by Chloe Allan and Rich Bolton, with contributions from Dilanka Kalutota. Dilanka is the co-founder and CEO at Velaris, an Octopus Ventures portfolio company. Velaris is an operating system for customer success teams that helps put operational cadence in place. 

This is the latest in our new series of guides to growing your B2B SaaS business from Series A and beyond. If you haven’t read it, don’t forget to check out Constanza Diaz and Jonathan Durnford-Smith’s guide to measuring your dev team’s output.  

Acquiring new customers is always more expensive than keeping existing ones (the received wisdom has it at around 5x the cost – although some argue it’s as high as 25x), but while keeping things low-cost and efficient should always be front of mind for any founder scaling a B2B SaaS business, it’s truer than ever today.  

In today’s macroeconomic climate, start-ups need to do more with less. Businesses that can leverage customer success effectively have a major advantage when it comes to navigating choppy waters and extending their runways, even as they scale.  

In this guide we’re going to explore what customer success means, how to build a great team dedicated to it, and how to measure it. Getting it right is a key step in reducing churn, but it doesn’t stop there – customer success can be invaluable in generating product insights, and even identifying opportunities for growth.  

The role of customer success 

The first major customer success challenge to be overcome is the problem of definition. Simply put, customer success means working to ensure customers are happy with the solution you’re providing. We see it as being about nothing more or less than enabling the customer to get the maximum possible value out of your product.  

Still, while this might be widely agreed upon, different companies tend to hold different ideas about what the role of customer success should be. Some focus on upsell and renewal, which is effectively just account management. These businesses might place their emphasis on net revenue retention (NRR) targets, meaning that’s where representatives focus, driving price increases rather than meaningful customer success.  

Other businesses view it more as a part of onboarding – getting the customer set up for success, ‘showing them how to fish,’ so to speak, with limited involvement past this initial point. Others over-emphasise support within their customer success functions. These customer success teams focus on solving tickets and ensuring customers are happy without the expansive measurement and proactive commitment needed to ensure (and improve) customer success over time.  

But done correctly, with a focus on maximising your product’s value to customers (however that metric is defined), upsells and cross-sells will naturally follow. 

The metrics aren’t always clear. We offer our tips on the best KPIs to track below, but it’s important to note that customer success teams are most effective when they’re left to get on with what they do best. They shouldn’t be expected to build KPIs out for themselves – they need to be readily accessible and easy to track. The better equipped your customer success team is with clear KPIs, the better they’ll be able to get on with the business of maximising the value of your product to customers.

The benefits of a working customer success team

In a perfect world, you wouldn’t need customer success. Your solution would work perfectly with every deployment and perform every function your customer required. The customer, meanwhile, would bring patience and diligence to its use, learning the ins and outs before taking issue with it.  But as we know, this almost never happens. That’s where the customer success team comes in. The Customer Success team acts as the middle layer between your product and your customers. When all is working properly, the team resolves the imperfections that exist with both the buyer and your product. 

Right now, closing new sales for SaaS companies is hard. However, beyond working with existing customers, a customer success team can help with this, particularly for mid-market and enterprise sales. If the customer is assured and confident on the customer success process and they trust the customer success team, they will have much greater faith that they’ll see a return on investment in your product. A great customer success team is a differentiator that will make your business’s solution stand out, even if it’s more expensive than competitors.  

For existing customers, the customer success team becomes their internal voice within your business. By building strong relationships with users of your product, and ensuring they’re gaining  value from it, the customer success team can furnish different go-to-market teams across the business with great, actionable insights that stand to improve both your product and the customer experience, as well as offer real business advantages. The customer success team can, for example, generate solid case studies, which it can share with the marketing team who can, in turn, use them to spread the message of your solution to the world. 

…And how to build a high-performing one  

When it comes to building a customer success team, there are a few important considerations to bear in mind. The first is to think about what kind of customers you have. Are you a product-led growth (PLG) business, where one customer success manager (CSM) can service 2.5k customers, or do you use a more traditional, enterprise sales approach? If it’s the latter, you’ll likely find your team speaking to customers more regularly. A rule-of-thumb that crops up often is the $2 million annual returning revenue (ARR) per CSM, but the truth is many variables determine the size of the customer success team you need, from the complexity of the product to the sales process, to the growth and maturity stage your business has reached.  

At an early stage, we advise focussing on quality of understanding in customers. That ensures you can keep developing for your ideal customer profile. As time goes on, you should aim to work towards a scaled customer success team with repeatable systems and processes. Whether you’ve got a PLG team or one fully focussed on enterprise sales, your scaled customer success team should eventually comprise both digital and human agents, to ensure it has the capacity to provide a high-touch service to your top tier of customers.  

