“If you don’t know where you’re going, you might wind up someplace else.”
Do you know where you’re headed with your Customer Success (CS) efforts?
Sure, you know where you’d like to be. You want loyal customers who promote your software to their colleagues and business associates. But do you have a clear understanding of where you are today and what you have to do to get to the next level?
Things change quickly as companies scale, and what worked for your business a year ago might not work today, tomorrow, or six months from now. That’s why it helps to consult a customer success maturity model—a chart that outlines where you ought to be at your current stage of development and where you should be headed as revenues grow.
A roadmap for customer success
The customer maturity model is a roadmap that outlines where SaaS companies need to be as they transition from a scrappy, ad hoc customer success effort to a robust program with optimized systems and processes.
Customer Success Maturity Model for B2B SaaS Companies
By the end of this short read, you’ll be able to figure out:
Here’s what the five stages listed above look like in more detail.
Stage 1: Ad Hoc
Companies with less than $2.5 million in Annual Recurring Revenue (ARR) are typically conducting their customer success efforts on a reactive, ad hoc basis. They may have a handful of newly-hired Customer Support staff who function as generalists, or perhaps the founders are still taking care of the customers themselves.
At this stage, a customer-centric startup won’t typically have any formal processes in place, and they can still get away with using Excel spreadsheets to record customer data. At the ad hoc stage, your main focus will be on acquiring new customers and ensuring initial renewals.
Stage 2: Repeatable
Companies with $2.5-10 million in ARR should be starting to come up with more detailed, specialized systems and processes. They’ll be busy onboarding CS staff (including CS Managers), and they should have a fully operational Customer Support team. At this point they should be using Client Relational Management (CRM) software with automated marketing tools (e.g., turn-key email and social media campaigns).
Customer success processes should be repeatable (as the name implies). In other words, the company should know exactly how to handle common customer outcomes and what measures to take to repeat their successes again and again. It’s also time to begin tracking things like Net Promoter Score and Customer Satisfaction (CSAT) from an automated fashion.
Stage 3: Managed
Companies with $10-20 million in ARR are at a point where they’ll want to start hiring director or VP-level CS professionals. These stategists will help map out and implement a larger, more robust plan for growth that accounts for an organization.
At this stage, companies should start using a powerful CS platform to segment basic workflows and start producing in-depth analytical reports. Health scoring and renewal management should be a key feature of this established and growing CS initiative.
Stage 4: Measurable
Companies with $20+ million in ARR should now have an established CS team complemented by a CS technology that allows the organization to continue scaling. The focus should be on driving the technology forward to increase workflows, drive better reporting and begin to think more predictably about revenue in the future.
At this point, it’s time to hire a Chief Customer Officer (CCO) to plot the course toward continual growth, giving an owner to the customer within the organization. You will begin to have leaders over Support, Implementation, Professional Services and Customer Success who will report to the CCO.
Stage 5: Optimized
Companies with $100+ million in ARR should have a fully optimized approach to customer success that spans the organization. They are engaged in continuous improvement, constantly refining the customer experience and increasing customer engagement. The company is using predictive analytics, value analytics, and value communication to encourage upsells and reduce churn.
Where are you on the CS maturity model?
Can you locate your customer success initiative on the first four rows of the chart (Strategy, People, Systems, Insight/Automation)? Do these positions correspond to your Annual Recurring Revenue? If you’re behind the curve on any of these things, don’t beat yourself up—but address the issue and fill in the gaps as soon as possible.
In the end, Customer Success should not be an afterthought, and if you wait until you notice excessive churn to start thinking about CS, it could be too late to recover.