Customer Success Management: Training Wheels for CXM?


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A couple of years ago a Forrester analyst told me that “Customer Success Management” would be the next big thing. I’m beginning to think he may be right, but I have some concerns.

The term has been popping up more and more of late, so earlier this year I spent some time at Pulse 2015, a conference put on by Gainsight, a vendor in this “space.”

I hesitate to call CSM a “space” because it suggests that it’s a technology category like CRM. But it’s turned into that, and how. The conference was huge, with an array of vendors trying to show how they can support customer success.

What is Customer Success Management?

Let’s stop for a moment and answer an important question: What exactly is CSM?

According to The Customer Success Association (another sign that the idea is taking root):

All across the SaaS B2B industry, a new and vital role is being established and developed. The job goes by many names: Customer Success Manager, Client Advocate, etc., but regardless of the label, it’s about customer relationship retention and optimization. And the most effective way to keep your customers is to make them as successful as possible in using your technology product.

OK, so the core idea here is to operationalize customer loyalty. We need that, and technology can certainly help empower people with actionable data.

A few years ago for a loyalty white paper, I wrote about RightNow’s development of a “health indicator,” a dashboard of statistics on customer usage, training status and much more. The idea was simple and powerful: look for signals that show the customer is getting value from the solution. If some signals are “red” (alert) or “yellow” (caution) that’s a sign that the customer should be contacted.

RightNow (since acquired by Oracle) was a forerunner of the trend that is busting out now. Salesforce has also gotten behind the term in a big way, going so far as to brand itself as “The Customer Success Platform.”

I’m all for customer success, that’s really the core idea behind being customer-centric. But like all trends that gain momentum, it can evolve in surprising ways as enterprising vendors jump on the bandwagon.

Whose Success Are We Talking About?

My main issue is whether companies are really committed to customer success, or is this just a customer retention program with a better name? I doubt that we would put “customer success” as a label on some of the reprehensible “save” practices in the cable and telecom industries, where they make it very difficult to cancel. Their problem is waiting until the customer is upset and ready to cancel.

In B2B software, as cloud-based subscriptions become the norm, it’s patently obvious that keeping customers happy is the key to renewals. A few years ago I spoke with a former rep who said they were mainly concerned about usage. Apparently, more usage = more likely to keep using and continue the subscription.

That’s a decent starting point, but I would add that sometimes more usage is not a good measure of success. What about a tool that is used infrequently (think analytics) but when it is used it must deliver insights fast and with minimal effort. In that case, high usage could mean confusion and a poor design.

Furthermore, if you ask the customer/user how they define “success,” I sincerely doubt that they’ll talk about usage. Instead they’ll talk about their business goals, such as growing revenue, increasing efficiency, making better decisions,… or maybe even boosting the loyalty of their customers.

“Putting yourself in the client’s shoes”

One company taking a more holistic view of customer success is FiscalNote, a VC-backed (Mark Cuban among them) SaaS provider of “legislative and regulatory intelligence solutions that track, analyze and forecast legal data in real time, empowering policy and legal professionals.” Not being a policy or legal professional, I don’t know what that means, but apparently, the company founders and investors believe it’s an important market.

Most companies invest in customer loyalty/retention after growth slows. Not so is the case with FiscalNote. According to newly minted VP of Customer Success Taj Chadha, CEO Tim Hwang wanted to ensure that the company was delivering value from the beginning. Good! Along with hiring Chadha, the company will be doubling its staff of three CSMs and investing in tools like Gainsight too.

Chadha sees his team’s role as “putting yourself in the client’s shoes.” While usage is one indicator, but they also consider the customers participating in training, time to launch, satisfaction/loyalty scores (e.g. NPS) — whatever they can attribute to the customer’s perception of value.

I think this is a classic opportunity for predictive analytics to figure how which indicators matter most, so staff can focus their attention.

Getting the Payoff

For the SaaS software industry, the payoff is obvious. First, plug the “leaky bucket” of customer attrition, which means less marketing required just to replace cancellations.

Second, and this is the next wave in my opinion, grow through referrals. One interesting vendor in this regard is Influitive, which helps mobilize advocates.

