Developing a Scalable Success Team Structure

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By Kristen Hayer

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One of the questions we often get from our customers is how to build a customer success team that scales from a budget and business-model standpoint, while still providing a customer experience that is consistent with their brand. Many teams are either understaffed to provide the customer journey they want to deliver, or are being asked to cut costs or headcount.

To have a smart, data-focused conversation with your leadership team about these issues, I recommend performing both a top-down and bottom-up analysis on your customer success program. If you have your client base broken into segments, evaluate each segment separately. At this end of this article I’ll also cover a few other things to think about as you plan your team.

Consider Top-Down Budgeting Issues

Unfortunately, a number of industry benchmark numbers get thrown around, typically a specific amount of revenue per CSM. CEOs and CFOs love to refer to this, and often push for this number when budgeting for customer success. I won’t mention a number here because I don’t want to perpetuate this problem. As you’re figuring out the ratio of customers/CSM it is important to consider a variety of factors beyond budget, including price point, brand promise and segmentation.

If you’re being asked to plan your team with this revenue/CSM benchmark, go ahead and calculate the number of customers per CSM that benchmark recommends. Then look at the number. Does it make sense? Can you deliver the program you’ve promised your customers with that ratio? Do you have very different numbers across different segments? Ask yourself these questions and then…

Balance with Bottom-Up Activities

If your CSM program is well-structured, this should be an easy exercise. Figure out how much time it takes to serve one customer over the course of a month with your current program. Divide the number of hours a CSM is available to customers by the first number and, again, you’ll arrive at a number of customers per CSM. Compare this number to the number you got from your top-down analysis.

Do the numbers match? Fantastic! You’ve arrived at a ratio of customers/CSM your finance team can get on board with and you can use for budgeting. Is the top-down number substantially larger than the one from your bottom up analysis? You need to have a candid discussion with your finance and leadership team about what is realistic. Either the revenue/CSM will need to be reduced to match the existing customer success program, or the CS program will need to be scaled back so that it aligns with the budget. Doing this planning and analysis will prepare you to have a discussion about the trade-offs.

Don’t Forget…

As you’re planning your team you’ll want to consider a few other things. First there’s segmentation. Most customer success teams have several different models in place, from tech-touch through high-touch. Before you do this analysis be sure that you’ve broken your customer base into segments that represent groups you want to interact with in different ways.

Next, consider automation. Without tools to automate, you’ll need to keep your customer/CSM ratio fairly low. As you add automation you can decrease the amount of time it takes a CSM to serve their customers, and increase the ratio. Tools cost money, so you’ll need to make some budget decisions, but automation is critical to building a scalable team.

The bigger your team gets and the more tools you add, the closer you’ll get to needing a customer success operations person or team. This function can run your tech-touch program, serve as the administrator for your tool set, and perform analytics for your team. Just like the sales operations function, this role is critical to growth.

Customer marketing is also becoming an important, behind-the-scenes part of a customer success effort. With 75-90% of revenue coming post-sale, it is surprising that this is a relatively new role on most CS teams. Email campaigns and other one-to-many communication vehicles serve as the foundation for tech-touch programs, and can drive expansion opportunities as well.

Finally, don’t forget about leaders for your scaling CS organization. As you move up into Director and VP roles, you'll need to delegate some people management. When hiring and promoting, keep in mind that experienced leaders can typically handle 8-12 direct reports, and new managers shouldn’t have more than 6. As you build your headcount plan, be sure to add leaders when the time is right.

Need help developing a scalable customer success team structure? The Success League is a customer success consulting firm for executives who want to build and scale a top performing team. As a part of our Leadership Training Program we offer a class in Planning a Team Structure that includes tools, group discussions and best practices. For information on this and other programs for customer success leaders, please visit TheSuccessLeague.io