Maybe I’m biased, but I think a CSM should be an early hire. To many people, customer success seems like a support role, but it’s actually directly responsible for a lot of revenue.

Jason Lemkin calls this Second Order Revenue: The revenue generated by upsells, cross-sells, and expansions that are the result of post-sale service. It also includes referrals from current customers because they love your SaaS so much and instances where your contact at one customer moves to another company and signs you again (which is a referral in a weird way).

Most importantly, customer success gets credit for creating renewals that normally wouldn’t have happened without a customer success program. This is difficult to measure, but you can compare your customer lifetime value before and after you build a customer success team.

In the long term, Second Order Revenue will account for a majority of your revenue. So just like compounding interest, the sooner you invest into customer success, the sooner you’ll realize those gains. Startups who manage customer renewals better tend to grow faster with less capital than their peers.

“In the beginning (and probably always), a pretty good customer success manager that is driven and committed, is far, far better than no customer success manager at all,” Jason says. “Because getting just that one or two extra second order customers, those one or two extra upgrades, from happy existing customers, is the magic in SaaS.”

Hire your first customer success manager as early as possible. You definitely need one by the time you hit about $2 million in annual recurring revenue, or as soon as you have one customer that represents 20% or more of your income (because you don’t want to lose that one).

Where do you get the first customer success manager?

Customer success is still new. There aren’t a lot of us floating around yet. They don’t have college degree paths for it yet. However, the SaaS market is booming, so expect to see more people with CSM proficiencies in the future.

Traditionally, an organization’s first CSM comes from another team. Usually sales, account management, or customer support. These positions have some skills in line with customer success, but there’s always a lot of learning to do.

That said, customer success is a principle-heavy discipline. It’s a big-picture role. The details of what a CSM does every day are highly specific to the type of business, the organization’s structure and process, the type of customer, and the purpose of the customer success team. What a CSM does in one organization may be completely different in another organization.

That means that once a new customer success manager learns the fundamentals of the trade, they can be reasonably effective in their position. You can tell a salesman he’s doing customer success now and as long he understands the purpose of your customer success program, it’s not like he’ll be unproductive for a year.

There’s a lot of room to grow, however. Great CSMs take a while to cultivate. They need time to acclimate to a proactive service role. Most service oriented people are used to reacting to problems instead of getting ahead of them.

The biggest benefit to hiring from another customer-facing role within your organization is that your hire doesn’t need extensive training to learn your customer. He/she should have some knowledge of who is buying the product and their problems, which is obviously critical in customer success.

No one to transition into customer success? Tap your network.

If you’ll be hiring your first CSM early and he/she can’t come from within your organization, you should start with your personal network. When your organization has less than 20 people, your culture is still malleable. You need people who think and work according to your values. It’s possible to find a quality hire through a recruiter or job search platform, but they aren’t likely to fit.

However, you need to cast your nets wide. Like I said, CSMs aren’t common, so make it clear that you’re looking for someone who hasn’t necessarily worked customer success before, but has the appropriate skills. Search for strengths, not titles.

That said, don’t hire anyone with an interest in customer success. It’s a trendy discipline, but it’s still tough work if you aren’t built to serve. A CSM needs to be driven, data-focused, organized, an excellent communicator, a keen strategist, and highly empathic. (Learn how to discover someone’s strengths.) Your first hire should be well-rounded, but you can specialize as you develop your team.

Additionally, CSMs need to be intimately aware with these concepts:

1. Customer lifecycle

Your new CSM needs to understand how customers flow through an organization from initial awareness to renewals and upsells. Have them explain the process using a company they know well. Look for opportunities where they’ve contributed to lifecycle movement. (Learn more.)

2. Customer health

They need to understand how customer health or satisfaction is measured. What data points are important? Which points are red flags? (Learn more.)

3. Customer segmentation

He/she needs to know how customers are separated into groups and treated accordingly. Have them explain some ways that customers are segmented, based on demographics, product usage, and health. Ask how they would treat each group reactively and proactively. (Learn more.)

4. Business reviews

The quarterly (sometimes “executive”) business review is a staple of the CSM, so your hire needs to understand what it is and why it’s valuable. These are a tad more formal than a phone call, so it’s worth asking the candidate to give mock presentation to make sure they can lead a discussion, speak articulately, and answer questions. (Learn more.)

Onboarding can be extensive, so start right away.

Onboarding a new CSM quickly is important, but learning the necessary knowledge of the customer and product can take time. When your income is recurring, every retained customer creates stronger, predictable revenue, so the sooner you focus on retention, the better.

First, clarify how the CSM will be measured. Retention? Customer satisfaction? Upsells? Decide on a purpose for your customer success program so your CSM is clear on what they’ll be working on. Then introduce them to everyone in your organization. Customer success is a diverse role. CSMs work with everyone at some point.

Next, stick your CSM in front of your product. They need to understand your tool to do their job well, so don’t rush this part. If a CSM gives bad information about the product to a customer… Well, that’s the opposite of service. CSMs need domain expertise.

The best way to learn a product is to use it extensively. Provide any resources, like a knowledge base, guides, or even a person sitting next to them giving a demonstration. Give them an account with real data to play with.

The learning process is pretty straightforward for simple products. “But if the product is complex, you need to make a concerted effort to stage learning into reasonable chunks,” recommends Dan Steinman, Chief Evangelist at Gainsight. He recommends that you start training new CSMs first on the value proposition and language, then product training, then the customer onboarding process.

Finally, give your new CSM every piece of data you have on the customer. Have them review marketing’s funnel. Have them sit quietly on a sales call. Have them read some customer support logs. Have them shadow whoever is doing implementation. Have them pow-wow with product.

The first interactions your new CSM has with customers is going to be tense for everyone. Whoever has been dealing with customers in the past should sit on these calls to mitigate any slip-ups.

Only hire someone who’s built to serve.

I’ve harped on this before, but it’s worth repeating.

It takes a special type of person to work in customer success. They must be built to serve. They must thrive in an environment of helping other people. They must derive success from watching other people succeed. They must focus on other people’s problems.

Don’t waste your time with someone who is focused on making their own job easier or hitting their own numbers. Those types of people have a place in SaaS organizations, but not customer success.

If you hire early and pick the right candidate, your customer success program will take off, giving you a boost of retention, and ultimately growth.