customer success industry

Using digital tools, companies can scale their businesses without scaling their teams by employing technology to automate stages of the customer journey. According to this years survey respondents, 76% of Customer Success teams consist of more than 10 members, which is up 27% from 2020. Pools of success managers can be called upon as required, rather than necessarily limiting support to dedicated one-to-one CS management, although this can be employed when desired as well. Opinions expressed are those of the author. Why Should You Adopt Digital-First Customer Success? The completed analysis provides many valuable insights into the trends of the customer success profession, including the unique challenges and goals of the industry. This makes it easy for team members to quickly retrieve customer data and knowledge base information needed to provide solutions. This is consistent with the results of our survey, in which respondents stated that their CS teams use a wide variety of tools, including, in-house built tools (40%), Excel or Google spreadsheets (55%), CRM systems (64%), help desk tools (51%), survey or customer experience tools (49%), and Customer Success platforms (42%). With a great sales process, strong customer support and well-maintained relationships, you may even increase recommendations for your own business. Get answers to the questions on both you and your colleagues mind. As digital data and solutions give CS professionals more access to insights and help with automating repetitive tasks, CSMs in turn have more time to work on those key activities that deepen value for the customer. This idea is for support teams to develop more meaningful customer relationships. There were significant increases this year in the amount of time that CSMs spent collaborating with Marketing, Operations, and Sales, reflecting a greater emphasis on customer advocacy. In this blog, well take a look at how AI has redefined customer success in terms of digital technology and delivering success at scale. Revenue can be tracked for each team as well as for the company as a whole. Compensation structures have evolved to align with the increasing importance of customer success, reflecting a shift in revenue responsibility. And finally, as organizations continue to shift their focus towards these customer outcomes, CS professionals will continue to gain more responsibility for business revenue. This report not only breaks down what Customer Success Teams are trying to achieve and obstacles they face, but what resources they are employing to better integrate CS into their organizations and be more customer focused. The COVID-19 pandemic shined a bright light on the importance of growing and protecting customers. All Rights Reserved, This is a BETA experience. Success starts with existing best practices and CRM and extends with scoping, planning and tracking a customer's journey to success. In previous years, the focus of CS teams has been mainly on retaining customers and decreasing churn. This report provides valuable insights into trends in the CS profession; industry benchmarks for CS compensation, growth and maturity; and guidelines for how to adapt to a digital experience in an increasingly virtual world. Irrespective of technology, success comes from focusing on a customer-centric approach. According to survey respondents, the median salary for the Head of Customer Success is $130,000. However, as more teams are working together and engaging the customer throughout their journey, organizations need to break down the departmental silos and enable a holistic, orchestrated experience for the customer from the first-touch through purchase, onboarding, adoption and advocacy. CS professionals are shifting their focus from minimizing churn to fueling the flywheel, driving growth from expansion and customer advocacy. According to this years survey data, the median salary for a Customer Success Manager in 2021 is $94,000. Another CSM introduced himself and followed the playbook of seeking problems to help us solve. This demonstrates the increasing trend of companies veering more toward the circular flywheel methodology. This became even more important when COVID hit, as many companies did not know when or if they would be able to secure new customers, so they had to focus on generating advocacy and revenue from their current customers. Its a feedback loop of service delivery, support, improvement, success and surpassing expectations. Since Totango began this survey in 2013, we have seen steady growth in the number of organizations adopting Customer Success functions. It is true that a great many industries and businesses have suffered tremendous hardship during the pandemic to date. Now that CS is being recognized as a critical function for operationalizing success and driving revenue growth, we are seeing more CS teams reporting to the Chief Operating Officer (29%) and the Chief Revenue Officer (16%). You may opt-out by. When customers receive value from a companys products and services, they continue to buy more products and advocate for the brand, thus decreasing churn, and increasing renewals and product adoption. As a result, we are seeing a shift in the CSM to account ratio. This flywheel concept and the enhanced focus on customer advocacy and