SaaS Customer Success Blog

Why customer support must come before customer success

whynotbothgif.gifCustomer support and customer success are related, but distinct practices. And customers expect both from mature companies.

Q: Which do customers need most, and which do they expect first -- customer support or customer success?
A: Great customer support is a market force in 2018. Build great support from day one. Then time the building of a great success team after.
You can't build both at the same time. So which to do first?

Why you can't avoid building a great support function first

There are patterns to successful companies. You can read them all day long on Hacker News for SaaS, watch the Sharks identify them on Shark Tank for B2C, or talk to your neighborhood friendly venture capitalist (you'll get a bunch of blockchain stuff nowadays). To all of these businesses regardless of industry, there's a normative pattern of success and growth.

If you follow that normative pattern, we can assume a few things about you as you grow:

  1. Competition: You have competition. They were here before you and are more mature, and likely farther along in this list than you.
  2. Product development: Your early product is focused and it loosely follows Lean Startup principles of, and you learn/measure/build in an iterative cycle.
  3. A functional experience: Customers expect your product to work most of the time. Working product is table stakes for customers to pay and not demand refunds.
  4. Help along the way: Customers expect you to be there when your product doesn't work, they need help, they need a refund, or have any other inquiry. Great support is an expectation of doing business nowadays; at least one of your competitors has it, and if not, they're getting it from vendors they use every day, like Amazon.
  5. Value creation: If your product and experience work well, you deliver the expected value that your customers were looking for customers. This is an economic expectation.
  6. Value expansion: Once customers see their intended value, they'll want more from you to expand upon that value. This is a behavioral expectation -- we can expect customers to behave in this way.

Support is the key to #3 and #4 above. Success is key to #5 and #6.

Great support is a market force and competitive imperative. You can't ignore that.

In 2018, great support is competitive imperative and market force. If you're a new entrant into an industry, I guarantee that at more than one competitor has great support already. You can't ignore that.

If you choose to ignore it, you can be like many other companies who have loads of "Customer Success Managers" and a team labelled "Customer Success"...the members of which are constantly sucked into help and support issues all day long, not focusing on value delivery and value expansion like they should. This is a confusing way to run a company; it's bad ROI on the success team to do success without support.

When should growing companies focus on customer success?

There are lots of high-leverage times to stand up a great customer success function.

Here are a few:

  1. After support: After you establish great support and are looking to expand the positive impact of your service team. This is the ideal time! It keeps you ahead of the demands of your customers, which is right were you want to be. And building out great support doesn't need to be complicated at a small size; it could be a matter of weeks. (In reality, many companies stop building out customer service after they establish basic support and take care of their new customers. These companies tend to have influential CFOs or short term vision. They usually get to)
  2. After the complexity: After your product reaches a sufficient point of complexity that users require human help to gain and expand value. This usually comes with a mission of "churn reduction" and looks like onboarding and "goal-based" help. Metrics like activation, adoption, and churn rate become key business goals.
  3. After the fall: If you don't manage or reduce that complexity, you'll inevitably have a churn spike and a big mess on your hands at some point as you grow. Establishing a team to manage existing accounts is absolutely imperative at this case. Some companies can manage to avoid "the fall"; most hyper-growth companies can't, without having established a great customer success function earlier on (immediately following establishing great support).
  4. After the ROI case: After your offerings/revenue opportunities expand sufficiently, you have opportunity for up-sell and cross-sell. At this point, a customer success team can carry an upgrade number and potentially a positive ROI for the business. Metrics of upgrade rate and PPR become more prominent at this time.
  5. After realizing you're playing the long game: After your upgrade rate has stabilized and the key opportunity becomes in keeping more customers, customer success teams again become appealing. Like with #2 and #3 above, this usually comes in the form of "churn reduction" as a core metric, but this time focuses on post-onboarding and very long-term value delivery from the get-go. NPS as a key business metric may make an appearance at this time, along with repeat purchase, retention, and TLV.

Not to belabor the point, but I'll do it one more time: the time for customer success is almost always after a key event in a company's growth or a after a key milestone/horizon.

With support being competitive imperative from say one, the best time to establish great customer success is immediately after establishing a great support function.

Predicting the day this all changes

I predict that in 5 years -- by 2023 -- great customer success will become a market force/competitive imperative/table stakes, just like great customer support is in 2018. The customer success industry and the progress of companies in search of customer value is just too fast and effective for this to not happen. Progress is on the march as you read this.

When success becomes table stakes like support is today, I'll personally throw a little party! It will be an exciting time in the industry of customer success.

Importantly, once success becomes table stakes like support is today, it'll pose a novel challenge for startups looking to grow their customer list. Successful, established companies will have happier customers on the whole, giving a further high bar for new entrants, even as switching costs of providers decreases in the modern economy. Plus, customer success will become an imperative from day one, increasing startup costs and dipping margins for new entrants. It'll be an exciting new set of challenges to stay ahead of that curve, once it arrives.

To RSVP to the 2023 party, drop me a note :)

PS: for an example of a time that a growing business failed to establish great support, look no further than the recent service-driven demise of Combatant Gentlemen, a suitmaker, as chronicled by GQ. Competing with Indochino, Blanklabel, and others, their pricing and social media marketing (reddit and styleforum, etc.) won then some accolades and a lot of orders initially, then things went bad...and got worse.

Topics: customer support customer success