Issue #23: Ed Powers on the future of Customer Success

“History doesn’t repeat itself, but it often rhymes.” — Mark Twain

I think Customer Success is going to go through what manufacturing went through about 40 years ago. 

The corollary to CS in manufacturing is the quality assurance department. Back in the 70s and 80s, manufacturing in the US went through a transformation in response to increasing competition around quality that led to an approach called Total Quality Management (TQM). Prior to TQM, the quality assurance function would deal with things at the end of the production line—they’d say, “this product doesn’t meet our quality standards,” or “we need to rework or scrap this part of the product.” So you’d have these huge operations at the end of the production line to fix things before they were shipped. 

That was the paradigm for years until the Japanese started competing on quality. The US went through the transformation of realizing that quality has to be designed into the process of building the product. Quality assurance can’t just sit at the end of the production line. 

So that was a very different way of thinking about how to build and deliver products. And Customer Success is on the same trajectory. 

Customer Success started out at the very end of the production line. Software companies thought they had these amazing products, but then customers would buy them and churn. “Why are customers churning?” Companies responded by getting team members to focus on renewals, and to get on the phone with customers that wanted to cancel and try to talk them out of it. Completely reactive, right? That’s “quality assurance” sitting at the end of the production line. 

So Customer Success started working upstream in the production line. Today, Success runs the onboarding process, implementation, and is managing customer health by getting in front of it from the beginning. (Some Success teams are starting to be part of the sales cycle even before the deal is closed.) So when it comes time for renewal, we’ve increased the chances that customers are going to renew and maybe buy more down the line. We’re working upstream in the manufacturing process to make sure products are built and delivered in the way customers want them to be built, just like they began to do in the 70s and 80s to make sure manufacturing defects were driven out of the process. 

Here’s the deal: the different parts of the process of building and delivering software—how you’re selling it, how you market it, who you’re targeting, what the reliability of the software is—Customer Success today has nothing to do with all of that. Those are factors outside CS’s functional silo. But they are expected to fix it anyway.  

The next evolution of Customer Success will be to be part of the entire process, to work across the enterprise to address the root causes of customer failure with the product. Success has to work across the organization to help the company design and build better products. To target the right customers. To sell better. To market better. And to deliver better. 

The next generation of Customer Success is to be preventative and proactive rather than reactive. How do we prevent customers from going anywhere else? How do we create customers for life? I think companies are going to move in that direction, and we’re going to see a transformation where Customer Success is an enterprise-wide activity.

The top articles this week: 

This week's newsletter features posts on: 

• The Management Flywheel
• Two Underappreciated MRR Growth Levers
• Why Customer Marketing Must Live Within Customer Success
• Building Out Tech-Touch 

LEADERSHIP

The Management Flywheel

“Most managers who see a team in a rut can quickly detect many things that are going wrong. But it’s the response to these problems that distinguishes the great ones.” Here’s Camille Fournier, Managing Director at Two Sigma, on how to begin building steam with a team that’s in a rut.

Read the Full Post

GROWTH

Two Underappreciated MRR Growth Levers

Travis Todd, Co-founder and CEO of SaaSync, on how Expansion MRR and Reactivation MRR can help drive pre-product/market fit businesses forward, both involving growing or deepening relationships with existing customers. 

Read the Full Post

CUSTOMER MARKETING

Why Customer Marketing Must Live Within Customer Success

Typeform’s Head of Customer Engagement, Angela Guedes, shares tactical advice on how to structure, measure, and support a Customer Marketing team.

Read the Full Post

DISCUSSION

Building Out Tech-Touch: Here's What I'm Doing

Here’s a discussion in Gain, Grow, Retain where a few community members share how they’re building out their tech touch (aka “Digital Led”) segment.

Read the Discussion