Customer Success for Non-Tech Companies

By Kristen Hayer

Often when you hear the term customer success, especially here in the Bay Area, it’s related to SaaS companies.  Technology firms were among the first to give customer success its name and build it into their business models, and at this point is has become an essential department in any SaaS company.  While companies in many different industries see the importance of a team that supports customers and optimizes revenue, most of the articles out there are still very SaaS-centric. 

So, where do you start if you’re a non-tech company that wants to embrace the customer success function?  Here are some things to consider:

Which functions should your success team include?

Think about all of your customer-facing team members.  All of these folks contribute to the success and satisfaction of your clients.  Anyone who contributes to the post-sale (and sometimes pre-sale) customer experience should typically be a part of the customer success team – account managers, service personnel, and professional services people all generally fall into this category.

That said, a recent client of mine provides a great example of an exception.  They are a service organization where people (in their case, contractors) provide the ongoing service to clients.  The operations of that team are highly specialized and complex, so there is an entire organization devoted to the assignment and management of the contractor pool.  It doesn’t make sense to make that team a part of the customer success organization, but the two teams do work very closely together to optimize the client experience.

Should you automate parts of customer success?

Even though your organization isn't a tech company, there are still ways to automate customer success.  Think about retailers like Target and Home Depot: Self-checkout, price check machines and inventory search kiosks are all ways these businesses have automated to reduce costs and streamline the customer experience.

To decide which parts of customer success to automate (if any) think about your target market and your business model.  Do you target an audience that is tech-savvy enough to respond well to automation?  Or would automation backfire and increase the load on your customer service team?  Do you have a lean business model that requires automation, or can you afford a high ratio of service team members to customers?  If it is well-planned, tested and rolled out, automation can enhance your customer experience while reducing costs. 

How many team members do you need?

For SaaS companies, I advocate for a combination of top-down ($1-2 million in ARR per CSM) and bottom-up (desired weekly activities per client/# activities a CSM can accomplish in a week) analysis to arrive at the optimal number of CSMs.  Non-tech companies should take a similar approach, but the metrics will likely be different depending on margins, the business model and your desired client experience.

In non-tech companies who are just getting started with customer success, I think a bottom-up analysis is the most effective.  Start by thinking about your brand and desired customer experience.  Do you have a luxury brand that requires a high-touch customer experience?  Is your product or service complex and expensive?  If so, plan on fewer customers for each of your success team members.  Does your business model show thin margins?  You’ll need to get creative in order to provide a good, but low-touch client experience with fewer CSMs.  

What should your KPIs be?

Once you have figured out the focus and approach of your success organization, you can think about your KPIs.  In tech companies the KPIs for success teams are well-established: churn, expansion revenue and customer satisfaction.  Non-tech companies can use tech KPIs as a foundation for thinking through their own.

Churn – Effectively, this is whether or not the customer choses to continue buying from your organization.  For companies that have a subscription model, this KPI should be called churn.  Other organizations could have similar KPIs like retention, repeat purchases or repeat customers.  All success organizations can benefit from a KPI that measures customer stickiness, so think about one that makes sense for your team.

Expansion Revenue – This represents whether or not a repeat customer chose to buy more than they did the first time.  Again, if you have a subscription model, expansion revenue is the correct term.  Related KPIs are things like up-sales, cross-sales, channel or partner sales, and expansion potential.  Customer success teams typically influence these increases in revenue, if they don’t drive them, and this KPI demonstrates the revenue-creating power of your success team.

Customer Satisfaction – This KPI is an indication of how happy your customer is with your product or service, and can be a leading indicator of whether they will churn or buy more.  This KPI seems like a no-brainer for any organization, but the devil is in the details.  It is critical to measure customer satisfaction at points in the customer lifecycle where you can use the data to change outcomes.  Measures like NPS can be vanity metrics unless they are implemented in a way that allows your success team to reach out before it is too late.

As you create the customer success strategy for your non-tech organization, remember that you’re not alone.  Many other companies and leaders are in the same boat.  As you’re networking, ask others in your field about their customer success efforts.  You’ll find that most non-tech success leaders are open about their struggles and would be happy to have someone else to compare notes with.

Need help designing a solid customer success strategy for your company?  The Success League is a consulting firm that works with executives who want to unlock the retention and revenue a top performing customer success team will bring to their business.