u/tao1952

Ever since 2012, when the global proliferation of Customer Success groups really began to skyrocket, the profession has had an identity problem. What is Customer Success? In the Buddhist tradition, there is a parable that offers insight. Several blind men are called in to determine what an elephant is by touching it. "It's like a fan" said one man, touching the ear. "No, it's a plough share," said another, touching a tusk. "It's like a broom," insisted one man, touching the end of the tail. John Godfrey Saxe's poem about it has an apt line: "“Though each was partly in the right, / And all were in the wrong!” Now we are entering the ai era, and doomsayers are proclaiming the end of the CS profession because most/all/many of the CSM pieces/tasks can be done faster and more economically by ai agents. Like the blind men, they mistake the pieces for the whole. What should we learn from that elephant? To determine our future, we need to look at the purpose of the role.

The Foundational Reality of Customer Success

Every complex/powerful product requires the user to make an investment in learning in order to obtain the promised increase in productivity and profitability. AI is no different. What is being sold to the customer -- and bought by them -- is that promised increase; the technology and the training in using it are only aids to the desired value outcomes. The purpose of the Customer Success team is to increase sustainable proven profitability for both their customers and their company. The lack of common active support for that charter is the proverbial elephant in the room, and it's time for all of us to talk seriously about it. Software companies need to stop selling technology, and start selling provable value outcomes.

The Transition to Value Outcome Operations

Marketing needs to promote promises of specific productivity and profitability gains through buying the company's technology. Sales needs to sell those gains and show how they will be proven. Product needs to build the features into the technology that will deliver the value outcomes -- while being able to track and to prove usage and results. Customer Success guides the customer throughout the journey to obtain those outcomes, and then to show how even more can be gained. At every step of the way, both provider and customer can see how actual usage necessarily ties into proven results.

The transition process begins when all of the functional groups come together to agree on the proven value outcomes that the customer wants to buy, to construct a library that can generate menus from which the customer can select. These need to be provable so that the customer can see the results and how they were obtained. This establishes confidence, and enables more sales to be made. The bulk of a company's profits comes from its customer base, and it's time to begin to operate on that strategic basis.

Note: No part of this article was written or edited by any ai.

I am often asked: "What's the primary skill to look for in hiring Customer Success Managers?"  My reply hasn't changed in twenty years; it's still -- and always will be -- Domain Expertise.  Early in my career, a veteran sales guy told me that unless I could put on a hard hat and a set of coveralls and go out on the floor speaking fluent "machine shop," I shouldn't try to sell the owner anything because they weren't going to trust me.  It was sage advice.  Forty six years later, my domain expertise is in Customer Success and Support groups and I speak both languages fluently.  What's yours?  In what environments can you comfortably step into the role of a trusted advisor, speaking easily with the voice of authority? Would your colleagues agree?

Building a personal brand

Domain expertise is not something you acquire in training courses.  It must be earned over time.  You can learn about a given product in training and in service on the Support hotline, and that product expertise is very valuable.  But knowing how it works and knowing how to use it to increase a customer's productivity and especially profitability are two very different things.

Look around your network of personal connections. Who are the leaders in your particular professional community? What issues do they communicate about? Do you join in those conversations? Are there professional associations that you have joined and conferences that you've attended? What topics are discussed at such events? Which could you lead, if given the opportunity?

Product expertise could enable you to do a demo of your product at a trade show. Could you lead an implementation team to effectively onboard a customer? 

Decision Points

I've been reading CSM and CS Exec position announcements for many years, and the social media posts of those who have taken positions only to find that the descriptions were inaccurate (to put it gently). It's common to find requirements like "must have x years in a CSM role" in them. What's not common is to see that the employer is looking for evidence of domain expertise in prospective candidates. That's a red flag, in my opinion. If that point is not covered in the interview process, it's a even bigger one.

As our industry moves toward an outcome based model for pricing, domain expertise is going to become far more vital. Which specific jobs and outcomes are most valuable to the customer? What's your foundation for making those decisions?

