The other day, I was talking to the CEO of a mid sized SaaS company and he asked "what's the difference between professional services and customer success"? Now, obviously he knew on a surface level what the difference was, but when asking him to clarify or expound upon the question, what he was really asking was "what services do you charge for vs. just giving away for free?" And that was a very good question. It's something that I've had to consider for the entirety of my career. With much consideration and with great influence from the likes of Gainsight, and TSIA, etc. I've become confident in my perspective on this topic. Here's a breakdown of how I view Professional Services vs. Customer Success.
The constant
In your business model, you typically decide what "service level" each customer will receive. They will either be assigned a Customer Success Manager, a Renewal Specialist, or nothing at all. Typically it's based on contract value. So let's only consider the cases in which a customer is assigned a Customer Success Manager (CSM). The "constant" when a CSM is assigned is that the CSM needs to be the "relationship manager" for the customer. Relationship management consists of the following:
Support escalations
Billing and payment issues
Help navigating your organization
Conflict resolution with other roles (e.g. professional services)
Arranging visits, event attendance, etc.
Providing access to best practices, thought leadership, etc.
In every situation, the Customer Success Manager needs to be that single point of contact, relationship manager for the customer. The lines start to blur when it comes to the actually using your product.
The gray area
To me, there really isn't a gray area. It's still very black and white. But it can seem gray when assessing the ability for your product to be used as expected and deliver the stated value.
In today's day and age, there are clearly "unstated" expectations with software:
I can sign in by myself and use it with the aid of a brief tutorial
As a "button click admin" I can integrate it with the most complimentary and industry standard products (i.e. Salesforce, Gsuite)
If I use it as instructed, I'll be able to realize the value I was sold
If all of the above is true, then customer success can be limited to the relationship management activities as stated above. As an organization, you have the ability to offer more than the relationship management activities to your customers via your CSM, but there's no expectation of additional service. That's the gray area. Do you want to provide additional service at no cost, or charge for additional service.
If the above is not true, and there is a service required to make the software integrate/operate,work, then the organization has a responsibility to offer that service for free.
What are Professional Services?
When talking to that CEO, I proposed that "Professional services are truly something exceptional, or in addition to the expected." A customer should absolutely understand that what they're getting is above and beyond anything that's needed to use or be successful with your product. Some common examples of acceptable professional services are:
Integrating with bespoke technology or accommodating advanced customization
Providing a managed service so the product delivers the stated value for the customer without the customer every having to "actually use it".
Providing consultative services that aid your business and organizational direction and decisions with the product as one component in that overall strategy
In each of these cases, an honest customer will acknowledge that these value-added services are not necessary to unlock and realize the value of your product.
How to position Professional Services:
In future blog posts, we'll talk about how to develop, organize around, and go to market with professional services. As a primer, remember that when you offer a professional service, it needs to follow the same value multiplier as your product does. It's best practice, when coming up with a price for your product to have it deliver "10x the value" over the price the customer is charged. That is, the customer should believe that a $1,000 product is worth $10,000 to them. The same goes for your professional service.
Does your organization have both Customer Success and Professional Services? How are you drawing the distinction internally and with your customers? Comment below to start the conversation!
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