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The Value of Customer Success Operations

By Gainsight Team

Recently, I listened to an informal conversation between a group of CS leaders and executives. The discussion centered on how to justify to the C-Suite and the board of directors the importance of financing new roles within their customer success organizations. One of the positions or teams most focused on was CS Operations. 

The attention on the emerging CS Ops role seems appropriate in the era of Customer Success 2.0. It is the same debate that concentrated on establishing a customer success team nearly ten years ago. However, today in the “eyes of finance,” there is often no common rationalization of the cost of someone dedicated to the full-time function of CS Operations, nonetheless a whole CS Ops team. It can be seen as another administrative head-count adding to the cost of CS. As the exchange became heated, one executive spoke up seemingly on behalf of the entire CS Ops movement. As they explained the rationale of CS Ops, its value made perfect sense.

CS Ops as a Part of Revenue Operations

As a Customer Success Executive or CCO, you need to begin incorporating CS Ops into the CS organization early. This is not a suggestion. It is an absolute. Why? As one member of the CS leadership group specified in the conversation, the roles of CS Ops and Sales Ops, if not also Marketing Ops, are equal. 

“Let’s look at CS Ops comparatively to the Sales operations position,” they said. “No one ever questions the value of this role because it has a proven ROI and because of the new logo revenue tied to that position.” 

They were right. There is no doubt Sales Ops role is recognized for its value to the business. “To put it bluntly,” they continued, “the same should be thought of about CS Ops in SaaS.” 

When looking at the extent of what CS Ops brings to your organization, you must view it parallel to all Revenue Operation activities. Accordingly, that means CS Ops sits as one of the three pillars of Revenue Ops, next to Marketing and Sales Ops. Along with the other pillars, CS Ops functions parallel, with analogous responsibilities, keeping the Go-To-Market machine running smoothly. 

The members of these three organizations should help shape your company’s growth strategy. They also inform the way you track leading indicators such as: 

  • Bookings and Retentions: which drives new and expansion revenue and decreases churn.
  • Gross Margins: which you always want to increase.
  • Op-Ex and Profits: which drive operational efficiency.
  • Customer Economics


With regards to Customer Economics: there are three main areas CS Ops affects. It increases Customer Lifetime Value (CLTV). It decreases the Cost to Acquire Customers (CAC) and reduces the Cost to Retain Customers (CRC). When you look beyond those indicators, the influence of CS Ops can be clearly seen on Net Revenue Retention (NRR).

CS OPs and NRR

Making CS Ops part of the Revenue Optimization strategy makes perfect sense. However, the lasting impact is seen on NRR. It must be explained and understood in consideration of the revenue increasingly coming from your customer install base. You must see that NRR and the ongoing revenue from expansion are related to the CS motion, and CS Ops are its hands. They form strategies and create everything from playbooks to enhancing the maturity curve of a business. That is not to diminish the role of the CSM. Yet, while CSMs are busy catering to customer relationships, utilizing technology to elevate expansion and renewal opportunities, who is helming the course of the CS processes or aid in developing new ones? That’s right, CS Ops. Though it may not be seen or called by this title, it is indeed CS Operations. 

You could even argue a dedicated CS Ops person is now more critical than Sales Ops because of the revenue optimization it represents. In the Customer Success 2.0 era, there is nothing more valuable than functional roles that secure Net Revenue Retention.  So, if you are thinking about justifying the need for a dedicated CS Ops position, consider the worth of your install base revenue. When explained in this manner, you can understand how CS Ops has earned its place under the Revenue Operations banner next to Marketing Ops and Sales Ops.

Beyond Revenue Ops: The Value Found in Process and Efficiency

The value of CS Ops is clearly seen in revenue optimization and the effect it has on NRR. However, the impact it has is not limited to those areas. Recently, one of Gainsight’s articles calledThe Who, What and When For CS Operational Success,” revealed CS Operations governs six key components in most organizations. Here they are with a bit more definition:

  • Reporting: The reporting or tracking of progress and pertinent metrics, is tailored to various personas or stakeholders. It could be helping to create an optimal dashboard of reports for the individual CSM and the portfolio of accounts they manage. It affirms that the right activities are being performed. This also assists executives to provide reports and prepare for meetings with either internal leadership or customer stakeholders. 
  • Data: CS Ops helps analyze, interpret, and then action the aggregated data of your technology and other sources. It is not enough to gather the information from the various sources. All information must be incorporated into processes, presently and in the future. Without using it properly, the information goes to waste.
  • Systems: CS Ops can oversee all internal systems operating within your company. These typically include CRMs, such as Salesforce, and CS platforms like Gainsight. Systems oversight allows proper analysis of the data but pinpointing the exact metrics and setting up criteria most meaningful to your company and customers.
  • Strategy: CS Ops, aligned with the CS leadership, provides and perfects CS strategy. However, the strategy must always work towards the goals of the business and the customer. Strategy can include segmentation, capacity planning, or balance of assignments to CSMs based on segments.
  • Process: Your Processes, like your strategy, are enabled by your systems. Using data enables you to determine the touchpoints and playbook each customer needs or should be given. 
  • Content: Data helps identify where your CSMs and customers are having difficulties. With this knowledge, you can be more surgical or tailored to better respond to what message or information is best suited for which customer and at what time. Customers are often only receptive to a message at the point of need. CS Ops helps you do this at scale for customers, and, if done properly, specifically at the persona level.