expansion are also reflected in the growth of collaboration efforts between CS and other teams throughout organizations. In private companies, we are seeing CS professionals being further encouraged to help grow the business by offering them stock options, reflecting the understanding that the health and happiness of a customer is tied to how much revenue can be generated from that customer. Artificial intelligence in customer success is no longer an innovation but an established best practice. We would not have coped as well in business or society if online shopping and streaming were not so advanced. Customer Success salaries are continuing to trend upward as the industry matures and businesses are placing more value on the expertise and responsibilities of these CS professionals. We predict an increasing shift in compensation structures with more Customer Success professionals receiving bonuses, stock/equity incentives, or commissions tied to revenue, which will increase average Customer Success salaries across the board. Seven Steps to Automated Customer Success Management, Click to download Totango's editable Customer Journey Map template, Conclusion: Embrace Digital-first Customer Success to Propel Your Own Success, Customer Success Metrics to Track & Improve, The 6 Key Areas of Customer Success Metrics, Defining Goals, KPIs & Your Measurement System, How to Build & Manage a Customer Success Team, The Importance of a Well-Structured Customer Success Team. PwC Cloud and Digital Transformation BrandVoice, How To Earn Cash Rewards For Everyday Spending. Then, sales reps can focus on bringing their impact to the task of customer success. They are currently building on the growth and success of the past few months as the world has pivoted from the physical to the virtual, and the trend will be for more services to go online as in-person experiences decline. Thats why sales professionals have been evolving from CRM to CRS, or customer relationship success. Even if your customer seems to be happy, there are always problems to solve. The COVID-19 pandemic and remote work mandates highlighted the need for, and value of, a digital-first Customer Success approach. By utilizing data-driven CS technologies, teams are able to gain a holistic view of each customer account, provide hyper-personalized interactions, automate repetitive tasks, and efficiently scale their businesses without having to scale their teams. When the ability to interact with them in person dissolved, organizations were forced to embrace digital transformation and empower remote teams to form and keep those strong customer connections in a virtual environment. When a number of different, disconnected systems are used, it makes it more difficult for companies to determine the root cause of issues like customer churn or how customers are engaging with the product. It's a philosophy that treats the customer as a unique individual with their own goals and needs. Data can be segmented so that each team sees the information relevant to the teams goals. This new digital-first paradigm permeates the way CS is handled, at every phase of the customer journey from onboarding through escalation, renewal and beyond. Its a necessity. Customer Success teams are continuing to grow rapidly, and due to the effects of the COVID-19 pandemic, the team sizes grew even larger and faster than in previous years. Theres no denying the impact that the COVID-19 pandemic had on the Customer Success industry. According to Customer Success professionals surveyed, the median salary for Directors of Customer Success in 2020 was $130,000. As CS becomes more infused into organizations, increasing collaboration between CS and Marketing, Sales, and other teams will be necessary as these teams will be required to access and act on the customer data in the same way that the CS team is doing using digital technologies. Customer Service vs. Account Management, Why Digital-First Customer Success Is Transformational. But life goes on, and this person left. These tools can be applied across every customer engagement model and tier, so team members are freed from handling repetitive work and can focus on handling tasks that are better suited to a human touch or engagement while managing more accounts. Technology can also help you manage your customer success teams more efficiently in order to deliver your customers better CS support. Digital technology is no longer just a nice-to-have or a complement to in-person experiences; it is now a necessity and is crucial to the success of CS. The shift towards a holistic flywheel approach that supports expansion and advocacy for driving customer and business growth is becoming more apparent. Obviously, it was a big loss for the first provider. There is also a new level of maturity as businesses are recognizing and expanding upon the value provided by these CS roles. Throughout this report, well explore the key findings we discovered during our analysis of the data, including: Totango has surveyed the CS industry for the past eight years to create this annual report, which delivers a yearly view of how Customer Success is changing and how its impact on business is perceived. You can streamline escalation management by combining digital monitoring and automated support workflows with digital support tools such