May 8, 2019 – Not long ago, customer service leadership meant finding ways to provide the same or similar service while cutting costs and reducing the time it took to service a customer. Customer care agents were timed to maximize the number of customers handled in a day. Service centers were moved off shore to reduce labor costs. Engineers and operations leaders were the top executives.
“But the trend has shifted entirely as more companies measure customer satisfaction and net promoter scores and the goal is more oriented around keeping existing customers and driving revenue growth,” said Ted Pryor, managing director of Greenwich Harbor Partners, a senior-level executive recruitment firm for the media and technology sector. “This environment calls for entirely different types of leaders with entirely different types of training.”
“Customers have more choices whether it’s mobile telephone service, streaming entertainment or even electricity supply,” he said. “Software companies have moved from selling packaged on premise software to subscription services where switching costs are relatively low. Therefore, companies have much less power over their customers and there is a much higher need to provide good service and providing good service helps retain existing customers. It is always cheaper to retain a customer than is it to acquire a customer.”
Recruiting top-flight customer success executives who are oriented around improving customer satisfaction, driving outcomes and increasing revenues, rather than cost reductions, has become a priority for consumer businesses, online businesses and B2B software businesses, which are rapidly consumerizing, Mr. Pryor said. “A dilemma for almost every company is that their customers do not necessarily compare their service just to industry competitors, but also to excellent companies in other industries,” he said.
Ted Pryor is a managing director with Greenwich Harbor Partners and focuses on senior level assignments in technology and business services. He specializes in recruiting top executives using his four years as CFO and CEO of a venture-backed start-up, his 10 years of experience at General Electric Capital and his 20 years of experience in international finance and investment banking.
“Once you have experienced retail service in an Apple Store, you wonder why all retail store experiences can’t be as good,” said Mr. Pryor. “Once you are helped by an American Express travel agent, you wonder why all service agents can’t be as good. Once you get used to software support from a company like salesforce.com, you wonder why all software companies aren’t as good.
Finding the Right Leaders
Service businesses and especially software businesses are rapidly building “customer success” teams, trained and incentivized to drive successful outcomes for their clients. “Developing systems, processes and recruiting the right leadership for this function has become a huge challenge and a top priority,” Mr. Pryor said. “Historically, operations people are oriented to managing costs and the talent that is needed today must be oriented to driving revenues. The right candidates are more likely to come out of professional services than help desk management. Many great candidates have been only been working in customer service for a few years.”
Mr. Pryor cited the software industry, where many services are offered for free or at low cost and customers only begin to pay when they are using the software extensively or storing large amounts of data. The strategy, said Mr. Pryor, is to land and expand. “This puts huge premium on service delivery, set-up, after-market support, high quality customer service and may include some level of consulting or professional services bundled into the initial sale to help customer get off to a good start, help drive desired outcomes, and ensure maximization of the benefits of the product or service,” he said.
When the software industry went to a subscription model, the lessons learned from other subscription-model industries such as telecom and cable services, became relevant: The company must manage the entire customer journey from first contact to training, utilization and retention.
“The recruiting challenge is to find tech-savvy leaders who have developed experience in both high volume customer service and highly customized professional services,” Mr. Pryor said. “They may have been in sales support for a period of time. They must also have proven ability to see white space and develop systems and solutions that are new to the company or perhaps new to the industry. They must also be data hounds with a strong ability to identify key metrics so that success can be tracked and rewarded in ways other than cost per call.”
Seven Qualities of a Perfect Candidate
It’s important to recruit executives that possess the right qualities to steer organizations through uncharted waters. The best leaders have a strong portfolio of future-oriented and change-ready skills that enable them to keep responding to fluctuating market demands.
Mr. Pryor also said that because the function is new and experiences vary dramatically, one’s finalist may have 70 percent of the ideal profile, and knowing where to compromise is key. “The ideal candidate probably has worked at a large company that instilled good process habits, but also has worked at a more entrepreneurial environment where change is constant,” he said.
“We like to try to find a candidate who has already walked the walk you intend to pursue,” Mr. Pryor said. “If you are going from $50 million in revenues to $500 million in revenues, ideally the candidate has already lived that life. It is really important that the candidates has worked at your scale for a portion of their career. Someone who has managed 3,000 people in the last job will not adapt well to a 50-person team.”
“Finding the right executive means a clear articulation for what you are seeking, and a broad, high-speed canvasing of the market,” Mr. Pryor said. “There may be good candidates in direct competitors, but most likely the candidate is in a related industry and probably not in your immediate network. Good executives are in demand and moving quickly to hire the one you really like is key.”
“Finally, by conducting a thorough and timely search process, if your lead candidate falls through at the last minute, if you have done your job properly, you have backups in the queue,” Mr. Pryor said.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media