Overcoming the Top Challenges Holding Back Customer Success

The rapidly growing Customer Success function, a critical capability of the cloud software industry, is experiencing its expansion because it delivers.? This commercial business function, which focuses on product adoption and positive user experience, can help drive up customer satisfaction, retention / renewal, and account expansion.? But, like anything, it is not without its challenges.? As more resources pour into this field, it is important to understand what the typical Customer Success Manager (CSM) faces and how to best prepare to ensure the best outcomes.

This article is the second in a series focused on Customer Success.? Check out the initial article that outlines Customer Success best practices from the perspective of the Customer Success Journey Cycle.? ?

Keep on reading here to better understand the common challenges.

8 Prevalent Challenges Facing the CSM

As the Customer Success function becomes more central to the success of the organization, so too are the insights shared between companies regarding both best practices and those factors hampering effective outcomes.? This set of 8 Challenges has been assembled from a review of content shared in the public domain and media outlets in combination with two decades of personal experience.? The 8 Challenges are overlaid on the Customer Success Journey Cycle presented in the first article in this series.? Following is an overview of each challenge.

Personal Credibility - This first challenge is directly related to the growth experienced by this emerging customer success capability.? Jobs are expanding rapidly, which puts pressure on recruiting sufficient resources with both industry and product experience at adequate levels.? When the client questions whether the CSM understands their business or can explain how the products satisfy their needs, this places the customer success function at risk.? Naturally, there is a training element to this, but a crucial success factor is for the CSM to truly understand the use cases of the client organization.? Of course this takes precious time and requires the CSM to do what is needed to learn the business requirements.??

This challenge gets exacerbated when there is turnover mid-cycle.? Teams tend to perform their requirements gathering with the greatest due diligence leading up to and throughout the onboarding stage.? CSMs who come onto the team after this time frame can be in a difficult position.? Knowledge transfer is really critical, with the need to spend an appropriate amount of time and effort getting the new CSM up to speed on critical elements of the client situation.??

Driving Adoption - At the core of this challenge is the question of change management and who ultimately owns it.? The customer success function most likely does not own it, but it needs to make sure it is performed effectively.? Without good adoption of the products, customer success outcomes are doomed.? Driving adoption needs to start during onboarding and then continue through the entire lifecycle.? Change management will be given the greatest amount of attention typically during the onboarding stage, but the CSM needs to ensure that it is performed well then and not abandoned once onboarding is completed.

Data is obviously very critical for Customer Success processes to function well, and product utilization data is at the center of the focus on adoption.? This requires timely access to quantitative data relative to who is using the products and qualitative data relative to the degree they are using products correctly.? Monitoring utilization trends and communicating that status is essential.? Using that data to ensure that change management outcomes are being achieved should be one of the prime areas of attention paid by the CSM.? Once past the early stages of the journey cycle it is important to review utilization data regularly - a great topic for the QBR agenda.

Timely Feedback - Adoption data is just the beginning.? A silent challenge, literally, that hinders the effectiveness of Customer Success is the absence of continuous feedback, another critical data element.? It is extremely difficult to deliver good outcomes when customer friction points are not heard.? There are several dimensions to this challenge.? One is when there is some dissatisfaction with the product or the deployment of the product, but it goes unspoken.? A second is when the dissatisfaction is spoken, but not “heard”.? This can cause client users to give up sharing concerns and result in more unspoken dissatisfaction.? A third dimension of this challenge is when feedback is provided to one department, such as customer service, but not shared across functions, ultimately not reaching the right resource to help address the issue.

Because of this multidimensional nature to the feedback challenge, a multidimensional approach is required.? First, Customer Success must take an offensive approach to this and be vigilantly proactive at seeking feedback.? All customer-facing agents should have, as a part of their customer engagement process, the solicitation of customer feedback built into their work tasks.? This then begs the question of company culture and the degree to which customer satisfaction is treated as a priority.? Customer Success functions become sub-optimized with a culture that does not place customer success at the top of the agenda.? A third element of the feedback challenge is to capture customer engagement points as actionable data, which can be analyzed to identify risks.? This helps to supplement and also enrich feedback data to support customer engagement decisioning.

Ensuring Value - Is one of these challenges more critical to overcome than the others?? They are all important, and extremely intertwined with each other.? Yet, this could be the most critical to get addressed.? Helping the client to achieve recognized value from a product or solution is a complicated journey and warrants its own article to fully explore.? The journey must begin during the sales cycle, where the benefits of utilizing products and solutions are defined and metrics or KPIs that help to monitor achievement of benefits are established.? The most common challenge here is not getting those metrics sufficiently agreed up front.? This leads to a cascade of challenges culminating in a great difficulty to overcome mis-set expectations.? Addressing all of this at the beginning of the journey is essential.? For example, the sales pursuit team should include members who help establish metrics, whether from the Customer Success function, or elsewhere in the commercial organization.

Post sale, more things can hamper the effectiveness of value realization.? Metrics are not monitored, the client won’t share the measurements, use cases are unclear and the wrong metrics defined, priorities change and new metrics are not redefined, adoption is low and metrics are hard to achieve, value is being achieved but not communicated sufficiently.? The list is long.? Similar to the adoption challenge and the need for ongoing change management focus, this challenge requires an ongoing value realization focus.? Resources need to be dedicated to the task, and may include a combination of client and Customer Success team members.? Either way, the Customer Success function needs to ensure that the focus on value is continuous.

