MarketStar Blog

Key Insights

• It is easy to fall into the mindset that customer success is only about keeping customers happy. In reality, customer success is a vital domain that can help you reach your business goals

• Between building internally and outsourcing, the right decision lies in having a solid grasp on your needs, as well as confidence in yourself

• Take the time to make the right decision, and you will see a big increase in the lifetime value of your customers 

Many customer-facing business functions get outsourced regularly. Outsourcing customer success is a standard practice wherein technical teams are used on a contract basis.

So, whether you are in the early stages of developing a customer success team or revamping your existing CS efforts, you may wonder this question: Is outsourcing customer success right for me?

Bringing in an experienced external partner has its benefits, but it is essential to keep your short-term and long-term goals in mind.

Let’s look at the pros and cons of each setup and evaluate which will be the best fit for your organization.

What are the Pros and Cons of Building Internally?

An in-house solution might work for you if you have an organization at scale and the resources who can focus their time and energy on this function. 

The Pros

• Company Knowledge: Your people have complete knowledge about the company, its culture, your business goals, and every detail of the product or service. In short, you have a resource pool that has grown with you. Additionally, they share your vision and have been serving customers for years. All this knowledge is already in place when you get to build an in-house CS team.

• Better Control: You can have complete control of the entire team when it is in-house. You have power over the goals, strategies, budget, and almost everything that has been etched out by the team. So, if your customers are not happy with your CS team, the responsibility unavoidably falls on you.

• Ownership: You have complete ownership of the logistics. When companies sometimes break their partnerships with an outsourced partner, it becomes a daunting task to get everything under control. With an in-house customer success team, you need not worry about this.

The Cons

• Lack of Good CSMs: While it is one of the fastest-growing jobs in recent years, finding a good Customer Success Manager can be challenging. This is because the demand is much higher than the supply. It is also critical to keep in account that CSMs have a higher attrition rate, up to 20% year over year, according to TSIA’s State of Customer Success report.

• Consistent Training: If you are building an in-house customer success team, you need to ensure that you have proper training and change management processes in place. Your training module must also match the job roles of the different members of your customer success team.

• Inefficient Mapping: You have to segment your customers and then assign the relevant CSM for them. If this part is mismanaged, your customer success module will fail, as your managers will work on too many accounts. Consequently, your customers will be unhappy and might move to another organization with better customer support

What are the Pros and Cons of Outsourcing?

An outsourced customer success model is a viable path for businesses that need to expand their customer base quickly. Let’s look at some of the advantages and disadvantages of this model.

The Pros

• Streamlined User Onboarding: Increasing retention rate begins at onboarding. When you outsource customer success, your vendor will assign a CSM for each account, ensuring that your customers are comfortable and satisfied through their journey. Likewise, the Customer Success Manager will be instrumental in retaining a customer who is currently on a free trial by guiding them through the process. 

• Cost-effective: Building an in-house team involves more than just paying salaries. You need to consider employee benefits, ongoing training, software, equipment, and facilities. Add to this the high turnover rates of losing your customer success manager. You can save these costs with an outsourcing solutions provider that has already invested in these areas. 

• Expansion: Your customer’s lifetime value is primarily generated through renewals, cross-sells, and up-sells. When you work with an outsourced customer success team you will be better equipped to identify and convert valuable upsells and cross-sell opportunities. Consequently, you will create a more profound association between your customer and your product.

• Consistent Experience: Customer success is all about the customer. With an outsourced manager, you can ensure your customer experience is always smooth, even if there are transitions between various points of contact. This is especially important when about 80% of consumers will leave a product after just one bad experience.  

The Cons

• Trust: Establishing trust with an external organization can be hard. Your goal should be to find a solutions provider who is passionate about nurturing customer relationships and has established leading methodologies for customer success. Evaluating your ideal outsourcing agency will be a smooth process once you have done your homework. 

