Eight Trends from East Coast CCOs
Silicon Valley versus Wall Street. Warriors versus Cavs. Tupac versus Biggie. The West Coast versus East Coast rivalry has a long and storied history—and I’m definitely caught in the middle! I have deep roots on both coasts.
As such, I was excited to lead our ‘CCO Connect’ forum back in my old college town of Boston this week. CCO Connect is a roadshow version of our CCO Summit—a facilitated peer-to-peer discussion for Customer Success leaders at mid to large sized companies. This week, Dayton Semerjian, General Manager and Senior Vice President, Customer Success of CA Technologies, was kind enough to host CCO Connect at his office in the Boston area for a half-day of Customer Success strategy and lots of laughter.
Here are the eight big trends I observed in the discussion:
1. Customer Success is moving from a function to cross-functional
Customer Success started out as a functional department headed up by leaders who saw an opportunity to do things differently. They were often assigned specific functions like “Adoption” and “Retention.” But inevitably, these leaders identified a much larger opportunity to transform their companies (Product, Sales, Marketing, etc.) around Customer Success. And at CCO Connect, it was clear that all in attendance were convinced Customer Success needs to be built into every function: Professional Services, Training, Support, Marketing, Sales, Product, etc.
We also talked about how this requires getting the entire management team to buy in—starting at the very top. I recently wrote about how CEOs need to take the lead on this.
2. We need to make sure funding models are sustainable
All of the companies represented at CCO Connect had large Customer Success teams. But one attendee asked, “What happens in year three [three years from now]? Will we be able to keep the funding going?” He pointed out that over time, people tend to scrutinize new programs more and more. On top of that, oftentimes Customer Success initiatives start small, but to have real impact, they need to scale. J.B. Wood, CEO of TSIA, talks about this as Customer Success efforts sometimes getting stuck as “art projects.” (You can watch his keynote from Pulse for more on this.)
We see this all the time in Customer Success teams—with some unfortunately taking a step back as a result. As such, the group talked about the need to clearly identify a scorecard of results early on and ideally have a neutral team (e.g., Finance) run the “measurement” so they believe in the results. We’ve written recently about some approaches to showing the ROI of Customer Success.
3. Retention calculations are complicated for businesses in transition
Since many of the companies represented at CCO Connect were large and established, several had run into issues with operating traditional businesses (e.g., on-premise software) in tandem with new businesses (e.g., cloud software). Those CCOs were wrestling with how to calculate retention given those challenges. If a client leaves the on-premise solution and moves to the cloud, is that one “churn” and one “new deal” or is it a retained client?
4. One-to-many is still hot
For the last several years, the most common topic we’d hear about at Gainsight has been scaling Customer Success outreach to smaller customers. Some call this “one-to-many Customer Success,” while others use the term “Tech Touch” (using technology to deliver a strong experience). Regardless of the preferred terminology, most Customer Success teams are staffed to cater towards their largest clients, but want to find a way to extend Customer Success to the rest of the base. Several attendees shared success stories in terms of using digital touch systems to reach the long tail.
5. The next frontier is partners
We had a robust discussion around the future of the “Channel” (partners) vis-a-vis Customer Success. We all agreed that:
- Channel partners still have a big role to play in the future, given the plethora of solutions available, as well as integration and security requirements.
- However, the old job of the Channel (install, connect, setup, etc.) is going away.
- The new opportunity is for the Channel to deliver Customer Success and outcome services.
Some challenges ahead include:
- Channel partners are often small, and therefore it’s hard for them to invest ahead.
- In particular, if Customer Success is “for free” (versus a paid service), it might be hard to fund.
- Additionally, lots of time needs to be spent developing new skillsets for partners.
- Finally, tools that have been provided to vendors (e.g., data, health scoring, etc.) need to be extended to partners.
We covered this more holistically in our recent guide to Channel Customer Success.
6. Multi-product Customer Success Is Complex
Several attendees were from companies with multiple Customer Success teams—one in each business unit. They talked about the need for coordination across groups to integrate the client experience while still preserving autonomy and specialization in each business unit.
7. Revenue Ownership Is Going Up
We talked about the emerging trend of the “big boss” running all of post-sales (either a CCO or VP Customer Success, typically) increasingly owning some part of revenue as well (e.g., renewals). This allows for clean, end-to-end optimization of the engine for Customer Lifetime Value.
8. Getting Closer to Marketing
Finally, we closed with a discussion on the partners critical for Customer Success in the long-term. We all agreed that Marketing teams have great capabilities in terms of digital engagement skills, data orientation, and program management. The large discretionary budgets don’t hurt either! Everyone left with a mission to get closer to Marketing and to ideally have a liaison between their group and the Marketing team.
To sum up, I’m so encouraged and impressed by the creativity and sophistication of the Customer Success thinking on the East Coast. And as we tackle these challenges, it’s inevitable—as Biggie said—we’ll have “Mo Money (and still) Mo Problems.”
If you’re head of Customer Success at your company, I would absolutely love to see you at our next CCO Connect. It’s August 31 at Hewlett-Packard in Austin, Texas. Our host is Mak Ghangurde, Head of Customer Success-Americas at HPE. Click here to register for the event.