SaaS Customer Success: Do You Need It and How to Build It

In Spring 2005, Salesforce was losing 8% of its customers every month. 

From the outside, nobody could tell. New business was coming in fast enough to cover the losses, so revenue kept growing while the customer base underneath quietly shrank. At that rate, roughly 60% of your customers are gone within a year. 

The lesson was simple: growth can hide a leaky bucket.

Marc Benioff responded by making churn a company-wide problem — something to measure, track and take as seriously as acquiring new customers. The function that came out of it got a new name: customer success. 

The story is covered in the book “Customer Success,” one of the foundational books on the discipline, written by Nick Mehta, Dan Steinman, and Lincoln Murphy.

Two decades later, the problem underneath hasn’t changed. With a leaky bucket, you can keep pouring new customers in for as long as you have money, but if customers keep falling out the bottom, you’re playing a losing game.

This article is about whether you need customer success for your SaaS organization, and how to get it right if you decide you do. To make sure it’s helpful, I spoke with several of my friends who lead customer success teams at SaaS companies today, ranging from manager to VP level roles.

What customer success actually is

Customer success is a proactive strategy for making sure users reach the goals they bought your product for. A lot of teams get this wrong. It’s easy to fall into thinking customer success is about keeping customers, but really that’s just one outcome. 

Customers who get real value from your software are more likely to renew, buy more, and recommend you to people you’ve never met. It’s retention, then expansion, then advocacy. But sometimes the customer doesn’t know how or where to find more value in your product. 

I have a friend who leads customer success at an early-stage B2B fintech company, and they shared this example: 

Their customer was using payment analytics software to monitor performance across its recurring payment setup. Their customer success manager (CSM) spotted something that wasn’t obvious from the overall numbers: prepaid cards had a dramatically lower acceptance rate than regular debit and credit cards — 5% versus 60%.

The recommendation was simple: stop accepting prepaid cards for recurring payments.

The customer made the change and saw fewer unsuccessful payment attempts and less money wasted chasing payments that were unlikely to go through.

The CSM connected the data to a business problem, identified an opportunity to change something, and gave the customer a clear next step to take. That’s customer success doing its job.

Great customer success is change management

Here’s the part nobody warns you about when you become a customer success manager: a lot of the customer success job is change management, and it happens inside someone else’s company.

Software doesn’t create value automatically just because someone logs in. It creates value when people change how they work, and people don’t change how they work because their company started spending money with a new vendor. Someone has to make the case internally, get other people on board, win support from senior stakeholders, and keep pushing until the new behavior sticks.

A good example is another friend of mine, a CSM at a global fintech company with nearly 1,000 employees. They specialize in bank payments and recurring payments, and their company had been working directly with the headquarters of a European gym company. It was a great fit and great relationship — so much so that headquarters decided to offer the product to its franchisees.

Suddenly, the relationship looked very different. HQ was effectively acting as a reseller,  promoting the product to franchisees. The customer success team reached out to each franchisee separately to onboard them. Even the support model had to change. HQ was used to receiving bespoke support, but that wasn't something the organization could offer to every franchisee.

The customer success team had to help everyone adapt to the new setup — including HQ, the franchisees, and its own internal teams.

That also highlights the less obvious part of customer success: sometimes you're not just helping customers change how they use your product. You're helping them change how they work with you.

Customer success vs. support vs. the rest of the post-sale org

While it varies from company to company — and AI is quickly driving changes — customer support is typically reactive by nature. It deals with the thing in front of it: a specific incident, a bug, or technical problem that needs to be fixed. That’s not a bad thing, it’s just a key difference between customer success and customer support.

Customer success is typically more proactive and strategic. It’s focused on the bigger picture: where the customer is trying to get to, how they’ll know they got there, and what has to change to make it happen. 

Every business can draw the lines differently, but here’s the most common breakdown of the different pre- and post-sales customer-facing roles:

The line between CSM, Account Manager, and Account Executive varies from company to company. Sometimes the AE owns renewals and upsells, sometimes the CSM does, and sometimes an AM gets pulled in. 

But let’s zoom out: where does customer success really fit?

Customer success is the glue across the whole journey.

Even if they don’t say it out loud, customers expect a consistent and unified experience with organizations they work with. Your company may be made up of dozens of different teams, but you can’t let that create a disjointed customer experience.

In B2B companies, this usually means that once the contract is signed, customer success steps in as the guide, responsible for helping the customer get where they need to.

Do you actually need a customer success function?

Churn often starts long before a contract is signed and a CSM is assigned. 

If you sell to the wrong customers, no amount of customer success will turn a bad fit into a great one. So before hiring your first CSM, look upstream: are you selling to customers who have a real problem your SaaS solves? Do they have the ability to implement your product? Do they have strong reasons to keep using it? 