• Loss of Control: If you feel like you need to have visibility and control over every detail of running your customer success department, then an outsourced model might not be the right fit for you. Seamless collaboration can only take place when your outsourcing partner has control over how your CS module should work. 

Finding Your Fit

Between the in-house vs. outsource debate, don’t forget to look at the value of having a customer success function. 

Long gone are the days when customer success was viewed as a ‘nice-to-have’ function. More than 90% of organizations have identified customer success as a dedicated function in their company. 

The reasons to outsource customer success are umpteen and its benefits permeate throughout your organization and work at different levels for the overall success of your business. 

Consequently, decide after considering how a particular model will affect you in the long term and the cost efficiencies that will come with it.

Every customer journey starts with your sales team. Stop. Please ask yourself if you are liking the results. Are you accurately defining success for this team? How does your definition translate to the larger enterprise clients’ sales experience?

Key Takeaways

• There’s no exception that sales organizations have their work cut out for themselves

• Factors such as a competitive market and consistent growth agenda can take a heavy toll on the sales force, especially the sales operations team 

• As responsibilities grow, so does the possibility of getting it wrong 

• The good news is that such pitfalls can also be avoided if proper processes are set in place and the larger team understands the critical role sales ops play in revenue generation 

As sales transform in an increasingly dynamic market landscape, the importance of the sales operation discipline has taken off in almost every sector. 

Sales and operations planning is expanding rapidly to touch more processes, while shaping new workflows, driving better policies, and delivering holistic insight across the entire sales cycle. 

The report titled “The LinkedIn State of Sales Operations Report 2021” highlights the many ways in which the role of sales operations is growing.

According to the report, the role around the world increased by 38% between 2018 and 2020. Additionally, 49% of sales ops professionals feel that they are valued as much as any other sales professional in their respective company.

These numbers are a clear indicator of the discipline’s evolution. Its growth stems from two areas.

First is the vast amount of data readily available coupled with the number of data providers in the space. Second is the acute need of the sales operation team to synthesize this data to enable salespeople.

This also means that the responsibilities of sales operations professionals have increased. From determining which accounts to focus on to building relationships with existing customers and forecasting business performance, sales operations need to be at the forefront.

Regardless of the scope of responsibilities, some common pitfalls can hinder sales effectiveness. Think of your sales ops team as the behind-the-scenes revenue generator.

While value demonstrations, negotiations, and deal closing might lie at the front, it’s the actions taken by your operations and planning department that make it possible.

5 Common Mistakes to Avoid in Sales Operations

1.Lack of Data Ownership

In all probability, the data exists that will help the sales team with their pitch success.

The problem is that it is not properly managed and processed, putting a question on its accuracy. Data is also the foundation of sales operations which means that data ownership must become a core value across BUs.

Instilling a practice of data ownership in day-to-day activities is a must.

2. Higher Load of Administrative Tasks

While processes, roles, territories, and quotas are all meaningful work that sales operations are tasked with, they eventually get burdened with crediting decisions, exceptions management, comp administrations, and commission complaints to make any bandwidth for the tasks that matter.

If the sales operations and planning team are buried in an avalanche of sales administration tasks, it would be difficult for them to focus on the larger goal: driving greater sales productivity.

3. Absence in Strategy Discussion

Many times, the sales and operations planning team is just not part of key meetings and discussions on growth strategy and sales coverage. 

This exclusion often leads to misalignment between the growth objectives of the organization and the focus areas of sales operations. 

In the absence of clear definitions of the company’s future outlook, the sales ops team will wrongly prioritize tasks or investments of time and resources. 

Sales roles require perfect clarity of the product or service and the customers being targeted. The same applies to sales operations. 

For your sales ops, the customers are internal and products are the internal sales enablers.

4. Lack of Documentation

If you document it, you learn from your mistakes.

It’s essential to capture all the institutional knowledge and assumptions that go into planning. Companies can put a mechanism in place to capture such information from all the participants.

