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Power Your Org With The Customer Success Flywheel

Power up your business by centering on the customer.
Patrick Icasas
November 16, 2021
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Customer Success as a business function has one of the largest potential impacts on the company as a whole. Nearly everything that CS does can either help or hinder another department; and the better CS does its job, the better off the rest of the company is. 

But how can CS leadership internalize that? How can a CCO move away from “plug-and-play” customer success operations where customers just go through the process like factory workers at an assembly line? How can CSMs look beyond themselves and their task lists? How can the CS organization elevate the rest of the company?

At Catalyst, we like to talk about Bringing Customer Success to the Center. This is one of our core philosophies, and what we want to encourage the rest of the tech industry to adopt. In this philosophy, customer success is the primary driving force for everything that the rest of the company does, whether that’s marketing, sales, or product development. 

This is best illustrated by what we call the Customer Success Flywheel.

What is the Customer Success Flywheel? 

The original flywheel was created by an inventor named James Watt, who used it to transform the steam engine from a clanking collection of rattling metal into a smoothly operating mechanical system. 

The Customer Success Flywheel is a system of performing Customer Success tasks that generate positive and replicable outcomes while removing friction caused by obstacles or tasks with negative outcomes. Over time, this sustained improvement will build an institutional momentum that drives success to your customers and business. 

The “flywheel” as a business concept isn’t new. Hubspot pioneered the use of the flywheel metaphor in marketing, and since then it’s been adapted into other industries. Catalyst even has its own Feelings Flywheel as a model for managing personal and professional relationships. 

At Catalyst, we consider the CS flywheel to be an ideal depiction of how Customer Success should work. This metaphor works on multiple levels. 

Distributed power

In a real flywheel, energy from the primary motor goes to the flywheel, which drives motion via belts that power other parts of the machine. In the Customer Success flywheel, the CS team is a major source of information, customer insights, and impetus for change, which is transferred to the rest of the organization where they can make the most use of it.


Let’s touch briefly on each major business unit and see how Customer Success imparts motion. 

Product/R&D. Customer feedback is rocket fuel for a product-led organization, but engineering rarely has the opportunity to harvest this fuel on their own. They don’t get to speak to the customer 1:1. That’s a job for Customer Success.

Customer Success is able to have raw, unfiltered conversations with end-users that cover everything from day-to-day UX input to overarching goals and user motivations. All this data is fed to Product/R&D so that they can iterate and improve the product over time. 

Sales. While Sales is good at understanding customer needs and getting them to the point of purchasing your product, they rarely (if ever) have cause to talk to a customer post-sale. This means Sales’ information is incomplete, because they don’t have visibility into what customers experience after the fact. 

It’s up to Customer Success to communicate to Sales what happens after the contract is signed. It’s this information that helps Sales determine the difference between an ideal customer and a bad-fit customer, and a truly valuable feature versus a nice-to-have. 

Marketing. In addition to the obvious benefit of customer insights and user stories, Marketing also benefits from a strong CS program through the creation of loyal brand advocates. These advocates are willing to collaborate and act as references, provide customer quotes, arrange referrals, and participate in case studies. 

Customer Success can even draw in customers and their network for co-marketing opportunities where customers appear on webinars and event panels, or act as Subject Matter Experts for content projects. 

Finance. Data provided by the Customer Success team directly impacts the content and accuracy of the Finance department’s revenue forecasts - particularly in the realm of recurring revenue. Churn rate, renewals, and upsell forecasts allow finance to better assess revenue risks. 

Operations. Customer Success Ops roles are deeply involved in creating the right processes to feed this flywheel, because it drives efficiency across all related aspects of the organization. By focusing on the end goal of serving the customer, CS Ops can leverage the right tools to enable the CS motion as a catalyst for growth. 

This brings us to the next defining quality of the flywheel: momentum. 

Building and maintaining momentum

Like a flywheel, it’s difficult for Customer Success organizations to gain momentum if they’re starting from scratch - especially if the business has already been operating for a while and CS has to play catch-up. 

But once your CS arm has gotten over the initial hurdle and has built up momentum, things become easier and more sustainable. Your progress from previous cycles feeds into the next. 