The Additional Value of Customer Success

The truth is CS Ops functionality adds so much value to your company by managing your infrastructure, systems, and processes. Critically, it provides you with an unabated opportunity to scale. Here are a few more ways CS Ops adds value to your organization.

  • Increases team productivity and performance: Some experienced or higher level CSMs can perform certain CS Ops duties if you are lacking the budget for a CS Ops position. But that divides their time and attention away from what their true duties are. To get better results from your CSMs, hire a dedicated CS Ops person to manage operations. They can actually help CS teams become more efficient and better coordinated in hitting team and personal Key Performance Indicators (KPIs). 
  • Transparency: Having a CS platform or other technology that produces data reveals how your customer is engaging your product and what their overall experience or health is. While the reporting reveals what is transpiring both at your CSM level and with your customers, the CS Ops professional is the one who can research, analyze, and interpret it. 
  • Communication: CS Ops improves organizational communication and cross functionality. They see the forecast and the issues before they happen. Why? CS Ops has their ears to the ground hearing not only what is revealed through the data, but what departments and teams are asking for. They can identify silos and bottlenecks of information, and friction in productivity. 

There isn’t a place within your company customer success doesn’t touch. The same can be said for CS Ops. They develop and expand execution, increase productivity, and improve efficiency. The newness of the role should not be an issue if its responsibilities, value, and ROI can be proven the same. Just like CS and the accompanying software platforms, CS Ops can design, manage, and report on processes in post-sales as well.

The When of CS Ops

You may be wondering about the best way to begin hiring the right people for a CS operations role. It was commonplace to believe starting a CS Ops program and hiring leadership for it required a minimum number of CSMs. Here is a word of advice: if you are thinking about hiring a CS Ops person, you are already too late.

Almost ten years ago, the argument was about the value of Customer Success. As CS spread, it proved its ROI and value. It became a necessity, especially if you wanted to preserve your customer base and scale your business. Now, businesses are having the same discussion about CS Operations.

This is the rule of thumb regarding CS Ops. There is no “one size fits all” formula anymore. At the beginning of CS Ops, when CS was maturing, it might have been easy to say “X CSMs=Y OPs.” As CS becomes refined and the practice is more detailed around segments, products, field or industry, and technology platforms, the same must be taken into consideration for CS OPs. Where CS has moved from reactive to proactive, CS Ops has moved from discretionary to prescriptive, centered on solving the pains of your customers. Here are some quick points to think about:

  • Strategy and how to execute it. 
  • Complexity of your product offering or the product your customer is selling. 
  • Your customer’s field or industry and its acceptance of Customer Success. Without it, there will be no CS Ops.

If you are having a difficult time addressing these points, a good place to start is Gainsight’s original guidance: 

  • Five CSMs per one CS Ops
  • Ten CSMs with a CS Ops lead, and one junior CS ops

Lastly, remember the advice to start early. While every company must have its own point of view as to when and where CS Ops need to appear within its organization, don’t wait until it’s too late.

One Last Question

Now, we must address the question, “What if my company or business is not ready for a CS Ops role?”  There is always something you can do proactively to fill in the gap for CS Ops when there isn’t a designated headcount. Usually, you see this early on in a company’s CS maturity, such as at a startup or Small to Medium Business (SMB). But if you have implementation specialists, then you can use them to serve as a form of a CS Ops specialist.  However, what you are really solving for is customer strategy. 

When leadership understands the premise, then you can develop a business case and executive buy-in to back this initiative. Mind you, this is not a permanent fix. The permanent solution comes in the form of a true CS Ops team with a designated leader who works cross-functionally with all departments and teams to achieve both business and customer goals.

If you are interested in Gainsight, its thought leadership, and CS platform to help your business incorporate the best of CS Ops knowledge and technology, contact us here.

2 Comments
  1. Guilherme Lopes
    Jul 28th, 2015

    Hi Allison,

    Awesome blog post. (Btw, your video about ‘at risk customers’ at Pulse Check was great too.)

    We’re about to promote one of our CSMs to CSO. A bit late maybe, we already have more than 30 CSMs and CSEs :-S

    I still have some concerns about the differences between a CSO and a Customer Marketeer, though. It seems that the two jobs overlap some times. Specially on the itens 3, 4 and 10 you’ve showed on the table above: Customer Engagement Process, External Communications and Enablement.

    How do you see theses responsibilities across these two jobs?

    Thanks,
    Guilherme Lopes
    @guilhermelopes
    Resultados Digitais

    • Allison Pickens | VP Customer Success & Business Operations | Gainsight
      Aug 2nd, 2016

      Hi Guilherme,
      I apologize for the delay in responding!

      At Gainsight, we consider Customer Marketing part of the Ops role. We consider Marketing to be primarily responsible for generating new business leads. Customer Marketing includes any scalable customer-centric processes (including 1:many customer communications) that are intended to drive adoption, advocacy, renewal, and upsell — metrics that the CSM team is typically responsible for.

      Hope this is helpful! Feel free to join the CS Ops Networking group and check out more best practices materials on the Community.

      Best,
      Allison

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