as knowledge bases which give customers the answers they need to frequently asked questions. Customer success teams help customers reach their goals via their product or solution and close support. Modern CRM solutions must underscore this, but a concerted effort of reworking business processes, personalizing team deliverables and aligning with the new goal of customer success is also required. The evolution of CS platforms is enabling this holistic view of the business, making it easy to integrate data-driven tools and empower all employees to work with more agility, increasing operational efficiency and delivering amazing customer experiences. However, over the past 12 months and especially with the COVID-19 pandemic, that growth has been even more significant. Imagine if the pandemic had struck 10 years ago. And in order to attract and maintain these top-tier professionals, it is becoming even more important for organizations to focus on employee satisfaction. The flywheel re-envisions the customers experience to emphasize the continuity between the pre-sale and post-sale experience and between the way successful customer retention sets the stage for brand advocacy and the recruitment of new prospects. Achieving Organizational Alignment for Your Customer Success Team, Best Practices for Enabling Customer Success to Scale, Traits to Look for in a Customer Success Manager, Scalable Coverage Models: A Digital Approach to High Volume Customers, Setting Up A Customer Success Tech Stack Right, How to Pick A Customer Success Platform (Scorecard Included), 6 Essentials When Selecting Tools for a Customer Success Tech Stack, Why Business Intaelligence is Not Enought for CS Teams, Customer Success Industry Trends & Reports, 2019 State of The Customer Success Industry Trends & Report, 2020 State of The Customer Success Industry Trends & Report, 2021 State of The Customer Success Industry Trends & Report, Artificial Intelligence and Machine Learning in Customer Success. The expansion of these collaboration efforts further demonstrates the increasing understanding that CS is more than just one team or department, but it is an enterprise-wide strategy that is critical to revenue and customer growth. Here is a quick taste of what you will find in this year's report: Over the past year, while most of us have been working remotely and adjusting to life in the midst of a global pandemic, Customer Success has been quietly surging right under our noses. The pandemic created a new sense of urgency around protecting and nurturing customers by highlighting the fact that customers truly are the core of every business. At one time, customer success technology revolved around using the phone, supplemented by email. Also, 16% of respondents stated that they report directly to the Chief Revenue Officer, up from 9% last year, which further acknowledges the increased impact of CS on revenue. As customers receive value from a companys products and services, they add more users and use cases which in turn adds more value to the customer. Companies are realizing the importance of customer outcomes over traditional business outcomes and are understanding that this shift requires the best talent available. To touch all of our customers and keep them happy, we had to be able to scale, and in order to scale effectively, we had to be able to automate tasks and trust in our data sources. Automating the process of managing escalations can greatly increase the efficiency of your customer support, yielding faster solutions and higher customer satisfaction rates. For example, when a customer reaches out for help with a common issue, they might receive an automated email recommending a video tutorial with the solution, along with an invitation to contact a support agent if they need additional help. Technology adoption still needs to mature to enable a customer success mindset, although the digital transformation is imminent. 44% (up from 10% in 2020) of respondents said that their CS team spends more than 50% of their time working with Marketing and 47% (up from 27% in 2020) reported spending more than 50% of their time working with Sales. Customer Success is continuing to grow and mature. Its no longer efficient or necessary to pull data together from multiple platforms to try to form a 360-view of the customer and figure out what steps to take next. There was also a jump in collaboration efforts with service and support teams with 56% of respondents saying they spend more than 50% of their time working with these teams. Digital CS is here to stay, and thats a good thing. CRS means the customer success team must invest in the customers, continue to check in with them and help them with their approach to delivering on their business goals. 