Your First CSM Hire: Avoiding Mistakes and Finding the Right Fit
What to Watch For When Growing Your Customer Success Team
In my experience with startups, one of the most common questions I hear is, 'When should I hire my first Customer Success person?' The timing is everything. Get it wrong, and you’ll face messy operational issues like over-hiring too fast, which I've seen happen. Suddenly, you’re scrambling to make a bloated team work efficiently—a nightmare you want to avoid.
Identifying the right time to hire a CSM
The ideal moment to bring on a Customer Success Manager is when your company is poised to start truly investing in customer outcomes, not merely managing an influx of support tickets. This is the point where a CSM can transition from a traditional support role to becoming a strategic partner for your accounts. This strategic partnership is essential as CSMs bridge the gap between your product's potential and the actual value realized by customers. They are pivotal in ensuring that the product's capabilities are fully leveraged to meet customer needs.
So all of that sounds good, right? But when exactly should a CSM be hired?
So when exactly?
To determine the right time, look for signs that your customers are ready for strategic partnership, where a CSM can deliver real value. This is when your vision is clear, and you're comfortable saying 'no' if it helps customers achieve success—not just short-term satisfaction. Here are a few simple ones that come to my mind:
1. Customer Base Growth: When your customer base grows to a point where personalized follow-ups and strategic engagement can no longer be handled by the founding team or sales staff alone. For example, let’s say your startup initially managed 50-100 customers with direct interactions by the founding team. As your customer base grows to over 500 diverse customers, individual attention becomes challenging, leading to missed opportunities for deeper engagement and customer retention.
2. Revenue milestones: Reaching a revenue threshold that allows for the investment in a role dedicated entirely to customer success without compromising on other critical operations. In this scenario, maybe your startup has reached a monthly recurring revenue (MRR) of $100,000, which provides enough financial cushion to allocate budgets specifically for roles that are strategic rather than operational, such as a dedicated CSM who can focus on maximizing customer value without affecting essential resources
3. Complex customer needs: Introduction of more complex products or services, or when entering new markets that require detailed customer education and support. For example, after launching a new, more complex product line or entering a market that requires specific compliance and detailed support, you notice an increase in the depth and frequency of customer questions that go beyond what your sales or support person is equipped to handle, necessitating specialized customer success intervention.
4. Feedback and demand: Customer feedback indicates a need for deeper engagement or when customers begin asking for more comprehensive support services that go beyond basic troubleshooting. In this situation, customers are providing feedback indicating that while they find the product useful, they need more strategic guidance to fully leverage its potential. Or, key accounts are requesting regular review meetings to ensure they are achieving their strategic goals, suggesting a need for more dedicated support.
5.Strategic shifts: Preparing for a shift towards a more customer-centric business model or when aiming to increase customer lifetime value through upselling and cross-selling that requires expert handling. For example, your startup decides to transition from a product-focused to a customer-centric approach, with a goal to increase average customer lifetime value. This involves not just selling products but ensuring that customers successfully integrate and expand product use in their operations, requiring a strategic partner rather than just a sales or support contact.
A quick tangent on CS teams and revenue…
I believe that Customer Success teams should be intricately linked to revenue generation. Lincoln Murphy talks about this a lot and I tend to agree. This isn't about turning CS into a sales operation; rather, it's based on the understanding that genuine Customer Success efforts, combined with a robust product and strategic execution, should organically lead to increased revenue. Customers who achieve success with your product are likely to expand their usage because they see real value, not because they're being sold to. CSMs play a critical role in making this customer-driven growth a reality.
How to approach hiring your first CSM
From my experiences and discussions with other CS leaders, here are some effective hiring strategies:
1. A true relationship builder
A successful CSM should not only understand your product deeply but also excel in forming and maintaining relationships. This skill is critical because it involves engaging with various stakeholders across the customer’s organization, navigating different personalities, and fostering long-term partnerships. During interviews, focus on their ability to handle complex scenarios, such as calming a dissatisfied customer or negotiating contract renewals. Ask for specific instances where they built or improved customer relationships that resulted in increased customer retention or upselling opportunities.
Make sure to dig into how they have built relationships with internal teams in the past. Do they play the blame game, saying things like 'at my last company, product never did X'? While that might be true, find out what they did to improve the situation and build partnerships. No company is perfect, including yours, so it’s important to understand how they’ll navigate challenges and foster strong relationships with your internal teams.
2. Set clear & achievable goals
When a new CSM starts, they often feel like they need to tackle everything, which can quickly lead to overwhelm and burnout. Setting clear, achievable goals is crucial because, without them, CSMs can easily get stuck in a bottomless pit of firefighting. They tend to gravitate toward urgent, reactive tasks unless you guide them to focus on high-impact work. Define realistic goals that include both leading and lagging indicators, like improving customer retention by X within six months. Leading indicators might involve personalized onboarding and regular check-ins with key accounts, while lagging indicators could be the resulting retention rates and customer satisfaction. This keeps their efforts aligned with meaningful outcomes.
I can’t tell you how many times I’ve seen companies bring in a CSM to firefight the biggest account at risk, claiming it's to help the CSM 'learn the customer,' when in reality, it's just firefighting. Allow your CSM to get to know your very best, most successful customers as well as your risky ones. But don’t just throw them into the fire with customers halfway out the door—that's a fast track to burnout and low impact. If you want your CSM to succeed, make their role strategic, with balanced exposure to different types of customers, and ensure they have the time to invest in both your product and the customer experience.
3. Evaluate success planning skills
Another key factor is whether the CSM can create success plans that lead to real, measurable outcomes. The focus should be on 'measurable.' A good CSM aligns your product with each customer's goals in a way that drives engagement, loyalty, and revenue by addressing their specific needs. Ask them, 'Can you describe a time when you had to develop a success plan for a customer? How did you ensure that it led to measurable results?' This helps you gauge their ability to deliver real impact.
To dig deeper, use scenario-based questions in the interview. For example, if your product is a SaaS tool, present a scenario where a customer needs to increase engagement with limited resources. Have the candidate outline a clear, measurable success plan using your product to meet that goal. You can also ask, 'When working with customers, how do you determine which metrics to focus on in a success plan? Can you walk me through your process?' This approach will help you find a CSM who can drive results that matter.
Bringing on your first CSM is a big step, but it's not just about filling a role—it's about finding someone who can drive real results. Focus on measurable outcomes, set clear goals, and give them space to succeed. Hire smart, and your CSM will do more than put out fires—they'll help your customers thrive and your business grow.