Starting Up

The Founder’s Guide to Building a V1 of Customer Success

A CS leader who has built the function from the ground up shares where founders should start — from how to hire to the most important metrics to track.

The Founder’s Guide to Building a V1 of Customer Success
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Customer success will always make up some portion of a founder’s job, but at a certain point, the scales tip. 

“When you start to build a meaningful volume of customers, you can quickly find yourself spending more than half your day resolving problems,” says Atlassian's SVP of Customer Success, Stephanie Berner. “Customer success is all about getting your product into your customer's hands as fast as possible. If founders and product builders are spending disproportionate amounts of their time solving customer experience problems instead of driving the mission forward, it’s time to formalize your customer success operations.”

CS is a vital early part of your company. It can be one of your growth levers. It establishes the connection between product, sales and other go-to-market functions. And even though you or another co-founder have been likely leading it up to this point, building out the org requires a different muscle — knowing what skills early hires need, team size, metrics to track and much more. 

Berner has seen CS from all angles. Prior to Atlassian, she led customer success for LinkedIn’s Sales Solutions arm, was the Senior Director of Customer Success Management at Box and gained early startup experience at Medallia, all the while learning the ins and outs of delivering strong customer experiences. 

While there's no exact timeline for when a startup should build out a dedicated customer success team, Berner's insights from building CS functions multiple times offer founders a detailed playbook on pulling it off when the time comes. In this exclusive interview, she gives a behind-the-curtain look at exactly how to do it right.

She starts by discussing that crucial first CS hire — the skills to look for, how to interview them and aligning on compensation. Then she dives into the organizational side, giving founders a blueprint for how to design the CS org, from where it sits within the company to early systems to implement. 

This is an invaluable, tactical approach for founders who are just starting to build their customer success functions. Let’s dive in. 

The people side of your CS team: hiring, interviewing and compensation

Building your CS team starts with getting the first hire right. Berner’s advice here is centered around alignment — finding the right candidates, getting the perfect mix of people on the interview loop and making sure the compensation is connected with the team’s goals.

Profiles and traits for first hires

Hiring in customer success can be especially tricky because of the vast skillsets and backgrounds that can lead to an impactful teammate. Even knowing where to start is difficult — but Berner suggests it always comes back to looking at the problem you’re trying to solve for your customer. 

"One of the questions I get a lot is, ‘Do you start with industry specialists or do you start with people who are really technical?’ The answer lies more in what your product is and what customers are doing with that product. There's no one formula. Start by understanding what work you can reasonably expect customers to do versus what your CS team needs to handle." says Berner. 

Here are two scenarios to consider: 

  • How deep does CS need to go on the use case? If your customer’s path from “yes, we want to buy this” to “we're implementing this” requires deep understanding of retail workflows, accounting functions, or sales processes, hire for industry knowledge.
  • How technical is the implementation? If getting to value involves complex integrations, data transfers, or backend manipulation that you don't want customers handling themselves, hire for technical skills.

Seniority of that hire is another factor. “I’m biased towards hiring ICs first,” says Berner. “Ideally, you can find somebody who either has been a manager before or has aspirations to be one, and you can assess for leadership qualities in their early interview process.” 

At the beginning, you need doers who can go super deep on your product.

She does offer one caveat: If you've waited a while to hire your first customer-facing team member and you know you’ll need to hire significantly more within the next few months, then hiring a manager first can be helpful. “If you get a manager in the seat, they can handle the IC hires instead of the founder having to do it. But the trade-off is that there's going to be a bigger lag. ICs are the ones who handle the bulk of the tactical day-to-day work, so you’ll have to wait a little longer before you see their positive impact.” 

Regardless of the profile you decide to bring on, Berner has had success hiring people with these traits specifically: 

  • Speed and curiosity. “You need people who can work really quickly, are really curious about your technology and are really curious about the customer,” Berner says. Customer success is fundamentally about velocity — getting products into customers’ hands and driving value as fast as possible.
  • Exceptional communication skills. “They're going to be your feedback loop to product, engineering, and leadership. They need to communicate what customers need, what you should build next, where they're running into problems, and what new workflows you need to build,” she says. 
  • Demonstrated bias for action. Look for people who see problems and fix them. “In the interview process, I ask for specific examples of places where they saw a problem and then fixed it on their own, or saw a workflow involving multiple teams that was broken and took steps to foster change.”
  • Natural customer empathy. Berner has developed a unique screening method: “Early in somebody's life, people often have opportunities to take on customer-facing jobs. If they continue to opt into customer-oriented experiences, that tells me they are inherently a customer-oriented person.”

Some of her best hires? A former Broadway actor who became a senior CS leader, and a nonprofit fundraiser who excelled at inspiring customer change. Both were unconventional hires, but shared a deep curiosity for and ability to communicate with others. 

While the customer empathy that these kinds of roles display is important, Berner warns against over-indexing on it. “You want someone who wants to be that customer helper, but they still have to balance that customer interest with business interest. In other words, they can’t let the volume of the customer’s pain get in the way of juggling the multiple interests they need to be juggling.”

The interview panel and questions to ask 

Your interview loops should have a combination of people who are either direct inputs or outputs to customer success. “The way I see it, the more senior leaders who can make time for the interview the better,” Berner says. She suggests:

  • At least one founder, whoever is closest to current customer experience
  • Head of product and/or engineering, as someone who understands the technical requirements 
  • Someone from go-to-market, who knows what the CS function could look like in the future

With the interview loop in place, Berner has a set of must-ask interview questions. To test for both key skills and an underlying desire to be customer-facing, Berner advocates for taking your interview questions a step beyond the basics. Some of her favorites are: 

  • Tell me about a time when you saw a problem and fixed it. “This is a great one for testing for drive,” says Berner. “It doesn’t matter if their answer includes fixing it themselves or elevating it to someone higher, you just want to look for someone with that bias for action.”
  • What’s the most impactful piece of feedback that you got in your last performance review? Nobody's perfect from day one, especially in a CS role at a fast-moving org. That’s why Berner says it's important that folks can take feedback and implement it quickly. “With this one, I’m really looking for some self-awareness because that drives an ability to work well with a varied set of people internally,” she says.
  • Your boss’ boss just called. They’re resigning, and you’re taking over the team. What are you going to change, and what are you going to keep the same? Berner uses this question to identify folks who think system over subsystem. “CS is highly cross-functional, so you want to look for people who can think beyond their own world,” she says. “Subsystem thinking typically is, ‘Here's the problem I'm facing in my team, and I think my boss should be directly addressing it.’ System-level thinking is, ‘I'm facing this problem, but my peer is facing this other problem that’s more important to the business, so that’s why we’re focused there.’”
  • Tell me about what it feels like to receive great customer service versus bad customer service. A great question for gauging suitability for being customer-facing. “Their answers and language generally tell you how empathetic they are to a given person's experience and how reflective they are of their own experience as a customer in the same context.”  

Another Berner interview tip: use hypothetical problem scenarios. “You’re looking for somebody to break down whatever scenario you present them with and say, ‘Okay, what's going on. Let me get on the phone with a customer, get clear on the problem, and then escalate it to the people who are going to be part of my solution. And then let me build a plan for what I'm going to do to help this customer.’”

While the actual answer might not be so framework-driven, Berner notes that running through scenarios is also a great chance to surface red flags. “What tells me that somebody may not be a fit is if they scoff at the question, or if they get flustered at the prospect of getting bombarded with customer questions when they don't really have an answer,” says Berner.  

Compensation: aligning on incentives 

Most CS teams work best on a base-plus-bonus structure rather than pure commission. But Berner says that the key to right-sizing comp is aligning it with the actual responsibilities of individuals on the team and the business value they’re driving (while also understanding this will change over time with scale). 

“I’ve seen the most impact with incentives where the bonus structure includes some very specific commercial KPIs, often renewals percentage, sometimes expansion or adoption numbers or other measures of value,” she says. “I’m a fan of that approach instead of explicit renewals quotas, unless you have a renewals team that is actually running renewals under customer success.” 

Berner says that when thinking about comp, it’s important to bifurcate — is the CS team, or some portion of them, responsible for getting a renewal transaction over the line? Because that means revenue for the company. And in those cases, you’ll want to set an expectation on how much revenue is going to renew, in addition to tracking other leading indicators like adoption or customer satisfaction. However, in a world where your CS organization is measured on retention percentage or churn percentage, it makes more sense to have KPI-based incentive structures. 

It's really important to be clear about where you want CSMs spending their time and you design your compensation systems to match that.

“The thing companies get tripped up by, is when you put a significant amount of comp against renewals or expansion quota, that is going to drive behavior. And if you want your teams focused on only getting renewals across the line, that is where they’ll focus,” she says. “Instead, if it’s important that your CS team is paying attention to product adoption, use cases or integration with other workflows in their business, then you need to incentivize that behavior in an appropriate way.” 

Berner remembers, in the early days of customer success, teams almost missed the forest for the trees. For example, if a customer success team in a high-transaction business was solely incentivized on renewals, that’s where they’d spend their time — but all of a sudden, customers would churn because nobody was ensuring they were actually getting value from the product. 

The three most common reasons CS hires don’t work 

Over her career leading customer success teams, Berner has found some patterns for unsuccessful fits:

  • Customer aversion. “People who actually don't have depth in customer-facing roles and it turns out they don't really like working with customers, so they can be abrasive.” This is why Berner looks for previous customer experience, even if it's waiting tables or retail work.
  • Inability to balance customer and business interests. “Some people get really bogged down in volume or pain that’s coming in from customers. They get frustrated when we can't solve problems immediately, and that becomes a problem because they can’t balance multiple interests at one time. They end up with a heavy heart.”
  • Difficulty taking feedback. “Being in a customer-facing role in a fast-moving organization is hard. It's really important that individuals can take feedback on prioritization, tone and internal collaboration approach. People who have a hard time with that don’t grow and evolve with the organization.”

Watch for these patterns in your first 90 days and address them quickly through coaching or role adjustments.

The organizational side of your CS team: systems, processes and metrics

Setting your team up for success first requires an understanding of how CS can drive impact for your business. Then you need to make that clear to everyone up and down the org chart. Berner shares her advice for the most important parts of early team-building. 

Establish where CS sits within the company 

Organizational design isn’t just about who reports to who — it’s about creating the right structure that fits your business needs. 

Option 1: Report to the CEO. Berner recommends this approach, because no matter what phase the business is in, the CEO is one of the closest people to the customer experience. “I'm a big fan of the CS organization reporting right into the CEO because it puts the CEO in direct line of sight to what's happening with the customer business,” Berner says. 

When CS reports to the CEO, it creates accountability for the customer organization to deliver the company's mission.

Option 2: Report to the CRO. While this can work, Berner recommends making the decision based on what your sales leaders need to be doing. “The CRO approach can make a lot of sense when you’re equally focused on renewals and growth,” she says. “If you’re in a phase where you’re all about gaining market share and most of your growth is coming from net new customers, you need revenue leaders focused there. But if your revenue is mostly coming from existing customers, then have your CS team report to the CRO to create strong alignment on both of the metrics that need to be hit.”

Why not report to the CPO? From Berner’s perspective, CS is core to the go-to-market motion and aligning it with the revenue team creates a flywheel that might be a challenge to achieve when reporting to the CPO. “The organization problems you’re solving, the opportunities you face as an executive, the alignment you’re trying to create in your organization — that looks pretty different in a product org than it does in a customer-facing team,” she says. 

Thinking through team size

Berner says this is one of the most common questions founders ask her during the zero-to-one phase of CS building. “The answer is different depending on what the team does,” she says. “For real technical support, which is break-fix, managing a real high volume of tickets and implementations — which is basically a repeatable process — it’s a lot easier to figure out how many people you need.” 

It’s really just a math problem. Berner suggests looking at your capacity in a given day and how long it takes you to do the task at hand. Put the two together to figure out the capacity you need and that translates to the number of humans on your support team. 

But in the world of CSM, it’s more unclear. “There are rules of thumb, mostly by segment. But it will depend,” says Berner. “What’s your ACV? What stage of business are you in? Are you operating in multiple countries and languages? How much support does your customer need? How many extra roles do you need — like technical account managers or product overlays?” 

Here are Berner’s starting points for ratios of number of CSMs to accounts: 

  • Strategic accounts (which are usually more than $500k): ~5-10 accounts per CSM
  • Enterprise: ~20-25 accounts per CSM 
  • Mid-market: ~40-50 accounts per CSM
  • SMBs: ~80-120 accounts per CSM 

There’s also a “dial up or dial down” component to these ratios depending on a number of factors, says Berner. “How complex is the technology? How difficult is it to get a renewal over the line? How much programmatic handholding does a customer need to get their program off and running?” she says. “If a customer has 15 use cases to solve for, that’s different from a customer who just has two in terms of the amount of time that CSM has to spend with customers.” 

I tell founders and leaders at growth-stage companies, ‘You have to start somewhere and be willing to change.’

The math is shaped by qualitative aspects, like if you think customers are getting the right level of support they need. This also might surface the need for different types of programs to support customers, like establishing a self-service motion. 

The two systems to set up first 

The way Berner sees it, your first one or two hires are like firefighters — dealing with customer issue after customer issue as they inevitably pop up. But in order to set your org up to successfully manage the customer experience as the business scales, it’s crucial to put lasting systems in place.

Berner outlines two areas where she believes templatization — or at least some consistency — are key:

  • Support tickets. “You need a way for customers to reach out to you,” says Berner. “Whether that’s through a Slack channel or an actual support system, you need a systematic way of collecting that customer feedback that's not just an email.” On top of simply being able to communicate with customers, Berner says this also becomes important as volume ticks up and you need a way of categorizing incoming questions to understand what’s happening with your product. 
  • Onboarding. “A big mistake I see companies make is that they don’t codify the multi-step process of getting a customer onboarded,” says Berner. “If you don't have that early mindset of creating a checklist, your business can end up scaling without you having a consistent way of onboarding customers, and that means there’s a weak understanding of what it takes to get a customer to value.”

While support tickets can take a number of forms, Berner recommends keeping your onboarding manual V1 simple — think a shared Google sheet with a templatized version of the 10-step process. “The details of that implementation are different depending on the product, but onboarding manuals should always include a kickoff call and a requirements gathering conversation,” says Berner. “Then it's planning out each of those steps. Ask yourself: ‘What data do we need to gather, and who's going to deliver those files or build that API? Who's on point to build the communications that will go out to our users when we roll out this product?’”

Orient your team around these success metrics

No matter what stage your CS org is in, there are always metrics that matter. “Another mistake I see early CS leaders make is that they don’t put the time and effort behind making sure they're tracking the right data and holding the team accountable to outcomes,” says Berner. 

Measuring success from the earliest days sets up your CS org to scale because they’ll understand the path to value for a customer.

1. Customer health (measured as product usage)

While measuring customer health can get a bit more complex down the road, Berner finds that, in the early stage, it’s all about product usage. “It’s a critically important starting point, because if a customer isn't using your product, they're not getting value,” she says. 

The equation itself is simple: Look at the number of seats purchased, the number of seats deployed, and how many of those deployed seats are being used. “It's a three-part equation,” says Berner. “As long as you start there, that’s enough to drive action with your team. If on any given day an implementation manager or support rep doesn't know what to do, they can start by looking at their customers to understand who has low usage and just start a conversation with them. It's a very action-oriented metric.”

2. Renewal rate 

This helps CS teams understand retention of current customers. “The whole value of a customer success org — from implementation to CSMs to support and everything in between — is to ensure we’re delivering value to customers. The best measure of that is when a customer renews and ideally grows,” says Berner. 

However, the question of where renewals sit between sales and CS is something that Berner says comes up often. Her dividing line is the type of renewal. If there isn’t a detailed negotiation, she believes it should roll up to a CS leader (or CSM, in the early days). But if that renewal is an important moment for expansion, then it becomes a very different commercial conversation more about discovery, negotiation or solution-building that lives in the world of sales. 

“The question is really what the renewal moment looks like for a customer. With that in mind, you can think about which team should be closest to that activity,” she says. 

Though, over the years she’s gone back-and-forth on this. “The reason I initially rejected the idea of renewals sitting under CS is because we really like to hold true to the fact that we’re the advocate for the customer. And it can feel like when you start having commercial conversations, you’re no longer the advocate for the customer — you’re the advocate for the company,” says Berner. 

But her thinking has changed. When value is delivered in the right way to the customer, then she says any renewal conversation is just an extension of value. “All the pieces of a CS org are built to touch the customer and deliver on what the customer is trying to achieve with your product,” she says. “If you have accountability for all the leading indicators like adoption and customer satisfaction, and accountability for the outcomes, which is renewal, that creates the right combination of incentives for the entire team to do the right thing for the customer.” 

3. Later-stage metrics, which you can add as you scale 

Net promoter score (NPS), customer satisfaction (CSAT), time to launch and implementation milestones. "I worry less about these in the super early days. They can be easily gamed and don't provide clear action items for CSMs," says Berner. 

While we’re here, let’s discuss another important metric: churn. 

When retention isn’t up to par, it’s time to get methodical and unpack why churn is happening. In Berner’s experience, high churn is typically the symptom of an adoption problem — but not always.

“You need to look at and capture all the reasons why customers are churning,” says Berner. “It’s key to analyze what's going on before you jump into fixing mode. From there, you can pick which solutions are going to have the biggest impact and which ones are going to need to involve multiple teams.”

To get it right, Berner suggests directly asking churned customers these three questions: 

  • Why did you choose another solution? You want to offer customers a space to be honest with you about why they decided to go a different direction. “This helps you understand if it was a features issue, something to do with deployment or if you didn’t train them on the product properly,” says Berner. “Typically, you end up with a list of between six and eight churn reasons, and from there, you can bucket those further into controllable and non-controllable.”
  • How did you arrive at your decision? This question can give you clues about other companies and what you may need to do differently. “You want to be asking, ‘How did they collect information on whether this product was adding value? How did they collect information on who was using the product?’ Essentially, you want to get an understanding of the process that led them to this point.”
  • What are your alternatives? Here’s your chance to get the inside scoop on what you’re up against. As Berner’s seen, this might be another company or a DIY solution from the customers themselves.

While getting the answers to these questions is great, not every customer is going to want to be forthcoming with every detail — and that’s ok.

“Anytime a company embarks on a retrospective interview with a customer, the most important thing is to approach it with a lot of respect and appreciation for the customer,” says Berner. “In most cases, they had to make a really tough decision. If they feel heard and you use language that diffuses the wall between you and them, you give yourself the best shot for finding a way to improve your product moving forward.”

You'll typically end up with six to eight churn reasons. From there, Berner suggests you bucket them into controllable and non-controllable churn reasons, and focus your energy on the controllable ones.

Common controllable reasons:

  • Low product adoption
  • Poor onboarding experience
  • Lack of ongoing engagement
  • Missing key features
  • Poor support experience

Common non-controllable reasons:

  • Budget cuts
  • Company acquisition
  • Change in strategic direction
  • Key champion leaves

Rituals for a customer-centric CS org

As a company scales, it’s the rituals and culture of the team that drive strong output. “Being on the receiving end of great work and a caring culture can make a huge difference in the results you’re getting with your customers,” says Berner. 

To take your customer success org from fine to great, she recommends creating company-wide rituals that enforce the principles of great customer service.

  • Always bring it back to the customer. This can be as simple as sending around a customer story, or asking, “What’s in it for the customer?” before big business decision — a practice Berner picked up from Box’s Aaron Levie. “When you do these kinds of little rituals, it builds customer empathy through the entire org and throughout the whole life cycle of the business,” says Berner. 
  • Get teams together. To drive a collaborative culture and solve problems early on, you can’t have a company full of silos. “There’s nothing more exciting for a CS rep than going to the product team and saying, ‘Guess what? Here's what I heard from my customer today. Can you help me solve this problem?’” Berner recommends a “forcing it without forcing it” approach — or making sure that cross-function meetings are happening on a regular basis. “It can look something like individual team meetings on Monday, a CS and product team meeting Tuesday and then another regroup on Friday. Ritualizing these and making them regular touchpoints is the key to creating a team that solves things together.”
  • Celebrate your people. In the same way that cross-org meetings foster connection, more informal rituals can help too. “Make sure you're building in those moments to recognize the teams that are doing great work,” says Berner. This is especially important for CS teams, who tend to sit at the end of the line of a lot of work and can start to feel left in the dark. “When a customer launches or you get a great story back, celebrate your CS folks.

“If you build these cultural habits at the start — whether that’s shining light on the customer, getting together cross-org or showcasing the work of the people talking to customers every day — customer success becomes a habit in your org, and it fosters a really great connection amongst a lot of people.”

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