By Haresh Gangwani, Bolstra Co-Founder and CEO

For SaaS companies to be successful in the long-term, we will have to figure out a way to turn our Customer Success organization into one that is self-funded, rather than one that is a cost center.

Customer Success teams are tasked with delivering value to customers so that they fully adopt our solution, renew with us, and become loyal advocates of our product. Inherent in this charter is the implication that Customer Success is a profit-building approach to account management and should somehow be self-funded. While those of us in the subscription software world are nodding in agreement that we WANT our Customer Success teams to provide value to both our customer and our bottom line, the challenge of finding and preserving this balance is palpable.

Consider the concept of “Green Gloving”

Green Gloving is that ideal counterbalance between providing just the right quantity and combination of services that yield loyal customers who renew contracts and grow with you, while not losing money (or, better yet, profiting) on the resources allocated to delivering these services. Keeping your customers happy “at all costs” (white gloving) means they get value, and you don’t. Conversely, not delivering what they need to meet their goals means you run the risk of attrition.

So, how do you Green Glove your customers?

You provide the right amount of help with implementation, onboarding and ongoing “support” as part of the software purchase, and then offer a menu of expert services that your customers are willing to pay extra for because these services facilitate the attainment of THEIR desired outcomes, as well as increased adoption of your software. Striking this delicate balance between providing real value TO your customer, while deriving value FROM them, is the linchpin to a self-funded model.

With a goal of delivering genuine value to customers and self-funding your Customer Success team, Green Gloving is as much of an art as it is a science. Preserving the balance involves a cycle of iteration, analysis, and reiteration. Here are some steps you can take to get started and continue to hone your Customer Success charter and offerings:

  1. Know your solution in its entirety. Recognize that, while selling your software is your main goal, your complete offering is much broader than that. Regardless of how robust or complex your software is, there are likely skills, knowledge, and experiences that your customer will need in order to gain ultimate value and reach their desired outcomes.○
    • Consider an analytics software company that enables AI searches across enterprises. They charter Customer Success to deliver expert services their customers require to derive full value. From self-service adoption and training sessions to strategic sessions and advanced education around artificial intelligence and machine learning, these offerings provide enhanced value to their customers and are part of their complete solution.
  1. Identify your customers’ needs. Before you can build and refine your menu of offerings, you need to know what your customers need in order to achieve their desired outcomes. This will take time and is best done iteratively: try, fail, try again.
    • Start by documenting what fires are being put out with your existing customers on a regular basis that could be prevented with the right services. Where are you constantly having to provide additional help? (i.e. Support, R&D, Professional Services, Red-zone recovery, etc.)
    • Study these incidents and consider the expertise or experiences your customers need to prevent those fires.
    •  Identify what resources you need to provide those services.
    • And then begin to consider ways to package those services.

Consider this case of “Green Gloving” The same analytics company had a goal of building a team of trusted (and expert) advisors who would augment their software with the right services their customers needed. To do this took time and lots of trial-and-error, which began by documenting the frequency of events that required intervention and education. What knowledge were customers missing that could have prevented these incidents? Could they be provided proactively? Could they be addressed with a library of resources, or would it require personal coaching? Answering these questions began to shine light on the most valued services and how best to deliver them.

  1. Define and package your offerings. Once you’ve defined the services your customers are most in need of, begin to develop and package them. A tiered retainer approach is a great model that affords you the flexibility to modify offerings based upon the profitability of the model. Consider three tiers:
    • A basic package should provide those services that your customers need to be able to use your software. They may include implementation assistance, access to best practices (templates, videos, guides, etc.), and defined parameters for interaction with the Customer Success team.
    • A mid-level package (“plus”, “silver”, etc.) might include one-on-one coaching with experts and routinely scheduled retrospectives to assess progress, needs, and paths forward. This level is often defined by a number of retained hours that a Customer Success Manager is available to the customer for the month, and the pricing reflects the value/cost of that resource.
    • A top-tier package (“premium”, “platinum”, etc.) includes tailored and strategic workshops facilitated customer journey mapping and increased access to the Customer Success Manager.
    • All tiers should include the opportunity to purchase additional CS hours for a fee. Note: if you have the resources, a pilot is a great way to test the waters using real customer and market data.

Consider this case of “Green Gloving” Tasked with creating a profitable Customer Success function, the vice president for the analytics software company began with a small team and a pilot with a segment of customers. The pilot provided real-time customer and market data that this VP of Customer Success was able to use to develop a more accurate tiered menu by scrutinizing the actual value of the pilot offerings to the customers and to her business. Ultimately, she was able to develop offerings that could be provided without touch, such as getting-started videos and a learning series of webinars to cover best practices and frequently needed topics for growth. These could easily be included in the basic tier. This freed up capacity to employ higher level and specialized expertise on the CS team to offer to customers who purchased top tier packages. Some of these services included governance/communication planning, advanced training in machine learning, and analytics coaching. This CS team continues to demonstrate value to customers and become self-funding and went from 5 people to 20 (and still growing) over the course of two years.

  1. Iterate. Fail. Fast forward. Striking the balance of offerings that add value and are provided by CS is a process. Your product will evolve. Your customer base will morph. And your composition of expertise will adapt to those changes. Don’t rest on your laurels, and don’t be afraid to fail. Just be quick to move forward by modifying your offerings when you find that something isn’t working. Perhaps you are finding that some services are more of a drain on your resources, and what you thought would be profitable is not (with the current structure of offerings). You have options:
    • Conduct a trial with an existing customer where you offer a service that you are vetting for free. Take care to measure and assess the quality and quantity of work involved in delivering the service as well as the actual value the customer derives. Use this as a benchmark for determining whether and where (in your structure of offerings) to provide this going forward.
    • Remove the service, or move it to another tier, based upon its value to the customer and the costs associated with providing it. When determining where a service fits in your tiers, be sure you have enough data points from existing customers. Just because something isn’t of value or drains resources for one customer doesn’t mean it automatically needs to be moved or removed. Before making the decision to change how you offer/charge for it, critically assess whether the service is lacking value because the customer lacks the capacity to derive value, the method of delivery isn’t ideal, or the resources allocated aren’t appropriate.
    • Reorganize resources. Perhaps the reason something isn’t valuable to your customer or profitable to you is that you have the wrong resource(s) dedicated to the task. Continually assess the efficacy and efficiency of your CS team. The work it takes to deliver services must be measured and evaluated routinely. Not only do you want to survey customers about their satisfaction/delight levels, but you need to know how much time and energy it takes your team to deliver. This requires accurate time and activity tracking.

We all want our customers to become loyalists who go out and advocate on our behalf. Figuring out what it takes to get them there is an ongoing struggle. Most of us in the SaaS community have stopped simply throwing bodies at our customers, hoping we find what works to keep them happily engaged and renewing. We are trying to find that ideal counterbalance between delivering value to them and deriving value from them. A successful self-funded model for Customer Success requires an agile approach, persistence and analysis. It isn’t a set-it-and-forget-it solution. If you think you’ll find profitability in a single iteration of your Customer Success charter, you’ll likely be disappointed. Accepting that this will take time and continuous evaluation will give you the right mindset to move forward in finding that ideal state.

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