Customer Success Manager Roles and Responsibilities

Customer Success Manager Roles and Responsibilities

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The number of organisations employing Customer Success Managers has grown dramatically over the past five years.

This post outlines exactly what CSM’s do, why they are important and the KPIs they use.

Customer Success Manager Interest over time
Google Trends Customer Success Manager Interest over time
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Why Customer Success Managers Are Needed

Over the past 10 years software companies, in particular, have dramatically changed their business model from selling a single perpetual licence to use their software to selling a recurring (monthly or annual) licence to use their software. 

This has enormous implications for how they manage their customers.

In the past, once a customer bought their software there was little incentive to keep them happy as most of the revenue had been captured in the big upfront licence fee. 

But now companies have a vested interest in keeping their customers happy long after the first purchase because revenue continues to flow month after month and year after year.

Customer Success Managers are primarily responsible for managing customer relationships to keep customers happy, engaged and customers as long as possible.

While this trend started in software companies, it is applicable to many B2B companies that have long term engagement with their customers. Those companies are now commonly employing CSMs to help manage the long term relationship.

Key Customer Success Manager Tasks

A Customer Success Manager helps customers to drive the maximum value from their company’s services so they stay longer and buy more. Their day to day focus is a combination of customer support, business analysis and sales.

The key elements of a Customer Success Manager’s role are:

On-boarding and Product Adoption

The first few days and weeks of any relationship are the most volatile and so it is with new customers. The customer needs to learn how your business and systems work. If it’s too hard they may leave quickly.

During On-boarding and product adoption, CSMs educate the customer on how to most effectively use the product or service. 

This can include training, documentation, tutorials, and even providing feedback to the development team on re-designing the product to make it easier to use.

Reviewing Use and Helping Customer Succeed 

CSMs must understand the customer’s business and their use of the service to help them drive the maximum value from their service.

Business Reviews and Quarterly Business Reviews (QBRs) are commonly used tools for getting a deeper understanding of the customer’s business and service usage.

The overall business review process will often be managed by the CSM but they may include senior management in their own business as required.

QBRs help the Customer Success Manager understand:

  • How the customer is using the service – so they can provide advice on maximising the value created by the service
  • Where the customer is having issues – so they can provide appropriate suggestions on improved training or different approaches.
  • Gaps in usage – so they can help the customer to make effective use of relevant aspects of the service.

This process has three steps:

  1. Collecting feedback – This is generally done via a survey (Net Promoter or other) of all levels of the organisation.
  2. Acting on the feedback – to correct issues
  3. Meet with client management – to discuss the feedback and agree actions

Driving Upsell and Cross sell

While it is the role of the account manager to sell to new customers. Customer Success Managers are tasked with selling more to existing customers.

Selling to existing clients is often the easiest sale to make and CSMs can drive substantial business value with this approach.

There are two ways to increase the value of existing clients:

  • Upselling: selling more of the same product or service to the customer, e.g. increasing credit card limits at a bank or adding more users to an existing system for a software company.
  • Cross selling: selling different products and services to the same customer, e.g. mortgages to credit card customers.

With their intimate knowledge of the clients business, CSMs are well positioned to provide suggestions on new or different services that help the client to be successful.

Recommended Customer Service Manager KPIs

Customer Success Managers have key metrics and measurements that let them know if they are being, well, successful. The three groups of measures typically used are:

Customer Lifetime Value related KPIs

As noted at the start of this post the role of the CSM is to sustain and if possible boost the lifetime value of each customer.

Customer retention rate (or churn rate) and recurring revenue are both linked to Customer Lifetime Value so most CSMs will be goaled on some combination of these metrics:

Customer Lifetime Value – directly using CLV is uncommon because it is difficult to calculate on an ongoing basis.

Retention Rate – calculated on a monthly or annual basis. This is simple to calculate with higher Retention Rates driving higher Customer Lifetime Values. 

Recurring Revenue – typically calculated as either Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR).  Again this is simple to calculate and is directly impacted by the CSM’s ability to upsell and cross sell to each client.

Customer Experience Related metrics

The common CX metrics of Net Promoter Score (NPS), Customer Effort Score (CES) and Customer Satisfaction (CSAT) are often used as CSM KPIs.

Care needs to be taken however when using these metrics as it can lead to score begging or gaming of the metric

Instead of using the score itself, companies can use the Survey Response Rate as a proxy for customer engagement with a lower risk of impacting the accuracy of data collected.

Product or Customer Health Scores 

Particularly in the case of SaaS software Customer Success Manager are often goaled on some type of product usage or activation scores because those KPIs can be good predictors of customer retention. 

These take a variety of forms but typically include:

  • User logins – how often and how many users are logging. Declining login volumes are an indicator the product is become less important to the client and they might be considering cancelling their agreement.
  • Product usage – how many of the features of the product is the customer using. If clients are using more of the product they are “stickier”. If their usage is stable or declining it may indicate less reliance on the product and potentially starting to use a competitor offering.

Customer Success Managers vs. Account Managers

While both CSMs and Account Manager sell, there is a distinct difference between the roles. Account Managers sell to new clients. Customer Success Managers sell to existing clients. Account Managers land new clients hand them over to the CSM to implement the project and look after them long term.

It’s common for the Account Manager on large or complex accounts to stay engaged with the client longer term but the day to day contact changes soon after the sale to the CSM.

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