By Todd Pearson, SVP of Customer Success
There’s an increased emphasis on Customer Success today by companies with a recurring revenue models. Above all else, happy and healthy customers are the lifeblood of any subscription business. But how do you build and maintain this culture in your organization? Dan Steinman of Gainsight recently wrote about this. Here, I’d like to expand on a couple of the points that I think are most important.
I’ve been running Customer Success at Zuora for about 2 ½ years. We are a B2B SaaS company providing a commerce, billing and finance application to businesses offering subscription services to their end customers. Doing this well is complex for two reasons. First, our service is mission critical to our customers: if our system doesn’t work, our customers can’t operate. And if our system can’t perform some function in the way the customer wants to run their business, they will miss opportunities. That puts a lot of pressure on us. Second, companies in the Subscription Economy come in all sizes and industries. We work with startups through multi-billion dollar global firms. We serve verticals as diverse as cloud, media, telco and finance. We serve B2B, B2C and B2Any. That pushes us to be a lot of things to a lot of different people, and to do all of it well, all the time.
So how do we organize to deliver Customer Success in this environment?
Dan is spot on with his most important points: Customer Success needs to be a central value for the whole company, it needs to come credibly from the CEO, and the actual Customer Success function needs to be empowered organizationally. Dan also speaks about alignment between the functions. I think that is the special sauce and will speak to this as well.
I joined Zuora because our CEO, Tien Tzuo, convinced me of the importance of Customer Success to Zuora’s success. He made the case that a company in our position, with a recurring revenue business model, had to earn its customers’ loyalty every day, and that as the company grows, its value would increasingly reside in the customer base. He convinced me of his commitment to Customer Success as the company’s central value. That’s a hard thing to live up to in a young tech company where growth is typically prized above all else. And it’s challenging to preserve that focus. That’s why the four anchors are so important.
1. The value of Customer Success needs to be central to the whole company.
People naturally focus on their own objectives, which usually align closely to their operational function. The larger a company gets the more this is true. For a concept like Customer Success to be embraced by everyone in a company it has to be presented as even more important than each person’s functional role. And it has to be reinforced continuously. At Zuora, Customer Success is our top objective. We actually have an all-day executive team offsite every year with the sole purpose to identify our top three objectives for the coming year. Since I’ve been at Zuora, Customer Success has been at the top of that list, even ahead of growth.
2. The value of Customer Success needs to be driven credibly by the CEO.
Because of the pressure for people to focus on their functional objectives, the concept of Customer Success, like any higher objective needs the weight of the CEO to drive it home. At Zuora, our CEO focuses on this relentlessly. He is the driver of our objective setting offsite, insisting that Customer Success outweighs everything. It comes out in every conversation he has, and is either the subject of or is woven into almost every email he sends out. People can’t ignore it—they have to take it seriously. And they are given license to focus on it.
3. The actual Customer Success function needs to be empowered organizationally.
Customer Success is not just a value. At many companies, Customer Success is also an operational group. At Zuora, the Customer Success function is responsible for customers once they go live using our product. The role reports directly to the CEO and sits on the executive team, giving it weight.
4. Achieving Customer Success requires tangible cross-functional operational alignment.
As I alluded to earlier, operational alignment is the real culmination of creating a successful customer base. The previous three criteria are essential but pretty straightforward. Operationalizing Customer Success cross-functionally requires a lot of things—strategic insight, trust, camaraderie, and a lot of operational thought and execution. Getting it right is hard—but it delivers immense impact.
At Zuora we’ve been refining the recipe, and this year we made a breakthrough. We’ve developed a new framework for understanding each customer through the lens of how they operate, and then how Zuora fits into that operation. The approach forces us to look through the eyes of our customers and their strategic initiatives. It allows us to apply our product to that reference point, and even visualize how our product can be improved as it aligns to our customers’ goals. We call it The Customer Success Framework and it encompasses what we believe are the nine critical functions of any subscription business.
The framework gives us a common and deep understanding of each customer and how they use our product. It gives us a common language when we speak internally with each other and externally with our customers. It allows for easier and more fluid collaboration and handoffs. It unifies us and helps us turn Customer Success from a value into a tangible approach—whether we sit in Product, Sales, Professional Services, or Customer Success.
Our annual Subscribed conference on Sept 19-20 in San Francisco will be focused on this framework. We’re incredibly excited to share it with customers, prospects and other participants in the Subscription Economy, and I invite every reader to attend!