The Centricity of Customer Success Management

In his recent book, “Inside Apple; How America’s Most Admired –and Secretive– Company Really Works,” Adam Lashinsky makes a point that ought to resonate throughout the SaaS/Cloud ISV community and especially with the growing profession of Customer Success Management therein.  “Apple’s challenge isn’t finding new customers anymore, but instead figuring out what amazing new products to sell us.”  Long described as a quintessential “product” company, Apple has built a huge and legendarily loyal customer base.  While I haven’t yet seen any job descriptions specifically for CSM’s at Apple, I’m certain that there are staff members whose job it is to know everything knowable about that customer base and all of its segments.  Those analysts have a strong resource in the blue-shirted young wizards at the Genius Bar in the Apple stores, who work with a wide variety of customer types every day.  “What do you want to accomplish?  … Okay, here’s how you can do that with [product].  And have you thought of…?”  Questions get answered, knowledge is transferred — and more products are bought. Beyond the increased revenues, though — the data and insight from the questions those customers ask is invaluable; it will tell Apple what it needs to know in order to answer Lashinsky’s challenge.

The Centricity of Success

The Wharton School of Business program defines “customer centricity” very precisely. To be authentically customer centric  requires that a company conceive of and manage themselves “not as a group of products, services, territories or functions, but as a portfolio of customers.” The program teaches that companies who are customer centric “know how much money they make or lose with each of their customers or customer segments, and they understand why.” Perhaps most importantly, “they understand in precise analytic terms exactly how their different customer relationships contribute to, or subtract from, the total value of the firm. Because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable profitable growth…”

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Mikael’s Mantra for Customer Success Management

The emerging profession of customer success management in the SaaS/Cloud industry came to be primarily out of the  necessity for customer retention in the subscription business model.  A core aspect of the CSM role is ensuring that customers succeed in measurable terms from their investment in the vendor’s applications.  But the customer, though unquestionably vital, must not be the only object of the CSM team’s concern.  Their own company, the app vendor, must succeed as well, and the team has the best access to the data necessary for that goal too.

The Need to Know

Every SaaS/Cloud ISV needs a detailed map for each of its customer portfolios so that the CSM team can track individual customer progress against that map.  The production of those maps is a prime goal of the CSM team, for they are the ones who should have the data necessary for the exercise.  With it in hand, slowed progress or plateaus should generate alerts, and quick corrective action, for revenues and retention are at risk.  The precise knowledge of just how much money is at risk is the proof of the CSM’s value proposition as a team.  Yes, the customer success manager must know which specific modules and features of the application are in use by which customers, but the knowing can’t stop there.  Being able to show the value of that usage to both the customer and to their own senior management team is what will bring both retention and continued employment.  And there’s still more knowledge to be gained — the knowing of the customers’ business so that other opportunities for profitable offers of technology and services can be identified and produced.

Want to know how your CSM team is doing?  A good list of initial questions to ask can be found in the Customer Success Management Initiative research, even if you’re only at the planning stage.  The ongoing discussions of the Customer Success Management Forum on LinkedIn, where nearly a thousand other SaaS/Cloud CSM professionals have gathered,  have a lot to offer as well.  For the discussion of this particular article, click here. To discuss other resources, please join me for an Office Hours conversation.