Customer Success or Client Executives?

Until a few years ago, the traditional division of salespeople in a software solutions manufacturer for large corporations was hunters and farmers.

The former has the mission to close new clients (usually medium to large size) by working with a very extensive list of possible candidates or even entire geographical areas and verticals. Their work is primarily opportunistic (with no pejorative connotation): they detect an opportunity, work on it, close it, and move on to the next one.

Conversely, the latter aims to maximize sales within a limited set of large clients. In many cases, they work on one or two accounts, and in some extreme cases, they are part of a sales team assigned to a single account, especially if it is a global account.

The idea behind the farmers is to establish very close relationships with the client, effectively becoming an advisor who understands their client's business, the people working in it, and its current and future needs, offering solutions that result in incremental sales. They also ensure that the client gets the most out of the purchased products in the shortest possible time. They are also the reliable communication channel between the client and the provider, conveying the client's needs, complaints, and suggestions to the responsible parties within the supplier's organization.

Why am I telling all this, which may sound like an old story? The truth is that lately, several startups in full growth and shaping their organizations have asked me about the role and need for a Customer Success department. It's trendy, and they've read that the most successful companies have vast armies in this department.

Of course, customer satisfaction and, therefore, their success is the central axis of the entire sales process. If we focus on keeping a client happy, more projects with their associated sales will naturally come.

But if we do some research on the functions of a Customer Success Manager (CSM), we find that their responsibilities are:

1. Planning and ensuring maximum success for the client during their lifecycle (i.e., ensuring the client uses what they purchase to its fullest).
2. Anticipating the client's future needs.
3. Proactively addressing these needs.
4. Identifying clients potentially at risk and proposing a recovery action plan.
5. Keeping communication channels open between the client and the provider.
6. Customer loyalty.

Sound familiar? It reminds me a lot of an old-school farmer. They are often called Major Account Managers, Client Executives, or Client Directors, implying they are the primary contacts responsible for the relationship between the client and the provider. Exactly what we ask of the Customer Success department today.

But there's a significant difference. The Client Executive is part of the sales department. They report to a sales director and coordinate with other departments (some also dependent on sales) such as pre-sales, professional services, marketing, etc. They follow the sales methodology in place and fulfill the CRM.

Customer Success departments, with some exceptions, depend on the services organization or support organization (when they have nothing to do with professional service or support). Most of the time, the way to reward a CSM differs from a salesperson's. Their goals and KPIs differ, so their strategies don't necessarily converge. This often creates conflicts between the two organizations over who "owns" the account.

That's why I reply to those companies creating their GTM that nothing is black or white; each organization is unique and depends on the ideal customer profile (ICP), the technology sold, the target sector, etc. However, when growing their businesses, they should, in general, consider:

1. Invest first in acquiring customers, i.e., an effective hunters’ team.
2. Once they have a decent installed base, invest in a unique team that combines Customer Success and Client Executives under the same role, dependent on the commercial management, with customer satisfaction goals (NPS, renewal ratio, diversity of installed solutions, etc.) in their compensation plan, in addition to the classic sales target achievement.

What about providers selling to SMBs or even domestic consumers? Do they need Customer Success? With the given definition of Customer Success, I believe not. It's not scalable or profitable. What they need is quality Customer Service.

Isn't it the same? No, it isn't. The most significant difference is that Customer Success is proactive, while Customer Service is reactive and based on operational efficiency. Customer Service should belong to the Support department in these cases, even if its work isn't necessarily technical.