When this gets embedded into the plan, you can understand the context of the decisions and changes, even months later.

5. Addition of Shadow Resources

Helping your sales operations and planning team become the center of excellence for one or more functions requires commitment from the entire organization. When this single team is given this amount of attention, added responsibilities and bandwidth issues can hinder team performance, putting the team’s efficacy in question.

Rather than investing in duplicative shadow resources, business leaders must work actively with the team to understand pain points and bring relevant measures to resolve them.

How Can Sales Operations Be Improved?

A common theme emerges when we look at revamping the sales and operations planning team: to keep on top of things. To transform the team, business leaders should look at the following recommendations.

• A culture of internal audits for continuous improvement can help to eliminate bureaucratic bottlenecks. Admin issues should be assigned to the sales department. Field salespeople should have access to regular sales training programs. Tools and software should get regular updates to keep up with the times.

• It is also critical for the sales operation team to have a crystal clear idea of the mission and objectives of the company. The executive team must consistently communicate them so that all oars keep rowing in the same direction. 

• Quick fixes will not work for your sales ops team. Sales are meant to be fast. This means that you will have problems faster than the time you have to fix them. Instead of looking at temporary band-aids, try to fix the real problem. 

•  While there is no shortage of KPIs and metrics, it’s important to choose the one that fits your team. Even when you have the numbers, break them down and examine them carefully. Deep dive into the performance of your sales operations team and identify the areas where they have shined and areas where they may have to improve. 

Empowering Sales Ops to Go Above and Beyond

89% of sales professionals feel that sales ops are critical to business growth, according to “The State of Sales Report” by Salesforce.

Navigating the landscape of sales operations and planning can be tricky, with the mistakes leading to activities being derailed.

But with proper processes in place, there’s no telling how much your team can accomplish.

Key Takeaways

In response to the demands of physical distancing and work from home that came with the onset of the current pandemic, many sales organizations were quick in adapting to a virtual sales model that they hoped would only be a holding pattern until the situation “returns to normal.” However, what we are looking at is not a temporary disruption to the sales process and methodologies, but a thoroughgoing restructuring. While many of the digital shifts were already in play before the pandemic, the new normal requires companies to adopt them within much shorter timeframes. Sales enablement has a vital role in all of these changes as it provides a robust framework to support remote sales training and coaching, virtual selling, and the implementation of a virtual sales model that is appropriate for the emerging digital world. 

No sales rep succeeds on their own. Successful sales performance is the result of many factors. You need the right leads, the right sales pitch, the right conversion tools, the right customer service, and more. Sales success is the result of solid sales enablement, which is why successful companies are more focused on developing a frictionless, integrated sales process.

Key Takeaways

• Customer Success teams are at the forefront of helping customers achieve their goals. It is through them that a company optimizes its value in the eyes of their customers.

• In the dynamic marketplace we are in, customer success teams have become even more critical in the business growth of an organization. 

• It can also be a challenging task to establish an effective customer success function. 

• The demand for good CSMs far surpasses its supply. And unless organizations understand the core capabilities they require, the process will not bear fruit. 

When software-as-a-service became popular in the mid-2000s, vendors focusing on the business model faced a major problem- customer dissatisfaction. The product in question was complex, and many customers were unable to find value in it. 

This resulted in low adoption rates, which eventually led to greater churn. 

To counter the problem, companies began building customer-centric initiatives. Many created formal customer success functions with a unique set of tools and methodologies. 

In the aftermath of the pandemic, customer success services face a new sense of urgency around protecting and nurturing customers and enabling them to find success with the product or service. 

According to a Salesforce research, 89% of consumers are more likely to make a repeat purchase after a positive customer service experience. 

With the growing importance of retaining and maintaining long-term relationships with customers, customer success teams have become an indispensable function of any modern subscription-based enterprise. 

It’s undeniable that customer success has become the growth engine, with the potential of becoming a company’s most powerful asset. 

