How to become a data-driven CSM: Part I

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Hi, Markus here. Welcome to a new episode of the Customer-Value-Led-Growth Newsletter.

I share strategies and guides to help you become a proactive CSM delivering more value for your customers and revenue for your company every week.

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You’ve probably heard that “CSMs need to become more data-driven” a gazillion times. But what does that even mean? I asked ChatGPT and got a pretty good answer:

Most CSM teams believe that if they are measuring

• Product adoption and usage

• Customer Health, NPS, and CSAT

• Customer engagement

and responding to (negative) signals they have accomplished their goal. But all these metrics have the same weakness - they lack of context.

Without context you are not acting based on data but based on assumptions. Assumptions like wide product adoption and high usage mean customers are successful.

It would make life in CSM much easier if it was true but the reality is not that simple.

Over the next 4 episodes, I want to show you how to build your data strategy to become more proactive and customer-centric.

1. Customer Basic Data

Your customers are not defined by their legal name, address, or industry. They are defined by their needs. Your customers’ needs are defined by their

• goals and success metrics

• problems and root causes

• level of skills and knowledge

This is the foundation of being data-driven because all other kinds of data, qualitative and quantitative alike, must be viewed in context to these 3 things. Product usage, customer churn, engagement - everything.

1.1 Goals and success metrics

If you do not have a clear understanding of what your customers are trying to accomplish you are guessing and assuming. Guessing and assuming is the opposite of being data-driven. Technically, you should get this information from the sales handoff.

But what I found is that they are often missing, too vague, or ill-defined. You should always start with a kick-off meeting to capture, verify, or help customers define their goals.

If your customers don’t know what they want to accomplish it’s not a problem but an opportunity. An opportunity to steer your customers in the right direction while taking the first step on the road to become a trusted advisor.

I can’t overemphasize the importance of getting this right. Your customers evaluate your collaboration in terms of goal accomplishment. This is how they decide between renewal or churn. They don’t pay for usage and convenience anymore.

1.2 Problems and root causes

Your goal is to help your customers to accomplish their goals. What stands in their way are the problems they have not been able to solve yet. Consequently, it’s your mission to help them overcome these problems.

If you don’t understand them then you end up solving problems they don’t have while not solving the ones they do suffer from.

Again, you are guessing and assuming which is the opposite of being data-driven. The only alternative is to provide one-size-fits-all-eat-or-die solutions that do not work.

Knowing your customers’ overall problem (e.g. high employee turnover for an employee engagement platform) is not enough. You need to understand why the problem exists in the first place.

• poor work-life balance

• micromanagement

• failed onboarding

• …

If the problem is caused by a poor work-life balance improving your customers’ employee onboarding is not the solution they need. And every problem can have different sources.

The better you understand your customers’ problems the better solutions you can design. The better solutions you can design the higher the odds of success.

1.3 Skills and knowledge

This is something rarely any CSM team is ever doing. They do not qualify their customers’ capabilities to tailor training and education programs. It makes a whole lot of a difference whether your customers are

• beginners starting from scratch

• seasoned professionals

• agencies

It does not make sense to invite customers to 1:1 consulting sessions when they lack basic knowledge. It’s a waste of time. Likewise, it does not make sense to point your agency customers doing the job for a living to your 101 guides and webinars.

Helping customers solve their problems does not mean doing it for them. It means to enable them to do it on their own with the right education and training. The right education and training are closing your customers’ gaps.

Customer segmentation typically includes revenue, size, and industry but rarely the things that are actionable - goals, problems, and capabilities. Building out these advanced segments makes your life easier because it summarizes the context.

If you are e.g. analyzing what customers do when they are using your product you need to understand who they are to make sense of it. Put simply, an agency customer will use your product in a different way than a beginner.