Every startup thrives for one thing: growth.
As ARR grows, your customer-facing teams have to keep their cool and juggle between more accounts, and all that comes with it. When things are moving fast, it’s vital to remember that proactivity should stay a priority for the company. Acquiring new customers isn’t worth it if it means your churn rate is at an all-time peak due to negligence.
Complexity is the enemy of scaling. To make sure your Customer Success team stays on track while your company grows, keep in mind these two factors: capabilities and capacities.
Capacity is the easier part, and it comprises three things: people, knowledge, and technology.
Growing your Customer Success team by hiring new people will alleviate the pressure that’s crippling your existing team, freeing more time and energy to be devoted to planning ahead, getting to know customers, monitoring their health, etc. When hiring, you may want to consider which type of knowledge your new CSM should bring to the table: domain expertise vs. process expertise lend themselves particularly well to different roles and businesses. That same expertise should be cultivated and encouraged with your CSMs throughout their career - the more value they can deliver to the customers, the more successful they will be. Finally, technology allows you to “multiply” your existing CSMs by automating time and energy-consuming processes such as data collection, early warning systems, health calculations, and engagements. Technology allows you to make sure close to nothing slips through the cracks, and this is the first step in making sure your CSMs stay focused and efficient.
When it comes to growing your team, the exact ARR at which you should consider investing in a new CSM depends on your business model. Customer Success and SaaS expert Jason Lemkin gives this rule of thumb for hiring:
However you do it, $2m ARR per Customer Success Manager — but hired in advance, not arrears — is a solid model to scale with. In fact, if you can afford it, you may even want to take the hiring in arrears to the next level, and hire one CSM per $1m per ARR or so, if you are growing reasonably quickly.
The capabilities you should build as your company grows depend on your business, but some aspects are common for all fast-growing companies.
First, you want to know what your Customer Success mandate is, and which strategy you are putting in place to achieve it. Where does Customer Success begin, and where does it end? Both your team and your C-Suite must understand and buy into your strategy before anything happens.
As your company grows, you need to focus on specializing your CSMs’ areas of expertise. And as specialization increases, you should put in place a talent management strategy. As specific skills become required of your team, evaluation, training, and compensation systems need to be built.
Processes and playbooks management: with a small team, processes are manual and ad-hoc. As the team grows, you need to make sure not everyone isn’t doing the same thing completely differently. Standardizing playbooks such as renewal or implementation is key to growth.
Growing capacity without growing capabilities means you’ll end up with a team of disorganized, heterogeneous individual CSMs doing everything differently and without a common end goal.
Growing capabilities without adding on the capacity you need will lead your Customer Success team to operate too rigidly to handle the various situations they may face.
The only viable way to adapt your Customer Success as your company experiences growth is by taking the middle path - adjusting capacity and capabilities simultaneously.
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