If the answer is yes, there’s one more question: do they need help getting there? 

You probably need customer success if: 

• Customers need implementation, training, or integrations before they can get value.

• Product adoption requires people or teams to change how they work.

• Contracts are large enough that losing a customer materially affects revenue.

• There’s meaningful expansion potential once customers succeed.

• Customers need multiple stakeholders — including executives — to stay aligned.

• You can’t reliably tell whether a customer is healthy until renewal is approaching.

You probably don’t need it if: 

• The product is simple and customers reach value quickly on their own. 

• Customer onboarding can be handled effectively through the product, documentation, and automation. 

• Contracts are low-value and churn has little economic impact. 

• There’s little expansion opportunity. 

• Customers don’t need much ongoing guidance once they’re up and running. 

Then there’s a third case: you have a customer success problem, but you don’t necessarily have a hiring problem. 

Maybe your documentation is poor or your onboarding is confusing. Maybe your product training is too generic. Or maybe your software is simply harder to use than it should be. 

If 40% of new customers ask the same onboarding questions, the answer might not be another CSM. It might be simplifying your product’s UI, creating an automated onboarding email sequence, or improving your documentation.

Every SaaS company needs a customer success orientation. It’s on you to figure out how to help customers be successful and retain them for a long time. That might mean you need dedicated people to make that happen, or it might mean you need to get creative in how you use technology, automation, and product design.

How to build a customer success function

Once you’ve decided you need one, don’t start by hiring a leader to build a whole department.

Start by figuring out what actually needs to happen.

Step 1: Hire a player/coach

If you’re building customer success from zero, don’t start with a VP who has nothing to manage or a junior CSM with no playbook to follow. Start with a player/coach. 

You need someone senior enough to shape the function, but close enough to customers to figure out what actually works. They should own the early accounts while building the customer journey, milestones, metrics, processes, and playbooks. 

Then, once you have a motion that works, they can hire CSMs into it and scale into a team. 

Step 2: Map the journey and its milestones

Once you have your first customers, map out what getting them to value actually looks like.

Break the customer journey into a handful of phases — onboarding, implementation, early adoption, proving value, renewal — and define the milestones that need to happen in each one. The phases can be fairly generic, but the milestones should be specific to your product and customers. 

A milestone is something you can verify: the integration is live, the first team is actively using the product, or the customer has achieved a specific outcome. 

Your commercial model matters, too. A license-based product might need to drive adoption across a certain number of users, while a consumption-based product needs customers to increase usage in a way that creates tangible value. Your customer journey should reflect how customers actually buy and get value from your product. 

Build in regular intervals to step back and review progress toward your customer’s goals. Usually this takes the shape of QBRs or semi-annual reviews, but feel free to be creative. The important part is using these checkpoints to highlight progress, remove roadblocks, and stay aligned on what needs to happen next. 

At any point, a CSM should know where your customer is, what needs to happen next, and whether they’re getting closer to value. 

Step 3: Get customers to articulate their goals, and how they'll measure them

This sounds obvious, but customers are surprisingly bad at answering the question of “What does success look like for you?”

Caught up in the details of their day-to-day life, they know they have a problem they want to solve, or else they wouldn’t be customers. But frequently you’ll find customers haven't defined the specific business outcome they’re after, or how they’ll know if they got there.  

That’s where a good CSM earns their keep. They help customers turn a vague statement into a concrete goal. 

Three questions really help here:

• What are you trying to change? 

• What will be different if this works? 

• And how will you measure it?

Here’s a real example from a peer of mine who works at a B2B SaaS company that provides feedback analytics for customer support teams:

When a new customer joins, they regularly say things like, “We want to understand customer voice at scale.” 

A good CSM can push that further: What does “understand” actually mean? What decisions will this insight help you make? How will you know you’re getting better at it? 

An actual goal for one of their customers might be: 

"Identify the top 20 ticket drivers each quarter and hand them to product owners with clear supporting evidence so they can plan against them." 

That’s something the customer can work towards and something you can measure.

This becomes the foundation of the entire relationship. You can use those goals to guide adoption, shape your success plan, and later come back to the customer and say: 

“This is what you wanted to achieve. Here’s what happened.” 

Step 4: Measure what matters and build a health score

Churn, renewal, and expansion are lagging indicators. By the time they move, it’s often too late to do something about it. It’s important for every SaaS company to find ways to get ahead of these situations.

Here’s another real-world example: a friend working as a CSM for a large B2B fintech company was dealing with one merchant who had a very large contract. Their renewal was still 10 months away, but they weren't using the product as much as expected and had already expressed some dissatisfaction. 

