Setting up new Customer Success Department

Anastasia Magnitskaia
Anastasia Magnitskaia Member Posts: 18 Thought Leader
First Anniversary
edited August 2023 in CS Org Conversations
Hello everyone, 

This post is to help someone in the GGR community who is looking for some insight. 

Here is a scenario: You are hired to set up a new Customer Success Department. There department currently functions in a more reactive manner rather than proactive. Currently Customer Success Department is more of a cost of doing business, rather than a function of growth. How do you change that mindset across entire company, including Senior Leadership team? 

Thank you all for your input.


    AGUSTIN BIAUS Member Posts: 1 Navigator
    edited January 2021
    I would love to hear your ideas! I'm actually in that exact position of having to set a new CS team and make it part of a more proactive team rather than reactive.
  • Jordan Silverman
    Jordan Silverman Member, CS Leader Posts: 109 Expert
    First Comment 5 Likes Photogenic First Anniversary
    edited January 2021
    First off - this is always a challenge if your leadership team is not bought in or you are inheriting a reactive department.

    When I joined my current startup about 4.5 years ago I sold management by talking about two things:
    1) Net Churn
    2) Referrals

    Net Churn: We are all familiar with the concept of net churn. If you are able to show the business impact over 3-5 years of net churn it is undeniable. Helpful Redpoint article here -

    Referrals: This is how I really sold management on why customer success needs a seat at the table. Happy customers = more customers. Currently 40% of our new revenue comes from upsells and cross sells from our existing client base. Plus referrals close at a 50% rate from lead to close. Sales will have ups and downs - but if you can build a pipeline of leads and MRR from existing clients that can scale tremendously.

    I told our team that without customer success these two things would fall by the wayside. By showing numbers I was able to make CS a priority and it has been since!
    Jordan Silverman
    (914) 844-5775
  • Rob Kagan
    Rob Kagan Member Posts: 12 Contributor
    First Comment First Anniversary
    edited January 2021

    I usually start by creating a customer journey map - complete with touchpoints and pain points.  Love to use color for emotion on the map to show good and bad experiences (on average).  Understanding that customer success is just one part of the customer experience is the key.  ex. We do not think of billing as part of customer success but it crucial to the customer journey and their experience.  All you have to do is think about your last - hell - any of your interactions with your cable company.  Most times it has to do with billing, or the call center getting to a billing person.  This can be a major pain point and should be part of the overall discussion.

    So when we think of creating a CS department or new team or new responsibilities...It helps to start from scratch and see the big picture. 

    Obviously there is so much more...just thought I would throw in what I see people gloss over when they start this journey.
  • Jon Johnson1
    Jon Johnson1 Member Posts: 5 Seeker
    edited February 2021


    Fantastic point of view! I always love the "big picture" as a place to start. It truly is as simple (and complicated) as "show the business impact" of these actions. Then, the conversation is focused on how we can improve that impact. Instead of trying to justify the cost of headcount.

    Super insightful approach here.

  • Wayne McCulloch
    Wayne McCulloch Member Posts: 14 Contributor
    edited February 2021
    Hi @Anastasia Magnitskaia,

    What a great position to be in.  Building a great CS organization is one of the most rewarding career experiences I've ever had.  Even though I've posted this elsewhere in the community, I thought it might help you create a framework foundation to build from:

    I use something called the 7 Pillars of Customer Success framework which uses a CS Tool Box consisting of 10 essential tools:
    T1. Moments of Truth (customer journey map exercise)
    T2. Playbooks
    T3. Customer Health Score
    T4. Customer Risk Framework
    T5. Customer Success Plan
    T6. Segmentation
    T7. Voice of the Customer
    T8. QBRs/EBRs
    T9. Customer Delight
    T10. Metrics
    Note: these are the tools that you use to Operationalize Customer Success in your organization (which is Pillar #1) and they are designed to shift your CS org from reactive (CS 1.0) to Value Driven (CS 2.0).  This also begins to move sentiment within the organization towards understanding how CS drives retention, expansion and advocacy which benefits all. 

    For an immediate action, you could also target something important to your org that will shift the mindset away from where it is today.  For example you could build a CSQL process (customer success qualified lead).  This will funnel new sales opportunities into your sales team without your CSM's "selling" in any way, they are simply doing what they have always done.  You use "up-telling" as a strategy (introduce new use cases and ways for the customer to drive value from your solution).  These CSQL's usually close approx. 80% of the time, which compared to typical marketing qualified leads (MQL's), which close at 15% of the time, is pretty awesome.  Now you are aligning with the field who sees a CS org not just retaining, but helping to expand customers.  Optionally you could create a spiff on CSQL's that close for the CSM's to benefit from expansion but that depends on the culture of your org and team (we use 1.5% of the deal value as existing customer expansion revenue is way more profitable than new logo revenue so it's easily affordable). I've attached a workflow on who the CSQL works (note: putting into the CRM is best for governance and reporting of impact).

    There is a lot to unpack here for sure (6 other pillars), but having a consistent way to communicate what the organization does, and then via the tools above use data to demonstrate value, the process to change the perceptions of the organization can begin to take hold. 

    Happy to explain more on any of these areas if you think it will help!

    Good luck!

  • Daniel Hoesing
    Daniel Hoesing Member Posts: 6 Seeker
    edited February 2021


    The first thing IMO is to capture all the virtual dead customers, those customers that have churned.  (You may need to develop a written definition for the moment of churn even if you have contract renewals)  Once you have this group, you can start identifying common characteristics that precede the churn.  None of the below is one and done, it iterates over time, Except for #0… maybe.

           0.  Define the moment of churn

    1. Get a list of the reasons customers churn and define it in writing (from examining the dead ones)
    2. Identify risk events that precede the churn and how to get back off of risk (document and define them - harder than you think!)
    3. Validate everything with the team as you go and refine the definitions
    4. Develop systematic reporting in whatever system you have so you have an idea for the scale
    5. Start developing customer scenarios from the largest risk reasons (how customers experience this risk and what they need)
    6. Then develop play books that address those needs. 

    This is not a pitch!  But... if you were Sales or Marketing, you would have already hired someone to help you with this.  There aren't an infinite number of reasons customers leave companies.  It will take months if not years to compile this from scratch - you can make progress, which is great and should keep your boss happy - but factor in the number of customers you may lose in the meantime. I suggest you find a professional who has done it.  They should be able to provide you with a high level assessment of what it would take to get you up in running and working through the iterations that are required.  Very difficult to do while you are also dealing with the demands of your day job!  DO NOT BUY SOFTWARE until you do this process work!!

    Hope this helps, good luck in 2021! 

  • Srikrishnan Ganesan
    Srikrishnan Ganesan Member Posts: 26 Expert
    edited February 2021
    Love the 2 things you've chosen.

    Building strong, reference-able customers will be a gift that keeps giving. So the importance on growing those cannot be overstated. Reactive teams without the support of the org cannot create more of those reference-able customers.