At FiscalNote, Chadha believes they will earn a payback on the CSM investment through client retentions, referrals and upsells. But that’s not all. His organization can also help improve the product by facilitating customer feedback.

A Practical Starting Point to Customer Experience Management (CXM)?

I like the core idea behind CSM and hope more companies approach it like FiscalNote. One thing that appeals to me is simplicity and focus — for now anyway. ( could muddy the waters by redefining CRM as CSM.)

Customer Experience Management (CXM), on the other hand, has become an all-singing-all-dancing Theory of Everything. As CXM proponents keep expanding and redefining what it means, it could scare off some executives wanting to take more practical steps with a clear ROI.

Savvy B2B marketing veteran and industry watcher Christine Crandell says she is an advocate, too. Why? To support the link between company treatment and customer loyalty, “Customer Success is a movement that people can understand and act upon.” CXM, on the other hand, “is too conceptual for many companies to wrap their arms around.”

So maybe CSM will be training wheels for a full CX transformation (a multi-year effort). That’s not all bad, you have to start somewhere. I just hope that companies start with a clear understanding that customer success should be defined in customer terms.

Disclosure: This post is part of my independent coverage of technology industry developments. No endorsement is implied for any companies mentioned in this post. Please visit our sponsor page for information on companies that have supported this community.


  1. Putting oneself in the customers’ shoes is critical. It’s the baseline to making sure onboarding enables customers to achieve their target outcomes. Too often companies are fixated on renewals and ‘counting net new logos’ instead of understanding how their customers need to be treated.

    I’ll never forget what one Fortune 50 customer told me during a client journey mapping project, “I put my reputation on the line for each vendor that I buy from. Vendors’ don’t appreciate that level of personal risk.”

    Great article (not just because you quoted me) 🙂

    I do wonder what others think about CS vs. CX vs. CEM? How is this going to play out?

  2. Great thinking, Bob. There are many thoughts you talk about. In of itself, CSM is a great idea. Forget whether you can define success, at least walk in the Customer’s shoes.
    My fear with CSM is that it will go the way of many great ideas like CRM. Many executives will look at CSM to mean I have made a sale, just as they look at customer value as the value the customer contributes to the company.
    Look at Pricing…they think of the last mile of pricing mean selling (and not buying, which means putting yourself in the Customer’s shoes).
    Coming back to CSM, good executives think of the Customer and what good they can do to make him successful and perhaps use the executives products more effectively; they aid and abet the Customer to success. They trade ideas with him, they give him information, they show him how the executive’s products are used elsewhere and how this can help the customer.
    I wonder if this is one more consultant led initiative. If it is, it will confuse the customer. Don’t good executives know all of this? Do they need consultants to advise them. Is enough not known or talked about in books and blogs, where every nuance of customer success will be discussed. Customer Think has 10 odd articles on CSM in the last three months. Mutiply by 1000, and you have what is written
    I remember when I ran a business for Continental Can 30 years ago we practiced much of this, and our customers loved us. Maybe we should star a practice to get customers to love us. Forget just customer delight and happiness!
    In of itself, CSM is a great idea. As long as it does not get skewed.

  3. I’m glad to see this term and subject being examined, for what it is and isn’t. Having also looked into CSM and how it’s practiced, too often I’ve found that it is thinly-veiled code for business development and/or sales. Many companies get to that level of customer relationship building and stop.

    More broadly, CSM seems to be about basic customer retention, where the emphasis is on fairly macro approaches to keep the most productive customers in the base. This is something I’d examined 20 years ago in my first book. CSM is a step beyond customer satisfaction, but it doesn’t involve the detailed array, and application, of relationship, communication, and value delivery elements we find in customer experience. So, is CXM ‘training wheels’ or elementary school for CXM? Yes, probably..

  4. Gautam, I’m not sure this is a consultant-created term. I ran into it with clients who needed a different group other than customer support as that didn’t speak to what customers wanted. Michael’s point is correct, too many companies view CSM as renewal sales, business development or even sales.

