You need to have clear executive support if your customer success program is going to survive. What metrics and measures do you need to prove the short-term and long-term value of their customer success investment?

I have had many discussions with customer success (CS) leaders about the challenges they face setting up a growing customer success team in an organization that has never had a customer success program.

Executive support for customer success is essential

There are numerous examples where SaaS vendors invested in hiring a customer success leader to build a customer success practice, and then soon after that, they cut the entire customer success program.

Most organizations use the wrong metrics to measure customer success in the short-term

Some fascinating insights emerged.

One of the most interesting insights to emerge was the idea that building an effective CS program and being able to gather metrics that prove its impact and value on the organization’s bottom line, requires a long-term commitment.

Metrics To Use While Maturing Your Customer Success Team

It takes time to:

1) Establish a customer success team

2) Train the customer success team

3) Build an effective, cross-functional methodology that delivers impactful customer success services to customers

4) Get customers to change how they are using your product/software/system to get more measurable business value from it

5) Gather the metrics to show the impact based on the work of the customer success team.

Along the way

You will inevitably make mistakes and learn as you move from establishing a customer success team to maturing it into a high-impact organization.

You will need to help internal stakeholders (e.g., executives, sales, marketing, product development teams, etc.) understand the importance of customer success and how they need to collaborate differently so that your entire organization has a positive long-term impact on your customers’ value. This is essential to increase your organization’s bottom line.

Manage Executive Expectations

Executive Meeting

Many organizations reported that their CEO and other executives expected rapid results.

They looked to see fast improvements based on traditional customer success metrics(e.g., CSAT, NPS, MRR?).

The reality is that it takes much longer to see results.

Many CS leaders stated it typically takes 18 ? 24 months to get reliable measures and a solid baseline for these metrics.

Expectations vs. reality

Here is the challenge: Many company executives are tightly focused on quarterly measures ? such as sales, profit, growth, etc.

Executives expect to see short-term numbers that prove their investment in customer success is delivering the outcomes the business needs.

So, what do you do when you have a program that requires a long lead time to deliver the results you need?

How do you get your executives to “keep the faith” and continue to support the development of your customer success program?

Differentiate metrics to manage expectations

Metrics and charts

One thing you can and should do very early on is to identify and develop separate management metrics for both the short and long terms to measure the performance of the CS team in the short-term vs. the long-term.

Long-term “Performance Metrics”

Many customer success leaders are familiar with the various long-term metrics they can use to prove the impact of the CS initiative.

Executives frequently rely on metrics like Net Promoter Score (NPS), Customer Satisfaction (CSAT), Monthly Recurring Revenue (MRR) to measure the performance of the customer success program. Customer success automation tools make this data readily available, further reinforcing executive expectations for quick results.

You need to be aggressive in setting the expectation that just because these metrics are readily available (often in real-time), does not mean that the executives should see improvements here in the same time frame.

It’s vital that leaders agree on a time frame for establishing a baseline metric values.

Leaders then need to agree on how much lead-time is required to build, test, and mature your customer success capabilities before these long-term metrics reliably show trends and changes you can use to manage the business.

These long-term metrics can be thought of as “performance metrics”. They give you insight into how your operations are running so that you can evaluate what is working and what is not. They provide evidence on which you can make important decisions for improvement.

Your short-term challenge

A more significant challenge is proving the value of customer success in the short-term.

You need a way to measure and prove short-term progress before your efforts deliver the expected long-term performance improvements.

You need a way to demonstrate to executives that you are on the right track. You need to maintain their confidence that you are building the customer success infrastructure that will deliver the long-term business results they seek.

Short-term “Trajectory Metrics”

One approach is to work with the CEO and other leaders to map out all of the actions and milestones you need to achieve to build the customer success infrastructure necessary to deliver the long-term business outcomes they desire.

You can define milestones or metrics for completing key actions such as:

  • Hiring a customer success team lead
  • Meeting with customers to identify the services your customer success team needs to deliver
  • Hiring and training your customer success team
  • Developing your customer success processes and playbooks
  • Implementing customer success automation tools
  • Establishing internal practices to have CS collaborate effectively with sales, marketing, and product management

Focus executives on the short-term, trajectory metrics

Get the CEO and other leaders to agree on priorities and realistic time frames for completing these actions. Make sure these accurately reflect any resource limitations and competing work priorities that will limit your time to do the required work.

Get the CEO and other leaders to agree to use these short-term, trajectory metrics, and NOT the long-term performance metrics, while you build your customer success infrastructure.

Remind the executives that the “trajectory metrics” are appropriate because they give the best measure of confidence that you are performing against the path they agreed to build the customer success capabilities required to deliver the long-term business results.

Maintain Executive Confidence & Support

By agreeing and focusing on these trajectory metrics, you give the executive team the confidence they need that their investment in a customer success program that will eventually deliver the business results they need.

When you are in the process of building a CS program, it doesn’t make sense to use long-term performance metrics when you are not yet delivering the full services that will have an impact on the outcome of these performance metrics.

What you need in this early stage is a way to measure your progress and maintain executive-level support for your CS initiatives.