“I am the lead of a small team of Customer Success Managers. I’m having some trouble proving what it is that we do, and I’m hoping you can help me establish the real value of my team.”
This is unfortunately a very common question, and I hear it every day in many variations all across the Customer Success Management Community. The key tasks of the first phase of a CSM team’s development are to understand and categorize your interactions with the customers (type, duration, volume, cost & effectiveness) and to begin to define the statuses of the customer relationship health measurement graph. You have to be able to use this data to prove the truth of that old adage “An ounce of prevention is worth a pound of cure.” My recommendation is to start by putting a ‘tiger team’ together to work on the following issues:
When your group was started, what was the driver? Almost invariably, the answer will be found in a lost account of significant impact ($$$) or the fear of such an eventuality. For the initial scenario, either the account was lost (Ouch! How can we stop this from happening again?!) or it was narrowly saved — and in the process, somebody saw a need for a special team of Firefighters who would know what to do and how to do it in the future. Customer Success Management at this level is about keeping customers away from the exit door once they’ve declared or indicated an intention to take that path. Firefighting, while undeniably necessary in the face of the flames, is completely reactive. Sooner or later someone senior will realize that waiting until the fire breaks out to deal with the risk is a very inefficient use of expensive resources — and will start looking at you and your team with grim budget-cutter eyes. Don’t wait for that uncomfortable moment to occur; take appropriate action now.
Start by learning everything you can about the fire you just put out. Where did it start? What were the first warning signs? What specific actions did your team take? How many calls, emails, visits or other activities were involved? How long did each take? How effective were they? Get Accounting to give you a general “billing rate” for each of your team members so that you can put actual costs to all of the above. Using your billing rate data, what were the direct and indirect costs of the emergency efforts? (Now is a good time to start having your team members log their activities so that you know how their time is being spent. They probably won’t welcome the extra work, so keep it as simple as possible while still collecting the data. Talk to the Support team to see if you can use their Case Management System to track your interactions as well.)
Next, what specifically could have been done to prevent that fire from starting? How many phone calls, emails and/or site visits would have been advisable? When should these actions have been taken and how long would each have required? Using these estimates and your billing rate data, put an estimated cost-of-relationship-maintenance picture together. Sales has their CAC, Customer Acquisition Cost — you need a CRC, Customer Retention Cost value.
The two sets of data, the actual firefighting costs and CRC estimate costs for prevention, are the starting point for our business case for the CSM team. We need to be able to prove that if no action is taken until the customer threatens to leave, the costs for saving the account are higher, along with the risk of failure.
Next, sort the customer list by the revenue each represents to the company, and assign them into 3 or 4 tiers by value. Determine how many accounts are in each customer value tier, and when they will be coming up for renewal. If you don’t already have a procedure for assigning a health status indicator to each customer relationship, now’s the time to develop one. Be sure to factor in what you learned from analyzing the fire and add those notes to the status definitions. With all of the above in hand, you should have a pretty good foundation for justifying moving your team up from the Firefighter stage to the next level. But don’t stop there — while making profits for the company can keep you out of the “despised necessity” class, it’s always better to be generating the kind of profits that make you interesting to the senior management team.
To see how others have approached the above tasks, please join in the discussion on this topic in The Forum . If you have specific questions to ask of me, please feel free to post them here , or to schedule an Office Hours  session.