    What I’ve experienced is when smart Boards start asking questions around churn by customer cohort groups and contact frequency as engagement metrics, the discussion starts to shift to look more like CX. To deliver great customer success requires understanding the relationship, emotion, channels and value delivery elements otherwise it’s customer (un)success.

  5. Michael and I are agreed this is an old term. Customer success is important and good companies should have been pursuing this. Why does it need to become another discipline in promoting Customer centricity like CX, and CRM.
    Christine, I meant no disrespect to consultants

  6. Hi Bob

    A very interesting and somewhat provocative post. You do this so well. We can all learn from your provocations.

    There should be no doubt that focusing on the success of customers before, during and particularly after the point of sale is what B2B customers want. In a paper on ‘Rethinking Customer Solutions: From Product Bundles to Relational Processes’, Tuli et al showed that what customers most want is relational processes comprising help with 1. requirements definition, 2. customisation and integration of products and/or services and 3. their deployment, and 4. post-deployment support, all of which are aimed at meeting business needs. A follow-up paper on ‘Ties That Bind: The Impact of Multiple Types of Ties with a Customer on Sales Growth and Sales Volatility’ showed that the more varied the ties between companies and their B2B customers, the more sales they make and the less volatile are the sales.

    So far so good.

    The challenge is in persuading companies to do this. A colleague and I worked with one of the biggest German software vendors, with thousands of B2B customers throughout the world. We developed a comprehensive CSM Capability Model to help it understand how it could create more value for its customers, exactly as outlined by Tuli et al’s research. Unfortunately, although its customers were keen on the vendor getting more involved in their success, the vendor itself saw this to be the responsibility of its system integrators or of the customer itself. It was only interested in licence fees. Perhaps unsurprisingly, the systems integrator saw this as the responsibility of the vendor, or of the customer. It was only interested in consulting fees. The result: stalemate with the customer left to create success for themself.

    Perhaps there is a different way forward.

    Evidence from other industries suggest that the key to CSM is through the ‘servitisation of products’ and particularly, the introduction of ‘Outcome-based Contracts’ where the Company is paid for the outcomes it produces for customers rather than for the processes it carries out or the outputs it produces. As Neely et al show in an executive briefing on ‘The Future of Servitisation: Technologies that will make a difference’, although leading companies have already started to servitise their products, there is still a long way to go before it delivers the value that customers define as success.

    Graham Hill

    PS. The Cambridge Service Alliance’s annual Service Week at Cambridge University will focus on ‘Creating Value Through Customer Services’ this year. I have attended several of the conferences in the past and found the mixture of academics and companies who attend invigorating. If you are interested in attending you can find more details at

  7. Graham, love your response and the emerging servitization trend. However, or maybe in addition, we need to look at compensation. If CSMs (as in many of my clients) are paid on commissions, flat salaries, MBO bonuses on company level statistics their behavior will not change. Start having their customer groups determine theirs bonuses based on outcomes, achievement of ‘promised’ success, etc. and you’ll see behavior change real quick – at all levels. Let’s not overcomplicate the fix.

  8. Graham, surely you’re not suggesting that companies focus on customer success. That’s sounds too much like customer-centricity, which you’ve made clear many times does not work.

    What companies should be creating are company success managers.

    Oh, wait, they already have those.

    All sarcasm aside, if companies are really serious about customer success, they’ll have outcome-based contracts. Think how clarifying that would be for everyone. If we don’t deliver the outcomes expected, no payment is due.

    But that is a bridge too far for most companies. I think CSMs are a step in the right direction.

  9. Wow…why did we not start here? CRM, CEM, CIA…does it not all start with defining how to create success for those we serve? Think Drucker had something to say about that. It reminds us success is ultimately in the eyes of the customer. It suggests being customer-centric requires a deeper understanding of what centric is to customers. It implies we manage to new metrics, new standards, and a new direction.

    Bravo for bringing “Success” into the center of the discussion! Now for the real challenge of figuring out how to operationalize CSM in a fashion acceptable to the customer. Some customers are hesitant to let organizations get inside their “mind.” Some are mercurial enough that daily recalibration of success would be required–especially for start-up companies. B2B would struggle with the collision between their success and their ultimate consumers’ success. But at least the conversation can yield to more fruitful intelligence about what matters most to customers! Looking forward to the ongoing dialogue.