75% of respondents stated that each CSM in their organizations handled between 16-200 accounts, which is up from 27% in 2020. Because CS is increasingly touching more and more departments, it is crucial for organizations to take an outside-in view of the customer journey. When we no longer had the option to drop by our clients offices or meet with them at industry events, we had to figure out how to form and keep connections and stay up-to-date on the health of their businesses, all while remaining socially distant. Let us give you a greater sense of security in this unpredictable time. Its vital to provide your customers with a quick response that not only solves their issue, but also feels human. The SaaS industry largely saw a massive surge in adoption, as customers rapidly accelerated their technology implementation to support remote and distributed working. For example, if a new customer has not completed their profile within a week, this might trigger an automatic email reminder with instructions on how to complete the process. The range of salaries for this role is vast due to the various sizes of the companies surveyed. Where CS was once a matter of dedicated success managers fielding phone calls, now the cutting edge of CS involves AI platforms delivering automated support at scale supplemented by human help as needed. And well look at how Totangos AI bot Zoe uses artificial intelligence to facilitate customer success management, pointing toward the future of CS. The need for teams to scale was likely exacerbated over the past year with the challenges presented by the COVID-19 pandemic, which forced many organizations to have to do more with fewer resources. However, when a Customer Success platform is implemented, teams are able to pull in key customer metrics from across all of these various data platforms into one single dashboard in order to gain a holistic understanding of customers and seamlessly integrate customer and operational insights. When asked about the goals of their CS teams, respondents rated churn reduction (94%), renewals (87%), and product adoption (86%) as their top high and medium priority goals. Escalation occurs when customers encounter obstacles to achieving their desired outcomes and need support getting back on track. As Customer Success becomes more important to organizations, we are seeing an increase in new titles, so weve included the salaries of a few new roles this year, including Customer Success Operations. But there was no follow-up, and after some time, the CSM changed again but without follow-up or resolution improvement. 44% of respondents said that their CS team spends more than 50% of their time working with Marketing and 47% reported spending more than 50% of their time working with Sales. To reach a desired outcome, the team must become more aligned and must plan and execute together. We saw the greatest increase in our respondents of teams setting in place in the last 1-2 years emphasizing again the tremendous growth in organizations prioritizing customer success and building and growing their newly formed customer success teams. Totangos Onboard New Customer SuccessBLOC module lets you set onboarding goals for new customers, monitor customer progress through KPIs and trigger automated or manual workflows called SuccessPlays based on what customer data indicates. According to 68% of Customer Success professionals surveyed, their compensation structure included a bonus structure on top of their base salary. During the onboarding phase, customer success depends on achieving outcomes such as: The process of achieving these outcomes can be automated by establishing best practices and setting up digital workflows and monitoring tools which implement them when customers reach appropriate milestones in their onboarding journey. In addition, an incredible 91% of respondents stated that their teams had grown in size over the past year, with more than 12% stating they had grown by over 50%. The range of salaries for this role was between $130K-300K. Visibility is a critical factor in CS as the ability to monitor account health throughout the customer journey allows CSMs to gain a deep understanding of their clients in order to provide consistent value, anticipate customer needs, and improve product adoption and retention. Is It Better To Lease Or Buy A Car In Summer 2022? The moral of the story here is that you must strive to never drop the ball. Zoe interfaces with other collaboration tools teams are already using, such as Slack. This is up from 34% over 2020. This year, 76% of CS professionals surveyed said they had a team consisting of more than 10 people, and 91% said their team had grown in size over the past 12 months. According to a 2020 study by Aberdeen sponsored by Totango, firms with a data-driven CS program enjoy 93% greater annual improvement in customer retention rates, 94% greater annual improvement in net promoter scores, and 400% improvement in the cost of customer service. This year, we also included a choice for stock or equity options and 37% of respondents stated that they received these as part of their overall compensation structure. As the role of CS within organizations grows and becomes more defined, companies are seeking to hire high-quality CS professionals. We can see this shift in the reporting structure of CS teams. The Totango Increase Customer Adoption SuccessBLOC includes out-of-the-box KPIs, dashboards and workflows to help you monitor customer behavior and assist customers with unlocking the full value of your product. This is up 34% over 2020. Businesses are embracing the idea that CS is a company-wide effort to ensure customers attain value from their products and services, so that those customers will continue to renew their subscriptions, expand their product adoption, and become advocates for the brand. The Customer Success industry has grown