hesitation around creating change that might upend those things.
Designing your scaling roadmap as outlined above can alleviate many of these fears. If you get to add a CSM headcount, all you have to do is “unlock” one of your segments away from digital and onto manual. It’s not all-or-nothing, either - if you have a large customer segment and can only hire 1 CSM for it, then you change only a small portion of the touchpoints from digital to manual. Or you sub-divide the segment and assign the new CSM to half of the customers, knowing you’ll assign the other half a CSM when you get your next headcount approved. If that’s your situation, you have a great opportunity to A/B test your touchpoint delivery.
One final thought: as you create your CS team planning roadmap, remember to work closely with your Sales leaders to understand the forecast of new customers, by CS segment if possible. Their projections will help keep you ahead of the game - just as sales pipeline may take months to come to fruition, so may the talent pipeline. Knowing you’ll have an influx of customers 4 months from now gives you time - and data - to have headcount approved, hired, and trained.
The Success League is a global customer success consulting firm. We offer a leadership class on segmentation, as well as consulting and coaching regarding segmentation. Please visit our website at www.thesuccessleague.io for more on these and our other offerings.
Russell Bourne - Russell is a Customer Success Leader, Coach, Writer, and Consultant. In a Customer Success career spanning well over a decade, his human-first approaches to leadership and program management have consistently delivered overachievement on expansion sales and revenue goals, alongside much friendship and laughter. Russell serves on the Board of Gain Grow Retain as co-lead for Content Creation. He is passionate about equipping individual contributors and business leaders alike to lean on their Success practices to grow their careers and help their companies thrive. He holds a BA from UCLA, and in his free time plays guitar semi-professionally.