  10. Hi Christine

    The introduction of outcome-based contracting forces companies to rethink how customer-facing staff are compensated. In particular, it moves the emphasis from closing servitised contracts to ensuring that the outcomes that trigger payment are collaboratively organised within the organisation. Not getting paid until outcomes are delivered tends to focus the mind.

    Outcome-based contracts are not new. They have become almost the standard approach in the military, healthcare and transportation industries. Irene Ng at Warwick University Systems Management Group has written extensively on how to setup, implement and manage outcome-based contracts. See her Executive Briefing on ‘Outcome-based Contracting – Changing the Boundaries of B2B Customer Relationships’ for a good introduction.

    Graham Hill

    Further Reading:

    Irene Ng
    AIM Research, EXecutive Briefing
    ‘Outcome-based Contracting – Changing the Boundaries of B2B Customer Relationships’

  11. Hi Bob

    I am suggesting exactly that; that companies focus on their customer success. This isn’t out of some misguided libertarian philosophy of customer-centricity, rather, it is pure self-interest. Just as customer-centricity taken to an extreme is ultimately doomed, so is a company-centricity. As Cleland & Bruno show in their book, ‘The Market Value Process: Bridging Customer & Shareholder Value’, the sweet spot is somewhere in the middle; customer-centric enough to keep valuable customers coming back and company-centric enough to keep profits flowing. The challenge is in finding the position that optimises value for the company. The challenge is in becoming a Pareto-optimal Company.

    Being customer-centric enough, but not too much is hard work. Most companies have no idea who their customers really are, what jobs they are trying to do and where they get help with their jobs. Focusing on customer success is a great way to find out, as Tony Ulwick described in the book, ‘What Customers (really) Want’. Once you know what customers want, it is up to you to organise yourself to deliver it profitably.

    A Customer Success Manager is a step towards becoming a more pareto-optimal company. But it is unlikely to be the place to start. Jay Galbraith describes the different steps in his book ‘Designing the Customer-centric Organisation’. Step 1is identifying other people in the organisation with a similar interest in customer success and forming an informal social network. As customer success starts to gain traction within the organisation Step 2 is to form a cross-functional work group to look at it formally and critically, to start learning about it by doing it. As customer success starts to demonstrate its benefits to the company, Step 3 is to appoint a Customer Success Coordinator whose job is to coordinate different customer success activities across the company. Only when the benefits of customer success to the company have been clearly demonstrated should a Customer Success Manager be appointed to drive through the development of the new approach across the company. The final step, Step 4, is implementing parallel management systems that measure, monitor and manage both company and customer measures. It will probably take some time, even after appointing a Customer Success Manager, before the company is ready for this step. Experience using Galbraith’s approach over 15 years highlights the importance of starting with Step 1 and proceeding purposefully through the following steps. Appointing a Customer Success Manager before the company has build a group interested in developing a customer success approach, experimented with it and shown it works, and built the required corporate momentum will likely result in failure.

    Graham Hill

    PS. I think it was F. Scott Fitzgerald who said, “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”

  12. Great post as always Bob – in my opinion, Customer Success Management just sounds wrong in the first place. I believe (and it is just my belief) that the best way to ensure that customers become and remain loyal is to understand how THEY perceive success – what does ‘success’ from the RELATIONSHIP look like to them. It is not about technology or one element of their relationship – it is the END to END customer journey that counts.

    Organisations that are able to clearly and successfully articulate and deliver ‘what success looks like’ to their customers are ones who will have long sustainable relationships in the future.

  13. Hi Ian

    All the research suggests that customers DO NOT WANT relationships with the vast majority of companies. For example, research by Liljander & Roos on ‘Customer‐relationship Levels – From Spurious to True Relationships’ showed that only around 5% of customers had anything like a true relationship with a company, and almost invariably the relationship was mediated by a member of the company’s staff.

