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PRESENTS

2013 STATE OF THE PROFESSION:


CUSTOMER SUCCESS

TABLE OF CONTENTS
1. The Average Customer Success Prole..............................................................4 2. Our Customer Success participants............................................................................................... 2.1 Participant title breakdown......................................................................................6 2.2 Where does their Customer Success function report to?..............................................7 2.3 How long has the Customer Success function been around?.......................................8 3. Top 10 Customer Success challenges............................................................................................9 3.1 Where else are Customer Success professionals facing challenges?...........................10 3.2 Analysis of Customer Success Challenges.......................................................................11 4. Looking into the Customer Success Toolbox................................................................................12 5. Anatomy of Customer Success Compensation.............................................................................14 5.1 Customer Success compensation structure....................................................................15 5.2 Customer Success compensation trends.........................................................................16 5.3 Things to negotiate for compensation..............................................................................17 6. Conclusion..........................................................................................................................................18 7. Infographic.........................................................................................................................................19 8. About Totango...................................................................................................................................20

WHO ARE YOU, CUSTOMER SUCCESS PROFESSIONAL?


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THE AVERAGE CUSTOMER SUCCESS PROFESSIONAL PROFILE


Title: Customer Success Manager Experience: 6.5 years in Customer Success or working directly with customers Background in: Sales/Customer Support Compensation Structure: Base salary + commission/ bonus Reports to: VP Customer Success Team Size: 14 people Weve had Customer Success for: 1-3 years Biggest challenges: 1. Lack of direction 2. Lack of tools/info to manage customer info Vertical: Computer software Education: Graduated with bachelors degree

MEET OUR SURVEY PARTICIPANTS


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BREAKDOWN OF PARTICIPANT BY TITLES


Our survey base spanned across multiple industry verticals such as: SaaS, analytics, broadcast, technology, email marketing services, call centers, project management, building systems, nance, automotive, and much more. We had a nice mix of participants from all levels ranging from Associate to Director to VPs of Customer Success.

19%

1%

Director Associate VP Manager

9% 71%

WHERE DOES THEIR CUSTOMER SUCCESS FUNCTION REPORT TO?


True to its inltrating nature, the Customer Success function has touched every department of an organization. This also makes it dicult to pinpoint who would be responsible for such a function. Many companies (47.1%) have dedicated a new organization to Customer Success, with 15.7% reporting directly to the CEO. Its important that Customer Success professionals are able to represent the customers at the executive level. For some companies, Customer Success is a fairly new introduction to their business processes; but there is a growing need for benchmarks and best practices to help instill this growth.
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Other 11% Client Services 3% Chief Customer Ocer 6% CTO 1% Marketing 3%

Customer Success 47%

Sales 10%

COO 3% CEO 16%

HOW LONG HAS THEIR CUSTOMER SUCCESS FUNCTION BEEN AROUND?


1%

26%

More than 3 years


37%

Between 1-3 years Under 1 year Just started

36%

TOP 10 COMMON CUSTOMER SUCCESS CHALLENGES


Most of the Customer Success professionals share similar issues - here the most 10 frequent ones (in order of urgency): 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Need direction/Lack of information/tools to manage customer info External communication (with customers) Adoption Onboarding Unclear denition or understanding of CSM role/customer culture Internal communication (sales and other departments) Product training Measuring and acting on engagement Lack of personnel in team Identifying at-risk customers

WHERE ELSE ARE CUSTOMER SUCCESS PROFESSIONALS FACING CHALLENGES?


Balancing time between selling/retention/relationships Retention/Renewals Customer employee turnover Accurate measurement/Analytics Technical Support issues Prioritize leads Budget Predict customer behavior Measurement usage/adoption Customer software usage

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ANALYSIS OF CUSTOMER SUCCESS CHALLENGES


37% of our survey population shared that Customer Success has been in their organization for more than 3 years, but still, as seen in the top 10 challenges, 13% complain that there is unclear denition/ understanding of the CSM role. In general, the Customer Success function is pretty new. Most of the Customer Success professionals have only been in this eld between 0-2 years. (41%). About a quarter (24%) of Customer Success professionals come from a Sales background and therefore may need direction or new tools on how to approach the customer from a dierent point of view, which is not pushing for a deal but understanding customer needs and leveraging their success.

