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How to Lead and Scale Your Customer Success Program

By June 8, 2015Article

Editor’s note: Despite an emphasis on the customer success journey gaining momentum, we’re still in the early stages of these efforts. Consequently, software companies are launching programs and initiatives sometimes without knowing keys to success. We asked Lincoln Murphy, a long-time expert in SaaS customer retention and now a renowned expert in customer success programs, for insights and best practices in delivering the anticipated return on investment. 

Q: Our recently published annual SandHill study on the Software CEO / CFO outlook for the software industry revealed a trend that many of the surveyed companies hired a Chief Customer Success Officer (or Customer Success Manager or VP of Customer Success) in Q1 2015. What attributes, skills and knowledge are necessary for effectiveness in this new role? 

Lincoln Murphy: It’s critical that everyone – not just in the customer success management organization – clearly understands the customer’s “desired outcome” (which may vary across disparate customer segments / verticals). It’s equally critical that the customer success organization is properly equipped with the right people, defined processes and supporting technology to help customers achieve that desired outcome. 

That said, finding the right people for your customer success organization – from leadership to boots on the ground – is definitely a hot topic. And that won’t change; it will only evolve as new roles emerge and existing roles evolve. 

One of the most important hires in a customer success organization is the leader, such as a Chief Customer Officer (CCO) or VP Customer Success. Much like the VP of sales or marketing, this person won’t just manage the practitioners (customer success managers, ops, communications, customer marketing, etc.) but also will create and lead the customer success strategy for your company.

For your customer success strategy to be effective, cross-functional cooperation is required. You want a VP Customer Success (or similar level position) that can:

  • Sell the vision internally
  • Back that vision up by reporting on successes (and failures)
  • Tie the value of the customer success organization (as much as possible) to agreed-upon metrics other executives and key stakeholders buy into 

Q: What if the company can’t find someone with prior VP-level experience in customer success? 

Lincoln Murphy: You’re asking the leader to figure out how to support your business; so if you can’t find someone who has been a VP Customer Success before, I’d look to find someone who has taken a strategic initiative and operationalized it. 

The leader needs to know how to look at your company, your business model, the various incarnations of your product, the different types of customers, and all the other necessary inputs and, from that information, figure out a customer success operation model and org structure. 

You might take someone with zero customer success experience but who has a ton of strategic, enterprise-wide (though within the context that fits the realities of your company today or at least in the next 12-24 months), cross-functional development and implementation. 

Q: Are the most critical customer success leadership skills something that can be learned? 

Lincoln Murphy: At its core, customer success is a simple mindset of ensuring the customer achieves their desired outcome. So it is really something that can be learned. 

However, there is a criterion you want to ensure the leader has from the beginning. It’s easy to get excited about customer success at first; but a good customer success leader will know how to maintain – and grow – that excitement over time without losing momentum. That’s critical. 

Q: One of the comments made by several executives in the SandHill study is that they find it challenging to scale their customer success processes or program while still keep the customer-facing communications unique to each customer. What is your advice on how to scale the program? 

Lincoln Murphy: There are many ways to talk about scaling a customer success organization, but here are three things that need to happen: customer segmentation, automation and documentation. 

Q: Is this customer segmentation somehow different from other customer segmentation efforts in sales and marketing? 

Lincoln Murphy: There are at least two different reasons for segmenting your customers. One is simply on the financial value of the customer (high-revenue vs. lower-revenue customers). The second is what we call cohorts, and these cohorts might be segmented by customer size, expansion potential, industry or advocacy potential. 

No matter how you segment your customers, doing so is the key to effectively scaling your organization. 

Q: Please share some guidelines for customer segmentation according to the financial value of the customer. 

Lincoln Murphy: There’s a common belief that you should have one customer success manager (CSM) for every $2 million in annual recurring revenue (ARR). And for the most part that’s a nice benchmark. But that $2 million ARR for a SaaS company with a few five- or fix-figure annual contracts vs. one where that revenue is comprised of many two- or three-figure monthly subscription customers starts to make that CSM:Revenue ratio hard to wrap your head around. 

And of course, most companies don’t have just low-revenue customers or just high-revenue customers; many have both types of customers. 

While you of course want a long-term, high-value relationship with all of your customers, there are realities about how much you can actually spend to cultivate that long-term relationship with a particular customer. 

For the lower-revenue customers, you simply can’t spend as much to help them achieve their desired outcome, which ultimately means you need to take a one-to-many approach with that segment of customers. 

In contrast, not only can you afford to spend more to help higher-revenue customers achieve their desired outcome, but it is probably expected by the customer. Based on what they’re paying, they expect they’ll have certain resources at their disposal. 

Q: You mentioned automation is also key to scaling a customer success program. 

Lincoln Murphy: Customer success organizations should leverage automation where possible. If you think about it, all automation is, or should be, what we’d do manually if we had unlimited time and resources. Automation should simply help you scale what you’d do manually if you could.  

I hear all the time from companies that have “high-touch” models that they’d never “do automation” because it might hurt their relationship with the customer. I get it, but I see it as a misunderstanding of what automation is. 

Remember, to some degree, if you’re a technology company, especially software or SaaS, you’re basically in the business of taking repetitive manual tasks and making those more efficient for your customers to complete. You’re in the automation business. 

You’ll likely leverage automation less for your higher-touch customers, but that doesn’t mean you shouldn’t use it at all. Think about a negative change to a customer’s health where automation triggers an email to the customer, by all appearances, sent directly from the CSM. It’s meant to start a conversation with the customer. Automation ensures the conversation is started at the right time; but it’s meant to drive a deeper human connection. 

Q: What part of the customer success processes need to be documented? 

Lincoln Murphy: Actually, you need to centralize and operationalize processes in addition to documenting them. A customer success team should never stand alone in its quest to improve retention and help customers achieve their desired outcome. 

In fact, customer success requires more cooperation with, and assistance from, every other organization in the enterprise than any other group. And of course CSMs will often work with other CSMs. 

Documenting a CSM’s interactions with a customer will ensure consistency from CSM to CSM, eliminating a lot of the redundant Q&A that customers can find annoying. And it will keep critical information from falling through the cracks. 

If you want to take even more inconsistency out of the CSM to CSM hand-off process, further ensuring your customers will experience less pain, annoyance and disruption, then you need to ensure all your CSMs follow the same playbook or steps to take when a particular situation arises. 

Documenting your processes, workflows, playbooks, etc. in one central location will ensure all CSMs work with all similar customers (a certain segment, cohort, etc.) the same way. This type of setup is critical for CSM-to-CSM handoffs. It’s absolutely a prerequisite for scaling a customer success management organization. 

Lincoln Murphy is customer success evangelist at Gainsight.  He is also managing director of Sixteen Ventures and is an expert in SaaS customer retention and churn reduction. Contact him at or at 

Kathleen Goolsby is managing editor at