https://www.youtube.com/watch?v=PsA23Katp5c&feature=youtu.be&ab_channel=Totango-ComposableCustomerSuccess
Every industry has to start somewhere. Customer Success is no exception. Back when “cloud” was not even a thing, enterprise software companies were dealing with customers as well. Many enterprise software companies structured their post-sales cycle roughly the same. Meaning there were different teams responsible for implementation, training, support and account management. They all acted on their own “island”, but there was no dedicated team responsible for what mattered most: successful customers.
A lot of people (including myself when I just started in Customer Success 🙃) assume that Salesforce is the “founder” of Customer Success. While that is partially true, we have to go back in time a little bit.
“Before cloud” enterprise software companies did not sell SaaS licenses like we know them nowadays. If a vendor would sell their licenses, it would be sold as a perpetual license. Before the rise of cloud computing, paying a one-time fee to download software was the norm. When a company bought a perpetual license, it means that they actually purchased the software and it would becomes theirs indefinitely. After the initial purchase, the relationship would end or move to a maintenance contract. Early B2B software industry enjoyed a vendor trap phenomenon: Customers made large upfront investments and it was difficult to change vendor. During those days vendors were more interested about new customer acquisition than existing customers.
<aside> 💡 You can read more about the differences between SaaS licenses and perpetual licenses here.
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In 1996, a CRM company called Vantive, was dealing with high churn rates. (Back then it was not called churn yet). Many enterprise software vendors earned most revenue at the initial sale right after signing the contract. This led to less focus on implementations and customers failing to reach their goals. Why should they care, right? The money was already in their pocket anyway. The team soon realized their traditional approach wasn't enough to help customers succeed. So they brought on Marie Alexander and set up a new Customer Success department. Before signing a contract, they asked customers the important question: “How are you going to define your success? What do you expect from us?” A Customer Success Manager was then assigned to each customer to help them reach their goals. Every six months, the list of expectations was sent back to the customer and a review meeting was scheduled. The CS team asked the customer if they felt successful, and if not, the expectations were reset for the next period. The Success Team included an Executive sponsor, the Customer Success Manager, a Support representative, the Professional Services consultant, the Sales rep, and sometimes an Engineering contact.