Most product-led companies want to scale their businesses. But with growth comes increased demands for customer support, which can get expensive.
How can you sustainably manage thousands of users asking for help when you have a free product? By implementing a customer success manager (CSM) model that suits the phase and strategy of your business.
This article is your guide to understanding why digital, low-touch CSM models are the top choice for SaaS companies. Learn the four common model types and essential skills your team needs to build a successful low-touch CSM.
Let’s get started.
What is a CSM model?
A CSM, or Customer Success Manager model, is a framework for managing customer relationships and ensuring their success.
Customer success is not customer support.
Customer success is a proactive function that ensures customers receive value from a product.
In contrast, customer support is reactive, like technical support, a support desk, and answering questions about pricing.
CSM models are strategically implemented, considering customer size and product complexity factors. These models provide varying levels of support and engagement, ranging from high-touch to low-touch or tech-touch approaches, which are covered in the next section.
CSMs aim to enhance satisfaction, retention, and company revenue by proactively engaging customers, addressing concerns, and providing guidance.
The four types of CSM models
SaaS companies must choose the CSM model that best suits their customer base, product maturity, and growth goals. Some may even combine different models to cater to different segments of their customer base.
There are four common CSM models:
- Dedicated CSM
- Strategic CSM
- Low Touch
- Tech Touch
Choosing between human- and tech-led models depends on customer size and product complexity. This decision ensures a personalized approach for optimal customer satisfaction and success.
Human-led models
Human touch refers to a model where customer success managers have one-on-one relationships with a small number of accounts. This model is more personalized and involves regular interactions and support for customers.
Human-led models are the most common and include:
Dedicated CSM
In this model, CSMs are assigned a small number of accounts (ten to 50) and have a one-to-one relationship with each customer. They focus on managing the accounts, conducting quarterly business reviews, and ensuring customer success.
Strategic CSM
This high-touch, white glove service model is deeply embedded into the product and manages a small number of accounts (1 to ten). They work closely with key executives in the customer's organization, focusing on expanding relationships to other business units and providing personalized support.
Digitally-led models
Digitally-led models leverage technology and automation to manage more customer accounts.
Digitally-led models are the preferred options for product-led growth and include:
Low Touch
This technology-assisted model uses automated emails, in-app notifications, training webinars, and other technologies to engage with customers. Tech-assisted CSMs may also work in a pooled CSM model, where multiple CSMs can assist customers with faster response times and scalability.
Tech Touch
This model is a purely automated approach where there is no human intervention. It relies on technology and automation to engage with customers, provide support, and drive customer success.
The SaaS digitally-led engagement trend
SaaS companies are shifting towards digitally-led low-touch and tech-touch models.
Here’s why:
Sales-led growth models are expensive to maintain, and the customer acquisition cost is often 100% of the first year's ARR or gross profit margins. For this reason, a sales-led model is not attractive for a company earning hundreds of millions of dollars in sales.
A company with a product-led growth model can let individual users make the buying decision at a low price point and then let success and support for the product drive adoption within the company. This action drives account expansion and significantly decreases the cost of customer acquisition.
A mature PLG motion drives incredible growth rates for companies. Many companies want to adopt a PLG model. However, to successfully implement a low-touch model, product-led companies need to invest significantly in making the product easier to use. This may involve simplifying the user experience, improving product onboarding, and providing self-serve resources.
Companies that have successfully adopted a low-touch model have seen the benefits of reduced customer acquisition costs and increased growth rates.
For example, Salesforce invested time and a lot of money in UX to make its accounting, contact, and opportunity management product user-friendly for web-based clients. Beforehand, the product was hard to use, and the company’s low-contract value consumers weren’t getting value. Salesforce unlocked its product-led growth strategy during this process.
The best CSM models for PLG
The growth of a PLG company comes from the product. Therefore, ensuring that customers are pleased with the product is crucial. Satisfied users recommend your product to others and may become paying customers.
PLG companies must service hundreds or thousands of customers on a free or low-paid plan. With a limited budget and resources, digitally-led CSMs are often a PLG company’s best option for ensuring customer value.
The best CSM model for your company depends on product complexity and the potential annual recurring revenue (ARR).
Here’s a graph to help explain:
When to use a low-touch model
A low-touch model works best for a PLG company when:
- The potential ARR of the customer is low, and the product complexity is either low or moderate.
- Or the potential ARR of the customer is moderate, and the product complexity is very low.
It's not appropriate for a PLG company to roll out a tech-touch model if their product is too complex. Without human intervention, getting value from the product would be nearly impossible. Even if you have a very high ARR customer, it doesn’t make sense when product complexity is high.
Three maturity levels of CSM model evolution
The maturity of a PLG company plays a significant role in determining which CSM model is most suitable.
In the early stages of a product-led company, a dedicated CSM model may be more appropriate when the product is still complex and requires human intervention to ensure customer success.
But as the PLG company matures and invests in making the product easier to use, a technology-assisted CSM model becomes more feasible.
Let's explore the three levels of the evolution of the CSM model, starting with a dedicated CSM at level one.
Level 1: Dedicated CSM
Many companies start with a level one dedicated CSM, where people spend most of their time reacting to inbound requests. This model serves hundreds or thousands of low-touch customer accounts with only a few CSMs.
Benefits
The benefits of a dedicated CSM include:
- People are good at overcoming deficiencies in the product. Therefore, customers can figure out areas where the product has shortcomings or is challenging to use. This is especially beneficial when your company improves the product’s quality and ease of use.
