Foundations of Customer Success — Focus on Client ROI

For growing tech companies, the decision to hire for a net new function is often difficult. The first product manager, first director of marketing, first VP of sales—finding the right blend of experience and cultural fit is even more critical when hiring for new roles, as those hires will be responsible for driving the company forward for the years to come. In my experience helping clients find this talent, I’ve noticed that hiring a VP of Customer Success can be especially tricky. There are a lot of conflicting ideas about how to define “customer success” in an organization—and those ideas can often make bringing in the first VP of Customer Success incredibly difficult.

I recently sat down with Jamie Cappelli, one of Toronto's earliest Customer Success Leaders. He is a software executive with 20 years of success directing customer-facing departments including Professional Services, Support, and Customer Success. Cappelli is currently SVP Customer & Partner Success at NexJ, and he shared his insights into the evolution of the customer success function, and what CEOs considering adding or expanding customer success in their organization should be thinking about.

Before You Hire: Start with the End in Mind

There are a number of reasons why an organization will decide to implement a Customer Success program: pressure from a recent investor, a pivot to a SaaS model, losing a number of high-value clients in a short period of time, etc. Whatever the reason, Cappelli recommends that CEOs start by articulating clear answers to the questions:

  • What is the outcome we’re trying to achieve?

  • What is our success criteria?

CEOs will often view Customer Success as another lever to pull in the quest to increase growth. It’s a fair assumption—CEOs often have a background in sales, and growth is something that everyone wants for their business. However, for organizations that are rolling out a new Customer Success function, Cappelli argues that it’s the wrong starting point. Growth can be the ultimate goal, but it shouldn’t be your starting point for a Customer Success organization.

“If a Customer Success program hasn’t existed before, it’s a much more foundational approach. Customer Success will die on the vine if the organization doesn’t have an understanding of its own value proposition.”

Build the Foundation of Customer Success

When a Customer Success program has not existed before, it should begin with a foundational approach to the business—the understanding of the company's value proposition through a very specific lens. Cappelli believes that the first objective for a Head of Customer Success is to turn the value proposition of the company into a clear ROI for their customers.

To articulate this ROI, he interviews internal members of the team to uncover the following:

  • What is the sales team discovering in their calls about the challenges that prospects are hoping to solve?

  • How is the sales team selling? When are they getting traction? Is there a particular stage of the customer’s journey when the offering has the most perceived value?

  • What are the marketing people seeing as the place of this product in the market?

Once the ROI for the customer is clearly understood, the Customer Success organization’s role becomes ensuring that their customers are achieving that ROI.

Define the Role of Customer Success In Your Organization

Simply put, the role of a Customer Success Manager (CSM) is to ensure that customers stay customers. And, customer loyalty becomes very easy if the customer is getting the value they’re expecting. The art of a good Customer Success Manager is in their ability to understand what the client is hoping to achieve with the product, and to dig into potential problem areas when that ROI is not being realized.

Cappelli recommends asking the question: Will a CFO sign off on a renewal contract if their company is not achieving value from their initial investment?

“The biggest misconception about Customer Success is that it’s goal is to make customers happy—which is way too fluffy. If the product isn’t linked to the client’s business objectives, that CFO is never going to sign off on the renewal—you’ve got to demonstrate the ROI.”

Creating success for customers needs to be a company wide philosophy that prioritizes ROI for clients—and it can be a powerful aligning force that impacts every department, not just the CS team.

“You can see it translating most directly to sales—generally the conversation that sales is having when they’re prospecting is kind of the same conversation that a CSM team would have with their client. It should be all around selling the same value proposition, helping to solve problems. But it also translates to marketing and product. If the product team hasn’t set up a mechanism for us to report on active use in a way that the client can tie very directly to ROI, it becomes very difficult to prove to the customer that they’re seeing value.   

The CS organization should be conducting the orchestra, but it needs the musicians. And everybody in the organization is a musician.”


Going back to the idea of growth—instead of thinking about growth for your own company, focus on helping your clients be successful. If you have established trust with your customers and have consistently delivered the ROI you promised, then they will stay with you, and be open to additional purchases.

Understand How to Measure Your CS Team

In our experience helping organizations recruit Customer Success leaders, we’ve noticed that there is a tension about how they should be measured. Should a new CS organization carry a quota? Be measured against cross-selling and up-selling? What are the right metrics to implement, especially with a net new Customer Success organization?

Cappelli feels strongly about this—he believes that when starting up a new Customer Success organization, operating with a quota-based program will ensure your failure in year one.

Why? Because customer success needs to become a company wide philosophy—it’s not just a “functional department,” it needs to become part of the fabric of how your business functions. Sales, marketing, product development—all departments need to be aligned to the common objective of creating ROI for clients.

“What I always say is that if customer success isn’t a company wide philosophy, you’re done. If you’re thinking it’s just the one department and that’s success, you’re done. As a CEO, you need to make sure that all of your executives are aligned to a common objective. But if it’s just that one department, you can almost put a timer on it. It’s going to fail within a year.”


Because many CEOs come from a sales background, they instinctively think that anyone who interfaces with clients should be measured against a quota. However, that means you’re not creating a true customer success organization—it becomes an account management organization, and those are different things.

Instead of focusing on a quota, in the first year, a Customer Success organization should be laser focused on building trusting relationships—and ensuring that every client is getting the value they expect from the product. Once that foundation has been built, you can look to things like revenue growth or adoption of additional modules—but don’t set your CS team up to fail by implementing a quota too early. Cappelli also recommends that CEOs consider tying all executive bonuses to customer retention, as a way to ensure that success becomes a company wide philosophy. 

Size and Stage Matters! Use the Right Tactics (But Keep The Foundation)

Although the foundational philosophy of customer success will be the same for enterprise software and smaller point solutions, tactics will vary. Cappelli argues that the same first steps are required for any new CS program: determine ROI for clients and demonstrate it. The CS strategy flows from there.

“I’ve put in 5 or 6 different programs, and the foundational philosophy is always the same. That never changes. The difficulty is the gulf that exists when I first start. Where are all the clients? Are they on a common platform or different solutions? How easy is it for me to articulate the value proposition, and then demonstrate it with the product?

If I can get through that really quickly, then it becomes a bit different—if you have large enterprise clients, that’s when you need dedicated personnel for one-on-one hand holding. If you’re more of a point solution with lots of clients, then you have to rely on automation to supplement your customer success program and keep costs down—you really have to be systematic in terms of how you set up your reporting and monitoring.”


In a large enterprise software company, you will need more dedicated staff to support your clients—it’s a high touch environment where each client has complex needs. Organizations that serve smaller clients need to implement systems that allow them to stretch their resources further. In either case, a strong foundation of Customer Success philosophy—throughout the organization—needs to underpin the program and inform the necessary tactics.

The Good News: Customer Success Makes Your Organization Healthier

There are a variety of reasons that organizations decide to bring in Customer Success: a recent investor exerting new influence, a pivot to SaaS, unruly growth that’s resulted in client’s leaving.

Whatever the reasons, once the principles of Customer Success are in place, CS will make your organization healthier. These foundational principles have a ripple effect: things become clearer, messaging becomes more specific, and everyone in the organization gets aligned around the common purpose of delivering ROI for customers. In particular, it will help the organization start to build smarter new products and modules that have ROI for the customer in mind. While it will take some time to build the foundational elements of customer success—throughout the organization—it’s an investment well worth making.

Are you considering bringing Customer Success to your growing organization? Book your free consult with Heidi Ram today.

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