    The research also suggests that it is not the experience over the customer lifetime that counts, but rather how successful customers are at getting the outcomes they want from the groups of related interactions they use to get their jobs done – what McKinsey calls ‘decision journeys’. Research by McKinsey on ‘The Truth About Customer Experience’ showed that companies that focus on decision journeys have 30-40% higher satisfaction and 20-30% better business results than those who focus on interactions.

    The emphasis on decision journeys is confirmed by Daniel Kahneman’s ground-breaking work on behavioural economics; that won him the Nobel Prize for Economics in 2002. Research by Verhoef et al on ‘Service Processes as a Sequence of Events: An Application to Service Calls’ showed that customers use Kahneman’s peak-trend-end heuristic to assess their satisfaction with the interactions in decision journeys, rather than assessing individual interactions or the experience over the customer lifetime.

    If a company wants to focus on customer success they should take six simple steps:

    Step 1. Identify their Most Valuable Customers

    First, the company should identify who their customers are and which ones are the most valuable. Most companies have a variety of different customers who make different contributions to its profitability. In most companies, 70-80% of its profits may be made by as few as 20-30% of its customers. All the rest are either profit neutral or much worse, are unprofitable, in some cases deeply unprofitable. The focus should be on customers who are the most profitable, the most loyal and the most vocal in their advocacy for the company.

    Step 2. Identify Customers’ Jobs-to-be-Done

    Second, the company should identify what jobs-to-be-done their most profitable customers come to the company to get help doing. The company should also survey their customers to identify which jobs are the most important to them and how satisfied they are with the solutions the company provides to get them done. The company should focus on the customers’ most important jobs, particularly where they are not satisfied with the solutions provided. This is the recognised sweet spot of innovation.

    Step 3. Identify Associated Decision Journeys

    Third, the company should identify the decision journeys that their customers use to get their jobs done and the groups of related interactions within them. Not all interactions in a decision journey will be with the company. One large bank I worked with identified over a dozen different 3rd-parties that played a role at different points over the lifetime over a customer’s mortgage. The company should focus on the interactions its customers have with it. The company should also identify interactions with 3rd-parties that they could potentially provide itself, particularly where this would contribute significantly to the success of the decision journey.

    Step 4. Identify Customers’ Desired Outcomes

    Fourth, the company should identify the outcomes customers desire from each interaction within the decision journeys. Experience shows that customers can easily have a dozen or more desired outcomes associated with each interaction. But not all interactions are equal; some contribute more towards the customers’ desired outcomes than others. The company should focus on the interactions that create the outcomes that customers desire. This sounds obvious. But it can be very difficult to focus on just these interactions and outcomes when other, less important interactions are obviously badly in need of improvement.

    Step 5. Identify Critical Customer Decisions

    Fifth, the company should identify the critical decisions customers make to manage their interactions and get the outcomes they desire. The failure to successfully help customers to make key decisions is one of the biggest reasons they abandon an interaction and look elsewhere to 3rd-parties for help. And today’s ‘always-on’ customers are far less tolerant of failure than they were; they expect the company to use what it knows about them to provide support, service and even sales prompts in real-time. A phenomenon I wrote about in a 2014 post on ‘How Marketing-as-a-Service Builds Trust and Engagement’

    Step 6. Identify Targeted Improvements

    Finally, the company should use what it knows about its most valuable customers, their most important/least satisfied jobs-to-be-done, the decision journeys they use to get them done, the outcomes they desire and the decisions they must make, to identify the most valuable improvements. It stands to reason that the improvements should create value for both customers and the company at the same time.

    Don Peppers described CRM as ‘treating different customers differently’. This applies every bit as much today as it did when Don wrote about it almost ten years ago. If a company wants to be successful, it should focus first on helping its most valuable customers to be more successful.