Deeply engaged with accounts, a skillful customer success manager (CSM) along with the entire team combines extensive product knowledge and domain experience with an intimate understanding of each customer and their objectives. 

But the backbone of a well-planned customer success framework is a talented staff. It’s the foundation of any robust customer success initiative. 

However, strong customer success leaders are in short supply. 

With an already stiff competition to recruit and retain the best in the field, many organizations are also unclear about the necessary skills for customer success management. 

So, how do you create a team that will amplify your customer success strategy? Have you set any expectations in advance? And if you already have an established customer success function, are you gauging their efficiency correctly? Let’s get started.   

What are the Top 5 Priorities in Building a Customer Success Team?

There’s immense power in great customer service. 

A company’s focus on customer success solutions heavily impacts its recommendations. It’s critical that 94% of consumers will give a company a “very good” CX rating and will be more likely to recommend it. 

As you get down to hiring your talent cluster, it is always wise to start with setting your expectations. Which roles are you looking for, and which skills will help you drive your customer success methodology? What reasons should you keep in mind? Some reasons have been listed below:

• Customer Retention: Customer success is about taking every step to ensure that your customers see value in your product or service, making customer retention a critical component. 

• Consistent Customer Feedback: In this, your customer success manager can help the organization get regular and detailed feedback from your customers. This can help other BUs such as sales, marketing, and product management teams to better align their strategies.

• Further Expansion: Upselling and cross-selling are an essential part of any customer success framework. By tapping on these opportunities, your customer success function will drive business growth.

• Brand Advocacy: While customer advocacy is usually a company-wide initiative, the customer success manager is responsible for guiding the customer throughout the journey, turning satisfied customers into loyal brand advocates.

With the why behind setting up a customer success function, let’s look at how you can make it a reality. 

1. Analyze Your Requirement

As a first step, organizations should examine their current team.

Link this information to the desired customer success outcomes, such as adoption, satisfaction, and growth. The insights you achieve will help you to transform your hiring and talent attraction processes.

2. Know How Many Members You Need

26% of respondents highlight that the typical customer success manager at their company handles anywhere between 51-100 accounts, according to a survey by Totango.

The number of people you require for an effective customer success framework depends on how many customers you check up on a weekly or monthly basis. Many organizations divide their customer base into three segments: High, Medium, and Low-Dollar customers. 

3. Create an Onboarding Process

It’s easy to assume that the ins and outs of your product or service are easily understandable to an outsider. But not everyone works on it every single day as you do, which means that what is straightforward to you might not be so for others.

An effective onboarding process can help your customer success team have a thorough understanding of the product, which, in turn, they will proactively use to help your customers gain value from your product. This saves the customer’s time in the early stages of their journey, and you benefit from a reduced churn rate. 

4. Upskill Your Existing Team

Equipped with the insights on your preliminary analysis of the team, you can deploy programs to build on capabilities. 

Many companies have established “field and forum”-based training programs where employees alternate between classes and apply them in the workplace. 

Ensure that you are creating personalized learning journeys since the strengths and weaknesses of each member of your customer success team will vary. 

5.Use Segmentation

Segmenting your customers can help your division of labor. 

When you divide your customers into groups based on shared features such as customer lifetime value (CLV) or geography, you deliver greater levels of personalized customer experience. 

Additionally, your teams provide contextual and relevant information. This type of segmentation can help you determine high-value accounts which require dedicated CSMs.

6.Get Feedback from Customers

How your customers feel about their interactions with your customer success team can help you assess their performance. This feedback is a simple yet effective way to boost engagement. Use this feedback to optimize your customer success framework.

Team Up for Success!

Companies derive more value when they identify opportunities to deliver greater value to customers. But few organizations have mastered this mutually beneficial relationship. 

Customer success management will only be effective when you have a team guided by the company's vision and mission. 

Looking to make customers your best growth engine? 
Benefit from a world-class CS strategy at scale with MarketStar.

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