Rather than waiting for the renewal conversation, her CSM reached out to the CFO with a different proposal: reduce the customer's commitment for the current year in exchange for leaving room for future growth. The customer was growing, just not as quickly as they'd originally planned.

What could have become a difficult renewal conversation turned into a collaborative one. It improved the relationship and gave the customer success team a much healthier working relationship with the people actually using the product day to day.

The key here was spotting the mismatch early and doing something about it. They may have taken a short-term financial hit, but they improved the relationship with the customer, retained the relationship, and have seen expansion over time.

You want to know a customer is drifting before the renewal lands on your desk. In most organizations, some version of a customer health score is how this happens.

To develop your health score, you need to do some data analysis: 

• Look at your best customers. What are the key signals that a customer is doing well with your product? What product features are they using? What do the customers who have purchased an upsell or another product have in common? 

• Look at your worst customers. What are the common things that happen prior to churn? What early indicators can you identify that show a customer is moving in the wrong direction? 

A health score is a formula that brings these signals together, helping your CSMs understand who to prioritize and to see where things are going awry. 

Here’s a caution: don't fall into the trap of trying to track everything. I’ve yet to see an organization with a perfect customer health score. That’s okay. The goal is to identify signals that tell you a customer might be heading toward trouble, then to intervene quickly to help get them back on track. 

Maybe it's usage dropping. Maybe the executive sponsor has stopped attending meetings. Maybe the product champion has left. Maybe support ticket volume is trending up or sentiment is trending down. 

Individually, each signal might mean very little. Together, they can tell you where a customer is heading. Health score is just one example of a good customer success metric, but it’s critical because it’s a big part of making your team proactive.

Step 5: Scale customer success with segmentation and AI

You can’t — and shouldn’t — give every customer the same level of attention.

The trick is to segment customers by factors like annual recurring revenue (ARR), number of licences, company size, or complexity. I’ve also seen companies segment customers based on their potential to grow. Whatever criteria you choose, once you’ve identified a few key segments, you need to tailor your approach for each segment. 

This is where high-touch, low-touch, and digital or tech-touch come in.

• High-touch customer success: Larger or more complex accounts might get a dedicated CSM, regular business reviews, executive engagement, and even travelling regularly to meet them in person. These are your most important accounts, so you pull out all stops to ensure they’re successful for the long haul.

• Low-touch customer success. Lower-touch accounts usually get a named CSM, but they don’t get the same white glove approach as your high-touch accounts. Response times might be slower, meeting frequency might be a little less, and your low-touch CSMs will likely carry a larger book of business.

• Digital or tech-touch customer success. These accounts typically don’t have a specific CSM they work with. Instead, they might have a small group of CSMs responsible for providing assistance — almost like a special support team. Tech-touch accounts typically engage through a one-to-many approach: group training webinars, automated onboarding, self-service, and selective hands-on support when it matters most.

Here’s a key thing to remember: digital customer success shouldn’t be reserved for your lowest tier. Automation should make every CSM more effective, regardless of the customer segment they work with. 

AI agents are a good example here: you might leverage an AI agent to prepare meeting briefs by summarizing customer research, usage data, and recent interactions. You might also set up workflows to notify a CSM when your health score suggests they may be heading towards churn. That could include an automated email to the customer for tech-touch customers, or prompting a high-touch CSM to reach out personally and set up a call. 

The goal is to give each customer the right kind of attention.

Step 6: Close the loop back to product

One of the best things about customer success is that it sits so close to the customer. Your CSMs are proactively partnering with your customers to figure out what they need, where they’re headed, and how your company can best help.

That means they get a lot of feedback about what your product does well and what your customers wish your product could do better. 

I’ve found it can help to think of CSMs as an extension of the customer inside your company. 

You need to feed those insights back to the teams that need to hear them:

• Recurring pain points from good-fit customers should influence the product roadmap. 

• The reasons customers churn should change how your sales team sells. 

• When customers love you, it should lead to marketing case studies and finding more customers like them.

The best customer success teams make your whole company better at creating successful customers.

Recommended Reading

The Supportive

How To Be Heard By Your Product Team

Customer success is mission critical for SaaS companies 

Customer success isn’t a department you add because “every SaaS company is supposed to have one.” It’s a capability you build out when your customers need help getting value from something they’ve bought. 

If your business relies on recurring revenue — like virtually every SaaS organization — then it’s your responsibility to make sure your customers get enough value to stay subscribed and expand over time. 

Start with your customer and define what success looks like for them. Build a clear journey and define the signals that matter. Use technology to scale what works, and feed what you learn back into your business.

Be consistent in your efforts, and you’ll build a product that customers love and a business that’s consistently growing, whatever shape your customer success efforts take.