Here are some examples of the Customer Success Flywheel gaining momentum:

  • Your initial onboarding cycles will become smoother, more efficient, and more repeatable over time, which makes it easier to train new Implementations staff.
  • As the CS team runs more EBRs, they will collect more customer insights, which will lead to better ICPs. 
  • Your first crop of Customer Success Managers will gain more experience and confidence, which will lead to better performance when they serve new customers. 
  • Your early CSMs may learn enough to be promoted to supervisory or management positions and will be able to scale your CS team to accommodate needs. 
  • CS organizations can gradually build up a library of documentation, reference materials, and training resources over time that will help them quickly answer common questions and speed up the support process. 
  • CS Ops will start out as very basic, with new tools being introduced on an ad hoc basis, but will then slowly be swapped out over time for CS platforms with greater capabilities.

But this momentum doesn’t just apply to internal CS concerns. It also applies to the customer journey:

  • CS helps get new customers to value
  • Insights from those customers help product build better products
  • Better products and customer advocates help marketing tell better stories
  • More compelling customer stories and customer references accelerate sales. 
  • Sales signs on new customers and hands them off to CS
  • And so the cycle continues...

Once a flywheel has built up speed, the momentum will be easier to maintain. Not only that, but it will also be able to better withstand friction that might have killed the momentum entirely at lower speeds. 

Speaking of which...

Friction

The Customer Success Flywheel defines “friction” as any task, process, or element that makes it more difficult for a customer to achieve value, whether directly or indirectly. This could be anything from long Customer Success response times to poor alignment between product and CS.

While all friction is bad, not all friction is a priority. Just as you apply varying levels of friction to the brakes of your car, different problems apply different levels of friction to your customer success flywheel.

The true challenge here then is not stopping all sources of friction, but knowing - and addressing - the sources of friction that will be the most obstructive to your flywheel’s momentum. 

To complicate matters further, you also have to take into account your available resources. If you don’t have the resources to tackle a specific problem, you either move on to something you can afford to tackle, or you find a way to get more resources. 

How to achieve the Customer Success Flywheel Effect

Before we get into this section, we’d like to explain what will not achieve the Flywheel Effect. 

You will NOT achieve the Customer Success Flywheel Effect through:

  • Sudden and major changes
  • Frequent changes in direction and strategy
  • Prioritizing profit over customer satisfaction
  • Disconnected and siloed internal departments

The CS Flywheel Effect is achieved through gradual and incremental changes to your CS process. These are done with the intent of bringing customer success to the center of your organization and bringing the rest of your departments on board. 

The Customer Success Flywheel is as much of a mindset change as it is a process change

You have to train and encourage your employees to look for opportunities to improve, whether it’s improving themselves, the process, or the technology. It’s empowering them to take a great idea and execute it, then rewarding them for success. This can happen anywhere in the organization, not just in the Customer Success department. 

Here are some examples of incremental changes that build Flywheel momentum:

  • Host Sales/Customer Success alignment meetings where CS can communicate customer stories
  • Assign a single point of contact per customer so that customers know whom to approach for help
  • Interview churning customers for product insights
  • Maintain a clean and accurate CRM database

One of the key advantages of this approach is that it’s (relatively) easy to stack up a series of small wins. Do enough of those, and it adds up to major upgrades to your customer success workflow. 

Customer Success leaders can help direct these changes by prioritizing which small wins to chase right now. Do you focus on beefing up the size and quality of your CS team? Do you build up your support documentation? Do you attempt to reduce customer churn?

All of these are excellent choices, but what you prioritize determines the direction your flywheel spins. 

Here are some important questions to ask:

  • What is the company’s primary strategy or concern over the next year? 
  • What resources do I have available to me right now?
  • Using my available resources, what improvements can my team make that will help accomplish the overall goal?
  • What tasks can I accomplish that will help me obtain more resources to do tasks with bigger impact?

As you can see, success in the CS Flywheel isn’t supposed to be just success in isolation. Each win is supposed to either improve life for the customer or help the team improve life for the customer. 

In conclusion

The beauty of the Customer Success Flywheel lies in its simplicity, achievability, and sustainability. 

It starts out with small, forward-looking motions that are well within the means of most CS organizations. By maintaining consistent effort and direction, this motion eventually builds up to truly impressive levels of energy that leaders can use to drive long-term company growth. 

It’ll take time, effort, and a whole lot of patience before you’ll be able to see dramatic results, but every locomotive needs time to build up steam. And the best time to start is now!

Better relationships. Less churn.

What’s not to love? Try Catalyst today.
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