What is Customer Success? (Your Simple Guide)

Tim Jordan
Tim Jordan
January 16, 2024

Customer success is both a strategy and a business function. 

As a strategy, customer success is about recognizing that if you’re reliant on recurring revenue, it’s critically important to figure out how you can help your customers be successful with your product. Because if they aren’t successful, they’ll cancel.

Whether you’re selling software or a service, customer retention is critical when your business uses a subscription model.

You spend a lot of money upfront to acquire new customers, and the only way to be profitable or grow is to make sure they keep paying you for a long period of time.

For many businesses and industries, recognizing that this needs to be part of their strategy has also led to the development of customer success teams and departments — which is how customer success has evolved into its own business function. 

As a business function, your customer success organization is responsible for figuring out how to consistently make customers successful. They’re responsible for tasks like onboarding, churn reduction, upselling, and more. 

When you get customer success right, your business growth skyrockets. 

The benefits of great customer success

Customers buy your product because they believe it’ll solve a pain point in their lives:

  • Mailchimp’s customers subscribe to their email marketing software to help them connect with their audience and drive new revenue
  • Chomps’ customers buy their beef sticks because they need a healthy, high protein snack 
  • Lovevery’s customers sign up for their subscription box because they want safe, age appropriate toys for their kids.

Why do your customers purchase your product?

Whatever the answer, you can bet they won’t continue to use your product if it isn’t helping them solve the problem they were hoping for. If Mailchimp’s customers don’t see their audience engaging with their email campaigns, it’s only a matter of time until they churn.

An effective customer success strategy and team helps you avoid these problems. There are at least three big benefits to building out a customer success function:

  • Reduced customer churn. Because your customer success managers (CSMs) are proactively engaging to help your customers be successful, you’d expect to see lower churn rates. Profitwell identified a 15%-27%  drop in churn for those organizations with customer success. 
  • Increased customer satisfaction. Increased customer satisfaction is why customer success leads to lower churn rates. When your customers are able to accomplish what they hoped for with your product, they’ll be happier. And happier customers churn less frequently.
  • Capturing growth opportunities. Customer success managers are usually closely connected with your customers. This enables them to identify and act upon upsell and cross-sell opportunities — meaning customers will spend more money with you through upgrading or buying additional products. This is collectively known as expansion revenue. In the same study mentioned above, Profitwell found a direct correlation between customer success and expansion revenue: organizations with customer success teams saw a 50%-125% increase in expansion revenue (compared to those organizations without customer success).

Why you need a dedicated customer success team

A solid customer success strategy requires a dedicated team to implement it. There are different ways to build out your customer success function, and the right approach will usually depend on your goals, budget, and company stage. For instance, many companies segment customers into three different buckets:

  • High-touch – these customers will get prioritized for one-on-one, customized onboarding and ongoing support. 
  • Low-touch – these customers will primarily rely on one-to-many approaches, such as a knowledge base and training webinars. 
  • Tech-touch – these customers won’t have a dedicated CSM. Instead, they’ll rely on your knowledge base, in-app resources, and other solutions empowered by technology.

There’s one thing that’s important to make clear: customer success and customer support are not the same thing. 

While there are always exceptions to the norm, customer support is usually a reactive team that responds to customers after there is an issue. Customer success is a proactive team that’s focused on guiding customers towards success throughout the entire customer lifecycle. 

Customer success managers play a vital role in maximizing the value customers receive from your product or service.  

They help onboard customers, monitor their usage of your product, and perhaps most importantly, guide your customers with best practices and suggestions on getting the most out of their purchase. 

Because they’re focused on helping meet your customers’ needs, CSMs can have a big impact on long-term customer retention and fostering loyalty to your brand. 

Common challenges in implementing a customer success program

While the overall goal of customer success is easy to understand — helping customers be successful — the way it plays out takes a million different shapes across different companies. 

When you’re launching or scaling your customer success program, there are at least three big common challenges you’ll encounter.

Defining clear responsibilities

Each musician and each section of an orchestra has a specific role in playing a beautiful piece of music. 

Similarly, you’ll need to clearly define the function of your customer success team and each role within that team. 

For instance, you’ll need to differentiate between what a CSM handles and what should be referred over to customer support. If your CSMs handle onboarding, you’ll need to decide when it’s the right time to move from having everyone generalize to having certain people become onboarding specialists. If they’re involved in upselling, you’ll need to figure out how they best partner with your sales function to drive expansion revenue. 

It’s common for CSMs to become a “catch-all” of sorts, responsible for handling all the random tasks that aren’t a good fit for other teams. But this can be a huge distraction from the primary goal of customer success: driving customer retention and expansion.

When you’re launching and expanding your customer success program, make sure you clearly define roles and responsibilities.

Nailing your internal communications

Effective internal communication is an ongoing challenge in any organization. 

But getting internal communication right is especially important when you’re leading a customer success team. Since your CSMs are typically the “face” of your company — the primary touchpoint with their clients — it’s important that they’re plugged in to all the latest news and updates. 

Your CSMs need to know when a big product release occurs — and why. They need to understand the value prop of that new feature you just launched. When a customer has trouble, they need to know what resources are available to help, what team to reach out to, and what to do if the customer threatens to cancel.

If you don’t figure out how to operate like a well-oiled machine, you run the risk of frustrating your customers with confusion and ambiguity. 

Defining clear processes and KPIs

You need to figure out how to have your CSMs communicate with other functions across your business. And you also need to figure out how to share knowledge across your customer success department — especially as your team and your customer base grows. 

This involves things like defining and documenting processes, such as your onboarding playbook or your internal escalation process. It also includes things like defining KPIs and metrics to keep your team motivated and to help them prioritize.  