    Graham Hill

  14. Good stuff Bob. Frankly the concept of CSM is not new. Traditional research firms in the CX space have done it for a long time, without using the CSM term. For example our firm oftentimes have onsite Customer Success Managers and have done so for years. I think one of the dynamics is that CX software vendors sold in their software to firms only to discover that clients don’t always know how to make them sing, regardless of how “friendly” and “easy to use” the software is. The merger of client services (such as CSM) with great software is now the focus. Software firms either buddy up with traditional service firms (the aforementioned research and consulting firms) or they vertically integrate the two as we have done at MaritzCX. In any event, it seems to be the backfilling of a need that some clients may have taken for granted or that research/CX firms have not provided as well as they could. In any event, i think it is a good thing. Software by itself is useless, you need experienced and curious people to make it hum and get the results have come to expect. Thanks again.

  15. CSM is not new. Successful companies always used it even thought they did not have the CSM nomenclature. We did it in the business I ran, and we also tried to help the customer’s people become successful, and this built a great relationship.

    Agree that most customers do not want a relationship. They want to expend the least effort. I want my phone to work and not have to make an effort to make it work. Nor do I want to make an effort to talk to the service provider.

    However, Graham people buy because they perceie there is greater value from one product versus another…you missed that

  16. Hi Gautam

    You raise an interesting question – why do people buy? – but you don’t really answer it.

    People buy for a huge variety of reasons. As you suggest, maybe they bought Product A because it is better than Product B. But to do what? And how do they know without doing a comparison? Maybe they bought Product A because their friends recommend it. We are a highly social species after all. Maybe they fought Product A because they were in a hurry and it was the first thing on the shelf. We are all relatively cash-rich and time-poor these days. Maybe they bought Product A because they used it before and it worked just fine. ‘Better the devil you know’, as the saying goes. Maybe they bought Product A because it was the only one in bright red packaging. Red evokes strong emotions in some customers. Who knows why they bought?

    The point is that there are many more reasons why people buy than a crude cognitive comparison of the relative value of a product vis-a-vis another.

    Technically speaking, as Irene Ng points out in her very insightful book on ‘Value & Worth: Creating New Markets in the Digital Economy’, without prior experience customers are not actually comparing the two products’ relative phenomenological value, but their utilitarian worth. There is a huge difference, that becomes critical as products are digitised, as they are delivered in real-time and as customers start to pay for the outcomes they create rather than the products themselves.

    As in most things. The devil is in the detail.

    Graham Hill

  17. Thanks for sharing your experience and expertise Graham. Just to continue to add to this very valuable debate – on the subject of what customers DO want, my own independent research identified the following top 5 most important things to customers:

    1. Value for money; cost; price; competitiveness
    2. Customer service
    3. Keeping promises; reliability
    4. Quality
    5. Ease of doing business

    You can read more here –

  18. Hi Ian

    Thanks for the interesting list of customer needs. These are meta-needs rather than needs themselves as they more are about how a company should treat its customers than about what customers want the company to do for them.

    Best practice today is to use a combination of customer Jobs-to-be-Done to capture what help customers want from companies and Desired Outcomes to capture what success looks like for customers when their jobs have been done. As Bettencourt & Ulwick describe in their paper on ‘Giving Customers a Fair Hearing’, this is as close to a customer need as you are going to get.

    Graham Hill

  19. In all honesty, the majority of CSM solutions are just cashing in on a new buzzword to try to boost their sales.

    Few systems are really designed to promote the success of the customer in such a way as to be called by that name; few deserve it.

    Most are glorified contact lists with a few followup features. Some are relationship builders and maintainers. Others still mix sales and marketing to envelope the customer’s experience to try to optimize it. But making end customer success the #1 goal in both deed and in thought is a whole other level entirely.

    I’m definitely interested in seeing how the technology can help, but most CSM makers aren’t even making the right tools and the vast majority of users still aren’t doing more than purchasing the software, effectively neglecting their personal change that needs to come to pass before they can have meaningful results.

  20. Hi Brad

    How right you are about the CSM vendors. As an old formula we used to use at PricewaterhouseCoopers goes:

    OO + NT = EOO

    (Old Organisation + New Technology = Expensive Old Organisation).

    This is a problem for new technology generally. As research by Helfat & Raubitscheck on ‘Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products’ shows, the ability of an organisation to get the most out of new technology co-evolves in an iterative, cyclical process. Introducing a new technology creates a steep learning curve for an organisation as it starts to develop complementary capabilities to make the most of the new technology. These tentative initial steps, which allows the organisation to learn how to get more out of the technology, further stimulates development of its capabilities, which allows the organisation to learn how to get even more out of the technology, and so on. You get the picture.

