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How To Start a SaaS Customer Success Program

If you're itching to start a customer success program at your SaaS company, you've got the right idea. A customer success program can increase revenue at your company and even control up to 75% of total revenue.

But resources can be tight for growing SaaS companies. Before the money can start flowing, you need to decide how much effort to put into customer success. Should you start with a dedicated employee or team? What activities should you focus on first?

To find out, we gathered advice from CS and CX experts at Hubspot, Appcues, Slack, SaaStr & more.

Let's see what they say.

For teams on a budget, check out our list of free customer success tools →

Jump to:

What is a SaaS customer success program?

At Hubspot, Blake Toder helped his team improve revenue retention by 20%. Here's how he defines customer success:

“Customer success teams within SaaS companies are dedicated to helping customers achieve their goals. They optimize their company's value in the eyes of the customer by providing them with useful resources and reliable support. When successful, customer success teams foster and develop a mutually beneficial relationship between their company and the customers they work with.”

It's easy to mix up customer success with other customer-facing roles, like customer support. Here’s a quick rundown of the differences:

  • Customer success helps customers achieve their long-term goals. Ultimately, this team helps prevent customer churn by getting key account renewals and preventing cancellations. But customer success isn't just about retention; it's also about account growth. Happy customers are more likely to increase seat count and opt for account upgrades over time.
  • Customer support provides speedy resolution to customer issues & feedback. Their role is more reactive than proactive, and because they deal with so many incoming issues, they can't cater to individual customers as much as customer success.

Are you ready for customer success?

Even though customer success will make your SaaS business more money in the long run, it's a mistake to prematurely kick off a customer success initiative. If your SaaS business isn't ready, you could waste both company resources and customer goodwill.

Chart with criteria for whether your SaaS company is ready to start a customer success program

If you're not sure, we suggest asking yourself 3 questions:

1. Is your company B2B or B2C?

SaaS pricing is its own science, but as a very general rule, B2B SaaS companies can charge more for a product or service than B2C. This means that B2B customer lifetime value is higher, making customer success efforts here more lucrative.

2. How many high-value customers do you have?

According to customer success expert Mercer Smith:

“A good rule of thumb is to wait until you have higher-value clients who can take advantage of your customer success team’s work. For instance, if 80% of your customers make up 20% of your revenue, it’s time to build your customer success function."

If you don't have many high-value customers, you may need to figure out product-market fit before building your customer success program.

Not sure what makes someone a high-value customer? Look at these metrics →

3. Are your customer interactions low-touch or high-touch?

High-touch interactions are highly detailed, customized, and professional. If your SaaS company offers personalized onboarding (or customers are always asking for it), you're probably in high-touch territory. If your company has a product implementation team, or your sales team is actually doing implementation work, you're definitely high-touch.

How to identify which customers are high value

Let's say you're ready for a customer success program, even if it's just one employee reaching out to customers at the beginning.

How do you identify which customers to reach out to first?

While there are lots of metrics used to gauge customer value, we like Customer Lifetime Value (CLV). As business owner Tommy Landry points out in this Parlor article:

“If you know which customers are providing the largest contribution to your bottom line over time, you can better focus efforts for cross/upsell, customer service, and other perks.”

You can see the full CLV formula here.

Customer lifetime value formula for a customer success team

If you don't have enough data available to run the CLV formula, try using Net Promoter Score (NPS) to identify high-value customers.

Over 60% of the Fortune 1000 use NPS, so you'll be in good company. However, some critics say the score can be misleading, since it measures intention instead of action.

To solve this, Christina Stahlkopf of C Space suggests adding two more questions to measure customers' 1) active advocacy; 2) active discouragement:

"By taking the percentage of active advocates and subtracting the percentage of active discouragers, they can calculate something we call an earned advocacy score, an approach that we believe provides clearer, more detailed, and more actionable data."

When to start hiring for customer success

Now that you have a list of high-value customers, you'll want a dedicated team to work with them…right?

Actually, we've found that the earliest stages of a customer success program can be handled by employees from customer support, or a product onboarding team if you have one. These employees are already well-versed in the product, so it's not a stretch for them to have high-level conversations with customers.

That being said, veteran SaaS leader Jason Lemkin recommends hiring for a customer success role as soon as possible. With a team focusing on the right numbers, you should start seeing an impact on revenue within 3 – 6 months.

What should a customer success team focus on first?

Chart with steps for a customer success team to take when a SaaS company is early versus mature

Linda Lin knows a few things about new SaaS customer success programs — after working at Zendesk, she was the first CS hire at Slack. Here are our top takeaways from her interview with Brianne Kimmel.

Tips for a new SaaS customer success team:

  • Start by thinking about what your customers need, and what's the most efficient way you can support that.
  • Be scrappy — you have to think, "Is this a building block that needs to happen now, or can it wait?"
  • Your earliest customers are very different than your later customers. Early customers may be partial to giving product feedback, meeting other power users, and self-serving when you provide insider content like release notes. Get feedback and learn from them!
  • As soon as possible, get success stories from customers — your sales and marketing teams will thank you.
  • Customer health scores can be expensive to develop and fall flat on their face. They're more likely to be helpful if you have 1) SMB type customers; 2) a wide base of customers. If you have more upmarket, enterprise customers and a narrow base, a customer success manager's qualitative perspective probably outweighs a health score.
Workona workspace showing customer success docs from various cloud apps, all organized in one place

Bring it all together with Workona

Every customer success team needs a way to organize all of their customer docs. That's where Workona comes in.

Workona helps you organize all the links, cloud docs, & files for a customer account in one place. When you're ready to move to another customer, switching is seamless. Workona is the best way to make sure every team member has the details they need, so they can focus on the customer.