and matured rapidly over the past few years, but due to the impacts of COVID-19, shelter-in-place orders and the increase in remote workers in 2020, the industrys momentum accelerated exponentially. This year, respondents reported that their bonuses were less reliant on overall team or company performance than in previous years, and more on growing the customer in areas like account expansions and upsells (89%). According to survey respondents, the median salary for CS Operations is $85,000. Its a challenge to change the nature of the products and services delivered and take a much longer-term view, but the rewards are a much "stickier" relationship and a revenue pipeline extending for multiples longer than a one-and-done approach. There was also a greater focus on protecting strategic accounts and enabling efficiency through automation in order to scale, which meant a digital-first approach to CS became a necessity. Additionally, there was a 32% increase in respondents who stated revenue impact such as account expansions and upsells (89%) were a key component of their bonus compensation. With this approach, the bulk of customer success is handled automatically, with manual one-on-one support triggered only when human help is needed. Interestingly, in the 2020 post-pandemic survey, it was reported that 64% of Directors saw a pay increase and that trend seems to have continued into 2021, reinforcing the value that companies are placing on CS and leadership during uncertain times. Organizations are often forced to use rigid, function-specific software and disconnected tools that prevent them from operating productively and effortlessly, and delivering a consistent, holistic customer experience. This year, 75% of respondents stated that each CSM in their organizations handled between 16-200 accounts, which is up from 27% in 2020. This year, we had more respondents to our survey than ever before. Doing that will entail changes, and one of the most interesting ways SaaS firms must do this revolves around their approach to customer success. Start with a benchmark for sales activity. Zoe integrates with Totangos Spark customer success management platform, which combines your customer data with key performance indicators, dashboards and automatic workflows called SuccessPlays to optimize your customer experience at each stage of the customer journey. The increasing maturity of the industry also shows that organizations are starting to better understand exactly what Customer Success is and the value it offers as a key function for business success. Then establish KPIs and other deliverables. When data indicates low usage rates, automated or manual workflows can be triggered to steer customers toward more active engagement. The emerging state of the art technology uses a digital-first customer success management model, where tools such as knowledge bases, chatbots and auto-triggered workflows and emails leverage the power of automation to systematically steer customers toward successful outcomes. Join us for Customer Success Summit: Teams in Miami Beach on September 14-16, Defining Customer Success Throughout the Customer Journey, Farm, Dont Hunt (the Customer Success Mantra), The Essentials of Digital-first Customer Success Strategies, How Digital-First Customer Success Can Improve Your Customer Success Management Process, Digital-First Customer Success vs. They pivoted so their customers still received great service. The 2021 State of the Customer Success Industry and Salary Survey reflected these shifts and the exponential growth that our industry has seen in just the past 12 months. Totangos Zoe, which can integrate with SuccessTeams, offers a preview of the future of artificial intelligence. They are in it together for the long-haul. We were approached by a competitor who was able to convince us to switch. Try it free to experience the cutting edge in automated customer success. This is our new normal, and in our new normal, digital technology is no longer just a nice thing to have or a nice complement to in-person interactions. SaaS providers happen to be leading in some of these areas right now, but the customer success approach is just in its infancy and promises to be an exciting and demanding model for high-performing organizations from many different industries to follow. Totango surveyed close to 500 professionals and analyzed more than 10,000 data points for its 2019 State of the Customer Success Industry and Salary Report. Digital technology has transformed the way customer success is delivered and the number of clients who can be supported. Retaining, Maintaining And Attracting New Customers. CS teams are being tasked with owning more revenue-generating activities that make an impact on organizations bottom lines, as well as activities that improve product stickiness - like feature adoption - which decrease churn and increase renewals. With the right best practices and automated systems in place, a single agent can field thousands of clients efficiently, just like Zoom did. Exceeding this limit tended to overwhelm CS teams and dilute support quality. From the first contact through onboarding, adoption and expansion, there needs to be a coordinated effort between all departments. Most will know customer relationship management (CRM) as a core business function.