Cohort Based Customer Success and Product Adoption

By Abhishek Parolkar
People don’t buy software,
they buy membership to join a community surrounding "the" software product.
Hence, Customer Success = Cohort's Success


When people spend money on software subscriptions, they don’t buy software they buy a membership to join the community surrounding the software product. Software systems facilitate progress in modern work and life by giving tools that help set guardrails for human error while making collaboration easier and more productive. On the other hand, as the complexity evolves, the software systems evolve equally to influence how the work is produced by organizations. i.e a company that relies on legacy processes as they were historically wired up in a legacy ERP/CRM is likely to produce work very differently from a company whose software systems can adapt quickly to business process change.

In 1968, Melvin Conway observed that software systems built by organizations heavily depend on how people communicate and interact (processes) in the organization. We think that the opposite side of this observation is true as well, a sufficiently complex software system can dictate the approach of how people work, what they produce, and how they behave at times. This is observed in software development teams (that deal with the highest level of complexities ) where the choice of tooling has a considerable impact on how the engineer's work evolves (teams with access to git vs subversion, python vs java vs php, Jira vs Trello, Excel vs AirTable, slack vs email can identify themselves as groups of distinct work styles and how they approach their work and evolve themselves). They also may recognize subtle differences in their work habits.

The Challenge of Product Adoption

If someone is choosing to adopt a new tool that works differently from the existing way of doing work, they are likely faced with challenges in breaking earlier habits and training for a new mindset to become more productive in the new stack of tools. This is the most painful part of the product adoption cycle or a frequent cause of failure in transformation programs. This is when almost all software buyers realize that spending money on getting the software up and running is easy, the most expensive part of software system investment is in the formation of new habits of their internal user groups. This is often referred to as change management.

We all know that changing habit is hard as an individual and even harder in the context of a group. It is widely observed in behavior economics studies that even when it relates to their health risks, individuals find it hard to change habits (eg about 50% of Gym memberships are unused after six months [1] ). So unless you are super focused, Changing the habits of an unorganized group of people is even harder. This is why over 40% of software purchased by companies or committees is wasted due to underutilization or shelfware [2]. On top of that SaaS Vendors lure enterprises with fixed multi-year discounted contracts which further increases wasteful spending in the organization[3] due to contractual obligations. Needless to say, this leads to time and opportunity wasted for the budget to be released / re-allocated.

Champions & the first followers

Companies have historically tried change management through top-down enforcement or creating collaborative enablement programs for realizing the value of their investments. But it is also often seen that if the change manager leaves the initiatives, everything falls apart. Those who achieve some success (greater utilization) in a sustainable way, find that it is driven by the motivation factor of people participating in the product adoption. Few catalysts among the user group may have motivation factor (often triggered accidentally) that keeps the entire group going on the journey even if there are difficulties. This is when people realize that they are part of an internal community with clarity of purpose and start valuing their membership and affiliation to this community. This is commonly observed in enterprise software (like SAP, Salesforce, Netsuite, and Atlassian) where people have built their careers and solved complex problems through the choice of these products and the community surrounding them. This is further validated by the evolution of open source communities of the projects and most B2B upstarts in the market using an open source /community-first approach to their marketing and business development. Even in Consumer products, we have widely seen the separation and evolution of these communities in Apple Users vs Samsung Users [4]. If we try to see the parallels of this behavior across a different discipline, the fitness industry serves as a good example. The evolution of community-based workout programs (CrossFit , F45) are highly cohort driven. Another key persona to observe in this group is the "first follower"[5] these are people who take the first few steps forward with the least resistance to bring in the validation and confidence that the rest of the group needs.

Hence, this suggests that software product adoption has a lot to do with habit forming as a group and you need sufficient motivation factor among the participants/users to follow through the adoption journey. The teams that are serious about the adoption of software systems tend to not buy just the piece of software but sufficiently invest in creating a community of champions within the organization who can make habit-forming easy for the broader group of users. This discipline is what we call "Cohort Based Product Adoption (or Customer Success as it is generally referred)"

Is this for me? It probably is for you if you believe in the premise and if the change/transformation initiatives under your belt deal with complex process & behavior changes.

Challenges of Customer Success / Product Adoption (from software vendor’s perspective)

Most subscription-based software vendors want their products to be utilized sufficiently and that's why they invest in processes related to it a.k.a Customer Success. But it comes with its challenges. Here are few

  1. The approach of a dedicated Customer Success Manager (CSM), Account Manager, or Relationship Manager doesn’t scale effectively. It only works on key accounts.
  2. The Tail-end of Customers/Users always remains neglected. This is mostly relative to the overall workload in CSM Teams.
  3. In response to the challenges in managing long-tail / volume accounts, Organizations tend to create Virtual CSMs or Volume CSMs (CSM allocation ratio of 1:100s) which may increase complexity and confusion for the customer. This also demands constant differentiation from 1:many Support teams to stay effective.
  4. Field sales may land into small yet strategically important accounts but quite often the CS segmentation and resources don’t allow the smaller customers with the same access to CSM as compared to larger enterprise customers.

The Solution

Cohort Based Approach to Customer Success or Product Adoption creates an environment for the community to emerge through a process of habit formation that has been well-tested in other forms of complex new skill acquisition activities of the group (eg Cohort Based Learning).


  • Selections by customer’s readiness (not by account segmentations) : By forming Cohorts through the customer’s readiness allows the CSM Teams to bring together a group of enterprise customers who are likely to collaborate and form a long-term community.
  • The new role of the CSM : The role of the CSMs, in this case, is less focussed on specific named accounts. Instead, CSMs are assigned to cohorts.
  • Cohorts have stages : Each cohort progresses through a stage of adoption. Eg. When you have purchased software (there are going to be a lot of activities related to product activations and enablement) hence the customers in this cohort will have to be led by CSM who is taking this cohort through the onboarding journey. On the other hand, when you have mature customers who are going through usage optimization, you would want them to be on a journey bit different than others. As a side-effect of this approach, marketing teams can use these new segments as part of the account-based marketing sequences or drip campaigns.
  • Customers may need to wait for a little (It’s a good thing) : For a cohort to start and for the adoption journey to be optimized for the customer, there must be sufficient customers who fall into the cohort/journey. If articulated correctly, customers do understand the importance of this. Many orgs are already familiar with such scheduling mechanisms for instructor-led training engagements.
  • Avoid wastage of field sales effort : Strategically important yet small accounts can be nurtured easily through the logical start and end of the cohort stages allowing Account Executives and sales management to re-evaluate their strategies with the new account.

But How? approaches the solution to these problems by publishing a framework for Cohort-Based Customer Success and tooling that helps CSMs manage their workflow in curating and delivering successful customer cohorts. More information on this can be requested by clicking here.

About the Author : Abhishek Parolkar is a Principal Researcher for Product Adoption & Behavior Change studies at Dotted Circle. He has diverse experience as a practitioner of customer success methods and technology leadership at growth stage companies across asia pacific region.

[1] Study conducted by the International Health, Racquet & Sportsclub Association (IHRSA)
[2] 2020 Flexera Study :
[3] Expectation mismatch with SaaS contracts :
[4] Mentions in the market report
[5] First follower is what turns a lone nut into a leader: