The Customer Success profession has grown exponentially year-over-year, expanding beyond traditional job titles and taking on a larger strategic and financial role in an enterprise’s business success. But even though great strides have been made in the recognition and importance of Customer Success, new research from Customer Success specialist firm Totango, more clarity, education and awareness about the function is needed.
According to preliminary findings from the firm’s 2019 State of the Customer Success Industry and Salary Report, compensation for Customer Success professionals has increased since 2018, reinforcing the importance of Customer Success and an organizational focus on customer-centricity to business growth.
Over the past six years, thousands of Customer Success professionals have participated in Totango’s annual survey, which was created to provide valuable insights into trends in the Customer Success profession, including the unique challenges and goals of the industry in order to establish industry benchmarks for Customer Success compensation trends, growth and maturity of the role.
“The Customer Success industry is growing at an incredibly rapid pace. As organizations, particularly enterprises, realize the importance of Customer Success in business success, they are expanding their engagement beyond their top customers to include their entire customer base,” said Guy Nirpaz, Totango CEO and founder, in a news release. “As a result, teams are growing in size alongside coverage models that scale to cover a broad base of customers. However, to successfully operationalize customer success, digital transformation is critical—organizations must invest in modern Customer Success platforms to equip their teams with practical means to gather customer data and effectively connect the dots across the enterprise.”
The recent Deloitte 2019 Enterprise Customer Success Study and Outlook underscores Totango’s findings that indicate the importance of strong Customer Success programs. According to Deloitte, Customer Success results in happier customers overall with noticeable improvements experienced in the level of customer satisfaction and brand advocacy. According to Deloitte’s study, half of companies with Customer Success teams saw a rise in Customer Satisfaction Scores (CSAT) by more than 20 percent.
Customer Success as a function matures and is no longer an organizational silo
Since Totango started surveying the Customer Success industry six years ago, the responsibility for the function has expanded beyond the core Customer Success organization. Customer Success within an enterprise is no longer built as an operational silo as customer-centricity becomes a top priority across the business. Virtually all (99 percent) Customer Success teams surveyed collaborate with teams across the company. Teams are also more established within organizations and growing in size alongside coverage models that scale to cover a broad base of customers. Sixty-five percent of this year’s respondents report that their Customer Success team has been in operation for over 3 years, and nearly a third have been in operation for over 5 years.
Compensation structures evolve as revenue responsibility grows across Customer Success teams
While opinions on revenue responsibility are divided, Customer Success departments continue to be tasked with generating revenue and impacting the bottom line. Half of respondents say their Customer Success team is responsible for revenue targets (50 percent), which has remained flat compared to 2018 (52 percent). As a result, compensation structures have evolved towards a commission or bonus structure directly tied to revenue generation. According to 64 percent of Customer Success professionals surveyed, their compensation structure included a type of bonus structure on top of their base salary.
Over the years, a larger percentage of respondents reported receiving a commission on renewals and upsells. Thirty-three percent of respondents reported commission on renewals and upsells in 2013, growing to 39 percent in 2019. Customer Success salaries have also trended up as organizations continue to place a high value on the Customer Success professional’s responsibilities and career, reinforcing the importance of Customer Success across companies. Nearly 62 percent of respondents report that their compensation has increased since the previous year.
Digital transformation of Customer Success is imminent
Almost all respondents (93 percent) think Customer Success should be the next function that goes through a digital transformation due in part to the lack of technologies available to automate and simplify Customer Success tasks. While there has been steady growth since 2018 in the use of Customer Success platforms, a majority of Customer Success teams are still using legacy tools such as CRM, Microsoft Excel/Google Sheets and Help Desk/Support tools. Customer Success teams also continue to prioritizereduction of churn, customer renewals and product adoption. Professionals surveyed consider operational issues including a reactive approach to customers, visibility into customer adoption and health, time management and focus as top challenges. This sentiment has remained consistent since 2015.
Totango will host a webinar on Tuesday, August 27 to deliver complete survey report details and analysis. Register here to access the full report.
This year, close to 500 professionals and more than 10,000 data points were analyzed in order to provide valuable insights into trends in the Customer Success profession, including the unique challenges and goals of the industry.