Heard the one about the Customer Success team that talked to each of their top tier customers every week, ran detailed monthly risk meetings, sent NPS surveys twice a year, followed up personally with responders, and still got surprised every quarter with an unacceptable churn number? And the punchline: even though their plates were already full and the client base was growing, the company cut the team size in half because Customer Success was a significant cost center with little demonstrated impact.

This might sound like a bad joke, but it's all too serious - and all too common. Does it sound familiar to you, either from reality or from your worst nightmare? Are you working to define or restructure one or more aspects of your Customer Success program? Have you been pondering what framework you need to effectively answer questions such as:

• Which customers are succeeding with our application and what do they have in common?
• How do we replicate the success of our top customers across our whole base?
• How much recurring revenue is at risk in this quarter, and why?
• Which customers are most likely to upgrade their plan, add users, or buy add-ons?
• Is our free trial effective, and which trial customers warrant the most attention?
• What customer segment is costliest to serve, and how can we make them more self-sufficient?
• Did our recent product release have a material impact on our customers?

Whether you are starting from scratch creating your company's first true Customer Success initiative or fine tuning one that's already running, it pays (literally!) to go back to basics and make sure that the building blocks are in place, explicitly stated, and well understood. Take a few extra background steps to tie your program's goals directly to those of both your company and your customers. Building up from that foundation will ensure that your approach is genuine, that it can be appropriately measured, and that it remains valid.

But don't worry, you don't need to reinvent the wheel - you can roll with this one!

This post is the first in a series that will address each of the circles above and their linkages, walking through a useful framework for creating a high-functioning Customer Success initiative. As a first step, we'll discuss specifying business objectives and outcomes, starting with some definitions:

• Business Objectives - The goals that define and serve to measure success for your company, usually with a direct impact on bottom line
• Business Outcomes - Customer events or behaviors that consistently support your company's business objectives

Why, you ask, are we starting from the perspective of our business, rather than that of our customers? Are we more concerned with our own success than with theirs? Absolutely not - we are 100% concerned with both, and they are inextricably intertwined. As I discussed in a recent post, a good Customer Success initiative is always a two-way street. We only succeed when our customers do, and vice versa.

Specifying business objectives is usually very straightforward. Simply list the ways your Customer Success program can impact generation of revenue or reduction in costs. In our experience and conversations with many SaaS B2B companies, the following common threads have surfaced as usual business objectives:

• Trial Conversion - Turning free accounts into paying customers
• Customer Retention - Maintaining the stream of recurring revenue and reducing churn
• Revenue Expansion - Maximizing new revenue from existing customers through upgrades and add-ons
• Operational Scaling - Building capacity to serve customers and expand revenue while keeping costs low
• Customer Acquisition - Closing opportunities that both win new revenue and grow the size of the customer base

You should decide if all of these business objectives apply to your initiative, whether there are others to include in your list, and how they should be appropriately prioritized.

The next step is to enumerate all desired business outcomes and map each to a business objective. Ask and answer the question: What do we ultimately need our customers to be doing in order for our business to achieve its objectives? If this sounds basic, that's because it is. But it's important to be explicit, so that things stay as grounded as possible when it comes to the next, more complicated step of determining what leads to those outcomes.

As you work through these steps for your Customer Success program, you might create a list such as the following:

Keep your list handy, so that you can build on it when we cover the upcoming topics in this series:

• Circle of Success, Part 2: Determining Business Outcome Indicators
• Circle of Success, Part 3: Defining Customer Value
• Circle of Success, Part 4: Determining Customer Value Indicators
• Circle of Success, Part 5: Aligning Customer Value & Business Objectives

Whether your list looks similar to or quite different from the example above, you are probably already noticing that some of the tactics your Customer Success initiative utilizes or tasks it's asked to execute cannot be tied directly to an outcome you are seeking. Those are exactly the kinds of inconsistencies we're hoping to uncover and prevent or address through this exercise and those that will follow.

Notice your team spending a lot of their time talking with customers, but not with those who represent the most immediate opportunities for renewal or upsell? Lean on your documented business outcomes to help steer them to efficiency and scalability. Suspect that your product's trial design doesn't lend itself toward conversion? Arm yourself with your business objectives and outcomes combined with data on trial customer behavior (discussed more in the next post), and seek out a productive discussion with your product team. For these and many other scenarios, taking the time to put the right building blocks in place now will pay off down the road.

The discussions in this series are designed to help you lay the best, business-based foundation for your Customer Success initiative so that it can become a thriving profit center that's taken seriously by your company's leadership, truly help your customers achieve the value they sought out in purchasing your application, and keep you from ending up in the punchline of a bad joke.