In the course of an Operational Review of a Customer Support group some years back, it became apparent that their customers were "caged" by the need for regular updates of the tax tables -- and the vendor knew it.  Their concern about Support quality was due to its perceived effect upon new logo sales, not for any real worry about retention.  In large and enterprise sectors now, the cage is usually about the perceived cost of tearing an existing system out and the burden of replacing it rather than the features of the technology itself.  However, vendors that rely on this moat may be in for a rude awakening as ai is developed to produce more options and to make transitions much easier.  The questions are vital: Are your customers caged or engaged?  How do you know?

Selling Technology in the Age of AI

There is no sustainable competitive advantage in technological features and functions.  They are too easily duplicated, and the speed of that will only increase.  Any bell or whistle in one app can be quickly added to its competitors.  What does it mean for Marketing, Sales, and Customer Success teams when the competition for customers is based on value outcomes and the ease of achieving them?

In the course of my research into Customer Realized Value as a new prime metric, I talked to a number of colleagues of my age who have said things like: "The idea of selling on value, not features, isn’t new at all. Forty years ago when I sold for X, we adopted “solutions selling” and “strategic selling” for our products." Others spoke of a "Sell-Deliver-Sell More" outcomes-based approach used in their past. How do we re-learn and refocus on these value lessons?

From Caged to Engaged: Starting The Process

What makes a customer fully engaged with your technology, to the point that the thought of losing it is too painful to consider? Start by analyzing a cohort of the people that use your technology to the fullest -- the power-users. Every customer ideally should have several of these individuals. Is it true that the more power users an account has, the better the chances for retention? Talk to your team in Customer Success and Support to develop an initial list of people to ask: "What specific jobs are you able to do better/faster with our app? What are those outcomes worth to your company? What barriers do you experience in your usage?" 

The resulting data should clearly identify common value outcomes. Check these with your sales reps: "Is this what prospects ask for? Could you sell on the basis of such outcomes?" The next step is an initiative on what it would take to act on that data company-wide -- more on that later.

Note: No part of this post was generated or edited by any ai.

There was a comment on one of my recent posts here about tracking Customer Realized Value that I found intriguing. The commenter noted that "What's worked for me is catching the value the moment it lands, in the customer's own words. Someone says 'this saved us two days a month,' you write it down verbatim with the date." An excellent practice, if only for the benefit the person added: "A running list of those per account is what survives a QBR or a layoff review, because it's the absence made concrete, in the voice of the person it happened to." But what else could you do with such examples of the Voice of the Customer?

There's a follow-up question that should immediately be asked after the value is acknowledged by the customer: "What's that worth to you?" They are paying a certain amount each month for the subscription, and here is a return for that expense. Further, it gives you insight to what might be considered a 'billing rate' for that person's time that can be applied elsewhere as a foundation for the value of time-saved.

Proven cost-reduction is a strong argument, but there's an even more powerful one to be made in increasing profitability. Does your application provide information to the customer that they couldn't get any other way? Or that makes it available faster than otherwise so that they can capitalize upon it? What's that worth to them? Here is where careful questioning can lead the customer to acknowledge points that they might not have considered before. Those answers are valuable in different ways.

A customer that directly acknowledges value-received may talk about it internally. It arms them with ready data to use when their CFO asks "are you really using that application?" Even better, it may also encourage them to respond when a colleague outside the company asks "which application are you using for x function? Why do you like it?"

Questions are important. How a question is asked can impact how it is answered, but be careful how you use a question. You don't want to leave the impression that you're just fishing for the answer you want to hear, that's not listening to the customer. You do want to encourage the customer to acknowledge to themselves the meaning of what they just said to you. As my commenter noted, capturing the value the moment it lands is vital for you. Getting the customer to also capture and internalize that value statement is even more so.

Note: No part of this post was written by or edited by any ai.