Start hiring a customer success team earlier than you think. We often see businesses planning for big investment in customer acquisition, so sales and marketing, at Series A – while customer success is neglected or backfilled further down the line. This makes sense if all that matters is ARR and new customers. But if you’ve only just achieved product-market fit (PMF), now is really the time to double down on your current customers and maximise the value they’re extracting from your platform. It’s better to hire in advance of growth than scrabble to stem the churn when customers are left feeling unloved.  

The ideal customer success team is built around strong generalists. This means talent with a great technical understanding of the product, and a clear vision for supporting customers in its use. While it isn’t a sales role, commercial skills are useful to spot opportunities for upselling. Because the customer success team’s proximity to the customer gives them a privileged insight into the customers’ needs, we think it’s important to hire for empathy, as well as top class communication skills. 

The customer success team will need to liaise closely with account management, sales and production development teams to share the fruits of that insight. In the early stages of building a team (and assuming no prior experience in customer success), we think the other major attribute to hire for is detail orientation – but as your team grows, don’t think twice about hiring specialists. 

KPIs that spell customer success 

When talking about customer success, it’s easy to assume the ultimate metric for defining it is net revenue retention (NRR). But as Dilanka Kalutota, co-founder and CEO at Octopus Ventures portfolio company, Velaris, explained,  

There is a temptation to link customer success KPIs to NRR, but just because a customer is paying more, that doesn’t always mean that the customer is having success with the software or say anything about its success for a business. It’s important to draw this distinction.

B2B SaaS founders must reevaluate what constitutes true customer success and design KPIs that reflect these values. Defining success from your customers’ perspective involves a comprehensive approach. 

First: ask how effectively customers are deriving value from your product. Are they achieving their desired outcomes? Measure this through metrics directly tied to their objectives, which you should have uncovered during the sales process. 

Second: think hard about customer engagement. Regular and enthusiastic usage of your software is a clear indicator of success. Monitor how often customers are actively using your platform, how deeply they are engaging with its features and whether usage patterns evolve over time. Expanding the user base within an organisation signifies that your software is becoming an integral part of their workflow, enhancing its overall value. This is why it is important your customer success teams have access to real-time data that alerts them when there has been an individual customer shift in these core KPIs. 

Considering these factors, here are some customer success KPI’s we recommend using: 

1. Value realisation metrics. Monitor key metrics aligned with your customers’ goals, such as time saved, revenue generated and operational efficiencies gained. Showing customers tangible benefits will strengthen their confidence in the value of your software. This is a key difference between customer success and customer operations – while customer operations deals with reactive queries, customer success proactively drives value for customers. 

2. Customer engagement. Track the frequency and depth of usage. Are customers making the most of the features available? If they are, this demonstrates that your service is aligned with their needs and well-integrated into their processes 

3. First response resolved. Efficient customer support is a significant contributor to success. Measure how quickly and effectively your support team addresses and resolves customer enquiries. Getting it right makes for a better customer experience and improves their perception of your product. And it doesn’t always mean hiring more people. Octopus Energy (part of the Octopus Group) has been using AI in its operations this year, and CEO Greg Jackson, reports that it consistently outperforms people in customer satisfaction surveys.  

4. Net Promoter Score (NPS) change: NPS reflects the likelihood of customers recommending your software to others. By monitoring how much their NPS has improved over the last 12 months you can build a good picture of satisfaction and success. It’s the trajectory here that’s important, not the absolute score.  

Finally, if there’s one key commercial KPI to focus your customer success team on, we recommend it be Customer Success Qualified Leads (CSQLs). These allow the customer success team to maintain their primary focus – you might ask that they be aware of opportunities to upsell, without expecting them to deliver it (this would fall to sales or account management). 

Optimised for success 

Given the economic climate, holding onto customers you’ve won – and getting the most out of them – will make all the difference to your business. And it starts with an effective customer success team. Using our guide, get them onboarded before you start to see churn, as soon as you have PMF.  

Customer success teams do more than protect the ARR of your business. As we’ve seen, they can help you win customers, acting as a critical differentiator in a competitive market. By helping to create value for customers efficiently and effectively, customers see their ROI faster and embed your software into their internal processes. Increased loyalty follows. 

Delivering value for your customers will organically create upselling opportunities, which is why we think CSQLs is the key metric for measuring your customer success team. It doesn’t just demonstrate the commercial mindset of the team – it also underscores the success they’re having in maximising the value of your solution to your hard-won customers.  

If you have any thoughts on customer success or think we’ve missed any crucial metrics – feel free to get in touch. This is the latest in our dedicated series exploring what it takes to grow a B2B SaaS business from Series A, and beyond. Check back next month when we’ll be exploring all things automation, and if you missed it don’t forget to check out Constanza Diaz and Jonathan Durnford Smith’s last blog on keeping track of your dev team. 

Reach us at [email protected] and [email protected].