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Should You Charge for Customer Success? Image

Should You Charge for Customer Success?

By Dan Steinman

I get asked a lot of questions every day about Customer Success, most of which don’t have a really definitive answer, simply different choices with different pros and cons.  But to this particular question, I have a strong opinion, and it’s “NO.”

Let’s define Customer Success before we go any further.  When I use the term, I’m referring to the group of people at your company that are responsible for product adoption and, ultimately, retention.  Customer Success may be the most common title, but certainly not the only one.

A typical Customer Success Manager has a level of product and domain expertise that makes them extremely valuable to customers.  It’s logical then, to debate whether it makes sense to charge for their services.  There are a couple reasons that this is not a good idea:

Success with your products is a right 

If I buy your product, it’s my assumption that I will either be able to figure out how to productively use it, or you will provide me with the resources to get there.  Charging me for it is not an option.  You have two choices – 1) build a product that’s so easy to use that I can do so from your online resources or 2) provide me with a Customer Success Manager (by whatever name) to help me.  Charging me for your product and then charging me again to become a viable user will not likely work out for either of us.  I’ll either get less value out of your products than you’d like because I don’t want to pay, or I’ll be unhappy for having to pay for something I think should come with your product.

Organizational integrity

There’s a word for providing product and domain expertise to customers for a fee.  Consulting.  Also known in the industry as Professional Services.  If you want to charge for these kinds of skills above and beyond the standard level of Customer Success, or in a more dedicated way, by all means do so.  But do it through an organization that is measured by revenue and efficiency and profitability.  That’s your Professional Services organization, not Customer Success.   If you start mixing these for-fee services in with Customer Success, the measurements will get confusing.  Customer Success should be measured by retention rates, not the percentage of billable hours they provide.  If you try to do both in the same organization, you’ll find too much gray area – what do you charge for and what is “free” – and neither will be effectively measured.

In the end, Customer Success will pay for itself, just like every other organization in your company must do.  But, with Customer Success, it can be very tangible even without charging directly for it.  Retention rates will rise, especially $$ retention rates.  Successful and happy customers will buy more products and more services from you.  Customer Success will be your best lead generation engine for opportunities within your install base.

Renewals will not only get easier, but your ability to raise contract values, even without selling more products or services, will be greatly improved and your customers will also be more referenceable.  While it’s true that the Customer Success skills you have in-house are valuable enough to charge for, it’s not a good idea and it’s just not necessary.  In the long run, you’ll be better off not doing so but instead keeping that team purely focused on helping customers adopt your products, while offering for-fee services only through your Professional Services organization.

 

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