How to transition from reactive to proactive CSM
Spending most of your time firefighting, band-aiding and quick-fixing sucks.
It’s the definition of a hamster wheel and it’s burning you out.
Here’s how to get out and grow into a customer success creator:
If the product has major flaws or you are getting bad-fit customers you will be on the back foot by design.
You’ll fight hopeless battles to prevent customers from leaving that are a waste of time and energy.
The first step to getting out of your reactive CS prison is to ensure your “raw material” meets the proper quality standards.
How? You need to create a churn report that uncovers why customers really churn and present it to your C-suite.
Your goal is to make your leadership get that churn is a company-wide problem.
Yes, they should be able to comprehend it by design but reality proves that most of them don’t (or don’t care).
I like to put the (main) reasons for churn into 7 different buckets:
- Product: design flaws and operating issues
- Customer: misguided expectations and lack of fit
- Services: failed onboarding, lack of outcomes, insufficient support
2. Change your mindset
Customer success does not work the way you think it should.
It also does not work the way your CS software vendors would like it to.
Customer success works the way your customers decide it does.
Many companies talk about it but only some actually put themselves into the customer's shoes.
Aside from the “external reasons” I mentioned in #1, following an inside-out approach to customer success is the main reason why you are stuck in reactive work.
Because every single time there’s a gap between outside-in and inside-out you have to fix it.
The solution is to put your customers’ desired outcomes at the center and build everything around it.
Based on accurate information instead of guessing and assuming.
3. Create a customer success program
Customer success does not happen by accident, it’s engineered. Customers buy your product because they want to
and your goal is to help your customers get there with a dedicated success plan.
A plan that turns into a program when it delivers the desired outcomes accurately and repeatedly.
Building such a high-level plan requires precision.
That starts with accurate information about your customers’ needs.
They are determined by the gap between your customers’ goals and their status quo.
The latter is defined by their current performance and capabilities.
Your plan needs to outline
milestones to achieve
problems to solve
tasks to complete
skills and knowledge to build
education, training, and consulting services required
4. Build customer relationships
Are you spending more time trying to re-engage customers than building relationships? You are not alone.
Many CSMs miss the opportunity to win their customers’ trust and get access to the information that powers effective customer success plans.
The best way to do that is to care about their success from the very beginning genuinely.
Start new engagements with a kick-off where you ask open questions about your customers’ business but otherwise let them do the talking.
Your customers need trusted advisors now more than ever and besides raising the odds of a successful partnership it’s a huge opportunity to win customers for life.
Because they will not forget who helped them to navigate through the stormy sea.
5. Optimize your resource distribution
Churn and retention are not all black and white. There’s good churn and there’s bad retention.
Spending time with the wrong customers will put you on the back heel once more. The best customer success program fails if you’ve got customers that
lack of basic skills
don’t follow the advice
don’t execute with discipline
don’t invest enough time to progress
Improving your strengths pays much higher dividends than working on your weaknesses. The same is true when it comes to your customers.
Spending more time with your high performers will deliver way more ROI than trying to turn your low- and mediocre ones around.
6. Source meaningful feedback
You don’t build a high-performing customer success program within a week. You’ll also not get it right on your first attempt.
It’s a work in progress that’s powered by meaningful customer feedback. You need to understand what works, what does not, and why.
I get it, using surveys is highly convenient. But your customers get dozens of them every month and grow tired of it.
It’s also highly questionable if you could even design a survey going deep enough.
Because uncovering the why requires asking follow-up questions and you’d have to anticipate them in advance.
7. Put effective customer success metrics in place
Many SaaS companies are not able to predict their customer renewals with high accuracy.
Because they rely on proxy metrics that are easy to measure but don’t necessarily correlate with customer outcomes.
But it’s exactly these outcomes that drive your customers’ decisions.
Most recently, it’s even gotten another major upgrade through the rise of the CFO.
Every CS team needs to measure success the way their customers do (e.g. in #3).
It will not enable you to stop all churn but there’ll be no more last-minute firefighting.
Customers either succeed and renew or fail and leave.
Reactive customer success needs to go extinct in 2022.
It’s a waste of time, energy, money, and talent.
PS: Have you checked out my brand new cohort training starting in February?