2015 Customer Success ndusI try Trends Report€¦ · 2015 ustomr succss inustr trns rort 2 table of contents 3 executive summary 4 meet the survey respondents 6 who does your head

2015 Customer Success Industry Trends Report


Table of Contents

3 EXECUTIVE SUMMARY

4 MEET THE SURVEY RESPONDENTS

6 WHO DOES YOUR HEAD OF CUSTOMER SUCCESS REPORT TO?

8 HOW WOULD YOU CHARACTERIZE THE MATURITY LEVEL OF YOUR CUSTOMER SUCCESS ORGANIZATION?

10 WHAT ARE YOUR PRIMARY CUSTOMER SUCCESS OBJECTIVES?

12 WHAT KEY PERFORMANCE INDICATORS / METRICS ARE REPORTED TO THE C-SUITE AND / OR BOARD OF DIRECTORS ON A REGULAR BASIS?

14 WHAT IS YOUR APPROXIMATE RATIO OF ANNUAL RECURRING REVENUE (ARR) TO CUSTOMER SUCCESS MANAGERS?

16 APPROXIMATELY HOW MANY CUSTOMER SUCCESS PROFESSIONALS DO YOU PLAN TO HIRE WITHIN THE NEXT 12 MONTHS?

17 WHAT ARE THE BIGGEST BARRIERS YOU EXPERIENCE THAT MAKE IT HARDER TO FULFILL THE PROMISE OF YOUR CUSTOMER SUCCESS ORGANIZATION?

18 DO YOU PLAN ON MAKING ANY SIGNIFICANT CHANGES TO YOUR CUSTOMER SUCCESS ORGANIZATION OVER THE NEXT 6 TO 12 MONTHS?

19 ARE CUSTOMER SUCCESS MANAGERS IN YOUR ORGANIZATION CHARGED WITH PROACTIVE OUTREACH TO CUSTOMERS?

20 ARE MEMBERS OF YOUR CUSTOMER SUCCESS TEAM ELIGIBLE TO RECEIVE COMMISSION OR OTHER FORMS OF VARIABLE COMPENSATION?

2015 Customer Success Industry Trends Report 3

Executive Summary

The 2015 Customer Success Industry Trends Report aggregates responses from 125 Customer Success professionals servicing customers across a wide range of industries. The survey included a combination of close-ended and open-ended questions designed to assess the structure of the Customer Success organization and identify common challenges experienced in this still relatively new field.

As the following report shows, the Customer Success organiza-tion is growing rapidly and already has a “seat at the table,” often reporting to someone at the C-level. This justifiably gives the de-partment significant exposure and empowers Customer Success leaders to influence positive change. Across all industries surveyed, the department is most commonly accountable for reducing churn, increasing product adoption, and enhancing the customer experi-ence. This has led many survey respondents to establish listening posts at various stages of the customer journey with programs such as Net Promoter Score® or Customer Satisfaction Surveys and using third parties to ensure the data is objective and reliable.

While there is a growing appreciation for the Customer Success organization, survey respondents agree there are still hurdles to overcome. In particular, they cite the struggle to scale (due primarily to finding qualified candidates and budget), buy-in

across the entire company, and determining the appropriate compensation plans as common pain points.

Despite these obstacles, Customer Success professionals remain focused on delivering customer value and creating long-term relationships as illustrated in this respondent’s verbatim feedback:

“Baseline, we are stewards of our customers’ investment. We ensure we protect every renewal and identify opportunities for cross-sell and up-sell. We also look for opportunities to capitalize on their great experience through cultivating references, video, and case studies. Beyond this, we are the trusted advisors to our customers, being their internal advocates within our organization and identifying opportunities to connect customers with other customers to learn from each other and share ideas with our company leadership as well.”

We would like to extend our gratitude for all those who responded to our inaugural Customer Success Industry Trends Report. This is clearly a very exciting and quickly evolving role and we sincerely hope you find the following summary research both valuable and actionable.

Learn how Satrix Solutions can help your company build a world-class Voice-of-Customer program.

www.SatrixSolutions.com


RESPONDENTS BY TITLE

Director, Customer Success 33%

VP, Customer Success 24%

Account ManagerCustomer Success

22%

C-Level 10%

Other 6%

Manager/Supervisor 5%

RESPONDENTS BY NUMBER OF EMPLOYEES

1001 +12%

501 — 10007%

251 — 500 18%

51 — 25041%

1 — 50 22%

Meet the Survey Respondents

n=125


“WE HAVE CUSTOMER SUCCESS AND ACCOUNT MANAGEMENT IN THE LARGER CUSTOMER SUCCESS TEAM — ACCOUNT MANAGEMENT IS RESPONSIBLE FOR SALES/RENEWALS AND CUSTOMER SUCCESS MANAGER’S ARE RESPONSIBLE FOR ADOPTION, SATISFACTION, AND PRODUCT USAGE AND CLOSELY CONNECTED WITH SUPPORT.

”


CEO

35%

COO or similar 17%

Head of Sales / Business Development

15%

President

9%

Other

8%

CCO

7%

CMO or simiar

7%

Still evaluating

2%

According to survey respondents, a majority of Customer Success leaders report directly into the C-Suite. This is significant in that customer experience leaders repeatedly outperform competitors and are rewarded with higher retention levels, greater share of wallet, and lower customer acquisition costs.

Who does your Head of Customer Success report to?


“WE ARE A COMPLEX ENTERPRISE-LEVEL PRODUCT THAT REQUIRES SIGNIFICANT CUSTOMER INVESTMENT AND COMMITMENT TO GET FULL ADOPTION. AS A RESULT, MORE CUSTOMER SUCCESS RESOURCES ARE NEEDED TO PROVIDE THE LEVEL OF ATTENTION THAT CUSTOMERS NEED EARLY IN THE RELATIONSHIP.

”


How would you characterize the maturity level of your Customer Success organization?

Just getting started 30%

Established, but we have a ways to go 51%

Fairly sophisticated 11%

More advanced than most 7%

World-class 1%

“BEING A STARTUP, WE’VE BEEN

TASKED WITH A LOT OF

DIFFERENT DUTIES, INCLUDING

TECHNICAL SUPPORT. AS WE’VE

BEEN SCALING, DETERMINING

HOW AND WHAT TO HAVE

MEMBERS OF OUR ORGANIZATION

SPECIALIZE IN HAS BEEN A

CHALLENGE.

”

“THE CHALLENGES WE FACE

IN FULLY LAUNCHING THE

CUSTOMER SUCCESS

ORGANIZATION HAVE TO DO

WITH DISORGANIZATION IN

THE SUPPORT DEPARTMENT

AND THE CUSTOMER SUCCESS

MANAGERS GETTING PULLED

INTO SUPPORT RELATED ISSUES.

”

“DATA RELIABILITY IS A BIG CHALLENGE. WE NEED CONSISTENT AND

RELIABLE DATA TO MAKE IMPROVEMENTS TO OUR OUTREACH AND

INVESTIGATE CUSTOMERS’ EXPERIENCE WITH THE PRODUCT AND THE

SUPPORT WE PROVIDE. WE ALSO NEED DATA TO ASSESS OUR IMPACT

ON OVERALL CHURN RATES AND REVENUE.

”

Most survey respondents agree the Customer Success organization is still in an early stage of development, citing a lack of resources as one of the many inhibitors of growth. To help guide their programs to a higher level of maturity, companies are attending conferences, relying on online communities, and working with consultants.


“WE ARE WORKING ON STANDARDIZATION, PROCESSES, AND REPORTING. THE OBJECTIVE IS TO IMPROVE OVERALL CUSTOMER ENGAGEMENT, IMPLEMENTATIONS, AND CUSTOMER SATISFACTION. WE WANT TO PROVE VALUE TO DRIVE CUSTOMER TESTIMONIALS AND UP-SELL/ CROSS-SELL OPPORTUNITIES AS WELL AS MAKE THE RENEWAL PROCESS A SMOOTH EXERCISE AND NOT A LABORIOUS TASK FIGHTING OFF VARIOUS COMPETITORS.

”


What are your primary Customer Success objectives?

Reduce churn/ improve retention 73

Increase product usage/adoption/stickiness62

Enhance customer satisfaction/loyalty 56

Increase up-sell/ cross-sell 41

Increase renewals 34

Improve onboarding/ implementation 23

Increase customer lifetime value 17

Inrease customer references, testimonials, case studies 17

Gather “voice of the customer” 12

Enhance company reputation 7

Reduce customer effort/friction 5

Increase margins/profitability 4

Reduce support tickets submitted 4

Other 2

While the Customer Success organization has many objectives, survey respondents focus primarily on reducing churn, increasing product adoption, and enhancing the customer experience.

Numbers represent the absolute count of respondents for each category.


“OUR CUSTOMER SUCCESS TEAM WORKS POST SALES TO ENSURE THE CUSTOMER IS ONBOARDED SUCCESSFULLY AND HAVE A GROWING ADOPTION RATE. FROM THERE, CUSTOMER SUCCESS EVALUATES CUSTOMER SATISFACTION AND USAGE TO DETERMINE ANY RENEWAL RISKS AND THEN ACTS OR ESCALATES AS NEEDED.

”


What key performance indicators / metrics are reported to the C-Suite and / or Board of Directors on a regular basis?

Customer churn data 63

Customerretention rate54

Net Promoter Score 54

Additional revenue from up-sell / cross-sell 52

Customer renewal rate 52

Overall customer satisfaction rate 33

Number of support tickets submitted 28

Number of formal customer business reviews ( quarterly, annually, etc. ) 13

Don’t know / still evaluating 10

Customer share-of-wallet /spend-per-customer 9First Contact Resolution 7

Product usage / adoption 5

Social media data ( followers, etc .) 5

Other 4

Customer Effort Score 3

To successfully meet department objectives and determine the health of customer relationships, a large majority of Customer Success organizations track customer retention and churn KPIs. Equally valuable to survey respondents: Net Promoter Score (NPS)®. Both a customer loyalty metric and organizational discipline, NPS identifies behaviors directly linked to profit, such as defecting less, spending more, and referring the company to others.

Numbers represent the absolute count of respondents for each category.


“I AM ONLY ONE PERSON MANAGING A LARGE NUMBER OF CLIENTS. UNFORTUNATELY, CUSTOMERS WHO ARE “ON FIRE” GET THE MOST ATTENTION. THIS LEAVES ME NEGLECTING CUSTOMERS WHO MAY BE STAGNANT IN THEIR ADOPTION OR SUCCESSFUL CUSTOMERS WHO I COULD BE SUPPORTING MORE.

”


What is your approximate ratio of Annual Recurring Revenue (ARR) to Customer Success Managers?

Many of the respondents surveyed are employing a tiered approach based on Annual Recurring Revenue. When formulating these multi-tier Customer Success strategies, companies establish “listening posts” to collect feedback at various touch points to continually assess customer needs and expectations.

$ 0 — $ 100 K 11%

$ 100.1 K — $ 1 M 38%

$ 1.1 M — $ 5 M 33%

$ 5.1 M — $ 10 M 15%

$ 10.1 M + 4%

Responses ranged from: $ 15 K — $ 17.5 M

Average response was: $ 2.7 M

“I HAVE SEVERAL TIERS OF CUSTOMER SUCCESS MANAGERS —THREE

WITH DIFFERENT RATIOS AND BOOKS OF BUSINESS. TIER 1 HAS 25/1

RATIO WITH ARR OF 12.1M, TIER 2 HAS 60/1 RATIO WITH ARR OF 9M, AND

TIER 3 IS THE SCALABLE TEAM WITH RATIOS OF 750/1 AND ARR OF 17M.

THEY ARE NOT DIRECTLY ALIGNED AND ARE PROACTIVELY MANAGING

CUSTOMERS THROUGH OUTBOUND CALLING AND EMAIL CAMPAIGNS.

”


“WE WERE JUST APPROVED TO ADD MORE CUSTOMER SUCCESS MANAGERS. ONCE THEY ARE HIRED, WE WILL BE AT 130:1 AND 10M:1 BY THE END OF THE YEAR.

”


The responses suggest Customer Success Teams of all sizes will double over the next 12 months.

Approximately how many Customer Success professionals do you plan to hire within the next 12 months?

87%


What are the biggest barriers you experience that make it harder to fulfill the promise of your Customer Success organization?

These quotes represent the most common themes identified across respondent feedback.

