Journal Junkie Vol.2: The Rise of Customer Success!

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Welcome to the Second of many, Journal Junkie volumes. Join me every month, as I battle my way through my Ph.D. journey on Customer Success. I intend to explore the depths of academic journals across the world on SaaS, Customer Success, Customer Relationship Management, Customer engagement/experience, and more. As your Journal Junkie, I aim to provide you with up-to-date research in the field, as well as interesting insights.

Vol. 1 Recap

We started at the beginning with the history of our Customer Success world. The rise of the dominant CRM platform we know as Salesforce and the finding that the SaaS model has been present since 1960! The Synonymous relationship SaaS has with cloud computing and the boom of everything as a service (XaaS) was highlighted. We discussed the importance of the computing era, as it paved the way for subscription-based licensing.  The journal concluded by establishing that more and more companies saw the need to bridge the gap between sales, product, support, and its customers. Even though it has not been around as long as some organizational departments the rise of Customer Success was apparent and academic research in the field is on the incline.

What is Customer Success?

There have been many definitions of customer success but at the heart, the key themes remain the same. [1] The definition I like the most is, “Customer Success is a long-term, scientifically engineered, and professionally directed business strategy for maximizing customer and company sustainable proven profitability” [2] Customer Success is the long game for Customer and Company Success!

Buoyancy in the Market and Why CS is Becoming the Norm

So why is there so much demand for CS nowadays? - Customer expectations are higher, customer power is greater, and holding onto customers is harder because they have so much choice. [3] The availability of options has changed the way customers think about vendors and not to mention the ease of changing environments in the cloud compared to the old on-prem environments. Customers are no longer slaves to hardware.

Market Stats

  1. The role of the Customer Success Manager (CSM) has seen a 736% increase since 2015 [4] and is one of the most promising professions according to LinkedIn. [5]
  2. Companies that consider Customer Success (CS) as a strategic priority saw higher improvements in metrics, with roughly twice the number of companies reporting a double-digit increase in renewal rates according to Deloitte. [6]
  3. Customer Success Manager has the highest Career Advancement score possible, according to proprietary LinkedIn data. [7]
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We all see the potential, that's why we made the move to CS... Winning! :)

The Function of CSM

“Customer Success Management (CSM) has transcended from a buzzword into the latest permutation in customer management practice” [8] Initially, CSM was viewed by some as a fad and lacked clear responsibility and discipline. However, the market started to take notice when they started to see results. Potter and Heppelmann believed that Customer Success Management provided a needed function. [9] They even asserted that the Customer Success unit was “crucial with smart, connected products, especially to ensure renewals in product-as-a-services models.” They went on to state that “The customer success management unit does not necessarily replace sales or service units but assumes primary responsibility for customer relationship after the sale.”[10]

What CSM ‘Can Do’ vs ‘Cannot Do’

The primary function of a Customer Success Manager is to Increase retention, Reduce Churn, Drive Growth and Product adoption. This is something we all know. However, CSMs are also responsible for customer loyalty, improving satisfaction, and creating customer advocacy. There is a lot of responsibility placed on CS in most organizations and sometimes the constant struggle to balance responsibilities and tasks is a challenge.

Now that we understand what in the eyes of the industry CSMs ‘Can do’, let's move onto the more controversial topic of what CSM ‘Cannot do’. Most would agree that support does not come under CS (Figure 1) even though we may support customers on non-technical issues. Some argue that Account Management and Sales do not belong under CS but depending on the company, CS can provide a combination of the two. Mehta and Pickens dedicate a chapter of their book to ‘Who owns renewals and revenue?’ and summarize with the fact that there is not a universal answer but that the trend is for Customer Success to own more overall Revenue.

Figure 1 [11]

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The Sales-Services Ambidexterity Conundrum

There is a current spur in research on the challenges and potential benefits of sales-service integration,  in order to understand this area and better inform this managerial challenge. [12] Some of the findings indicate that commitment to service quality and sales performance are highest when employees are singularly focused on one or the other. However, when required to be ambidextrous—that is, when employees must maintain a dual focus—these outcomes begin to suffer as employees are unclear of their role in the organization. While ambidextrous employees experience role conflict, they are also more likely to use creativity in their selling activities. These positive and negative consequences of ambidexterity underscore both the potential risks and rewards of a dual-orientation on the front line. [13]

Final Thoughts

Customer success is a natural outcome of massive changes in the economy, including globalization, technological advancements [14], and the subscription-based model.  To end this month's journal with a quote that sums up Vol.2’s theme nicely.

“Today’s B2B customer feel empowered. They demand a whole new level of customer focus, expecting companies to know them personally, recognize their challenges, and cater to their needs.”

  • Dana Niv, Strategic Customer Success Manager at WalkMe [15]

Some have argued that Customer Success and Customer experience are closely interlinked and sometimes the two functions merge. We will explore this more in Vol. 4 - The Customer Success Equation.

Well, that is it for Vol. 2, I hope you found it insightful. Next time we will go deeper into journal research to find more key insights.  Look out for - Vol.3: The Customer Success Org Structure!

Did this article spark any questions? Do you have any research questions or areas of research you would like me to look at? Feel free to reach out on LinkedIn! :)

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[1] Adams, R. (2019). Practical Customer Success Management: A Best Practice Framework for Rapid Generation of Customer Success, CRC Press.

[3] Mehta, N. and A. Pickens (2020). The Customer Success Economy: Why Every Aspect of Your Business Model Needs a Paradigm Shift, John Wiley & Sons.

[4] Gainsight (2019). The State of the Customer Success Professional 2019, May 2019.

[5] LinkedIn (2019). LinkedIn’s Most Promising Jobs of 2019, 10 January 2019

[6] Deloitte (2019), 2019 Enterprise Customer Success (CS) Study and Outlook: Fostering an organization-wide CS Mindset

[7] Roman, Carine (2018). Keynote presentation at Pulse 2018 Customer Success Conference “LinkedIn on the Future of the CSM Profession,” May 2018.

[8] Hilton, B., et al. (2020). "Customer Success Management: The next evolution in customer management practice?" Industrial marketing management 90: 360-369.

[9] Vaidyanathan, A. and R. Rabago (2020). The Customer Success Professional's Handbook, Wiley.

[10] Potter, M.E. and Heppelmann, J.E. (2015). How Smart, Connected Products Are Transforming Companies, October 2015.

[11] Gainsight, What Customer Success Management is/is not

[12] Rapp, A. A., Bachrach, D. G., Flaherty, K. E., Hughes, D. E., Sharma, A., Voorhees, C. M. (2017), “The Role of the Sales-Service Interface and Ambidexterity in the Evolving Organization: A Multilevel Research Agenda,” Journal of Service Research, 20 (1), 59–75.

[13] Gabler, C. B., Ogilvie, J. L., Rapp, A., Bachrach, D. G. (2017), “Is There a Dark Side of Ambidexterity? Implications of Dueling Sales and Service Orientations,” Journal of Service Research, 20 (4), 379–92.

[14] Mehta, N. and A. Pickens (2020). The Customer Success Economy: Why Every Aspect of Your Business Model Needs a Paradigm Shift, John Wiley & Sons.

[15] Jennifer Chiang (2019), The Startup’s Guide to Customer Success, How to Champion the Customer at Your Company, New Degree Press.