What is customer success?


Customer success (CS) is a commonly-used phrase in business today, often confused with customer experience and customer service. Let’s start with some definitions.

Customer service is responding to customer needs and concerns via various communications channels such as phone, chat, email, and forums. This can also be called customer support or customer satisfaction. 

Customer success is working with a customer to ensure they get both initial and long term value from the product or service you are selling by performing onboarding activities and periodic check-ins over time. To put it simply, customer success is the accumulated success achieved by a customer, made possible through a mutually-beneficial relationship and collaboration between a software provider and its customers. Customer success management is the process of creating customer success and its outcomes. 

Customer experience is the culmination of the total interactions that a customer has with an organization, including support, success, and service, plus additional interactions like onboarding, upselling, cross-selling, surveys, emails, newsletters, social media and more. You can think of customer experience as the umbrella under which terms like customer service and customer success are under. 

Below, we clear up the confusion around what customer success is. We also explain how customer success is dependent on, and interconnected with, an entire organization, both from a revenue and a collaboration perspective.

Customer success in go-to-market

According to Gartner, a go-to-market (GTM) strategy is a plan that details how an organization can engage with customers to convince them to buy their product or service and to gain a competitive advantage. It was once thought that go-to-market was owned by the marketing team or even the sales team, but today’s go-to-market think tanks include product and customer success in the mix and look at go-to-market strategies collectively across these teams. Why? Because so much of a business’s success depends on repeat customers, and customer success strategy is vital in retaining and growing your customer base.

What does customer success mean today?

To understand what customer success truly is at its core, it’s beneficial to first understand the evolution of customer success, and why it has become so important today. Customer success is associated with repeatable, renewal businesses, so it is most often associated within the realm of B2B Software-as-a-Service or SaaS businesses.

The idea of your customer being successful using your product is simple to grasp. To conceptualize it in the way it’s being used today, we must look at the birth of modern-day cloud computing.

Cloud computing becomes mainstream

Image representing cloud computing

Until 1999, computer software was sold on floppy, then compact discs, that were installed on a local computer. When the software provider released an update, you received a new disc and installed the update yourself.

Then, something revolutionary took place. A sales executive from Oracle founded Salesforce, with a vision that in order to make powerful B2B software available to the masses, it had to be accessible through the internet.

A famous, though ethically questionable media stunt in 2020 by Salesforce announcing the ‘death’ of software with fake protests and news crews cemented the transition to cloud computing in the minds of 21st century business leaders. The time for the cloud had arrived. 

No longer would businesses suffer to install software, update it and manage it on servers internally. Those efforts would be placed on the vendors’ plates in exchange for recurring subscription fees which provided a more stable financial model. 

An unexpected challenge

When B2B SaaS products became popular in the early 2000s, vendors began to face a problem. They’d invested significantly in acquiring new customers and growing brand awareness, but hadn’t invested enough in customer training, nor thought about retaining these new customers and renewing their subscription-based contracts.

This frustrated customers as they were using complicated software but not receiving sufficient guidance on how to use it properly. Their customer questions and concerns were not being heard. When customers did not renew their cloud software subscription, they began being counted in a statistic known as churn. This is particularly concerning due to profitability metrics. When customers purchase subscription software, it can typically take several months before the vendor ‘breaks even’ on the account. Further, the vendor gets more profit from the customer the longer the customer continues to subscribe. This is known as lifetime value. High customer churn rates decrease customer lifetime value. 

Customer success is born

At that point, customer success arrived on the scene. It was the tool early B2B SaaS companies discovered and implemented to help customers derive more value – both initially and long term, make them more likely to renew, and slow customer churn. They realized customers had to be successful using their products, otherwise their recurring revenue business model might not survive. Customer loyalty and positive experiences became paramount.

Customers would no longer simply reach out to customer ‘support’ teams when they had issues. Instead, they would engage with customer ‘success’ teams to get initial value, provide customer feedback, and get continued, ongoing value from their monthly subscription. 

This planted the seeds that would grow into modern customer success and continue to define its evolution.

Defining customer success today

With that background in mind, here is a more nuanced definition of customer success:

Customer success is the end result of a multi-faceted, organization-wide effort to understand customer needs, challenges, and goals, then work directly with customers to meet and surpass those objectives.

This requires vendors to provide all the tools and education needed to ensure that customers: 1) understand the purpose of the product they’re using, 2) know how to use it effectively to drive their own business success and revenue growth, and 3) continue to use and grow with the product to make it more ‘sticky’ within their organizations.

Customer success in 2024: Who needs it & why?