    Experience implementing a wide variety of technologies – from airline scheduling systems, through telco billing systems, to bank marketing automation systems – over the past 25 years suggests that this coevolution of technology and capabilities occurs in four stages:

    Stage 1: Technology Implementation

    In the first stage, the technology is selected, implemented (usually with the help of systems integrators) and handed-over to the organisation. Experience suggests that the technology by itself is only worth 10-15% of the total value available from the enablement it provides for the organisation. The value curve is hockey-stick shaped, with all the costs up-front and little of the benefits. This is the ‘Expensive Old Organisation’ referred to in the PwC formula. A surprising number of organisations don’t make it past this stage, leaving themselves heavily out of pocket with another failed technology implementation. One Swiss bank spent a million USD implementing a well-known campaign management tool, but never used it to run a single marketing campaign.

    Stage 2: Capability Co-evolution

    In the second stage, the organisation’s capabilities to get the most out of the technology are iteratively restructured in the co-evolutionary process described earlier: Processes are re-designed around the technology. New data feeds are automated. New roles are developed to operate the redesigned processes. Internal collaboration with colleagues is promoted. And new performance measures are implemented. A new and improved business operating model emerges. As more colleagues use the new business operating model the organisation starts to get the benefits from using the technology the vendor and systems integrator promised (but are rarely involved in making happen) and the organisation starts to get a return on its investment in the technology.

    Stage 3: Organisational Adoption

    In the third stage, the co-evolved technology and complementary capabilities are embedded in the organisation and the new business operating model starts to become daily business. This process requires the organisation to go through the difficult organisational change process that so many struggle with. A wide variety of research confirms that approx. 75% of new technology implementations fail to deliver the benefits their business cases were built on. As Virginia Satyr describes in her widely used change model, it is only when the ‘organised chaos’ in Stage 2 caused by the introduction of new technology has been overcome that the organisation can start to change and reap the benefits provided the technology. John Kotter provides a simple but powerful model to manage these organisational changes. And Leandro Herrero provides a complementary model to manage the viral aspects of organisational change.

    Stage 4: Business Transformation

    In the final stage, the organisation uses the now fully implemented business operating model to gain what Rita Gunther McGrath describes as a ‘temporary competitive advantage’ over its competitors. As the business operating model becomes the ‘way we do things around here’, colleagues start to identify new opportunities to improve business operations that were not known, or even knowable, during the earlier stages. To borrow a phrase from complexity science, the new opportunities ‘emerge’ from the interactions of the operating model and the markets in which it competes. Organisations need to continuously look for these new opportunities and be agile in implementing them.

    CSM might be new wine in old bottles, but it will still face the same implementation challenges as all the technologies that came before it.

    Graham Hill

  21. I agree, Brad
    Graham, I stated why people buy. “However, Graham people buy because they perceive there is greater value from one product versus another…you missed that” And in your remark you cited examples of value creation

  22. Hi Gautam

    People buy for a variety of reasons. As you suggest, maybe they bought Product A because it is better than Product B. But to do what? And how do they know without doing some kind of comparison? But there are others reasons as well.

    Maybe they bought Product A because their friends recommend it. We are a highly social species after all.

    Maybe they fought Product A because they were in a hurry and it was the first thing on the shelf. We are all relatively cash-rich and time-poor these days.

    Maybe they bought Product A because they used it before and it worked just fine. ‘Better the devil you know’, as the saying goes.

    Maybe they bought Product A because it was the only one in bright red packaging. Red evokes strong emotions in some customers.

    Who knows why they bought?

    The point is that there are many more reasons why people buy than a crude cognitive comparison of the relative value of a product vis-a-vis another.

    Technically speaking, as Irene Ng points out in her very insightful book on ‘Value & Worth: Creating New Markets in the Digital Economy’, without prior experience customers are not actually comparing the two products’ relative phenomenological value, but their utilitarian worth. There is a huge difference, that becomes critical as products are digitised, as they are delivered in real-time and as customers start to pay for the outcomes they create rather than the products themselves.

