How to start a Customer Success program from scratch?

Step 1
Get to know your ideal customer really well (through qualitative data)When your company was merely a gleam in your founder’s eye, there was (hopefully) a process in place to identify ideal customers and find out what problems they needed to solve, which pain points felt the worst, and what they deeply wanted to achieve.
If your founder followed the Lean Startup methodology, customer interviews happened to ensure product-market/problem-solution fit well before Product Development set to work.
But, if your company skipped those steps, you’ve got a lot of qualitative data to catch up on.

Step 2
Build Your Team Once you understand who you’re serving and what they’re trying to achieve, you need to put your team together. Sure, you could hire an experienced Customer Success manager or consultant, but you can also look inside your own building – at the Sales department.
A good salesperson already knows your product and your customers, which makes for a relatively easy transition. The key, however, is to shift the sales mindset from selling the product to setting up customers for success.
That can be a substantial challenge. Because sometimes, a customer’s success won’t come from being upsold, and it can run counter to the salesperson’s gut instincts to not jump at an immediate sale, and say “Hey, your company is on the smaller side. I don’t think you need this additional service yet. So let’s focus on how we can help you grow to the point where this service would be really useful.”

Step 3
Determine What Structure You Need to Help Customers Reach Their Ideal OutcomesIf you have the resources, investing in a full-service Customer Success platform, like Gainsight, is a great way to begin. But these solutions can be out of reach, budget-wise. If that’s the case, then you may have to DIY and create your own processes.
Things you’ll need to consider:

• Customer segments – do you have one “ideal customer” or an “ideal customer” for each user segment?
• Do your user segments require different levels of help to reach their ideal outcomes? Often, one segment of users needs a higher-touch approach than another segment (and no, you shouldn’t base higher-touch vs. lower-touch solely on how much the segment pays – a lower paying segment might have high-paying potential with the right nudge).
• What are the desired outcomes for each segment? Do they require different resources to reach them?
• How do you intend to track customer health? What can you identify as “red flags” of disengagement?
• Do you have a way to mark different customers according to their life stage – and whether/when they are reaching their Success Milestones?
• If you have an existing product and the ability to track user behavior within it, where do users drop off?
• Is there a process in place to identify when certain Success Milestones are reached and present opportunities for logical upsells?
• Where are success gaps happening for each segment? (A success gap is the space between what your product does and the user achieving his or her desired outcome).

Step 4
Must-Have Metrics

1. Customer Lifetime Value (LTV) is the foundation for a strategy to increase ROI and sustain growth, but its shortest definition is: The revenue earned from a single customer over time. LTV includes Cost to Acquire a new Customer (CAC) and Churn rate – how quickly customers leave. However, most calculations fail to include cross-sells, up-sells, and the value of referrals for each customer, which increase LTV. To affect LTV, your marketing strategies should take these other factors into account as well. LTV is, perhaps, the most important metric CSMs in subscription-based businesses can track because it’s the best at predicting success… or failure. Cost to Acquire (CAC) is intimately connected with LTV because if your CAC is higher than or equal to your LTV, your business is FAILING! The Cost to Acquire number comes from tracking metrics like  manufacturing costs, research, development, and marketing – everything you need to convince a potential customer to buy. While the equation is simple enough – just divide the total costs of acquisition by total new customers within a specified time period – adding up every acquisition-related activity is where companies get bogged down.
2. Net Promoter Score (NPS) works better than churn to score how well you’re doing at delivering desired outcomes. Sometimes, an unhappy customer won’t get around to churning – the effort is just too low on their to-do list. But if you ask that customer if they’d recommend you to a friend (the NPS question is “How likely are you to recommend us to a friend or colleague?”), you’ll get an honest answer. Many NPS platforms also allow you to segment your surveys for even deeper insights. This is a great number to use if you haven’t got time to creat a complex customer health score system.
3.  Churn is important to track, but more so in the context of understanding what causes churn and how you can proactively prevent churn. Yes, you need to know how many people are leaving. But that number is too little, too late. What you really need to track are the leading indicators of churn.
4. Customer Effort Score – Traditionally used by support teams, CES can also be used to get feedback on user experience in onboarding, new feature setup, and to identify obstacles to users finding value.
   

Step 5
Collaborate
Customer Success can’t do its best work separated off from other departments, keeping its data in a silo. It won’t do you any good to collect all of this data on your customers if you can’t share what you learn with departments able to act on that information.
To really begin to see the results of your Customer Success program, you’ll need to open lines of communication with Sales, Customer Service and Product Development so you can work together to identify and bridge success gaps for customers. Better yet, invite one person from each department to be part of the Customer Success team.

Step 6
Focus on One Thing at a TimeIs it retention after onboarding? Identifying upsell opportunities? Filling success gaps? Kayla Murphy, Customer Growth, Advocacy and Success at Trustfuel works with early-stage Customer Success teams and recommends focusing on one thing at a time.
“Start with one focus and build processes to go with it. Institute QBRs (Quarterly Business Reviews) or regular check-ins. Start tracking your usage data and figuring out which metrics give you the best picture of customer health.

Just start.
Many of the teams I work with felt a great deal of analysis paralysis at the beginning of their customer success journey. They were worried about annoying customers, tracking the wrong metrics, or focusing so much on unhealthy accounts that morale dies. You have to start somewhere and no one knows more about your customers right now than you. Start being proactive and consistently evaluate your processes.”
Just start, perhaps, is the best advice.

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