Executive Playbook: Planning and Budgeting for Customer Success in 2022
By Boaz Maor
Can you believe it is November already?(!) Wasn’t it just Q1 a few weeks ago when we all said: “Hey, can you believe it has been a year since we discovered COVID” and started to work from home?”
So, here we are in Q4 - and Q4 means: Budget Time! (cheers in the background!)
Q4 is that time in the year when we all look towards next year, develop our execution plans and make our budgeting requests. I mean, the cadence of business is monthly and quarterly for the most part. But, still, we all get our heads together in Q4 to plan ahead towards the next year at a higher level to refine strategies and align priorities. I was taught: The budget is the manifestation of priorities. So, we sharpen our pencils, dust off our models, run the numbers, stack rank initiatives and discuss/plan/negotiate with other teams to ensure we are all aligned. We will then manage on a daily/weekly/monthly/quarterly to those numbers and budget and make adjustments.
Keri Keeling and I hosted a session last week as part of the Customer Success Leadership Network about the key tenets of our thinking towards the 2022 plan and budget. It was a very lively and in-depth conversation, fueled by a lot of our already in the works thinking, but also contributed by a lot of excellent questions by a large number of CS execs and practitioners who joined in. Here are some of the key takeaways we landed on in the discussion. Feedback, as usual, is most welcome.
Key Tenets for 2022:
Where to work? (WFH vs. WFO)
Situation: COVID drove many of us to work from home. Overall in the US, that increased the portion of the workforce that worked at pleast 2 days a week from home as opposed to in an office from 8% to close to 25%. Among “Knowledge Employees” the number was close to 100% for a while. It was tough, then we adjusted and now we know how to make it work. At the same time, many employees moved to remote locations from their original offices and companies started hiring more remote employees. Recent surveys of employees indicate the majority of them prefer “hybrid” models with a mixture of time in the office and time WFO. Companies are planning to bring more and more people back to offices, but more often than not, the plans call for at least a portion of the time for people to continue to work remotely.
Implications: Most likely, many of your people may be working remotely or in a Hybrid mode. This means less time in the office, lower ability for them to engage in knowledge exchange with their peers, lower ability for their managers to engage with them for ongoing performance monitoring, reviews and development and more limited emotional connection with the team and company. All of these might lead to lower engagement and increased retention pressure. It also means you may need smaller offices for your teams…
Suggestions: The most important insight here is to acknowledge the above implications and be intentional with your approach to your team location and work style: What is your strategy? How do you plan to achieve it? How do you plan to budget for it? What does the above mean to your hiring practices and compensation? Is there an impact on team productivity and team morale and employee engagement? Then, assuming you are most likely to have some form of remote and/or hybrid approach, plan to invest less money into your physical offices and more money into social activities, such as travel to meet-ups and offsites (which may now be renamed to be “onsites”...). Lastly, consider more dedicated investment into engagement and productivity tools to aid your team in his new working style and environment.
Remote Work with Customers:
Situation: For all of the negative impact of COVID, it has positively accelerated adoption of many technologies, especially for remote work. It’s not only your team that worked remotely instead of in-office - it’s probably a large portion of your customers as well. They have now gotten used to engaging with you and your team remotely. TeleMedicine adoption has increased in acceptance, Zoom is a household name, and even colleges and universities have deployed remote learning programs. You may have settled on different ways of conducting QBRs, running project meetings, designing processes and providing updates on your product and services.
Implications: while there is always value in meeting people, many of your customers may prefer to continue in the operating mode of the recent months. They may not wish to spend time on the logistics of face-to-face meetings, especially if many of them still work from home. Furthermore, they may have learned to appreciate the digital updates you may have started to provide them in lieu of not having those meetings.
Suggestions: In the land of Customer Success, when less of the work can be done face-to-face, more of the work can and should be done digitally. This makes the TechTouch strategies (aka Digital Customer Success) applicable to more customers and more service providers. Consider directing investment to digital / techTouch tools and best practices as the base operating structure for all of your customers, not only the segment that previously you could not afford to serve via people. On top of this base, you should layer additional high-touch services if you so choose.
Hiring is Very Hard:
Situation: For a multitude of reasons, the job market has become very tough including for CSMs and Knowledge Worker jobs. The growing economy is increasing demand for talent. The explosion of investment in startups (both internal investments and public offerings) further increases demand while also putting upward pressure on salaries from those cash-rich companies who set the tone in the marketplace. On top of these factors, the Customer Success field continues to grow fast as more and more companies acknowledge the value of the function to their growth and operations. Such growth continues to push demand for skilled people higher. And if those things were not enough, the desire of many CS professionals, especially early in their careers, to be able to work remotely carries the risk of shrinking the supply of talent.
Implications: talent acquisition is hard and is likely to stay that way. This means both harder time hiring new people AND retaining existing ones (we already mentioned the importance of employee engagement in point #1 above). Bottom Line - It is hard to hire good people, and very competitive!
Suggestions: budget more time and money to hiring and retaining your people. Invest in better understanding career aspirations of your top people and cater to their needs with investment in career development, training, mentorship and coaching. Don’t forget onboarding, make sure they have an easy “on ramp” with your company so that they feel connected and become productive quickly.
More Tools Require More CS-Ops:
Situation: as can be seen from everything mentioned above, your team is likely to be using more tools and rely more on technology than people in servicing at least some of your customers.
Implications: more tools require more people to manage those tools. Those people are needed in deploying (set up, configuration, integration, design of initial use cases, training your team, administrating, managing access, providing support, running reports, managing the vendors, etc.) and operationalising (process design to optimize value, continuous improvement initiatives, ongoing training, etc.). Those tools need to be managed in an effective way. Welcome to the world of Customer Success Operations (aka: CS-Ops). This is here to stay, especially for CS teams of any size.
Suggestions: If you don’t already have it: you need a CS-Ops team! And you may want to further invest in hiring additional CS-Ops people in order to meet the demand and maximize value from your solutions. The benchmarks of CS-Ops to CSM ratios from 2-3 years ago are probably inappropriate anymore and you need a higher ratio of those people.
So here you are, facing your budget, take a minute to think through these four areas, and you will have a better chance of building a strategy and budget that will work as we start 2022. Also, be prepared to adjust. For sure one thing we learned is that nothing is static and we need to Adapt, Adapt, Adapt and that is sure to continue for the foreseeable future.
