Myth: Every Enterprise customer needs a CSM

With Leanna Castello, Ex-VP of Customer Success, Density

Munish Gandhi
Founder

In Episode 2 of our series, I am joined by Leanna Castello.

Leanna has built Customer Success organizations that use data, generate revenue, and are ready to scale.  She’s truly monetized services. She’s boosted on-time ARR renewals by over 60%!  And she’s grown a CS team from 2 to 42.

Across all aspects of CS, Leanna has truly been there and done that. 

Here’s Leanna sharing her journey and learnings with us in a conversation that’s part truth bombs, part reflections, and a whole lot of real talk. 

Let’s dive right in!

1. Leanna, give us your most controversial CS take! The biggest myth you think needs to be challenged?

Every customer does NOT need a dedicated customer success manager.

Sure, it's tempting, especially when you’re dealing with large customers and when you want to give them the white-glove treatment.

But, customers have different needs. You need to meet them where they are. 

CS superpowers like driving product adoption, change management, and relationship-building are crucial.  Yet, some high-spend customers prefer the self-service route. 

They'd rather work with your support team for specific issues than dive deep into change management. Simply because they have already nailed it internally.

It's not about being hands-off; it's about offering the right support at the right time. 

2. How do you reconcile that with the customer maturity model? I.e. the role of CS to help customers mature along the value realization journey. 

A maturity model is actually a great framework to use. The key is to have different engagement models to keep the customer satisfied and make sure they are getting the value they need.  

What matters is where the customer is on the maturity curve. 

At Density, we had large customers who did not want – or even need – any hand-holding. 

We were hands-on at the beginning of the relationship. However, four years into the relationship, we KNEW they simply didn’t need more. They did not want to explore because they were saturated with our use case. 

As your customers move along the adoption curve or maturity model, you simply don’t need a CSM talking to them every week or month. You could have a salesperson or renewals manager own that pulse check.  You could even use your customer success platform to flag if something changes or goes wrong. The relationship and the pulse check process is important, but it doesn’t have to be done by a CSM. 

3. Time for a quick flashback. How did you find your way into customer success?

My first career was in finance.  Back then, I built models to support high-net-worth customers to help them decide where to invest their money.

I loved being client-adjacent. I loved that I could be an expert on complex topics and still be able to distill the topics to meet the customer where they were…and take them where they needed to be!

After spending some time at this notorious hedge fund, I realized that finance wasn't for me.  

This was when I got an opportunity to join Medallia at a very exciting time. It was a fabulous introduction to SaaS, building a company, and building a great culture.

Since then, I’ve been building companies. A big part of that is helping them build and evolve their customer base.

4. What advice would you give to someone looking to excel in Customer Success?

Challenge the status quo.  Try new things.  Take more risks. 

Think about different ways to evolve the model. Don't just assume that what got you here will always get you there. Whether that’s your customer base or even your career.

Industries evolve, customers evolve, business models evolve.  And so should you!

And if you are a manager, make sure that you focus on coaching your team. Don’t just give them the answers. Help them come to the right conclusion or solution. That can be incredibly empowering for your team.

And it’s the best way to build the skill set and the capabilities of your team. You don’t want to become a bottleneck by being the only one who can help solve problems for your team and your customer.

5. Why did your organization invest in CS? How did you define success for Customer Success?

As a relatively new founding team at Density, they needed someone to help manage customer relationships as they were coming up on our first renewals. That’s where it started. 

But as the business and the company evolved, CS became so critical because our product is a new category of technology. Certain customer segments needed a ton of change management and support.

Today, it’s about truly working with customers to provide them white glove service.  And to help them use our platform to run their business better.

The key metric for CS at CEO and Board-level is Net Dollar Retention (NRR). It’s about making sure customers stay and grow with us.

We also closely look at product adoption. We need to make sure that customers make the most of our platform.   In many ways, that unlocks the maximum value for their org at large. (Win-win!)

6. We’re a month into 2024 already. What does the year and the journey ahead look like for CS?

One, it’s about finding the answer to the question: How does the business model evolve? 

Simply having a big team of CSMs to support product adoption has long fallen out of favor.

I’d even say that CS as a cost center is also quickly falling out of favor. 

You need to think about monetizing value-added services or moving quota-carrying activities like renewals or some upsell to CS functions.

Two, a lot is happening on the technology front. We need to make sure that we use technologies like Gen AI as a competitive advantage.

For example, in my team lead meetings every week, I’ve been pushing my team to think about how they are using AI and other technology in their work and the team’s processes. For customer research, rewriting customer communications, etc.

7. On that note, how do you think AI will impact customer success?

I think the sky's the limit. 

On the customer side, there’s so much potential to personalize our offerings to ensure that customers get exactly what they need. And at the right time.

On the company side, there’s huge potential to extend the capabilities of CS folks or account executives. Whether that’s to understand customers deeper or provide them with better service.

Customers tend to want to work with one main person who knows their entire account very deeply. But that’s nearly impossible to achieve in large enterprise relationships.

But if AI is fully incorporated into your data, your workflows, and how you understand  your customers, it’s like giving your CS team superpowers. They [CSMs] can then have a bigger influence on the customer, and give them a truly personalized experience in a scalable way. Our teams will be able to move towards that “impossible scenario” of providing a seamless customer experience.

8. With this increased focus on automation, do you see fewer humans doing customer success?

It's conceptually the same number of humans. But… they get to do higher-value work!

Think about this. With the right tools, a CSM can spend more time with customers to think about strategies to help build the business. 

I'm not worried about jobs being automated away. We’re going to have more impactful and fun jobs!

9. Jason Lemkin of SaaS recently said that CS as we know it is dead. What’s your take?

CS is going to evolve to be much more of a revenue driver for companies in the immediate term. Whether that's via being responsible for dollars or monetizing the value-added services. 

I also think that things are changing in terms of how humans will add value. Today, there are different ways to evolve the customer journey and be targeted about it. 

It comes down to making sure that humans in the loop add very specific value – the kind that only they can!

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Big thanks to Leanna for all the expert insights, advice, and perspectives!

Get ready for more myth-busting conversations and inside insights as this series unfolds!

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