In B2B is it a good idea to outsource Customer Success?

As the CEO of your company, there may come a situation where you need to implement customer success. You have two options to choose from-

In-house customer success or
To outsource customer success.
With customer success being a new function and companies not prepared for it, outsourcing might seem like a wise decision. But will it help in the long run? Let’s explore that in detail.

What is customer success
Customer success isn’t that complicated. In simple words, SaaS customer success expert Lincoln Murphy says,

Customer success is simply ensuring that your customers achieve their Desired Outcome through their interactions with your company. That’s it.

Companies are becoming more customer-centric, that is they are concentrating more on long-term locked-in contracts and are always ready to upgrade their services in order to meet their customer needs.

The competition is growing in the SaaS industry and customers now have many choices. This means businesses have to find new ways to improve retention and reduce churn. After all, when another product is never more than a click away, any competitive advantage becomes essential.

It’s here that customer success comes in.

Due to high records in the cost of customer acquisition, brands have become much more invested in developing strong customer relationships.

Customer success is mainly focused on customer relationships. It focuses on customer needs and what the customers want to achieve. If there’s something that will act as an obstacle for the customer, the business must do what it can to not only remove this obstacle but notice it before the customer does.

What happens if you outsource customer success
Outsourcing customer success has its own pros and cons. Very often, many customer-facing business functions get outsourced. Outsourced customer support is extremely common, technical teams are often used on a contract basis, and even sales get accomplished by outside teams.

But should you outsource customer success operations? Well, it depends on various factors. If you’ve outsourced other customer-facing parts of your business, you might be tempted to answer “yes” right away.

The decision, however, is much more complicated than you might realize. Let us look at the advantages and disadvantages of outsourcing customer success.

The reasons for not outsourcing CS function
Customer Success Professionals Need To Be Decision-Makers
Because they’re on the front lines of your company and addressing the needs of your customers, your customer success team needs to be able to make high-level decisions and act on them quickly.

Customer Success Requires Extensive Knowledge
Outsourced sales teams can develop a solid base of knowledge about your products and services. But their knowledge is very focused: it’s on features and benefits. It might include your position in the market among your competitors.

Reasons you should outsource
It’s not a long-term solution
When you partner with a third-party customer success organization, it initially might seem like a quick solution for early-stage startups. They may want to focus more on product enhancements and customer acquisitions. And instead of spending time on building your own customer success team, outsourcing it to an experienced company might seem correct.

No need to teach things from the scratch
When you outsource customer success operations, you do not need to teach the team from scratch. The CS team is already packed with professionals. Without external assistance, you are responsible for engineering all the CS best practices from square one. From customer segmentation, all the way to how to monetize customer success, the responsibility for formulating every step is resting on your shoulders.

What happens if you have in-house customer success department
Pros
Company knowledge
Your employees have complete knowledge about your company culture, your goals, the lay of the land, and every little detail about your product. These employees have grown with you. They are clear with the vision and mission of your company. They have already been serving your customers for years and they understand your customers. Keeping CS in-house means all of this company knowledge is already in place.

via GIPHY

Control
If the customer success is in-house, you have complete control. You know and own every employee and their details. You have power over the goals, strategies, budget, and almost everything. But also, If your customers are not satisfied with your CS team, the responsibility unavoidably falls on you alone.

Ownership
There can be a case where you and your outsourced partner stop working together. This is where you’d need to figure out what remains yours and what you cannot access anymore. But if you build an in-house CS organization, you need not worry about these scenarios. You also never have to worry about the logistics of getting your information back under your own control. It’s all yours, and it’s always been yours.

Cons
Tight labor market for CSMs
According to LinkedIn, the role of a CSM is one of the fastest-growing jobs. But it can be difficult to find a good CSM. They are in high demand, so if you are looking to hire a team of experienced CSMs, it might take a while to build your team and you have to put in a lot of effort. Also, you cannot afford to mismanage your CSMs, because this could directly end up with you losing them to your competition.

Read: Where to look for Customer Success Manager

New training
If you’re building your own in-house CS organization, you’ll need to provide your current employees with proper training. Your employees can be from different departments and each one of them has their way of doing things. Also gathering existing staff can weaken the other departments.

Spreading your CSMs too thin
You have to segment your customers and accordingly assign CSMs to them. If this is mismanaged, your CS plan can fail because your CSMs could end up working too many accounts, leaving the rest of your customers unsatisfied. This will lead to losing valuable customers and wasting your CSMs’ time. Studies show that “when customer experience falls short, 58% of customers don’t hesitate to move on to your competition.”

Conclusion
It’s very important to go visit at least your top customers frequently, get their feedback, and engage with them, it is the least that can be done for ensuring customer success.

Your own employees and the team will know your product, the issues, and its future better. It’s much better to staff these functions in-house. But, it’s better to outsource customer success than to “non-source”.

This blog is originally published in CustomerSuccessBox's blog section, check here https://customersuccessbox.com/blog/in-b2b-is-it-a-good-idea-to-outsource-customer-success/