One additional observation about this challenge is related to the notion of the product “health check” as a Customer Success tactic.? Software vendors tend to give these away and systems integrators tend to charge a nominal fee for an assessment of how the product has been configured and being utilized.? Virtually always the conclusions from the assessments come back with recommendations for how to optimize the technology and the initiative.? But, the hook is that there is usually a cost to the client - they have to invest more in order to get a better return.? For many, following these recommendations helps to turn around an otherwise challenged program.? Unfortunately, for a percentage of the clients, this suggestion to spend more in order to get the value they expected pushes them over the dissatisfaction edge and propels them rapidly toward the final hurdle on the list, Churn.? When the Customer Success function performs a health check, it is important that there are recommendations identified for improving value that don’t involve more investment by the client.

Engagement Sufficiency - This is an unfortunate challenge.? While the opening of this article stated that the Customer Success function is growing and resources are being added at an increasing rate, it is also observed that most companies don’t have enough resources to adequately cover their growing set of clients.? There are not enough bodies budgeted to perform the work (much of which are the actions identified in this article).? This translates into not enough time understanding client needs, not enough time building relationships, not enough time to be proactive seeking out feedback, not enough time driving adoption, not enough time looking after value realization.? This challenge makes all the other challenges harder to overcome.

Several important best practices can be offered for this challenge generally under the heading of prioritization.? Ultimately the notion of customer segmentation comes into play:? create levels of customer priority based on their value;? provide more attention to the higher levels; and offer less personalized attention to lower levels.? This enables the CSM to spend their finite ability for action in a prioritized approach.? Prioritization of action type also emerges as a key best practice.? Paying attention to higher return activity such as adoption and value is ultimately more important than petty fire fighting that can completely drain one’s calendar.? The CSM is a resource that must be consumed wisely. Additionally, as has been identified with other challenges, utilizing data to understand where to prioritize action is a key requirement.

Managing Champions - Continuous utilization of products and solutions is highest when there is a champion, or champions, inside the client organization who care.? They need to see a strong correlation between product utilization and outcomes.? When they do, they push to keep utilization high.? Some studies indicate that the #1 predictor of client churn is associated with turnover of the champion.? A key role of the Customer Success function is to identify, nurture, and support champions.??

This requires a clear process and accountability, which must start either during the sales cycle or the ramp-up to onboarding.? The care and feeding of champions is an ongoing requirement.? Allowing regular contact with champions to diminish over time can be the first step toward the erosion of their loyalty.? However, the bigger element of this challenge is the probability of champions changing jobs.? This needs to be anticipated before it happens and a new champion identified while the transition begins.? Re-organizations can lead to champions departing without warning, which requires that the CSM also consider the idea of grooming champions-in-waiting.? Utilizing the contact management functionality within the CRM system is important for champion succession planning.? Again, this is yet another factor elevating the need for good data.

Cross-functional Alignment - Back in the early days of the quality movement, it was discovered that forming a quality control function can become a detriment.? The presence of the function can create the perception that they own quality and others don’t need to worry about it.? Ultimately the answer became that everyone must feel ownership for quality.? The same goes for the idea of customer success and customer satisfaction.? Everyone has to feel ownership across all customer-facing functions.? The challenge here is when there is imperfect alignment between functions.? Process handoffs, communication gaps, competing objectives - all common organizational dynamics that get in the way.

So, now the Customer Success function does not own customer success?? Correct.? But, they do own responsibility to drive the alignment between functions to minimize the risks of hand-offs, foster communication, alert when objectives compete - Customer Success as a function needs to be the steward of customer success across the organization.? In some cases there may be processes where they take on more accountability, such as with onboarding where alignment is essential.? Customer Success Managers can also serve as customer advocates, which are a critical role for driving customer centrism in the organizational culture.

Preventing Churn - This final challenge is the one most inter-connected with all the others.? When another challenge does not get managed well, the likelihood of customer churn rises.? This challenge is at its worst when it is not discovered until it is time for renewal.? The big causes of churn include, champion turnover, unaddressed dissatisfaction incidents, low return on investment, another shiny technology becoming more interesting, and, in combination with others on this list, the client being told to invest more to get better benefits.??

This is without question the most negative of the challenges confronting Customer Success Managers and it demands that the CSM is on top of what is happening in the account.? And, the recommendations related to all the other challenges apply here.? Preventing churn requires attending to all of the risks posed by the other challenges, and most importantly not waiting until contract renewal to discuss that renewal.? The proactive focus on the relationship with an unrelenting concern that value is achieved is the best advice here.? Checking in with key stakeholders on a continuous basis relative to satisfaction, business needs, and perceived benefits must be the mantra.?

Summing it All Up

There are undoubtedly many factors that have to be managed well in order to achieve good Customer Success outcomes, including deep understanding of client business requirements, achieving sufficient adoption, a near obsessive focus on communication, and an unwavering drive toward client outcomes and value.? There are many moving parts, a large swath of people involved, and a big need for individuals to step up to do their part.? Across it all is the need for quality and timely data to drive awareness, understanding, and support decision making.? It is a tall order, but we need to prepare Customer Success Managers to effectively overcome these challenges.

For more on customer success, check out the next article in the series: