Market Guide for Customer Success Management Platforms

Customer success management is a crucial function for organizations with recurring revenue streams. Product marketers should use this research to identify CSM platforms that will enable them to scale the function and provide increased visibility into the health of all customer segments.

Key Findings

• Businesses that offer products that are high-value, sold with subscription models or have long life cycles face scaling challenges as they build out their customer success management (CSM) efforts. A technology solution becomes essential in order to help a growing and often diverse set of customers obtain value.

• To provide more transparency and predictability in achieving customer renewal and growth targets, a CSM solution must:
  • Provide the means to improve customer engagement
  • Continuously refine best practices for guiding a customer to obtain value from the product
  • Incorporate more data sources and factors when evaluating the health of each customer

• CSM requires increasingly large teams and cross-functional participation to help customers recognize value. Point solutions or manual tracking methods become cumbersome and error-prone and do not enable uniform support for customer success across a growing customer base, multiple regions and an expanding product portfolio.

Recommendations

To improve marketing agility by utilizing tools for customer success management, product marketers should take these steps:

• Define your CSM solution needs by analyzing your current CSM practices, anticipated automation for scaling programs, and cross-functional collaboration necessary to retain and grow accounts.

• Evaluate vendors by prioritizing the capabilities that will be most important to your customer success program, which will encompass customer data integration to support a wide range of signals, customer journey playbooks, automation and customer health scores.

• Determine how the CSM platform will be deployed, including pilots and access to users beyond the core customer success team, by developing a roadmap and change management plan for the platform’s rollout.

Market Definition

CSM programs have become the standard enabler for technology and service providers to encourage customers to remain engaged and increase customer lifetime value for products sold via a subscription model (see Figure 1).

CSM is a fundamental shift in approach, not simply a rebranding of existing post-sales services or account management. Consequently, gaps exist when employing existing sales or service technology solutions in an effort to properly address CSM needs.

A technology sector — customer success management platforms — has emerged, and matured, to address this market need. Initially deployed primarily to reduce churn in high-value B2B accounts, CSM programs and platforms are now implemented to proactively manage customer engagement, adoption, retention and upsell/cross-sell objectives.

Customer success management is the business discipline of guiding customers to recognize value through product adoption or service utilization across their owning life cycle.

It uses a data-driven approach to monitor customer health and uncover insights to drive proactive and prescriptive action to lead the customer to renew, expand and advocate. CSM platforms provide capabilities to create a holistic view of the customer, guide customers through their journey, and expose customer health packaged in a way that provides accessible insights to all stakeholders that are actionable.

Figure 1: Customer Success Management Platform Pillars

Market Description

CSM programs have progressed from an emerging discipline into an increasingly mature and evolving practice. It is now possible to find talent with prior hands-on customer success experience who can help to shape, mold and operate a new practice and CSM platform implementation and deployment.

When first starting a CSM practice, especially if it is a smaller team or pilot, it is not uncommon for some organizations to support it through manual tracking: using spreadsheets and adding tracking fields to their CRM records.

However, CSM quickly requires technology to better execute as the:

• Number of accounts grows (into the hundreds)
• Number of CSM resources on the team expands (beyond a few into dozens, and eventually hundreds)
• Volume of data inputs swells

It is exactly for this reason — the success of these initiatives — that the need for an adoption of dedicated CSM platforms has grown from a couple of suppliers into a growing number of solution options.

Initial CSM program adoption has been most pronounced in the technology and service provider industry, principally for SaaS cloud solutions. This is a natural fit as it is possible to measure and track software product adoption and is reflected in product usage data being a key data source integrated into the CSM platforms.

This data can serve as triggers to invoke team member actions, automated outreach to the client or even in-app messages to prompt the customer to take an action. Penetration within the tech sector continues to build — across all types of products and services (no longer just cloud applications) — with an increasing number of success stories. 

As the practice grows to support a larger number of clients, some type of technology solution becomes necessary to support the effort at scale. According to the fifth annual Growth Index from Edison Partners, a private equity firm, companies with 30% or more annual growth (aka “fast growers”):

• Invested six times more in building their customer success teams
• Grew annual recurring revenue (ARR) within existing accounts by 35%
• Retained revenue at 17% higher rates
• Achieved a net retention rate of 102%¹

Market Direction

Over the past five years, Gartner has seen steady growth in the number of CSM platform inquiries — an increase of 88% in the past 12 months over the prior year. Within that time period, we have seen the CSM practice continue to evolve in three ways: a shift in the primary business driver for the investment, organization collaboration (reach) and expanded industry adoption.

These factors are explained below.

Primary business driver: Based on the CSM inquiries we’ve taken, we’ve seen a shift from a business case built on churn reduction to one increasingly built on protecting ARR, focusing on adoption from onboarding new customers through renewal, and an eye toward expansion. Using CSM as a foundation for upsell and cross-sell is the next step in its evolution. For the CSM platforms, this also means extending the reach of the solution — or at least the data and insights — more heavily into marketing and sales.

Organization collaboration: Although it is essential that resources be dedicated to customer success, it cannot be the sole responsibility of a singular function. Ultimately, customer success must become an enterprisewide mindset and discipline. The CSM team must work with sales, marketing, product, customer experience, services, operations and other stakeholders to continuously understand and address customer challenges.

The CSM team must also facilitate how customers obtain value from the organization’s products and services. To that end, the CSM solution must provide the means to keep stakeholders informed, hand off tasks or responsibilities, actively collaborate with others to address client needs, and keep information accurate and current. CSM platforms do this by providing tools for surfacing data and insights through dashboards and APIs to facilitate the update of data directly into other functions’ applications.

Expanded industry adoption: The CSM practice shows signs of expansion into new industries. Technology and tech-related industries, including hardware, software, telecommunications and biotech, remain the lifeblood for the sector. But from an inquiry perspective, and in reviewing referenced customers from the providers, we are starting to see CSM expand into other industries, including manufacturing, financial services, healthcare and transportation.

In many of these cases, there remains some type of “digital product” for the focus of the CSM initiative, and most are still B2B. This has also extended the data sources to be supported by the CSM platform to include time series data coming from IoT devices in some cases.

Finally, there is a growing interest in the service industry (even absent a digital product offering) with a goal of more continuous repurchase, expansion, project extensions or variations (upsell/cross-sell). With an increased focus on expansion, CSM platforms will see the need for tighter connection with marketing and account-based marketing (ABM) platforms.

Market Analysis

With the CSM function being in existence for some time, CSM platform solutions have all evolved to support four essential capabilities:

1. Creating a holistic view of the customer

• Integrate/ingest customer data from multiple sources including but not limited to:
  • CRM (e.g., open opportunities)
  • ERP (e.g., sales orders)
  • Help desk (e.g., tickets submitted by customers)
  • Marketing automation (e.g., engagement in customer marketing)
  • Digital adoption/product usage analytics (e.g., frequency and type of usage)
  • Voice of the customer (VoC) (e.g., customer satisfaction surveys)
• Build customer profiles that provide a holistic view of the customer, inclusive of products purchased and where clients are in their life cycle journey for each product.

2. Guiding customers through their journey

• Define and manage overarching success plans for customers, which might include goals and progress.
• Create customizable playbooks (templated processes that are proven best practices), consisting of human and tech-touch elements, that can be initiated and executed for different stages of the journey or events.
• Provide alerts and automation based on certain conditions, events, sentiment or customer health score to indicate a customer challenge or progression through their journey.

3. Exposing insights into customer health

• Incorporate VoC feedback into the system to help inform actions.
• Define and monitor customer health scores, using the most pertinent data signals.

4. Making the information accessible and actionable

• Create unique views of the day, plans, playbooks and health scores for different customer segments and products.
• Grant the ability to drill into data and history for individual customers and segments, including progress toward goals.
• Provide access to this information, with the ability to update, take action on and collaborate with participants in functions throughout the organization.

Although all these functionalities are common to the CSM platforms included in this Market Guide, they are not the full extent of the capabilities provided within these solutions.

Further, although each platform is data-driven, there is variation in the extent to which it supports the above capabilities, the way in which it is implemented and how it is manifested to the users.

The CSM solution market is not commoditized.

A fair number of our clients ask through inquiries if it makes more sense to build on top of their existing CRM solution (see Magic Quadrant for Sales Force Automation) (such as Salesforce Sales Cloud, Microsoft Dynamics, Oracle Cloud CX or SAP Sales Cloud) or invest in a CSM platform.

Both paths remain viable options, with pros and cons associated with each.

One advantage to the platforms are the professional services offered by the providers, which extend from workshops to help you define your approach through implementing your solution.

For example, some CSM platform vendors offer services to assist customers with identifying, cleaning and transforming the customer data that will be incorporated into their CSM approach prior to implementation.

Some common themes emerge in terms of market and product direction, based on the provider roadmaps and what we observe in inquiries. We anticipate the following to continue to expand within the platforms:

• Support for different sales models and emerging CSM roles: There are different CSM philosophies on whether customer success managers should have quotas and sell directly to customers. We see different models in existence today, but regardless of which is deployed, in many cases, the business, commercial and technical engagement with the client often requires a mix of skill sets with the ability to share information and collaborate. We anticipate CSM platforms to continue to evolve their capabilities for employees across the organization’s functions to collaborate toward common customer goals.

• Automation and pooled CSM models: To scale CSM practices across different customer segments and product types, the platform must be able to support lower-touch models driven through more “sense and respond” approaches. A good deal of automation already exists within the platforms, and we anticipate this to continue, with increased support for pooled CSM models where a named resource does not have specific account responsibilities.

• Customer collaboration: While CSM platforms started as a collection point for customer data and engagement to be shared internally, we see some providers beginning to extend their capabilities to enable external communication and collaboration with customers. Although this capability is still emerging among vendors, it has the potential to reduce effort for both the customer and the CSM teams. This may take the form of summarizing data into shareable slides for external audiences, quarterly business reviews (QBRs) or even direct customer project collaboration subsites.

• Consistent product portfolio and regional support: It is not uncommon for large companies to begin implementing CSM at a product or product-line level within designated geographic regions. While that approach works effectively for guiding customers on their journey with that specific product, it does not provide a consistent experience when other products are utilized or when the same product is used in different regions across the world.

• Facilitating upsell and cross-sell: To excel at using CSM as a foundation for increasing upsell or cross-sell, it is not solely a question of how to structure the relationship between sales and the CSM team. Ultimately, it also requires a tighter collaborative working relationship with customer marketing and product. We are seeing some providers begin to add more deal collaboration features for cross-sell or upsell opportunities and even sales-oriented functionality like pipeline management. Although not common today, this is a prime use case for integration between ABM programs and CSM.

• Extending across partner networks: We are fielding more inquiries from companies that have both direct and indirect sales channels, and would like to leverage CSM across both. Implementing CSM through an indirect channel is more challenging because of the minimal visibility afforded into accounts. Although this differs across sector and relationship type, the ideal approach is to develop a partner CSM certification program where channel partners are:
  • Provided the training on methodology and tooling
  • Certified in the company’s CSM process
  • Tightly integrated into the organization’s strategy to drive adoption, retention, expansion and advocacy

Representative Vendors

The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to provide more understanding of the market and its offerings.

Vendor Profiles

ChurnZero

ChurnZero is aimed at cloud-native, SaaS solutions with a high-touch or high-velocity model. With its own facilities for measuring customer usage and providing in-app support, the solution provides a strong path toward driving product adoption.

ChurnZero does not require a separate product usage analytics solution, as it offers connections directly into its customers’ platforms. However, in the case where a separate product analytics solution is preferred, it provides the ability to integrate data and lists several of the providers in its supported data sources.

The solution is oriented toward its ability to define customer segments, which can be analyzed, used to take action upon and/or continuously monitored. Those segments might be longstanding and predetermined, such as “strategic accounts.” Or, customers that are incorporated into segments can be changed continuously based on conditions as determined by the data.

For example, you could define a segment for all customers that have been onboarded within the last 90 days, but have not yet taken an explicit action within your product. Automated actions can be defined, such as providing in-app prompts or messages to entice the customer to act. Other examples include sending an email to invite the customer to a prerecorded training refresh, or creating an activity for a customer success manager to directly follow up with the customer.

ChurnZero utilizes this capability itself by providing in-app guidance for users of its platform, helping new users onboard quickly. In addition to data import sources, such as an HTTP API and JavaScript, the application provides over 60 data integration sources and also offers a Calendar feature that integrates with Microsoft Outlook and Google Calendar to ensure that all the CSM’s activities and work are reflected in the system.

Vision and Roadmap: ChurnZero’s roadmap includes a mix of advancing existing capabilities and focus. Examples include incorporating customer metrics and custom surveys, increased coordination with customers through automated sharing of data and content in reports and QBRs, and extending customer success throughout the organization with chatbots and customer-facing collaboration centers.

Pricing Model: ChurnZero offers three package options: Growth, Professional and Enterprise. Each contains an increasing number of modules and a variable number of user seats.

ClientSuccess

Founded in 2014, ClientSuccess is built primarily for customer success organizations in the midmarket and small and midsize business (SMB) segments that want strong “out of the box” fundamental capabilities without the need of a dedicated administrator to manage.

To that end, it does not have a formal implementation team, but instead offers a CSM “coach” to help customers with setup and onboarding. The core capabilities in the ClientSuccess platform include SuccessScore, which provides customers with an objective view of customer health with weighted scores that incorporate customer usage, adoption, feedback and engagement. It can also be customized into a unique “recipe” for the client’s business.

ClientSuccess provides an intuitive visualization of the SuccessScore showing trending over time and underlying drivers. Pulse provides the customer success manager a vehicle for a qualitative assessment of account sentiment and health.

In addition, SuccessCycles serves as the application that functions like playbooks, responsible for managing, executing and measuring the customer success methodology. ClientSuccess also has a native NPS application that collects customer feedback and uses it to determine health scores and revenue at risk. It also delivers a revenue management application that helps organizations manage revenue including subscriptions, renewals and expansions.

In terms of reporting, ClientSuccess offers a report suite with many reports that include waterfall visualization of revenue — including total revenue that is up for renewal, cross-sell/upsell opportunities, and what’s closed, churned and pending.

Vision and Roadmap: ClientSuccess’s vision is aimed at empowering the customer success manager to build better and more productive relationships with customers and providing insights to executives around the nature of customer relationships and how CSM is driving successful revenue and retention outcomes.

Pricing Model: ClientSuccess offers one-, two- and three-year contracts for its products and services. It has a tiered pricing structure that begins with a basic offering and goes up to an enterprise offering.

Freshworks

Founded in 2011, Freshworks launched its customer success platform Freshsuccess in 2019, utilizing its acquisition of CSM provider Natero. 

Freshsuccess includes Account 360, enabling organizations to capture user behavior within their products and centralize customer information from other business applications, such as ticket management systems, communications and billing.

Freshsuccess uses this rich customer data to provide data analysis and dashboards and to segment customers on a number of selectable attributes that can drive different automations, such as alerting, account health scoring and targeted email campaigns.

In addition, Freshsuccess Team Management is used to optimize CSM processes and workloads by providing insights into the effectiveness of automations, the balance of portfolios, overall customer health and more. Freshworks recently added Success Goals and Deal Management capabilities to its portfolio.

Success Goals are playbooks with measurable metrics anchored to a business outcome to demonstrate value delivery to customers. Deal Management allows customer success managers who identify cross-sell or upsell opportunities to create deals directly from within Freshsuccess, keeping it in sync with the sales team and within the CRM.

Freshworks offers several implementation packages to assist customers with the implementation, configuration and integration of the Freshsuccess application.

These implementation packages include Bronze, Silver, Gold and Platinum packages, with varying degrees of admin training, implementation, integration and application configuration.

Vision and Roadmap: Freshworks is building a model aligned around outcomes where signals from marketing, sales, service and success come together to build a 360-degree customer profile and prompt actions across teams that can be executed in an optimal and coordinated fashion. Freshworks is planning to add a feature named “Touchpoints” to help CSM teams manage meetings with their customers, as well as an NPS survey capability.

Pricing Model: Freshworks offers two editions: Estate and Forest. The Estate edition includes 10,000 accounts, 100,000 emails, three maintained integrations, Health Scoring, proactive alerts, reporting and analytics, goal and task management, deal management, and email campaigns and email triggers. In contrast, the Forest edition includes 200,000 accounts, 250,000 emails, eight maintained integrations, all of the Estate capability plus account hierarchy, team performance, multiple products and enterprise service level.

Gainsight

Gainsight introduced its core solution in 2010 and has, over time, extended to provide one of the most comprehensive solution options in this market category.

It provides capabilities to form a customer 360 view via data aggregation at the account, business unit, geography, product or any other level. It also provides workflows based on customer data and health score, as well as customer journey orchestration and playbooks.

Playbooks provide a series of actions for customer success managers, and the Timeline feature allows them to see every account interaction across the customer journey. Gainsight has grown its customer base across multiple industry sectors beyond SaaS companies, and continues to play a prominent role in building momentum for the CSM discipline.

In late 2020, Gainsight attracted a $1.1 billion investment from Vista Equity Partners. This growth trajectory has allowed Gainsight to invest heavily in R&D to build out platform functionality and enhance the user interface (UI). 

While CSM remains the core of its platform, Gainsight extended its capabilities to incorporate users well beyond the CSM team into other corporate functions, by adding modules outside the classic boundaries of customer success.

This began when the company introduced PX (moving into product adoption, engagement and analytics), resulting through its acquisition of Aptrinsic.

This continued with the introduction of the CX module (the ability to solicit or ingest direct customer feedback) along with Revenue Optimization (RO), which extends into sales pipeline management and intelligence around customer renewals. Finally, Gainsight stands apart for the investment it has made and the success of its online customer community — allowing the company to drive customer adoption, engagement and education at scale.

Vision and Roadmap: Gainsight is working to continue building out its platform with features that support the entire postsales journey and help companies improve net dollar retention (NDR). An example is Key Driver Analysis, which uses AI to identify how different factors (e.g., scorecard measures) impact business goals like NPS and retention. The company is also working on a Value Center that makes it easier for sales to organize and communicate the value the end customer expects from their investment and that is a shared view between the end customer and the vendor.

Pricing Model: Gainsight offers entry-level packaging starting at five users and select modules, as well as an Enterprise version where pricing is determined based on the numbers of seats, customer records and modules included.

Medallia

In May 2019, Medallia acquired Strikedeck to add CSM capabilities to its Experience Management product portfolio. Prior to the acquisition, Strikedeck was an independent technology provider that had been steadily increasing its presence in the CSM market.

The product is architected to integrate with external systems using API-based connectors and self-service connectors, and has a robust ETL engine that can be used to perform complex operations on data from multiple sources before being ingested.

It also established a methodology to help its customers address inconsistencies in the customer records. The Medallia Strikedeck solution couples its ability to ingest a wide range of customer data into the platform to form a 360-degree view of the customer with an events-based automation engine that detects, alerts and facilitates meaningful customer action.

This data-driven approach results in different views or actions to support a customer operational view (tracking of individual customers or segments), customer success manager views and workflows, customer engagement mechanisms, automation actions (such as alerts or initiating playbooks), and team process management.

Dashboards can be easily configured to visualize trends, manage customer journeys and assess customer health. Data triggers can initiate workflows and playbooks, which incorporate individual customer success manager tasks.

Vision and Roadmap: Medallia’s roadmap supports an expanding purview of customer success and the types of roles encompassed within the team: from pooled CSM teams to product experts, content contributors and specialists focused on particular stages of the journey, such as onboarding. These plans include an expansive set of metrics to facilitate improvements in execution and an emphasis on learning and coaching. Medallia is planning to leverage AI and machine learning in order to move from reporting to predictive insights and intelligence — such as expanding algorithmic churn methodologies to include predictive modeling.

Pricing Model: Medallia Strikedeck pricing is a platform-plus-per-user model. The platform incorporates all its core CSM capabilities plus up to three data integrations. Additional data integrations are at an additional cost. Medallia also offers a view-only user type to extend information access to others in the organization, such as executives or marketing, that need visibility to dashboards but do not update or participate in the workflow, playbooks or tasks.

Planhat

Introducing its first customer success solution in 2015, Planhat deployed its core Customer Success Platform built to provide insights and manage workflow for the CSM team.

In the past years, the company has added additional modules, including:

(1) the Customer Data Platform to integrate other customer data sources;

(2) Customer Portals that can be shared with the end customer;

and (3) the Customer Success Inbox, a single inbox for all communication with the end customer, regardless of function.

Planhat has a unique approach to integrations with other platforms via native integrations, API and webhooks, with privacy guardrails around customer sensitive data. The UI allows users to develop custom visualizations on the fly. Some of the customer data visualizations are very innovative. An example is the Bubble Room view, where customers are represented in a single graph with a “bubble.”

The bubble’s size and color indicate the health score and contract value. The bubble can be plotted along a variety of axes (such as time left before renewal) to understand the state of the customer at a glance.

Vision and Roadmap: Planhat positions itself as a customer platform for use by the entire organization, for anyone who needs to engage with the customer. As a result, its roadmap is focused on a range of features for all customer-facing teams, including automation for customer “tech touch,” advanced subscription revenue management and customer marketing. Planhat also plans to provide new ways to collaborate and share data with customers and internal resources to break down data and knowledge silos.

Pricing Model: Planhat stands apart for its pricing, with unlimited users/seats included in the package price. The company offers three packages with unlimited users/seats: Startup, Professional and Enterprise.

Totango

Totango is one of the pioneers in the industry, with its platform incorporating 360-degree visibility of the customer through DNA-CX, engagement model orchestration (human and digital) through Spark, and the coordination of cross-company collaboration through Zoe.

The complementary Shield product provides support for ISO and regional data protection regulations, such as GDPR. Initially focused on large deployments, Totango built a range of services to ensure initial and ongoing value for both its enterprise and small team customers.

To address the challenge of helping customers get to value faster, and the growing number of smaller teams that struggle with defining a full journey and plan before implementation can begin, the company introduced SuccessBLOCs.

These provide the ability to define and implement success plans for individual stages of the customer journey, such as onboarding. They include the ability to define what customer data will be needed, with links to the DNA-CX Data Hub and Data Modeler to establish the necessary integration points and mapping to the requisite fields.

Data Hub includes standard sources and has an API for any custom integrations. Seeing success with this approach, Totango has introduced a marketplace for SuccessBLOCs where customers of all sizes can consume or contribute their own examples. This capability, when combined with a freemium offer, allows smaller teams to get started very quickly, with the ability to expand into the fully featured paid version in the future.

Vision and Roadmap: Totango envisions support for a customer journey that includes engagement with the customer from their first touch with their brand through their purchase and postsales life cycle. The goal of its “no code” SuccessBLOCs is to provide a coordinated and well-orchestrated engagement model across the organization that is easy to implement and agile in its ability to adapt to changes in the business or market.

Pricing Model: Totango offers two entry-level options: freemium (up to three users and 100 accounts and including its core capabilities and SuccessBLOCs); and an entry-level package (up to five users, 500 accounts and up to 1,000 emails/month). Pricing is then variable, which includes additional capabilities not available in the entry-level options, depending on number of users and number of accounts.

Market Recommendations

• Define your CSM solution requirements by using the four categories listed in the Market Analysis section; namely, creating a holistic view of the customer, guiding customers through their journey, exposing insights into customer health and making the information actionable.

• Carefully evaluate the postsales services the vendor offers (like implementation, onboarding and professional services) and determine which are chargeable items.

• Determine how users beyond the customer success team, including sales, customer service, customer marketing, executives and other customer-facing employees, will access and interact with workflows and data within the CSM solutions.

• Explore buy-versus-build options by evaluating your CRM and other platform capabilities and then comparing them to packaged CSM solutions. Assess both initial implementation and the effort to continue to make regular modifications as your CSM models evolve.

• Evaluate solution options based on the types of customer data that you will incorporate, your planned customer success model (such as named versus pooled CSM teams), and the degree to which you will need to support different customer segments and products.

• For larger implementations, begin with a pilot and use a “crawl, walk, run” approach to facilitate user adoption. Focus on actions that provide the most value to customers, delivering the strongest impact.

• For companies with large product portfolios, look to establish CSM practices spanning the portfolio, especially if expansion through cross-selling is a goal. For companies that have operations globally or sell through indirect channels, explore how your CSM solution will be deployed across regions and external participants.

• Allocate time and resources for regular changes by recognizing that your CSM solution will not be a “set it and forget it” system. Instead, continuously evaluate what practices and customer insights might lead to better outcomes.

– Source: Gartner, by Michael Maziarka, Maria Marino, John Quaglietta