I recently got a quiet alert that a very large European company just laid off their entire Customer Success team of around 100 people. Zap! Gone.  This is unfortunately far from the first large scale group wipeout in the global profession, and it won't be the last.  While there is a lot of chatter these days about Customer Success groups owning revenue and increasing value to the customer, when you start to zero in on exactly what that means in practical terms, the conversation quickly goes fuzzy.  You can't afford that scenario.  The clock is ticking and the CFO's -- yours and your customers' -- are running the numbers.  If you are not providing them with proven numbers that show your direct and necessary connection to significant levels of profitability, then your team, your job and the customer relationship are all at-risk.

Connecting Activity to Value

Whoever made the decision to lay off those 100 people clearly did not consider them or their functions as being necessary for the continuation of the income streams from the customers.  Perhaps Senior Management thought that an agentic ai could be installed to replace the bulk of the typical CSM activities, with the balance of the tasks being transferred  to other departments.  Maybe they thought those tasks could simply be dropped altogether.  The bottom line was that the Customer Success group was perceived as being unnecessary. And so it was gone.

The lesson is clear:  for every activity, there should be a definite and *necessary connection to tangible value for the company and for the customer.  For example, the preparation and delivery of standard QBRs isn't a value outcome by itself,  you have to show how that event brought value to the customer and therefore to the company in the form of increased renewal and expansion sales.  Quick test: would the customer be willing to pay you to prepare and present that "QBR?"

Show Me The Money

The famous quote from the movie Jerry McGuire should be a mantra for both Customer Success groups and individuals.  It isn't safe to assume that either your company or your customers perceive your worth.  You need to show them the value you bring to the table consistently in different ways.  Your CS group may not be formally recognized as a profit center, but you can do the reporting as if you were.  Instead of doing QBR's, prepare and present regular CVR's -- Customer Value Reviews -- to your customers, giving them actionable insights that they could not otherwise easily get.  Listen carefully to what they say when you speak, and pay even more attention to what they do afterward.  

Talking directly about money can be uncomfortable.  Do it anyway.  So you cut a customer's processing time for a certain function by 20%.  What's that worth in dollars and cents to the customer?  How did it affect their profitability?  Would their CFO agree?  That's a value conversation worth having.

Note: No part of this post was created by or edited by any ai.

Throughout all of my career, I've gone to many professional conferences (and produced a number of them myself!) knowing that the primary value of attendance was the chance to meet others who faced similar challenges. The conversations in the lunch line, at the receptions, and at the bar at night always produced good questions and answers that enabled me to increase my group's performance and/or to further myself as a professional. The same thing happens here in this online forum; it's why we're all participating. Going to conferences, however, is expensive and time consuming. Some questions may be too sensitive to be openly asked online in groups like this one. But there is another pathway to accessing in-depth knowledge and direct expertise.

There are over 200 firms offering consulting services across the global Customer Success community. Their principals and associates know how to design, build, equip, and manage effective Customer Success groups across the full range of industries because they've done it themselves, often multiple times in their careers prior to becoming consultants. While you may not have the budget to bring such a consulting firm in on full time projects, there is another way to tap that in-depth expertise. Beyond the consulting firms, there are people who are employed full-time as CS execs who are interested in offering their services outside on a part-time basis as Customer Success Coaches. 

Coaching can take a couple of different forms. It can be delivered direct in one-on-one sessions between the coach and the CS executive or practitioner CSM. It can also be delivered in online group sessions where the coach can ensure that there aren't any competitors present. Or both. The advantage of retaining a coach is that you know what you're buying, and it's available whenever you need it. 

I'm in the process of creating a new page in The Customer Success Directory on the subject of coaching.  There will be a list of the firms offering such services with links to their websites, and a detail page that breaks out the potential subject areas together with the names of the firms and people who cover them.

In the meantime, where and how have coaches been useful to you in accelerating your professional development and/or in improving your group's operations? Did you have to pay for the service yourself or did your company cover the cost of the resources? 

Note: No part of this post was created or edited in any way by any ai.

