Episode 2 of my interview with Gainsight’s CCO, Dan Steinman:
Innovative Vendors Strike Back – Vendors organize themselves for Customer Success
Following on from Episode 1: New Hope: SaaS Wars – A New Business Model and The Growing Importance of Customer Success.
Sue: So who do you think should own the role of customer success Dan?
Dan: It’s a really interesting question. Literally I have seen customer success organizations in different entities: sales, services, product, marketing and in a separate stand-alone organization. I believe that customer success is going to ultimately become so important that it’ll be more and more a separate organization for most companies, reporting directly to the CEO. It’s one of the reasons that the role of Chief Customer Officer (CCO like myself) is in vogue. That’s the person the CEO is going to hold accountable for the entire customer life-cycle and customer retention number. Whilst you want someone high level to own your sales number you also need someone to own your retention because it’s so critical to the long term success of the company.
I think for an ideal organization the following 3 roles reporting to the CEO are key:
– CRO (Chief Revenue Officer) who owns the acquisition process via marketing and sales.
– COO (Chief Operating Officer) who owns operations and finance and maybe engineering.
– CCO (Chief Client Officer) who owns customer success, professional services and support and perhaps the renewals.
Customer success can work in any organization and so there’s no right or wrong. But I think the evolution will take us where customer success will become this stand-alone organization.
Sue: We’ve also seen the emergence of different customer success roles, often called customer success managers (CSM). What for you does it take to be a great customer success actor ?
Dan: Yes I have a pretty long list after having managed CSMs over a number of years and so I’ll give the highlights. Firstly, I think it’s obvious but if you’re going to be dealing with customers, you have to have the right personality and demeanor to do that. That’s not just about being likeable. You also have to be able and willing to take some level of punishment. That’s because this job is often dealing with customers who are not always delighted. There is an element of pain which comes with that and so you have to know how to live in that world. In addition, the 2 skill components that you have to either find or build are:
1) A high degree of product expertise. At a user level, I can help you use my product better because I really know how to use it in an optimal way.
2) The second one is equally as important or even arguably more important and that is domain expertise. If I’m selling a marketing solution like we did at Marketo, my CSMs had a thorough knowledge of marketing processes. So if you are selling accountancy software, you may want to hire accountants and teach them how to use your product.
Sue: Yes that is really important for your credibility with your customers and their trust in you.
Dan: Yes, they love talking to people who have actually done the job which you are trying to do and who can truly empathize. There’s so much power in words when you know exactly how they feel.
Sue: So a typical great CSM needs to be a Jack of all trades.
Dan: Yes and there are a lot of skills in managing customers and product expertise as well as supporting and consulting team skills. It’s all about bringing all these together in one place with people who are very passionate about their customers. It’s not that I want to see CSMs going to hospital but I kind of expect them to feel ill if their customers aren’t really doing well. For the great CSMs, it’s a very personal thing. It hurts in your stomach when your customers aren’t happy. Great people in every job are like that. A great sales person for example anguishes over their deals. Great CSMs are just the same.
Sue: I empathize with that. It’s all about how you interact and the real concern and passion you feel for what’s happening with your customer’s success. It’s not just another routine job.
Dan: That’s right. It becomes a craft. It goes beyond a job and almost becomes a hobby. I think about it and work on it in my apartment in my spare time. I’m always determined to be better at it even if no-one else notices except me!
Sue: Indeed it gives you a great sense of satisfaction knowing that you’ve created added value.
Coming soon… Episode 3:
Return of “The Wall Street”- Evangelism of Customer Success Value and Return on Investment.