In our first podcast episode of the year, “Your CS team is at risk of becoming the “everything department,” our guest, Customer Success veteran turned investor, Rav Dhaliwal, talks about what happens when Customer Success is an afterthought, why it happens, and what you can do to prevent it.
But let’s start from the beginning: what’s an “everything department?”
What’s an “everything department?”
At the early stages of a company and its growth, the focus is typically on product and engineering. Soon, that focus shifts over to sales and marketing.
But it’s at this point, just when the sales and marketing engine is getting up and running, that you’re running a very high risk of turning your Customer Success team into an everything department.
So what goes wrong? Well, it’s simple, really. You focus too much on sales and marketing, and you forget about what really matters: your customers.
Then what? What happens when you’re bringing on board more customers than you can handle?
As Rav Dhaliwal points out, “if you’re not optimizing for thinking about the customer beyond sales and marketing, what can happen is, you’ll get to a certain size and complexity or volume of customers. And then lots of things you hadn’t anticipated happen, or lots of needs that the customers have that you hadn’t thought about start to crop up.”
And that’s when you end up with an “everything department” trying to handle them all.
Customer Success as the “everything department” means that they end up doing everything that other departments either don’t have the time or the resources for. Or they end up just having to reactively jump on every issue that you would find while scaling an organization.
It’s not sustainable. It’s not scalable. And it can be detrimental to your business.
But let’s dive a bit deeper.
Why it happens
When customer needs come in at a faster pace than you can handle, there’s typically no organizational owner.
Because the root cause of the problem is: you weren’t anticipating these issues.
Next, companies find themselves in a scrambling effort to tackle customer needs they hadn’t thought about. And while this scrambling is happening, the business suffers a lot of problems that can propel into bigger issues that prevent growth.
“You could have really slow deployments or you could actually have a lot of product issues causing the customer pain. You may even start to see some churn for example. And so the natural instinct then is to say, ‘Well, let’s just build a function or an organization to take care of that.’” says Rav Dhaliwal.
And that’s how it happens. Customer Success ends up not being built for productive reasons, it ends up being built as a reaction to these unanticipated needs and problems.
Et voilà: You’ve got yourself an everything department. A Customer Success team that grows out of a reaction to unanticipated needs or challenges, and then either ends up owning everything that doesn’t fit – or wasn’t wanted – elsewhere in the company.
So how do you know if you’re running the risk of creating an everything department at your company?
Let’s take a look.
How to assess if you have an “everything department”
There’s a lack of industry definition for Customer Success. The reason? Customer Success looks different at every company; it depends on the company, the product, and the stage the company is in.
But unfortunately, that lack of definition causes problems.
As Rav Dhaliwal points out, “How would you know to build something if you don’t know what it is? Sales is very well understood by everyone. […] Marketing is very well understood. In tech, engineering and product are very well understood. Success is not. So if something isn’t understood and doesn’t have a clear definition, it’s quite natural for someone to not think about it.”
Your “everything department” assessment criteria
There are a couple of things you can do to figure out if your Customer Success team is the everything department in your company.
Ask yourself this (no matter the stage your company is in):
- Does your Customer Success function have a defined mission?
- Does Customer Success have a clear definition of the value it’s adding to customers?
- Does Customer Success have a clear definition of the value it’s adding to your company’s bottom line?
- Does your Customer Success function have materially important targets?
- Does Customer Success have access to important data that helps inform their decision making?
- Is there alignment between sales and Customer Success?
- Is Customer Success integrated into the selling effort?
- Does Customer Success have a formal feedback mechanism with the product team?
If the answer to two or more is “No,” it strongly indicates you might be in an everything department.
Dhaliwal also stresses the importance of data as a sole indicator of an everything department, “If you don’t have access to good data or any data, then you’re very likely an everything department.”
Alright, now that you know the indicators of an everything department, what can you do to prevent it from happening?
How you can prevent it
Preventing Customer Success from becoming the “everything department” starts at the very beginning of your journey as a company.
So let’s take a step back and look at the mission you’re on.
The mission you’re on, simply put, is trying to reach what we call product-market fit. That means building the best product for the target buyer that generates the most value for them – and for you.
So then the next question is: where does Customer Success play a part in that?
And the truth is that Customer Success plays a crucial role in achieving product-market fit.
Customer Success and product-market fit
First off, Customer Success is contextual, it’ll vary greatly depending on the company and how you’re going to do it.
But regardless, Rav Dhaliwal argues that some form of acceleration will take place. That acceleration can be anything that helps your customer get more value out of your product. Perhaps you bring deep technical knowledge to the table? Maybe you bring project and change management skills? It could be strategic skills that help your customers model their workflows in the most efficient way using your product – you name it.
While how you accelerate things might look different, what every good Customer Success team is trying to do, is speed up the time it takes for the customer to see value.
Let’s take a year year-long subscription, for example. If it takes them 10 months to deploy the product and see value, that puts you in a very high-risk situation. But then if you add Customer Success to the mix, they might help the customers see value in 30, 60, or 90 days.
Now, even if you don’t have that many customers yet, it’s still important to have someone who’s working with them to help them fully understand the value of what you’re selling. Because you need to be able to feedback what you’re learning to accelerate the product-market fit.
This is why it’s important to build out your Customer Success function alongside sales, marketing, and product, not as a reaction to problems those teams didn’t anticipate.
Establish a Customer Success function early on
Setting up (or at least thinking about) your company’s Customer Success function before kicking your sales and marketing engine into a higher gear is essential to sustainable growth.
Here are a few things to think about:
- Develop a solid understanding of Customer Success, what it is, and the function you want it to have at your company.
- Don’t see Customer Success as an add-on, but as a driver of real growth.
- Start thinking about Customer Success before you’re ready to bring onboard customers.
- Define what Customer Success looks like at your company.
- Establish roles and responsibilities across all departments to avoid lack of ownership.
- Identify the right Customer Success tools that can scale with you as you grow.
Remember, your sales and marketing engine will get the business going, but Customer Success is what will keep you in business.
Want to learn more? Listen to our latest podcast episode “Your CS team is at risk of becoming the everything department” and read Rav’s guest post on Scottish Equity Partners blog here.