Realigning around Success

We're starting to see a major realignment of how enterprises work with their customers: from a siloed model where uncoordinated groups deal with the customer at various points along their life cycle, to a single coordinated team that can provide whatever a customer needs at any time.

Siloed Organizations

We're all familiar with the current set of silos:

• People who do Consulting
• People who do Implementation
• People who do Training
• People who do Technical Support

They define themselves around a particular kind of interaction that happens at a particular point along the customer life cycle.

Focusing on "Success"

But more and more we're seeing these silos breaking down. We're seeing integrated teams that do bits of all of this. The focus is changing from "I do Training" or "I do Technical Support" to "I do whatever it takes to make my customer successful." This change in alignment is showing up in job titles like "Customer Success Manager" and "VP of Customer Success" and we're definitely seeing Software as a Service companies leading the charge.

As of this morning, a Google search on "customer success manager"(with the quotes) gave me 677,000 results. I scanned the first 10 pages and it's mostly job listings for a Who's Who of SaaS companies: Lithium, Eloqua, SocialText, Yammer, and our clients Spigit, Appirio and Salesforce.com.

A couple other quick searches shows Jobster lists 1,921 "customer success" jobs and Business Week lists 1,000+.

Why the realignment?

SaaS companies are making the shift to Customer Success for financial, practical, and philosophical reasons.

On the financial side, customer success is critical to driving financial success. SaaS companies have month-to-month subscriptions with their customers and switching costs that are much lower than for traditional enterprise software. Successful customers renew and grow their business. Unsuccessful customers walk away. Any SaaS company who is not making their customers immediately successful is quickly dead.

On the practical side, many of these companies are just not able to staff for a bunch of separate specialized teams. According to IDC, 33% of the $13.2 billion generated by SaaS companies in 2009 came from companies under 100 people. They're often hiring as fast as they can to meet customer demand. People drawn to these fast growing startups tend to have a flexible "do whatever it takes" mindset. So putting these people on a single team with a mission of "make customers successful" just feels natural to these companies.

On the philosophical side, these companies believe that this is a better way. In many cases they were founded by people coming out of large software companies who have seen the difficulties that a fragmented approach to their customer interactions can take. Simplicity is a mantra for SaaS companies. So, of course it should apply to how they deal with their customers: just make sure they're successful.

Success beyond Saas

While we're finding this Success-focued model well established in most of the SaaS companies we work with, we're starting to see it in larger traditional technology companies as well. We haven't seen any wholesale realignments, but we're seeing the signs of change. Companies are starting to question the traditional silos and are starting to facilitate communication across the borders. People are starting to notice that 3 different groups create almost the same content. The Customer Success Manager job title is beginning to pop up in new places.

I think over the next several years we're going to see this realignment spread further and further. And I can't wait to help!

~ posted by John Hathaway on 22 Nov 10
   tagged as: customer success, SaaS

 

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