Setting the Stage
Customer experience is crucial to Customer Success and the Buyers Journey. How so? Well, if the customer's experience aligns differently with their expectations, you may have some unhappy customers.
For instance, if customers pay more, their expectations are greater for the product or service. It's the same for Customer Success Programs; the more you pay, the more you expect from a CS team. Since there is a bit of overlap worth discussing, keep reading to uncover the crossovers.
Let’s start by breaking down the blog into the following types of customer tiers…
1. Default Customer Tier
Serves every customer, regardless of the customer size.
2. Small-and-Medium-Sized Business (SMB) Customer Tier
Serves small to medium size businesses or customers. Often, these customers hit under $5k in annual reoccurring revenue (ARR).
3. Mid Market Customer Tier
Serves larger businesses or customers. Hits between $5–100k in ARR.
4. Enterprise Customer Tier
Serves large enterprises or customers. Hits over $100k in ARR.
Now, let’s take a look at the needs of each of the listed customer tiers.
Foundation Customer Tier Must-Haves
1. Striving for Product Market Fit
Customer Success programs should include a clear path to product market fit. Though there is no rule of thumb on achieving Product Market Fit, from experience, I recommend having at least 100k in ARR before establishing a CS program. Passing customers to Customer Success too early can lead to misunderstanding customer pain points and desires.
2. Customer Support
Customers of any size should have access to customer support. Customer Success focuses on larger issues, while Customer Support addresses smaller or technical problems. Ultimately, Customer Support plays a key role in customer happiness.
3. Product Documentation
Product documentation is required to start a Customer Success program. If you can’t write down best practices and how-to guides for your customers to reference (if needed), your company may not be ready for a Customer Success program.
Customer Success Program Requirements
1. Customer Relationship Management (CRM) or Customer Success Platform (CSP)
Using a Customer Relationship Management platform or Customer Success platform will be a lifesaver in keeping track of customers. If you don’t already have one, it’s time to shop for one.
2. Customer Success Leader
Your first Customer Success hire should be versatile. Ideally, this hire will be in the weeds with customers but also think about the program at a high level. In addition, this hire should be able to fully understand customer pain points and your business to scale the Customer Success program. All in all, be sure to be strategic with your first Customer Success hire.
3. Customer Journey
As you understand your product and how it fits into customer use cases, you can loosely define the customer journey. Of course, the journey evolves with time, but understanding the ideal customer path is important.
SMB Customer Tier Must-Haves
Refer to the Foundation’s “Company Needs” subsection, as you will not need anything beyond Foundational needs
Customer Success Program Requirements
1. Automation Capabilities
If you manage the SMB tier with manual work, it will prohibit the program from scaling. Consider switching to automated messaging for customers to share information. Automation could be through a CSP or a CRM.
2. Customer Success Operations
Having a CS operations team is critical to managing a CRM or CSP. This team will strategize automation efforts. For instance, if the goal is a tech-touch customer success model, having a team with the skills to build out automated workflows and reports will be key to achieving this model.
3. NPS Scoring
Capturing customer feedback is a must. Since the SMB tier leans more on the side of automated communication with customers with minimal human interaction, a simple NPS score will indicate the state of your customers and the likeness of the product. Additionally, NPS scores will help with accurate renewal forecasting.
Mid-Market Customer Tier Must-Haves
1. Customer Request Process
Larger customer tiers mean higher expectations. Customers in this tier have greater expectations for bug reports and feature requests. You will want a process to set the proper expectations by sharing a rough timeline for when those requests or reports will be completed.
2. Aligning Sales and Customer Success
As the Customer Success team is more involved with the customers, you must set swim lanes for Sales and Customer Success. For example, are the Account Executives or Customer Success Managers (CSMs) handling renewals? Are Sales Engineers expected to stay on customer calls, or are the Customer Success Engineers (CSEs) handling those post-sales? There is no one size fits all solution here, so work together to determine what processes will work best for your teams and the company.
Customer Success Program Requirements
1. Customer Success Managers & Customer Success Engineers
Depending on the technical requirements of your Customer Success team, you’ll need to hire Customer Success Managers or Customer Success Engineers. The role hired depends on the alignment with the Sales organization and must be a requirement to scale Customer Success.
2. Capacity Plans
When you understand the needs of the CSM or CSE hired, you’ll need to decide how much of a workload they can handle. Simple products could have a 1 to 100 ratio, while extremely complex products could be 1:5 or even as low as 1:1. These ratios change based on customer size, too, so work with your team to understand their workloads and reasonable targets to achieve.
As ARR grows, NPS scores become less useful. Tracking product usage data and account sentiment scores will accurately reflect customer health. Understanding and tracking usage will help gauging the likelihood of renewal.
Enterprise Customer Tier Must-Haves
1. Customer Advisory Board
As you move into the enterprise market, the customer base becomes more strategic, bringing in over 500k ARR. With that, expectations of your product or service are even higher. These customers need one-on-one attention and often form personal relationships with the product team(s). It’s okay not to commit to every ask, but if they want something done that happens to align with your roadmap, I recommend prioritizing it. It’s also important to stay transparent with these customers on why things are not happening. Customers are often understanding with the whole truth!
2. Escalation Processes
It happens, things break, and it’s not always pretty. Hopefully, escalations are not common, but be sure to have a plan for when something could go wrong with the product or service. Expectations are internal and external. Like requests, customers usually need transparency during a rough patch.
Customer Success Program Needs for All Customer Tiers
1. Training & Onboarding
Larger customers tend to have higher turnover and new users more frequently. Therefore, having solid training and onboarding resources is vital. Consider creating videos or written resources for easy disbursement and host live support training for new customers.
When a large customer's usage hits the red zone or a champion leaves, it's unnecessary to create a new playbook each time. It's best to have a plan to track that playbook's performance. If you try the "at-risk" account play multiple five times and succeed four times, that's great! If you only succeed once, consider drawing up a new play. TL;DR have plans because it's easier to be flexible within them and iterate over time.
Customer experience is at the center of customer success. After all, as Customer Success professionals, we are here to help our customers use our product or service to the fullest to reach their desired goals and outcomes. Nailing down segmentation and customer tiers is a great step toward building a customer success program that is both scalable and effective. Vitally’s customer success platform was strategically built to execute effective customer tiering, playbooks, automation, and so much more, so it’s worth checking out.
This blog was written and contributed by Tyler Diderich. Vitally is proud to distribute thought leadership content to the Customer Success community, so if you know of an article or author with some Customer Success knowledge and wisdom worthy of endorsement, we would love to expand its reach. Reach out to email@example.com with all the details, plus visit our blog to read more Customer Success content worthy of your time.