- Also, people are good at detecting at what stages customers will likely have roadblocks or problems with their experience. A company that scales out the dedicated CSM model over time can pinpoint a few factors within its customer journey where users experience problems and then invest time automating them.
Drawbacks
The downside of the dedicated CSM model is that it’s expensive to implement at scale. The model eventually becomes completely reactive because the CSM has too much inbound. This results in the CSM spending the majority of time on the loudest and highest potential growth customers while everyone else is ignored.
A dedicated CSM is not a long-term model your PLG company wants to implement. One person cannot manage thousands of customers realistically, and technology needs to bridge that gap.
If you have tools and content, you can turn a single CSM into an army of one.
Level 2: Technology-Assisted CSM
A more mature company that understands its customer journey is ready for a level two.
A technology-assisted CSM is superior to a dedicated CSM. Content and automation drive engagement and touchpoints with customers. This model uses emails, text messages, in-app notifications, and helpful resources such as training webinars and case studies.
Companies may create a pooled CSM model to help with customer engagement at this level. For example, a customer may write a success email, and one of five CSMs is available to answer the questions.
The CSM has quite a few tools to track and manage what’s going on in customer accounts. Tech-assisted CSMs examine net promoter scores (NPS), measuring customer loyalty and satisfaction. Customers are often segmented into groups based on when they bought, what product they purchased, who they sold into the industry, etc. And so what CSMs can do with these more advanced tools is identify groups of customers that are possibly having problems in onboarding or maybe a specific feature that’s not being used very much.
The process of a maturing tech-assisted CSM is interactive. User feedback identifies the biggest pain points for customers. Then, the company can react to the situation with new product content, automation, and improvements. Over time, the CSM identifies areas of pain for customers.
Benefits
The benefits of a technology-assisted model include:
- Customers receive faster response times because a pool of people can engage as questions come in.
- The customer experience is better because technology is used for most customer journeys with roadblocks. Instead of waiting to talk to customer support, the customer is unblocked when they have a problem.
- A technology-assisted model scales better than a dedicated CSM model. A couple of CSMs can manage hundreds or thousands of accounts.
- At level two of maturity, your company can start creating specialization, so this idea of a CSM disappears. Specialized new skills are introduced to team members, transforming into a new way of thinking about customer success and ensuring that customers get great value.
Drawbacks
Implementing technology-assisted CSMs has the downside of being time-consuming. Building a library of quality content that serves customers takes a long time. As your business changes and matures, your content also needs to be updated to match the current state of the product and target customers.
Level 3: Fully Automated, Technology-Driven Engagement
Investing in the UX of the product is the only way to achieve an automated, technology-driven CSM engagement. The product has to be stupidly easy to use. Users should understand how to use a product and get value when visiting the website.
An example is Dropbox.
A PLG company with an easy-to-use product can:
- Automate customer onboarding.
- Carry out training and onboarding sessions with prerecorded webinars, whitepapers, or in-app notifications.
- Deliver newsletters and content throughout the customer journey to help ensure they get the most value from the account and product usage.
Think of the CSMs in this model as special operations in the US Navy SEALs. When a customer has gone off the rails, these level-three CSMs come in and do small engagements to get them back on track. For the most part, at this level, a company relies on technology to drive consumer engagement.
Essential skills for a winning low-touch CSM team
As a low-touch CSM model scales, companies spend less time thinking about how many CSMs they need or how many customers they dedicate per CSM.
Instead, the effectiveness of the low-touch CSM is the focus.
The five must-have skills you need to onboard onto your team to pull off a low-touch CSM model at scale include:
1. Operations
Your customer success or marketing team should control backend systems, implement the right tools, sync data between systems, automation for CSMs, and provide internal CSM training on using the products effectively.
2. Customer advocate
This designated team member anticipates churn risk by looking at data and identifying accounts at risk. They accomplish this by analyzing data reports; reading customer feedback, surveys, and NPS; looking at product usage patterns, and; finding problems with product adoption. A customer advocate identifies customers willing to promote the company product with a case study, success story, or testimonial quote for the website.
3. Content creation
You need members of your team who can create training material, product descriptions, and onboarding webinars. They should understand the problems that customers experience and have the skills to solve those problems with straightforward, easy-to-digest content.
4. Programs and enablement
This is someone on your team who is good at collating content and deploying information about your product in campaigns for customers to get the right content at the right time. They’re skilled at A/B testing and can test several models simultaneously to see spikes in adoption, usage, and renewal rates.
Upsell and cross-sell
Your company needs a worker focused solely on expanding the account. Their responsibilities include additional usage of new features within the product, getting customers to adopt more licenses, and cross-selling products. The goal is to unlock new pockets of revenue or budget within an account.
These five skills described in this section can be onboarded within the customer success team or pulled from other teams, but all of them are required to successfully implement a low-touch CSM model at scale.
Growing a successful PLG business
To build a successful, productive business, you need to believe that your end user’s success will become your success. User satisfaction is measuring how well your product serves your users.
Your PLG company needs to help customers achieve their outcomes, and adapting the suitable CSM model is a big step in the right direction.
If you need help determining where a customer success manager fits your product-led strategy or where to get started, consider exploring the ProductLed System. Designed by our founder, Wes Bush, this free framework provides a systematic step-by-step guide on propelling predictable and profitable growth for 7-figure product-led businesses.
Start learning the nine components of the ProductLed System.