    Graham Hill

  23. Sure, CSM vendors are cashing in. So what?

    Let’s ask why there is an opportunity to cash in. The term was created out of a business imperative for B2B SaaS vendors. Customers that leave undermine the entire business model.

    What’s driving this trend is good old-fashioned self-interest, not ideology. And that’s what I’ve liked about the SaaS trend from the start — the pricing (subscription-based) and delivery method (cloud) keep the customer’s and vendor’s interests better aligned than in the not-so-good-old installed software days. The vendor rep sold, the company collected the payment, and any support after that was viewed as an expense. It didn’t matter (in the short term anyway) if the customer was successful.

    Now there is an emerging set of software vendors that are trying to help stem the flow of defections, while in some cases also helping advocates spread the word. That’s not a new problem, but then again, neither was CRM, ERP or any other software category.

    And just like those aging buzzterms, CSM will only be as successful as the skill of the practitioners.

    But that aside, I came away impressed by the range of software providers rallying around a category that at least has something to do with the customer’s success. The same can’t be said for CRM, which became known as a way to extract customer value, not deliver it.

    It will be interesting to watch the influence of on this category. It’s the dominant CRM software vendor, and yet now is marketing itself as a Customer Success Platform. Is it time for another CRM renaming? Social CRM didn’t work out, but maybe CSM will. I’m going to buy some popcorn and enjoy watching!

    BTW, Christine Crandell wrote an excellent post on the State of the Customer Success Profession.

  24. Hi Bob

    I agree with you about CSM being the latest acronym for what has been called TES, CRM, CLM and CEM in the recent past (and these are just the acronyms I can use in polite company!)

    I also agree with you that SaaS delivered through the Cloud has (theoretically) made it easier for companies to switch-on/off software on-demand, compared to on-premise software. That doesn’t stop SaaS vendors from trying to tie companies down with on-premise type contracts, as one of my large banking clients recently found to its cost.

    Sadly, three of the many hats I wear (as a former software architect, former systems integrator and former corporate Head of CRM) lead me to believe that CSM will deliver no more (or less) ‘success’ to companies than CRM and its cousins did before it. Vendors are still a long way from offering Business Process -aaS, which creates incremental success for companies over and above SaaS, let alone servitised Outcomes -aaS required of CSM to create the success promised by the vendors’ glossy brochures. Only time will tell.

    Pass over the beer and popcorn.

    Graham Hill

  25. Very interesting article Bob.
    I’m jumping in a little late, but this has raised 3 pertinent points in my mind.

    1. Customer Success is a B2B term for Customer Retention. It’s the way a customer is retained in a B2B scenario; by making sure you’re part of their success. It’s a no-brainer actually. Do companies really need to form a new department and hire new people with new designations to do the same old work? Or should they instead get the existing mix of customer service and sales employees aligned to the concept of CS and let them go for it with renewed vigour? If they can’t, maybe they should let the old lot go. It’s twice the cost for an organization to share one piece of work between two separate teams.

    2. I tend to agree with Michael here about it possibly being a consultant created term. Why do we need to invent a new term for the ‘same old’ customer retention efforts? Every time a new term is coined there is almost an entire new parallel consultation business set up to cater to that term. What is done within that is a rehash of everything that’s been done before, only the garb is new. If companies that invest in it, break it down, they’ll realize they’ve been there done that; just not so well and they need to do it better.

    3. ‘Customer Success’ already seems to be going the CRM route; where a technology platform takes over the reins of the job at hand and every one waits around for it to perform a miracle. Technological tools can only support the efforts a business makes in any direction (in this case customer retention). I always envisaged the CRM tool supporting customer service, but it has almost always been used as a sale pipeline management tool (and not very effectively mind you. Salesforce and the likes do a much better job). If there is no new thinking (which seems apparent from all that is happening around ‘customer success’ and as mentioned by Michael and Ian) there really isn’t going to be much change, except for the profits to the consultancy business.


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