Because CSMs can get involved in so many different areas and can manage dozens or hundreds of clients (depending on your approach), it’s vital to get crystal clear on your core processes and desired outcomes. 

How to build an effective customer success strategy and team

Building a great customer success program requires teamwork and a mix of skills and expertise. 

Leadership teams across your organization must work together. Since customer success is a business strategy, you need alignment on how you’ll best support your CSMs’ efforts at driving retention. Once you have that alignment for a good retention rate, you can get down to building out your customer success program. 

Here’s how. 

1. Identify the right talent for your team

No one goes to college to be a customer success manager. On the contrary, successful CSMs come from a wide range of backgrounds, which means you can’t just rely on a degree or job title as the primary qualification.

Instead, you need to look for certain skills and past experience. Relevant skills for CSMs include things like strong communication skills, a proactive attitude, and the ability to think quickly. Sales or customer support experience can also be relevant.

And of course, a robust understanding of what a CSM does and why customer success is important is also a good thing.

Throughout your interview process, you should look for real-life examples of times when candidates demonstrated these skills — regardless of what their job title was at the time. 

2. Ensure quality training for your team members

Hiring the best talent possible is only half the battle. Ensure they can get up to speed quickly by providing a quality training program that teaches what they need to know about their job, sets clear expectations for the CSM role, and reinforces a culture of knowledge sharing.

Some key aspects of training should include:

  • Sharing the metrics used to measure whether customers are successful.
  • Training the team on your organization’s customer health score and when/how to take action to improve customer health. 
  • Product training to ensure they’re able to speak accurately about your product’s capabilities (although CSMs often don’t need in-depth technical knowledge).

Successful customer success training programs often involve a mixture of live training, role play, and asynchronous training through tools like a knowledge base

3. Establish clear expectations and goals for your team

Clear business objectives and expectations are essential to tracking how your customers and team are doing. 

Start by creating a customer success plan that’s in line with your organization’s KPIs and objectives. If your vision for your customer success team differs dramatically from the vision of your executive team, your program will never get off the ground.  

A customer success plan should be an actionable description of what customer success looks like and what your CSMs can do to help your customers achieve it. What standard operating procedures should your CSMs follow? 

Expectations should be set around:

  • Communication frequency. How often should your team be reaching out? Determine a specific cadence based on your customer’s needs and lifecycle.
  • Expectation setting. Your CSMs should be letting your customers know what they can expect and how often they’ll hear from you. 
  • Customer health score. How should your team be handling the data they get from your customer health score?
  • Customer hand-offs. When should your CSMs hand over issues to the support team as opposed to keeping them themselves?
  • Documentation. To help with knowledge sharing, set clear expectations on what your CSMs should document about your customers and what software they should be using.

4. Create an effective onboarding process

One of the best ways to drive customer success  is by building an effective onboarding process into your customer success strategy. 

Think of it as a first impression. 

When your customer decides to purchase your product, your onboarding process is how you get them started on the right foot. It’s a great opportunity to underscore to your customers why choosing your product was a great decision. 

An effective onboarding system includes things like:

  • User-friendly onboarding materials. Create comprehensive, easy-to-understand documentation including step-by-step guides, FAQs, and video tutorials.
  • Clear onboarding goals. Define specific onboarding goals and outcomes and communicate these goals to both the customer and the onboarding team.
  • Realistic expectations. Set realistic expectations for the onboarding process and clearly communicate milestones and timelines.
  • Automated workflows. Where that human touch isn’t needed, automate routine tasks to streamline the onboarding process. 
  • Gather feedback. Use feedback to improve the onboarding process during and after the onboarding process.
  • Provide additional educational resources. Initial onboarding will end at some point, so offer webinars, knowledge base articles, and community forums as your customers transition to the next phase of their customer journey

5. Set up a single source of truth knowledge base

As businesses continue to move at lightspeed, collaboration and knowledge sharing between teams can become even more difficult.

An effective way to address the challenges is to maintain an internal knowledge base as the single source of truth for your customer success team (or even for your whole company).

An internal knowledge base is a simple way of getting everyone on the same page. It can include everything from process docs to product information to user guides and troubleshooting tips. And while you might make some of this accessible in a customer-facing knowledge base, your internal knowledge base will include an additional level of detail for internal eyes only.

Here are some tips you can use when setting up a single source of truth internal knowledge base:

  • Decide what tool you’ll use to house your knowledge base and make sure the entire company has access.
  • Examine and consolidate resources across your organization to identify knowledge gaps.
  • Work cross-functionally with stakeholders to update information. 
  • Make sure the content is arranged in a way that’s easy to read and navigate
  • Monitor analytics for article use and updates.
  • Encourage accountability for keeping information accurate and current and recognize contributions.

Internal knowledge bases provide a centralized repository for information, enabling seamless communication within the team and ensuring everyone plays their part in the success of your customers. 

How Tettra can help your customer support team

Customer success teams grow and evolve quickly. As your organization, your product, and your customers change, so will the mandate and the goals of your customer success team. 

Amidst all of that chaos, Tettra’s AI-powered knowledge management system makes it easy for your team to find the answers they need. Tettra is an intuitive platform for the seamless creation, organization, and sharing of information, and it also integrates with all kinds of tools you’re probably already using.

Start your free trial of Tettra today!

Tim Jordan is a Manager of Customer Support at Cars.com and a writer for Supported Content. When he’s not busy leading his team, you’ll find him spending time with his wife and two daughters, usually on some Disney-related activity. He also blogs about personal finance at Atypical Finance