How Customer Success Relates to Customer Experience: 6 Takeaways for Senior Leaders

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Whilst the concepts of Customer Success and Customer Experience have been with us for many years – arguably for a very long time indeed – it has only been relatively recently that each one has been codified into its own specific and individually definable concept that comes complete with its own targets, activities, budget, and maybe even a headcount of employees.

Of the two, Customer Experience (or CX as it is often referred to as) is the older and therefore arguably more mature of the two, and it tends also to be more widespread across many different industries. Customer Success (or CS) on the other hand is the new kid on the block and could potentially be described as being more niche in terms of which industries require it or at least which ones benefit most from it. However, for those industries where Customer Success has proven itself as an essential component of those industries’ service to their customers, there is inevitably several questions that arise around demarcation and collaboration.

To put it simply, senior business leaders within those industries may need to ask themselves the following; what is the difference between CX and CS, which of the two is responsible for which activities and for which outcomes, and how should they combine to generate the best possible service for customers and (equally if not more importantly) the best possible ROI for ourselves?

This article starts by defining the customer journey and then it reviews each of the roles of CX and CS respectively in terms of their input into and management of that journey. Finally, it describes the business relationship between the two and how businesses in the real world that have adopted both CS and CX can combine the two to generate maximum rewards for all concerned.

The Customer Journey

Every business’ customers undergo a “journey” that describes their progress through the process of working with their supplier, and this customer journey is commonly broken down into a number of stages, such as Awareness, Consideration, Selection, Retention and Advocacy for example. In broad principle, a typical customer will move through these stages in order from start to end as they progress their relationship with the supplier.

At each stage of this journey the customer interacts with the supplier, and these interactions are often referred to as touchpoints. At each touchpoint, the customer may undergo a positive, negative or neutral experience. For example, they might find the salesperson particularly helpful and responsive during the Consideration stage – a positive experience. Or perhaps they might find the self-service support facilities to be complicated and time-consuming to use during the Retention stage – a negative experience.

As the customer encounters these different touchpoints, so they will add to their overall experience of being a customer of this supplier. Ultimately what we can say is that the total of all of these encounters adds up to being the complete customer journey that the customer undergoes, and which in turn informs the overall customer experience that this customer will have throughout their dealings with the supplier.

Customer Experience as a Horizontal Function

Customer Experience Management is by definition the process of managing the customers’ experience. By “managing” what we mean here is “measuring, analyzing and (most importantly) improving”. Because the customer journey is such a lengthy one that covers so many different business functions from within the supplier’s business, the role of “Head of Customer Experience” needs to be very senior. The title that is often used to describe this role is CCO – Chief Customer Officer, and the CCO is effectively responsible for improving all aspects of the customer journey from the very first time a prospective customer becomes aware of the brand name through to the very last drop of value the customer attains from the very last product or service they ever purchase.

The function of the CCO and their department can be described as “horizontal” and “supporting”, in the sense that it crosses various corporate functions such as R&D, marketing, selling, etc, and performs a supportive role to those functions but does not touch the customer itself directly (or at least not usually). The CCO will often report directly to the CEO (Chief Executive Officer) and is oftentimes themselves a member of the Board of Directors. The CCO’s job (and therefore the job of the entire CX team) is sometimes described as being “the customers’ advocate” because they are there to represent the interests of the customer and to help all the vertical functions become more customer-friendly by being more effective and efficient in their dealings with customers.

Customer Success as a Vertical Function

Whereas Customer Experience is a horizontal, supporting function, Customer Success is very much a vertical, direct function. It’s verticality comes from its exclusive interest in just certain parts of this overall journey, and it slots into place alongside other vertical functions such as Marketing (largely responsible for the Awareness stage of the journey), and Sales (largely responsible for the Selection stage of the journey). Customer Success is responsible for specific aspects of the Retention and the Advocacy stages of the customer journey, just as other functions such as Product Management and Product Support (and for that matter Marketing and Sales too) are responsible for other aspects of these two stages. The aspects it is directly responsible for can vary from company to company, but can generally be thought of as falling into the following three categories:

