The Top 10 Reasons Companies Hire Customer Success Consultants
When should you hire a Customer Success (CS) consultant? In our experience, successful companies have made working with consultants a key growth strategy. From 2012 to 2019 the management consulting industry grew every year by over 100% and peaked at $160B in the US alone. This article can help you understand if hiring a Customer Success consultant is a smart strategy for your business.
Launching Strategic Initiatives Quickly
The top reason companies hire a CS consultant is to launch a strategic initiative now. When a company finally realizes it needs to pursue a revenue protecting or generating initiative, it wants to move quickly. You’re much more likely to successfully launch an MVP of your new CS initiative if it’s led by an experienced professional than internal team members who lack domain experience. The entire focus of the consultant can be on your project, not the 100 other digressions that steal your team’s time and focus.
Initiatives that fall into this category include launching a new CS organization, adding a premium service tier to your offering, or launching a health score initiative to either minimize churn or accelerate growth. Generally the expectation is that the payback for such an investment is 12 to 24 months after launch.
Are you trying to launch a new initiative that could materially impact revenue retention or unlock new growth and need to launch in one or two quarters?
Unsticking a Stuck Project (Gracefully)
Sometimes projects stall because you have a number of paths that seem viable, and internal stakeholders can’t agree on one direction. Making a decision means considerable resources will be devoted and no one wants to make the wrong decision. Also, management may be sensitive to disenfranchising key stakeholders. Bringing on an objective and experienced consultant can be a great way for parties to unite without anyone losing face. A skilled consultant can help foster alignment in a process that builds or repairs strained relationships.
- Have you been trying to make progress on an initiative but you’re stuck in the research or design phase for more than a few months?
Accelerating a Slow-moving Project
Brooks’s law observed that adding someone to an already late software project usually makes the project later. Fred Brooks, author of the Mythical Man-Month book from which the law was derived, explained that this “law” is an oversimplification but generally true. One exception to this rule is when you can add skilled talent that can produce modular deliverables that can be integrated into the larger system.
A number of common CS initiatives that commonly take too long can be accelerated by adding CS consultants. Many health score projects, for example, are led by smart teams with an ambitious design that includes more than 10 categories of data and dozens of metrics. While complex scores like this can eventually be effective for predicting churn or growth, one of the first goals of a health score project is building the organizational framework to assess the readiness for systems and stakeholders to support an ongoing process.
While subject matter experts debate the right formula to represent an “active user”, a CS consultant can focus on defining and developing the operational process of designing, testing, and releasing KPIs and metrics, which can be used in the health score. No health score is perfect at launch and a consultant can help your CS Ops team build this process so they can iterate on and improve metrics that provide actionable insights.
- Do you have an important CS project in flight that could use targeted ownership?
Gaining Access to Tools and Templates
Experienced consultants have a library of templates and tools that are developed and updated continually based on their ongoing learning. For example, what kind of resources do you have or will you need to rapidly develop a health score, or launch a revenue generating service? A consultant will have templates you can start with and customize as needed. How many times have you defined the VP of CS role and created a job description, interview process and evaluation homework? Most consultants will start with their templates and customize them based on your needs. If included in the agreement, your team can continue using the tools and templates long after the consultant moves on.
- Are you spending time on creating tools and templates and feel like you’re probably reinventing an inferior, non-reusable wheel?
Investing in Star Talent
Smart leaders know you need to invest in the development of star talent to keep them engaged and loyal. While enrolling a promising executive in night courses and workshops is useful, pairing her with an expert to work together on an important project is the best way to develop a rockstar. This is an increasingly common reason why companies launching new Customer Success initiatives hire experienced consultants who can mentor and fast track the development of key team members.
For a younger company, it’s common to have a CS leader who knows the business and is effective at building relationships with customers but is less experienced with management or customer success. Providing a consultant to work with this type of leader is a great way to quickly develop an emerging leader.
- Do you have a valued team member that has significant growth potential and you want to demonstrate your commitment to this person by investing in their growth?
Providing Ongoing Training and Development
Even established CS teams can benefit from ongoing training. It’s increasingly common for a CS leader to partner with a CS consulting firm to provide ongoing training for core CS skills. CS consultants frequently offer a variety of training, certification, and coaching services to help level up or refresh the abilities of customer-facing teams.
- Do you want to level up or energize an entire team that needs newer skills or needs to sharpen the saw?
Adding Smart Plug-and-Play Capacity
When you hire a new employee, it can take months for that employee to ramp up and become productive. A seasoned consultant can hit the ground running. For example, companies looking for a CS leader can hire a fractional VP to either manage an existing team until a new leader is found, or support a team if a leader is out for an extended leave. The interim VP can help you find a better candidate based on their deeper knowledge of your business and its current stage of development.
- Do you just need more capacity, specialized skills AND appropriate judgement to support your customer-facing teams while you determine your long term strategy?
Establishing a Coaching Bench
Successful leaders learn that they don’t need to know everything. Instead, they develop a robust network of subject matter experts they can call for immediate support and brainstorming. Steve Blank recently wrote a blog post about how important this lesson was for him. It’s a must-read.
- Do you as a leader have a Customer Success expert you can call to brainstorm and think through issues privately to mature your thinking on a problem or opportunity to scope or prioritize it?
It may sound counter-intuitive to hire a consultant in an effort to save money, but it’s actually quite common. Companies often realize that an ongoing project with 10 people meeting weekly is costing thousands of dollars in time and lost opportunity if progress isn’t made consistently.
As an entrepreneur, it’s easy to look at every new project and think, we can figure this out for ourselves. And it might even be true to some extent. But you’re often going to waste a lot of time and resources in the process, and make many mistakes—learning isn’t free. So even if you do ultimately want to develop subject matter expertise in a certain area, it can still make sense to hire someone who has done it before to help you make meaningful progress faster.
- Are you concerned that a major initiative could steal and you want to be more efficient and minimize risk and waste?
Being the Bad Guys
Sometimes consultants can help protect team morale by being the face of a difficult reorganization. While you wouldn’t hire someone just to take blame for a difficult decision, an added benefit of having a consulting partner lead a reorg is that the consulting partner can recede to the background after the project. Having an objective third party who is working in the best interest of the company can make it easier for team members to accept changes. Unpleasant changes can feel less aggressive if the person leading the effort isn’t someone you’ve had personal challenges with.
- Have you realized your team or organization needs a fundamental shift that will be challenging and you want to retain and energize the new team?
The Bottom Line
If you haven’t incorporated consultants into your management toolkit, I invite you to do so. The world isn’t getting smaller, the rate of technological change is not slowing down, and more, not fewer competitors are likely to emerge in any viable market. Improving your ability to explore, understand and act quickly on growth opportunities can only be improved by leveraging the right teams, internal and external.
About the Author:
Paul is a prominent Customer Success thought leader recognized as a Top 100 Strategist in 2017 and 2018. He wrote the foreword for The Beginner’s Guide to Customer Success. He is a founding member of the Customer Success Leadership Network and the Customer Success Standards Initiative. He has been a mentor for emerging Customer Success leaders for years and routinely participates in First Round Capital’s fantastic mentoring program. Paul specializes in helping B2B enterprise SaaS companies, from $0 to $50M ARR, launch or redesign effective scalable Customer Success programs for both tech touch and white-glove customers. He has joined very technical companies and repeatedly improved NPS scores from negative and single digits to 60+ within 18 months.