I've been asked a lot of late if I thought that FDE's --Forward Deployed Engineers -- will replace Customer Success Managers as the future of the profession.  The quick answer is: No.  FDE's have their place, as do properly chartered and managed Customer Success teams.  While generalist CSM jobs are at risk from takeover by agentic ai agents, for the busywork that made up the bulk of the utilization in CS groups can be more economically handled by ai, there will always be a need for people who have in-depth knowledge of the product *and* the customers' business.  The difference between FDE's and trusted advisor CSMs is, and will be, in how a company uses them to ensure retention and expansion of the company-customer relationship. Both are needed.

B2B software companies have always had FDE's involved in implementation.  They guided the customer through the whole process; integration, training, and onto go-live.  The specialists ensured that the customer didn’t try to boil the ocean by turning on every last feature, they took them through a phased roll-out and change management process.   It definitely paid off. One large CRM company discovered that if the company's implementation group or a competent 3rd party did the install, the likelihood of retention was well north of 50% better than if the customer company’s IT team did their own implementation.  That’s a duh!? moment that should have been obvious.  Deep product expertise combined with deep domain expertise  consistently applied through onboarding builds a solid foundation.

But there is a missing piece in expert onboarding that is definitely why Customer Success needs to stay. The FDE's don't directly focus on retention or expansion; their role is to get the onboarding done properly and then to move on to the next gig. (Note, too, that the FDE may be a consultant from an allied firm and not an employee.) The CSMs' have a different focus, which is to ensure that the customer continues to realize value. 

Should both of these roles be offered as a paid service to the customers? Yes, if properly marketed and sold, for it's in the best interests of both parties. The FDE builds a firm foundation and the CSM guides the customer to continued realization of value.

(Note: No part of this article was created by or edited by any ai.)

More and more Customer Success groups are "owning" revenue -- they have a number to meet and presumably are accountable for all renewals and expansion sales.  The group performance metrics are a mix of tracking gross-this and net-that.  That's an important change that has been growing for the past ten years, and it may play well with the company's board and the investors to have the Customer Success team be "responsible' for post-sale revenue.  But if you look deeper, the picture has some ugly edges.  Responsibility and authority are not equal.  Churn due to bad product decisions and Sales closing deals with inappropriate customers is being counted against the CS group who had no input to those choices.  What's worse, and far more fundamental, in the "ownership" discussions, nobody is talking about responsibility for ensuring and proving value realized by the customers.  The imbalance and the silence is a set-up for failure both for the team and for the company.  In an incremental income profitability model, the ownership of Customer Realized Value needs to be the foundation of a company's global GTM strategy.

Customer Realized Value occurs when the customer actively uses their purchased product to profitably accomplish real tasks more effectively than otherwise -- and is aware of that fact.  That's not something that can be safely left up to the customer to produce or to acknowledge, down that path lies both churn and significant money left lying on the table.  It leaves the door open for the competition to distract with their glittering promises.  The vendor needs to not only be a part of the ongoing ROI and budgetary discussions with the customer's CFO, but to be actively managing them so that the decision goes towards continuation and expansion of the relationship.

Once a company fully understands and accepts that actual user adoption determines Customer Realized Value, and therefore the probability of renewal and expansion sales, then it's time for the conversation about who in your organization owns and is accountable for guiding adoption through to accomplishment and proving that value.  The first vital question is:   Does the proposed ownership team have the appropriate staffing, data and tools to do the job?  If the accurate answer is no, then there can be no true ownership.  

So what are the required tools to enable authentic ownership of CRV?  Specific application feature usage tracking by identifiable users is an absolute base requirement, for the CRV ownership group needs to use it to identify real jobs being done by the customer and to put a monetary value on each of them.   Feature clicks alone are not the answer, for they are not proof of CRV that the customer will acknowledge.  The company must be able to directly demonstrate the economic value of the real jobs being done and who is doing them.  The CRV ownership team also has to have the in-depth domain expertise necessary for establishing their credibility with the customer's CFO and other decision makers.  The data that the team develops about actual value to the customers has strategically significant value to the company as well, for it informs both the ICP and the ongoing product development definition and schedule.

Does your Customer Success group authentically own Customer Realized Value? If not, who does?

