Customer success managers focus on adding value and reducing churn by developing personalized solutions that match the client’s needs and goals. You can think of a CSM as a white-glove-support and sales-role hybrid.

The goals of a CSM can include the following:

• Empowering customers to use the right features for their goals

• Helping reduce churn by working with customers that may not renew

• Shortening the onboarding process

• Identifying upsell opportunities when appropriate

Demand for CSMs has risen sharply in recent years. According to PWC, customers are willing to pay more for a product if it helps them to achieve what they want. CSMs align with this by designing unique solutions for customers and proactively acting on customer health metrics.

Happier customers lead to less churn and end up spending more with your company over time.

What Makes a Good Customer Success Manager?

A good CSM has a unique mixture of soft and hard skills that allows them to develop relationships with customers and pair customer goals with different solutions. This requires a deep working knowledge of the product as well as a strong bond between the customer and the success manager.

Soft skills are incredibly important as a CSM. The customer needs to know that the CSM has their best interest in mind when recommending solutions or additional product upgrades. Without this trust between the customer and CSM, recommendations designed to help the client achieve their goals may be ignored or cause friction.

Below are a few key traits of a great CSM:

• Has a deep understanding of the product, its value, and the outcome it delivers

• Is proactive in addressing questions, resolving issues, and general communication

• Can understand clients needs and goals

• Can develop long-term relationships beyond simple rapport

• Has strong leadership skills - is considered a self-starter

• Can empathize with the customer and put their needs first

There are several important metrics to consider when evaluating the success of a CSM. Some of the most common are churn, upsell, net revenue retention, and gross revenue retention. Other important metrics are as follows:

Customer effort score (CES)

The CES measures how much effort it takes for a client to get an issue resolved, a request filled, or a question answered.

Customer lifetime value (LTV)

LTV measures the total worth of a customer to your business over their entire relationship with your company. This is a key metric because it costs less to retain existing users than to acquire new ones.

Customer health

Customer health scores can determine whether your users are healthy or at risk of churning. Paying attention to this metric helps managers identify and mitigate risks before they escalate.

Daily active users

Measuring your user base daily provides an overview of your product engagement. A downward trend could indicate a disconnect between the customer and the value your product provides.

Engagement rate

This measures metrics such as number of logins, time logged in, and number of features used for each user individually. This metric is important, especially when building a customer health score that can predict churn.

Retention rate

Your retention is one of the most important metrics, especially in software-as-a-service. This measures how long your customers stay with you. A high retention rate naturally correlates with a low churn rate.

Net renewal rate

Your net renewal rate measures the percentage of renewals including upsells, upgrades, and cross-sells. This is important for measuring growth and the effectiveness of your upsells.

Customer satisfaction score

Your CSAT acts as a key performance indicator for your product quality and customer success. These are direct scores from your customers ranking your service. CSAT is useful for measuring overall customer satisfaction as well as identifying candidates to become brand ambassadors.