As the SaaS industry matures, business models mature as well – including pricing. How can Customer Success Managers manage to stay relevant?
We have a candid chat with YK, former Head of Customer Experience at Sendbird – and now, co-founder and COO at Kaldea – about the impact that pricing models and the involvement of subject matter experts could have on the evolution of the CS role within organizations:
1. Pricing models can help align to customer expectations – and, therefore, success
For software companies, general pricing model evolution is best. You’re going to get customer trend pressure here, either to go by seats, subscriptions, or consumption, and that is going to heavily sway what Customer Success has to do. Is it consumption? Or is that Sales? Or is it Professional Services?
If you’re consumption-based, a lot of the Customer Success work gets put on the Account Manager.
Increasingly, I see a preference towards that model because it means you sell what you know the customer can use, and the customer buys when they are using it more, and then they pay when they use it. So ideologically, this is really perfect alignment.
2. What happens to the Customer Success function as the business model evolves toward consumption?
But if it's a consumption model, I definitely see much more Customer Success, the usage part, getting levied on to the Sales account owners. So usually Account Managers rather than Account Executives. They would be really geared up on driving usage and adoption.
Customer Success, in that case, a lot of the time comes in as a kind of professional service on a project-by-project basis. Or on a retainer model with a TAM model, like Technical Account Management. But then, at that point, that TAM isn’t really Customer Success. It’s closer to Solutions Engineering, or Solutions Architects.
So on a strict consumption model, and when product-market fit is really high, and the company has really high confidence that a customer can do most of the job on their own, and the product does most of the job, like Snowflake, you will start to see that get more transferred over to Account Management. So it’s almost like you don’t have Customer Success Managers.
3. If Customer Success folks want to be trusted advisors, they’d better hire for subject matter expertise
One of the new things that I’m seeing is Customer Success Advisor positions.
How you hire [for this position] is you hire your customer. So you would actually meet the customer, not like, ‘Hey, I have an onboarding playbook for you.’ But more like, ‘Hey, why did you not do X? What’d you do in your last project?’
Today, if you meet most Sales or Customer Success, they are knowledgeable about their product, but they may not be as knowledgeable about [the customer’s] job. But now we’re seeing that there is quite a bit of that space to bring on subject matter experts inside your company. So you need a doctor, if you are a medical industry service. You need a scientist if you are in natural science; if it’s for an education, you need a teacher. That is one trend we’re seeing as companies start to scale up-market.
Thanks to YK for educating Customer Success folks on how to stay relevant in the world of SaaS business model evolution!