Onboarding

Getting the customer initially acquainted with the newly purchased solution so they are aware of what needs to be done in order to generate value from it

Adoption

Ensuring the customer’s end users are trained, support and otherwise enabled to be able to use the solution

Value Realization

Helping the customer to measure and report on the value being generated by the ongoing use of the solution

From the perspective of the supplier, the benefits from fulfilling these duties can be divided into the following five categories:

Retention

Maximizing the number of existing customers that renew their contract and/or make the same or similar purchases in the future

Expansion

Maximizing the value of renewals and further purchases from existing customers and spotting additional upsell and cross-sell opportunities

Advocacy

Gaining commitment from the customer to help with marketing the solution to additional prospective customers

Product Improvement

Learning what the customers really think about the products and services they have purchased in order to help refine and improve them

Value Added Service

Providing a value added service that can be marketed to potential customers as an important part of the overall sales proposal

The Customer Success / Customer Experience Relationship

Whilst there is some overlap between Customer Success (CS) and Customer Experience (CX), the two are very different. CS is a vertical, direct function, and CX is a horizontal, supporting function. CX is broad, strategic and cross-functional, whereas CS provides a depth of capability in its specific areas. CX works indirectly through multiple functions and teams to enhance the customer experience across the entire customer journey, whereas CS is directly responsible for specific aspects of that journey.

From the CX perspective, CS is one of the functions that CX needs to manage, liaise with and support. From the CS perspective, CX is a broader and more strategic part of the business that CS needs to report to and indeed is often directly managed by within the organizational hierarchy. So the Head of CS (for whom the title VP Customer Success is often used) will often report directly to the Head of CX (for whom the title Chief Customer Officer or CCO is often used), potentially alongside other customer-facing functions such as Sales, Marketing and Customer Support.

CX will determine overall strategy and set targets and objectives, and will also be involved in ensuring frictionless alignment between the different vertical functions. CS will determine how the relevant parts of this strategy and those targets and objectives will be achieved within their areas of responsibility, and will also be responsible for collaborating with other functions as necessary to help ensure that as the customer transitions between CS and these other business functions, the transfer is as smooth and seamless as possible from the perspective of the customer.

Key Takeaways for Senior Leaders

From the perspective of the senior leadership team, what does all this mean? Let’s focus down on six key takeaways.

1. It’s Not a Case of Either/Or

The first thing to be clear about is that Customer Success and Customer Experience are not the same thing. In fact, they are not directly comparable at all. CS is a direct (i.e. customer-facing), vertical (i.e. responsible for a specific set of functions within the value chain) organization, whereas CX is an indirect (ie non-customer facing – at least as a general rule), horizontal (ie responsible for providing its services across multiple other functions) organization. Because of this, CX cannot “do” as a replacement for CS, and neither can CS “do” as a replacement for CX.

Which one is more important? Well to me that’s an uninteresting argument, since both are necessary for most B2B companies. There could be an argument made that CX is more important than CS because it is more strategic, crossing multiple departments if not the entirety of the company. On the other hand, as we have already seen, the customer journey is only as good as its weakest link, so if there’s nothing there to support onboarding, adoption and value generation then the company will likely start to experience severe breakdowns in its relationships with its customers, leading to a loss in renewals and even potentially in new sales. Both are needed.

2. Customer Experience Should Have Senior Leadership

Because CX’s remit spans much if not all of the company, its leader must be senior if the organization is going to be effective. My recommendation (which follows that of many others) is that the Head of CX is a “C” level executive, and that they report directly to either the CEO or COO, and there would be a very strong argument to say that for the majority of companies they should also have a seat on the Board of Directors.

This does two things. Firstly, it sends out a message that strengthens negotiation positions when dealing with other departments and ensures that CX is taken seriously throughout the company. Secondly, it ensures that the “voice of the customer” has a strong and direct influence in the strategic planning activities of the company at the very highest level of the decision making process.

