How To Build Customer Success

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Companies centering their business around customer success is actually a relatively new concept. In the late 90s, many B2B businesses barely had any customer support. Service calls would last hours, and a customer with a question was considered a resource drain at the end of a sales chain.

However, today, a new model known as Customer Success Management (CSM) is exploding in popularity among B2B enterprises, and especially in companies dependent on a recurring revenue model to bolster their growth.

As consumers, we’ve become more informed and demanding. We’ve shifted from buying products (DVDs, automobiles) to enjoying services (Netflix, Zipcar). In more and more aspects of our lives, we’ve separated the solution (a ride) from the device (a car). We’re not as interested in managing physical assets anymore.

As a result, companies have to pivot from selling products to managing services, and services require huge amounts of customer engagement. Product metrics like units, margins, and inventory have been replaced by relationship metrics like renewals, upsells, and churn. Companies are less concerned about the number of units shipped than they are about the successful outcomes they deliver and the consistent, positive interactions they have with each and every one of their customers.

And, as a SaaS company becomes larger, so does the size of their subscription base. So much that customers who churn after an initial contract purchase can have a huge impact on a company’s long-term financial prospects.That loss of revenue requires more and more bookings coming from new customers just to replace the churn. As a result, growth slows substantially.

When centered around managing relationships vs selling products, businesses are economically focused on customer retention. But boosting retention requires comprehensively managing the success of customers, keeping all health metrics up to date, and moving proactively when warning signs appear in any given account, at any given time.


Every company has to build a customer-centric culture their own way. Here’s how my company did it. Hopefully it will prove useful.

A couple of years ago, our CEO took our managers to an offsite in Sausalito, California to tackle some existential questions: Who are we? What do we do? How do we get closer to our customers?I have to admit, after three days of this stuff we were ready to strangle each other! But we came out of it with a pretty great vision: To create “a world subscribed,” to help all companies transition from product to subscription models.

While we felt really good about what we accomplished over those three days, it took only a few weeks for us to realize we still didn’t have a plan. How do we actually help our customers? And how do we accomplish that goal? No fancy offsite this time — just a whiteboard.

We identified nine core processes that we help our customers with: price, acquire, bill, collect, nurture, account, measure, iterate, and scale. These nine processes represented the nine keys to success in a subscription business. And there were precisely nine keys. Not eight. Not ten. Nine.

We decided to test it. Relentlessly. We had 150 of our customers rank the nine keys, we looked at our support cases in Zendesk to map them against the nine keys, and we had our product managers test it against new feature requests. It was a pretty even distribution … almost scarily so. There were no clear losers.

So there we had it. Nine keys. They were comprehensive, mutually exclusive, and evenly distributed in relative importance. April Oman, VP Customer Success, Zuora

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What did we do to get our entire company wrapped around this framework and laser-focused on understanding our customers? Naturally, we went Glamping.

We corralled 200 employees at Costanoa Lodge on the California coast, where glamour meets roughing it in canvas tents with real mattresses and most importantly, a minibar. 20 cross-functional groups were each assigned one of our actual customers. We gave them everything we knew about these accounts — sales process material, professional services information, case support details, and anything else they’d need to walk in a customer’s shoes. And we asked them to figure out the customer story against our new nine keys framework.

Today we map pretty much everything we do against the Nine Keys: marketing collateral, employee onboarding, sales decks, support analyses, etc. It’s a framework that runs through our entire customer engagement cycle.

Our account executives analyze new prospects against the Nine Keys to make sure we have an accurate cross-section of their business. All of our monthly product updates are measured against it. When we acquire a new customer, a write-up goes out to the entire company that describes that customer’s aspirations against each of the nine keys. And, as you can imagine, this information is devoured by everyone.

We’ve instilled the nine keys as a culture. And as a result, churn is down, customer satisfaction is up, and customer engagement is consistent.


Every relationship needs regular engagement. In an ideal world, every bit of communication a customer receives would be directly relevant to their needs at that point in time. While that is extremely difficult, on the flip side blanket communication as your only form of engagement is insufficient and potentially counterproductive to fostering retention. What’s needed is a balance between universal and personal communication based on your specific customers’ requirements.

For some customers, a regular cadence of universal communication is an excellent tool in ensuring customers are up-to-date on the latest capabilities of your product, which can help further the ROI for your customer. Without this regular cadence of universal communication a customer can become stale and potentially lose sight of the ROI of your product. In this instance, all customers are created equally.

