As digital transformation accelerated in 2020-2021, companies have invested heavily in their customer success (CS) teams. For example, more than 50% during the pandemic have a mature CS function, older than three years, and companies brought a sharper focus on retention, adoption & expanding segments where the churn rate was lower.
However, there’s also a shift in CS priorities as we move forward and the SaaS landscape evolves. Initially, customer success was built at the intersection of sales and marketing functions to create business value as an ancillary function to marketing, sales, and support to generate revenue. While revenues continue to be the underlying driver, the means for achieving that end have changed. As a result, CS is now looking to:
- Improve the health of each customer relationship instead of overall renewal numbers
- Prevent customer disengagement instead of only cross-selling and up-selling
- Drive customer advocacy in addition to top of the funnel marketing
As the role of CS changes, there is a need for greater collaboration with the product so that both move towards a singular goal: enhancing CX for more excellent retention and reduced churn. Unfortunately, in most companies, the collaboration between these two functions leaves much desired.
What Causes the Customer Success-Product Disconnect?
In a recent survey, when asked how CS teams spend their time, it is revealed that most of CS’s workday is collaborating with customer service/support.
- The majority of CS professionals spend over 50% of their collaboration hours working with support/customer service.
- A primary reason was to collaborate internal functions to improve operations leading with 45% and 43% on marketing.
- Product management brings up the rear, with only 29% of CS professionals reporting that they spend more than 50% of their collaboration hours working with the product.
So, what causes this disconnect? Despite customer success and CX hinging on the product and its features, why is it difficult for the two teams to align? It comes down to the following factors:
Product managers are used to 100% ownership and a micromanagement approach to leadership
The very nature of agile product development requires product managers to take a hands-on leadership role, which can veer towards micromanagement at times. Every feature and experiential aspect of the product is analysed after close involvement by the product manager. Understandably, product managers may feel confronted when CS steps in with feedback and market response after the release. Adapting to CS needs may require a strategic dismantling of the product manager’s approach so far.
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CS is still seen as an extension of service and sometimes of user research
In many ways, customer success is viewed as a support or service function, responsible only for post-release activities. In reality, CS will not only put out relationship fires, but it also serves as a conduit between the customer and product. What features are working and which ones aren’t? Is the learning curve too steep? How does the product fare against the competition in the real world? This information gathered by CS is instrumental when informing future product iterations.
There is a misconception that CS and product have conflicting interests and different priorities
This factor is perhaps at the crux of CS-product misalignment in most organisations. Perception is that CS is bating for the customer, with their interests and needs in mind – not necessarily putting business profitability first. On the other hand, the product puts functionality, feature differentiation, and UX design above all else, regardless of the precise market demands of customers ask. Organisational leadership needs to deliver the message that both functions make up superior CX that attracts, retains, and adds to the customer base.
There isn’t enough cross-skilling and lateral movement between the two teams
Finally, there is minimal lateral movement between CS and product, despite a clear overlap in skills and professional experience. A CS expert conversant in user needs and market trends is well-positioned to help build great products. A product manager who knows the ins and outs of the software is equipped to convince and convert the end customer.
Recommendations for CS and Product Management in 2022
In 2022, we expect demand for digital tools and software products to gain even more momentum, along with complex expectations from customers. As a result, both CS and product development teams will be under pressure, and without collaboration, neither can succeed. Unfortunately, right now, just 8% of CS teams engage in “extremely close collaboration” with the product – this has to be addressed in 2022 via:13
- Regular channels of communication between the two functions
- A CS manager working as part of the product for at least a few sprints
- Shared ownership of key activities like customer onboarding and product adoption
- Hiring for product teams from CS and vice versa
CS will continue to occupy a central role in organisational success in an increasingly digital world. You can read my take on customer success from the investor perspective and a CXO standpoint to know more about this vital issue. Comment below with your thoughts, or email me at Arvind@am-pmassociates.com to continue the conversation.
Arvind Mehrotra is a well-known thought leader, Strategic Advisor, and Board Advisor helping start-ups and mid-size organizations to develop strategic plans, mitigate risks, develop platform strategies, and scale their business. You can connect with him on LinkedIn here.
Published December 22, 2021, Updated July 25, 2022