B2B SaaS companies require a robust and experienced internal customer success function. Today, the customer success program and function of many B2B SaaS companies is one of the largest, if not the largest teams. They are focused entirely on educating customers on how to successfully use their software as it relates to each customer’s specific use case. Depending on the organization, they may handle renewals as well as expansion in the form of upsell (selling more of  the current product, e.g. more ‘seats’) and/or cross sell (selling additional products from the vendor), and even provide professional services for an additional fee. In general, they focus on customer happiness and look for ways to improve relationships with customers.

There are key customer success roles. Teams of customer success managers (CSMs) serve customers on a one-on-one basis with the end goal of driving their business success. Typically each customer has a dedicated CSM that understands their needs, challenges, and goals. CSMs support and help each individual customer achieve their unique goals and in a way that aligns with their operating practices.

This is necessary given increasing competition in B2B SaaS. The companies leveraging success programs are pulling ahead of those that don’t. Customer expectations now obligate B2B SaaS companies to do so.

Why is customer success so important?

Direction sign

Customer success impacts the rest of your business in many ways. It provides numerous benefits and involves many moving parts. In short, it’s all interconnected and it starts with a vendor’s employee satisfaction rates.

Let’s unpack this web of interconnectedness.

Employee satisfaction

Satisfied employees are more motivated to produce a high-quality work product. They pay more attention to customers’ needs, leading to a better customer experience.

Customer experience

When your company delivers a positive customer experience, it generates satisfied customers. They advocate for your brand and are loyal to it. They help expand your brand awareness through word of mouth advertising. This creates market trust and attracts new customers.

Organizations can deliver a better experience by leveraging the personal and historical customer data. This data is typically stored in a customer relationship management system (CRM). A modern CRM, one that is affordable, easy to use, and flexible to meet the needs of your team, is a solid choice since it may also offer apps on the same platform for marketing automation, customer service ticketing, and integrations. This provides all team members with a 360-degree view of the customer without having to log in to multiple systems. 

Customers benefit when a company uses a unified CRM through the increased quality of support and attention they receive from their vendor. Vendors benefit through higher rates of customer retention and lower rates of customer churn.

Customer churn and retention

The happier and more loyal customers are, the more likely they are to stick with your company over the long term. This reduces customer churn rates and consequently increases customer retention rates. Those two factors lead to further benefits for the vendor.

Increased revenue & business growth

When customer churn is low and retention is high, your company has a reliable source of recurring revenue. This is important to note because, on average, 83% of SaaS revenue comes from customer contract renewals. Happy customers can become brand advocates that you can leverage for tactics like online reviews, video testimonials, and referrals. 

This sounds like an easy-to-navigate process, but it’s more complicated than it appears on the surface.

How does customer success work?

What do customer success teams do? Customer success teams take the baton from sales once a new customer is acquired. CSMs’ first task is to conduct comprehensive customer onboarding programs, complete with extensive product training.

Customer success teams then continue to work directly with customers to ensure that success is achievable, scalable, and sustainable.

This requires customer check-ins, routine health checks (often called QBRs or quarterly business reviews), and a deep understanding of how successful customers are at any given point in time. It also requires CSMs to initiate additional touchpoints to ensure customers always have the tools they need and receive additional education when needed.

Customer success doesn’t start and end with onboarding, but rather it continues through a customers’ entire lifetime and relationship with the vendor. 

A key area of expectation for customer success is that they are aware of best practices with the product or service they are supporting. A good CSM will be able to listen to what a customer is attempting to accomplish as an end goal and determine what method is the best way to get there based on their experience with other customers in similar industries, in similar business stages, or with similar problems/issues to rectify. 

Ensuring long-term customer success requires customer success teams to have customer success playbooks that define actions that should take place at given points in the customer journey. For example, each customer success team should have a customer renewal playbook that is put into action when a customer’s renewal date approaches. CSMs can either conduct or support the renewal process. (Some companies now have renewal specialists that focus solely on renewals and nothing else.) 

Continuing the discussion

You now understand what customer success is and have a high level of understanding of how it works. Now you know it’s vital to make customer success an organization-wide priority.

Whether you have a dedicated customer success team or are not quite there yet, you know that helping customers success is vital to your organization and should be a priority for all teams. From sales and marketing to operations and product. From the most senior leadership down to the the basic contributors, helping customers success must be a focus for every member of your entire team. The literal success or failure of your organization depends upon it.

The feedback loop that starts with customer success feeds intel to the entire company, making customer insights the driving force behind new ideas for marketing, sales, product and more. It’s a vital function!