“THE BIGGEST BARRIER IS

EXTRACTING USAGE DATA

FROM OUR PLATFORM TO

PROACTIVELY HELP OUR

CUSTOMERS SUCCEED. SALES

HAVE ALSO LED TO MULTIPLE

(SOMETIMES COMPETING)

PATHS TO SUCCESS, WHICH

DAMPERS OUR ABILITY TO

SCALE. AS WE REBUILD OUR

CUSTOMER SUCCESS

ORGANIZATION ORIENTED TO

THE NEW PRODUCT, WE CAN

TAKE THESE LESSONS LEARNED

AND IMPLEMENT THEM INTO

OUR NEW SOLUTIONS

STRUCTURE.

”

“A LACK OF AWARENESS

INTERNALLY OF WHAT

CUSTOMER SUCCESS IS

AGAINST OTHER DEPARTMENTS.

”“

A SILO MENTALITY. DATA IS

THEREFORE NOT INTEGRATED

SO THAT WE HAVE ONE VIEW

OF THE CUSTOMER.

”

“AS A NEW TEAM, THE BIGGEST

BARRIER WAS HIRING THE RIGHT

PEOPLE WITH THE RIGHT

ATTITUDE AND SKILLSET.

THIS TOOK LONGER THAN I

ANTICIPATED BUT IT WAS MORE

IMPORTANT TO ME TO HAVE

THE RIGHT TEAM MEMBERS THAN

PUTTING A TEAM TOGETHER

QUICKLY.

”

“SCALING — WHETHER IT’S

MONTHLY ACCOUNT

SNAPSHOTS REPORTS FOR

CUSTOMERS, HANDLING

THE IN-PERSON MEETINGS

FOR ACCOUNT REVIEWS,

OR ANSWERING A FLURRY

OF QUESTIONS FROM

CUSTOMERS.

”


Do you plan on making any significant changes to your Customer Success organization over the next 6 to 12 months?


“WE WOULD LIKE TO START

CELEBRATING THE

SUCCESSES OF OUR CLIENTS,

“HUMANIZING” OUR TEMPLATES,

ENGAGING OUR DEVELOPMENT

STAFF WITH CUSTOMER

FEEDBACK AND HAVE BETTER

METRICS FOR BENCHMARKING

OUR SERVICES.

”

“EXPANDING OUR OUTREACH

TO LOWER TIER CUSTOMERS

THROUGH AUTOMATED

ACCOUNT MANAGEMENT.

”“

BRING CUSTOMER SUCCESS

TO ALL DEPARTMENTS —

PROMOTING THE TEAM

AND THEIR ACTIVITIES.

”

“PART OF MY JOB IS TO CHANGE

THE CULTURE. WE HAVE

ALREADY STARTED TALKING

ABOUT CHANGING THE

DISCUSSION FROM “SAVING” A

CUSTOMER TO FOCUSING ON

HOW TO HELP THEM SUCCEED

IN ALL AREAS (NOT JUST WITH

OUR PRODUCTS).

”

“WE PLAN TO IMMEDIATELY

SEGMENT OUR CLIENT BASE.

FURTHERMORE, OUR GOALS

INCLUDE CUSTOMER

SATISFACTION SURVEYS AND

CUSTOMER HEALTH SCORING.

”


Are Customer Success Managers in your organization charged with proactive outreach to customers?


“YES, DEPENDING ON THE TIER

OF THE CUSTOMER. HIGHER

TIER CUSTOMERS GET MORE

REGULAR PROACTIVE

OUTREACH, WHILE THE LOWER

TIERS MAY NOT GET AS MUCH.

HOWEVER, WE ARE DEVELOPING

MECHANISMS AND AVENUES

TO PROVIDE LOWER TIER

CUSTOMERS WITH THE SAME

INFORMATION HIGHER TIER

CUSTOMERS GET THROUGH

WEBINARS, NEWSLETTERS, ETC.

”

“YES. OUR CUSTOMER

SUCCESS TEAM REACHES OUT

WITH “TOUCH POINT CALLS”

AND QUARTERLY BUSINESS

REVIEWS (QBRS)/ROADMAP

DISCUSSIONS. TYPICALLY THEY

CONTACT EACH OF THEIR

CUSTOMERS ON A QUARTERLY

BASIS, BUT THE ONES WITH

MORE REACTIONARY ISSUES

(OPEN SUPPORT INCIDENTS)

ARE CONTACTED WEEKLY

OR MONTHLY.