3. Customer Success is Essential for Growth

No matter how great your sales team is, very few (if any) businesses can grow in any meaningful or sustainable way by relying simply on new business from new customers. For growth to occur, almost all businesses either need repeat business from existing customers (i.e. renewals) or new business from existing customers in the form of both upsell and cross-sell opportunities.

Some customers are loyal out of laziness or fear, but most customers that do not get as much value as they should be getting from the products and services they are buying will eventually leave. Some will rush away at the first signs of reduced value, whereas others might need to be enticed away by a competitor that offers a better deal for example, but leave they will. The role of CS is to maximize the value that customers realize from the products and services that they have purchased. This is a critical aspect of the “modern business” and it can no longer be left in the hands of customers to “get by”.

4. Customer Success is Not Just for SaaS Companies

There is a myth out there that CS is only relevant to the SaaS (Software-as-a-Service) industry. Whilst it is true to say that due to its reliance on renewals from existing customers for revenue growth the SaaS industry has led the way in (and indeed to at least some extent invented) customer success management as a specifically defined function within the business, that doesn’t mean that they are the only types of business that can benefit from it.

Any organization that wants to retain its customers for longer and/or sell more to those customers over each customer’s lifetime needs to find ways to help customers realize the value from what they have already purchased because this is what will help those customers to perceive the value both of remaining as a customer and of purchasing more products and services. Most businesses desire repeat orders from existing customers, so most businesses need CS.

5. Customer Success is Not Just about Renewals

There is another myth out there which states CS is only good for renewals. Again this is not the case. Increasingly, prospective customers (ie “new” potential customers) are demanding customer success activities be included within the proposal. This is because these potential customers realize that it’s not owning the solution that will help them with their business initiative, it’s using the solution in the right way to generate value that’s what they need. Hence they understand the importance to them of CS, hence they are now starting to insist upon it as a part of the overall proposal, and in many circumstances are willing to pay for it as a separate item within their bill of materials.

Additionally, CS is also proving its strategic value through the deeper and more meaningful relationships that CSMs can form over time with customer stakeholders, as they work with those stakeholders to help with value realization. This leads to three potential benefits.

  • The CSM can understand customers’ needs in new and profound ways, which information can be passed across to Product teams to help with new product development and with existing product improvement.
  • The CSM can generate increased customer loyalty, since over time the customer’s stakeholders may both realize the value of the assistance their CSM is providing them with and also recognize the pain of starting over again with a new CSM from another supplier who will not know them as deeply and profoundly as their current CSM.
  • The CSM is often well-positioned to spot fantastic advocacy opportunities that can be passed to Marketing and used to evangelize, educate and explain the value that the company delivers through its solutions to other prospects.

6. Customer Experience and Customer Success Must Work Closely Together

Just as we cannot do without one or the other but need both CS and CX, so we need CS and CX to collaborate closely together. Generally speaking, the Head of CX will be senior to the Head of CS, and if this is the case then it may be beneficial for the Head of CS (VP Customer Success for example) to report directly to the Head of CX (CCO or Chief Customer Officer for example).

As previously stated, the reason why the Head of CX is oftentimes a more senior role within the business is due to its breadth of impact across the entire organization and the strategic nature of its work. But when it comes to specifically Customer Success-related activities, the Head of CX should play a supportive and enabling role to the Head of CS in just the same ways as they should do for the Head of Sales or Head of Marketing for example. This is because the other direct functions (such as Sales and Marketing for example) will already be understood and valued to an extent that may not always be the case for CS, which may still be less mature as a function and still “proving its value” to the rest of the organization.

The Head of CX should recognize their responsibility for helping the CS organization to justify and prove this value. Furthermore, the Head of CX would do well to develop a close and harmonious relationship with the Head of CS and indeed with the whole CS team for their own benefit. This is because CS holds a vital and pivotal role within the overall customer journey, just at those parts of the journey that customers (or at least wise customers) are most concerned about, namely the onboarding, adoption and most critically the value realization stages of that journey. So for the Head of CX to perform well in their role of ensuring a great customer experience, they will require every possible assistance that the Head of CS and their team of Customer Success Managers can give them.

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