Most frequently, these professionals ask: When does my role between reghter and customer advocate begin or end? My team is overwhelmed. The customer to CSM ratio is too high, how can I manage this eectively? What can I do when I feel like I have no authority or inuence on product decision or priorities? How can I convince our executives of the value of our work and not just another extra department? How can I improve communication with other departments like sales or support to solidify our customer understanding?
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Even though these professionals ultimately want to help the customer be successful, it helps to empower them with the right training and tools. Its important to help these professionals achieve the goal of being the customers advisor and advocate. A good place to start is to create a company-wide understanding of customer success: what does it mean? What is considered a successful customer? How can we bring the customers voice into the boardroom? It would be a good idea to introduce structured training for their customer success teams.

LOOKING INTO THE CUSTOMER SUCCESS TOOLBOX


TOP TOOLS USED DAILY IN CUSTOMER SUCCESS
CRM Other (social media, soft skills, etc) Communications Analytics Tools Proprietary (homegrown) Helpdesk Customer Engagement Management Oce Suite
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26.3% 21.7% 21.1% 11.9% 7.7% 6.2% 5.5% 5.2%

Salesforce was the big winner among our participants as CRM of choice, followed by social media and communications tools. Following close behind was the need for customer analytics. In order to better manage the customer journey, key data for Customer Success professionals comes from these customer intelligence tools to identify growth opportunities and at-risk accounts. One repeated comment from the surveyed participants who had to manually analyze their customer data was the need to have amazing Excel kung fu. Our Customer Success professionals made it a point to touch base with their accounts while also providing added value via video conferencing, personal emails, and monitoring usage.

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ANATOMY OF CUSTOMER SUCCESS COMPENSATION


Factor in experience and how established the customer success function is, and youll nd theres a great range of how Customer Success professionals are being compensated.

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CUSTOMER SUCCESS COMPENSATION STRUCTURE


An interesting nd was that a majority of customer success professionals are compensated rst with a base salary then with added perks like commission and bonuses from the success of their accounts.

7% 17%

Base+Commission/Bonus Base Only Commission Only


76%

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CUSTOMER SUCCESS COMPENSATION TRENDS


Altogether, 91% of our survey participants received a base salary. From that number, 64% also received a bonus in addition to the base salary, while 33% received commission for upsells/renewals in addition to their base salary.

91%$ 64%$ 33%$


Base Salary Receive bonus in addition to base salary Receive commission in addition to base salary

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THINGS TO NEGOTIATE FOR COMPENSATION


Heres the breakdown on how Customer Success executives are being compensated for commission and/or bonuses: ! ! ! ! ! % of sales % of renewal revenue, quarterly % of upsell revenue % of project value % of target met in relation to available bonus ! ! ! ! ! Reverse % of churn Team performance Personal performance Company performance Set percentage

In some cases, a certain threshold must be met before commissions/bonuses are activated.

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CONCLUSION
The Customer Success function is starting to emerge at all organization levels, including executive ones. Customer success professionals come from varying experience and backgrounds, but their goals are the same: reduce churn and earn customer loyalty. Here is the 2013 State of the Customer Success Profession: 1. Customer Success is still emerging (and growing). Businesses are in the process of trying to understand how to organize customer success and manage compensation. 2. Businesses are missing the Customer Success Playbook. They are guring out how to dene the role of Customer Success. What are their goals? How is their performance measured? How can this role be more integrated in other aspects of the business? More importantly, they need internal buy-in by upper management for more successful adoption. 3. There is a need for the right technologies and tools. Being able to narrow down the wide array of homegrown or scattered tools will help streamline customer success processes. Customer Success professionals are looking for better ways to prioritize accounts, monitor and analyze, as well as improve communications both internally and externally.
Learn more about being a Pro-Customer Company at www.totango.com

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ABOUT TOTANGO

Were a full-service Customer Engagement Management platform for online businesses. Totangos Customer Engagement platform helps online services create an active and engaged user base. Totango combines big data analytics with powerful segmentation and engagement tools to allow online services to take the right actions with each customer, in real time. End-users become happier and more successful driving usage and adoption, increasing conversions, sales and lifetime value while reducing churn. In the Customer Era, the whole dynamic and interaction model between vendors and users have changed. Whether its for Customer Success or any function in your business, Totango was built from the ground up to help businesses deliver more value and drive more active and engaged users the foundation for business success. Find out more or start your free trial at www.totango.com.
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