However, every customer success team will have to tier their customers. It’s a harsh reality, but some customers are frankly just more valuable to the business than others. These types of customers need more than just blanket communications to ensure their successful adoption and retention. In this case, it is the CSM’s responsibility to provide relevant communication at all the relevant times.

Because at the end of the day, for these customers you want your product to become as sticky as can be. And that means your communication has to be tailored around topics that drive adoption and proven ROI. April Oman, VP Customer Success, Zuora

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In order to truly encourage customers to engage, it works best if you are direct and offer them a real incentive. In other words, demonstrate the value that exists today and the investment you’re making today for increased value in the future. What improvements are underway? Are any new features being added? And not just in the product. This could also be around best practices education or connecting them with other customers at local events.

For instance, an annual user conference is a massive tool to re-engage with customers — there’s literally something for everyone at these types of events.  And at the end of the day, the what’s in it for me criteria are the threshold these messages must meet.


It’s critical that customer retention and its evil twin churn have a place on the dashboard in your weekly executive staff meetings. And even though every public company has to report on churn, there’s no standard practice for reporting on this, yet.

From business to business, measuring churn and customer retention can be very different. For instance, some companies measure churn against customers with a certain ACV threshold. But for a company looking to grow all segments of their business, this does not give you the full picture.

Your role is to make sure everyone looks at the raw, intellectually honest facts of the business — that means both the good and the bad. The first and critical step to doing this is defining a consistent set of metrics to measure customer success that everyone at your company can understand.

Some of the questions we asked ourselves when building a unified dashboard for churn and customer retention were…

  • Do we measure churn in terms of ACV (dollars) lost or customers lost?
  • Do we include the negative impact of downsells?
  • How do we reflect the positive impact of contracted ramp, renewals and up-sells?
  • Do we segment the churn we can control from the churn we cannot control (ie customer goes out of business)?
  • Do we care about the risk triggers and/or the reasons for churn?

Gainsight recently surveyed more than 100 subscription businesses and found…

  • 46% track churn on both a customer and a dollar basis, with 23% track only by dollars and 26% only by customers (the remainder did not respond)
  • 63%+ include downsells and downgrades in churn numbers
  • 58%+ include upgrades, cross sells and upsells in churn numbers
The more information you know about which types of customers are churning, when, why and how, the easier it is to identify actionable trends.  April Oman, VP Customer Success, Zuora

Instead of simply looking at when they cancel, we look at things like — are they a commercial or an enterprise account? How long were they a customer before churning? Were they live or still implementing? What were their usage trends? What were the risk triggers? For instance, if a customer is coming up on a 1 year renewal and they are not yet live, the churn risk exponentially increases.

At the beginning of every fiscal year, I am given a churn target. This target is dollars of ACV lost, not number of customers lost. And it includes all churn-not just the churn we can control-as well as  downsells. Then this target is broken down further. Over time we’ve seen trends in the following segments and are now confident allocating  a percentage of the total churn forecast to each category:

  • Not live: Commercial
  • Not live: Enterprise
  • Live: High Usage
  • Live: Low Usage

With this framework, you’re identifying cohorts — and with them the ability to visualize a starting condition and the variable. This is the exact framework we use to report to our board, as well.


Now that you’re engaging with your customers regularly to foster retention and you’ve outlined how you’re going to measure the health of your install base, you need to begin to monitor and be proactive on churn threats.

And churn threats aren’t merely a signal that you have an at-risk customer; these are literally threats to your business, your revenue, your valuation and your ability to grow.

I’ve learned that the longer the implementation is the more at risk the customer will be for churn. I’ve also learned that enterprise customers tend to have very different reasons for churning than a commercial customer. So, just like I’ve mentioned before, it’s helpful to flag churn risks by segmenting customers into 4 buckets — live, not live, enterprise & commercial. And then within those buckets we have several triggers, some of which are mentioned below, for churn risk.

  • Loss of key user or advocate
  • Lacking or not realizing ROI
  • Not implemented in time
  • Poor utilization or adoption
  • Product gaps
  • New management
  • Business model change
  • Business failure / failed product launch
  • M&A (meaning the acquiring company has a standard system for which the acquired company will migrate too)
  • Failure to pay
  • Lack of resources and/or expertise

The seeds of churn are often planted early and can start to sprout over the course of a customer lifetime. If you aren’t looking for them, you could miss that your customers are telling you that they’re going to terminate the relationship. They’re telegraphing their next move and it’s up to you to read the signals and jump into action.