Your company's product is a value engine, and it needs to be managed as such so that both you and your customers can clearly see the benefits of its use.  Putting the reporting burden on the customers to tell you about the value they're getting leaves that relationship at-risk to the churn monster.  As you start to prepare for your upcoming Customer Value Review with a major account, there are some core questions that should be asked.  Do you know what your executive sponsor at that customer is doing with the features of your application?  How about your champion?  Power users?  Critically, which actual jobs are being done more effectively via your app -- and what are they really worth in dollars and sense to that customer?   Which users are not using the application's feature set, and what jobs are not being done?  How much potential value is being left untapped?   If you don't have the data, you can't do the science.  If you can't answer these questions, what does that say about the mission and role of your Customer Success group?  The security of your job?

There has been a lot of talk about how the profession of Customer Success is changing.  The pursuit of AI is definitely having an effect, but the real change is being driven by something deeper.  It's no secret that CS groups are being given revenue responsibilities and being measured on their results.  That shift has been long overdue, but tracking company revenue is only half of what needs to be done.  What about the customer?  Customer Realized Value is the road to your company's future.  What specific actions are you taking to track and to increase it?  

What are your options if you don't have the data about Customer Realized Value?  The first is to do nothing and watch while the risk of churn increases until the relationship ends.  The second is to start bridging the gaps in your product's design by bolting on tools that will begin to provide the data and insight that you need to authentically talk about value with your customers.  *The Customer Success Directory'*s TechMap page has a list of all of the vendors that I have found whose apps enable specific application feature usage tracking.  Knowing which features of your application's set are being used -- or not! --  by a given customer, however, is only the beginning of what you will need for an outcome led growth strategy to become possible.  You also need to know what real tasks are being accomplished by that usage and what those outcomes are worth to the customer.  The tracker will also tell you what features are not being used.

Having the product usage data by itself isn't going to get you very far. That data still has to be analyzed by someone who knows what it means -- someone with both in-depth product knowledge and extensive domain expertise. If you don't have such a person on your staff, look farther afield. 

Your company's product is a value engine, and it needs to be managed as such so that both you and your customers can clearly see the benefits of its use.  Putting the reporting burden on the customers to tell you about the value they're getting leaves that relationship at-risk to the churn monster.  As you start to prepare for your upcoming Customer Value Review with a major account, there are some core questions that should be asked.  Do you know what your executive sponsor at that customer is doing with the features of your application?  How about your champion?  Power users?  Critically, which actual jobs are being done more effectively via your app -- and what are they really worth in dollars and sense to that customer?   Which users are not using the application's feature set, and what jobs are not being done?  How much potential value is being left untapped?   If you don't have the data, you can't do the science.  If you can't answer these questions, what does that say about the mission and role of your Customer Success group?  The security of your job?

There has been a lot of talk about how the profession of Customer Success is changing.  The pursuit of AI is definitely having an effect, but the real change is being driven by something deeper.  It's no secret that CS groups are being given revenue responsibilities and being measured on their results.  That shift has been long overdue, but tracking company revenue is only half of what needs to be done.  What about the customer?  Customer Realized Value is the road to your company's future.  What specific actions are you taking to track and to increase it?  

What are your options if you don't have the data about Customer Realized Value?  The first is to do nothing and watch while the risk of churn increases until the relationship ends.  The second is to start bridging the gaps in your product's design by bolting on tools that will begin to provide the data and insight that you need to authentically talk about value with your customers.  The Customer Success Directory's TechMap page has a list of all of the vendors that I have found whose apps enable specific application feature usage tracking.  Knowing which features of your application's set are being used -- or not! --  by a given customer, however, is only the beginning of what you will need for an outcome led growth strategy to become possible.  You also need to know what real tasks are being accomplished by that usage and what those outcomes are worth to the customer.  The tracker will also tell you what features are not being used.

Having the product usage data by itself isn't going to get you very far. That data still has to be analyzed by someone who knows what it means -- someone with both in-depth product knowledge and extensive domain expertise. If you don't have such a person on your staff, look farther afield.