”

“YES, WE ARE VERY SENSITIVE TO

HOW OUR CUSTOMERS REACT

TO OUR PRODUCT. IF WE SENSE

ISSUES, WE PROACTIVELY TRY

TO GET IN FRONT OF THEM TO

MAKE SURE WE CONTINUE WITH

SYSTEM ADOPTION AND USAGE

RATES. WE DO NOT TRACK

FREQUENCY OF OUTREACH.

”

“YES. WE STRIVE FOR

SUBSTANTIVE, PROACTIVE

OUTREACH. THE FREQUENCY

VARIES FROM CLIENT TO

CLIENT BUT, ON AVERAGE, IT IS

APPROXIMATELY BI-MONTHLY

PROACTIVE OUTREACH. THE

GOALS OF THESE CALLS ARE:

ENGAGEMENT WITH PLATFORM,

STRATEGIC INITIATIVES, AND

RESOLVING ISSUES.

”


Are members of your Customer Success Team eligible to receive commission or other forms of variable compensation?


“THEY RECEIVE A QUARTERLY

BONUS FOR CROSS-SELL/

UP-SELL OPPORTUNITIES WITHIN

THEIR CUSTOMERS. IF THE TEAM

HITS THEIR GOAL, THEY ALL

RECEIVE COMPENSATION. THIS

ENCOURAGES COLLABORATION,

GROWTH DISCUSSIONS WITH

CUSTOMERS, AND DOES NOT

PUNISH ONE PERSON WHEN A

LARGE COMPANY DECIDES NOT

TO RENEW.

”

“NO VARIABLE COMPENSATION

FOR THE CUSTOMER SUCCESS

MANAGERS, BUT THEY ARE

ELIGIBLE FOR A BONUS BASED

ON INDIVIDUAL AND COMPANY

PERFORMANCE. ACCOUNT

MANAGERS RESPONSIBLE

FOR UP-SELL AND RENEWALS

ARE ELIGIBLE FOR SALES

COMMISSION.

”

“YES, WE HAVE A QUARTERLY

VARIABLE BONUS PLUS

COMMISSIONS ON RENEWALS

AND UP-SELLS. CUSTOMER

SUCCESS IS NOT RESPONSIBLE

FOR CLOSING OR SELLING

TO CUSTOMERS. HOWEVER,

WE ARE RESPONSIBLE

FOR DEMONSTRATING VALUE

SO THAT WE CAN RETAIN

AND GROW OUR BUSINESS

WITH THESE CUSTOMERS.

THEREFORE, WE PARTNER WITH

THE SALES ORGANIZATION

AND SHARE IN THE REWARDS.

”

“YES, THEY RECEIVE

COMMISSIONS ON EACH

RENEWAL THAT THEY CLOSE.

THEY GET PAID ON UP-SELLS

OF ADDITIONAL PRODUCTS

AND SERVICES, THEY GET A

QUARTERLY RETENTION

BONUS AND THEY ALSO GET

PAID A % OF ALL CLOSED

DEALS THAT STARTED WITH

A LEAD THAT THEY PASSED TO

THE NEW BUSINESS SALES

TEAM FOR A LAND EXPAND

DEAL OF A CLIENT THAT THEY

WORK WITH.

”

17470 N. Pacesetter WayScottsdale, Arizona 85255

480.773.6120

@SatrixSolutions

SatrixSolutions

Satrix Solutions is a customer success champion, helping com-panies derive maximum value from their most important assets—customers, employees, and reputation. Benefitting from a range of feedback programs and a consultative approach, companies that partner with us realize Net Promoter Scores® twice the B2B average and experience increased retention, referrals, and sales win rates. The objective insights and recommendations deliv-ered empower business leaders to outperform the competition and achieve higher valuations in the public and private markets. For more information, please visit: www.SatrixSolutions.com or call 480.773.6120.

©2015 SatrixSolutions LLC. All rights reserved. ®Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

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http://www.SatrixSolutions.com

Documents

2015 Customer Success ndusI try Trends Report€¦ · 2015 ustomr succss inustr trns rort 2 table of contents 3 executive summary 4 meet the survey respondents 6 who does your head