No doubt about it, downselling your customer is better than a churned customer. We see two common reasons for a downsell with an existing customer.

Most commonly seen are customers that experience poor business health, primarily due to a failed product launch. By downselling them, it buys them time to refine their business model, solicit more funding, or launch a new product in order to transition to a healthy business.

To assist in these situations, we go back to our nine keys and make sure they’re addressing the keys with the best strategies. Are they pricing & packaging effectively, acquiring customers across all channels, collecting all possible payments or have an established mechanism to collect on failed payments, is accurately recognizing revenue, and so on.

I also often see customers that will over-project their growth and over-buy their volume. In this case, nurturing these customers by offering tiered volume blocks is a win-win. We recently incorporated this into our new pricing & packaging model. Customers can buy blocks of volume which allows them to test the volume they’ll actually put through our system. Our goal then is to monitor in such a way that prevents them from hitting overage pricing so that we can proactively offer the opportunity to upgrade.

The exchange of information between the CSM team and the rest of the business is absolutely critical. At this point, because of the nature of this business model, several groups within your company  will have relationships and/or information to share with each other to create more targeted, relevant communication with your customers. Some scenarios at which these internal groups would come together would be when customers cannot pay their bills, their usage plummets or there is a change in the key user and/or advocate.

In my group, instead of waiting for an issue to arise before we exchange customer information, we’ve forced ourselves to more proactively share information at key milestones in the customer lifecycle. Two customer milestones that have formalized internal knowledge transfers are 1) when an account converts to a customer and 2) when the customer goes live on our platform.

During the sales cycle, our sales team gather copious amounts of information – tons of details around where the customer is today and where they want to go. April Oman, VP Customer Success, Zuora

From pricing & packaging to use cases to expected growth trajectory, the list goes on. This helps the team build a demo that mirrors their future business state. Typically, this data is buried, spread across fields in Salesforce CRM. Here we’ve formalized a process so that once every deal is closed, the Sales Engineer leverages the Nine Keys framework to tell the story of the customer — why they bought, what they’re trying to accomplish and how they plan to use our product to address their needs. And this Nine Keys write-up is sent to the entire company. Another example of building a customer culture.

Then, upon go live the Solution Architect also creates a Nine Keys write-up — again, sent to the entire company. The second Nine Keys write-up focuses on describing what has been implemented, in what time frame and what may come in future implementation phases.

The great things about these write-ups is that we can see the evolution of the customer from the time they bought through go live. This data is invaluable. The support team uses it to understand deviations from the standard. The customer success team uses it to start account planning by discussing with the customer what they want to achieve relative to each key.

Internal transparency and communication also provide other tangible benefits. Sales has a relationship with the economic buyer. When you’re ready for an upsell, they will be the intro you need. For a customer up for renewal in the current or next quarter, a renewals manager will gather  data on their current usage, timing for when potential overages may occur, and package this up for a sales rep to run the renewal campaign. Sharing this data not only facilitates the identification of upsell opportunities based on usage, but also gives you early warning if the customer is in trouble. For example, if the data is doesn’t look good (not live yet, low usage, etc), it’s time to engage with the appropriate group — sales if the customer is live, services if the customer is not live — to pull together a churn save plan.

Finance can be pulled into the churn save plan, as well, to help refine the plan and any respective terms — for example, downsells.

However, the most common way the customer success team will engage with finance is when they’re tracking down a customer for collections. They want to know things like, has their usage level decreased? Has their invoice volume decreased? If so, these are signs of churn risk. Same as above, information is exchanged between the appropriate groups to create a churn save plan and determine the right strategy for moving forward with this customer.

Another important way to leverage the information we’re gathering from customers cross-functionally is with the product team. Most obvious is the impact this can have on the product roadmap. The customer success team should be sharing what customers are reporting as gaps in the product and which features they are or are not using. They should also be connecting the product team to customers directly. This approach is dually effective: the product team learns specific customer requirements and challenges, while the customer feels that their voice is being heard and that their needs will be addressed. It’s critical for the people building the product and the people using the product to have constant engagement.

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