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Hi, Markus here. Welcome to a free edition of the Customer-Value-Led-Growth Newsletter.

Every week, I share strategies, guides, and frameworks to help you create exceptional value for your customers and company.

If you are not a paid subscriber, here’s what you might have missed:

• 5 highly Effective Tools Every CS Team Needs to Use

• The not-so-secret to high Product Adoption

• How to build a Customer Success Metric System that rocks

• Customer Onboarding that drives Growth

• How to build a dedicated Customer Success Plan

Being a CSM is the most challenging role in SaaS.

There’s no other one that requires such a wide set of skills like

• Active listening

• Problem-solving

• Transferring knowledge

• Handling escalations

• Demonstrating value

• Analyzing churn

just to name a few.

But there’s something more important that determines your success:

Your mindset. 

The past decade has shaped a certain way of how Customer Success Management is understood and executed.

Unfortunately, not in a good way.

To this day, there are a bunch of harmful myths and misbeliefs holding CSMs back.

In today’s post, I want to debunk some to help you move forward and improve your performance.

1. The goal of a CSM is to maximize product usage.

Your customers don’t buy your product for the pleasure of using it. For them, it’s merely a tool to get what they care about

• more revenue

• lower costs

• higher productivity

• …

and they want to achieve their goals with minimum time and effort. That means they want to spend as little time as possible with your product.

They don’t want to use it all day long.

• Sales reps want to talk to customers, not spend their time in the CRM

• Project managers want to move forward, not spend their time in their PM tool

• Social media marketers want to create content, not spend their time distributing it

The only exceptions are products whose very nature is being used all the time. Like Accounting or BI software where the roles people work in are centered around it.

But again, high usage is not the equivalent of getting value. Your customers could simply spend so much time there because it’s clunky and cumbersome to get things done.

2. You have to choose between trusted advisory and commercial responsibility

Most CSMs have a completely wrong understanding of what selling means in their context. You are not turning into the “sleazy car salesman” if you have commercial responsibility.

It’s not even close. New customers buy based on the perceived value of your product. You are selling to existing customers who buy based on the value they have already received.

If your customers get a lot of value from your product you don’t have to sell renewals. They become a no-brainer, a mere formality.

Similarly, you are not selling expansions or upsells. You are creating and capturing demand.

If you have helped your customers to double their revenue from E-mail marketing, they will start looking for ways to further grow their value.

They want to send more E-mails to more people, more often, and buying more resources is the logical consequence.

Guess who has the highest odds of enabling customers to get all that value from the product? CSMs who have reached trusted advisor status.

If you deliver value first and accurately demonstrate how your customers can get more by buying more resources and features everybody wins. 

3. Customers churn because the product is too expensive.

I haven’t researched that matter but this could very well be the most common reason customers give about why they are leaving. The only problem is that it’s simply not true.

If the product was too expensive, your customers would not have purchased it in the first place.

They knew the price they would be paying and if the pricing is usage-based, they would simply stop using it. 

What customers are saying is that they did not get enough value for what they were paying.

This is something entirely different. You don’t have a pricing problem, you have a lack-of-value problem. 

The same is true when customers are telling you they can’t afford your product any longer due to budget cuts.

Technically that’s true but they are still paying for products and services. What they are saying is that their company stops paying for everything non-essential.

Non-essential are the ones that don’t deliver a high enough ROI. Again, you have a value delivery and not a pricing problem.

4. Giving discounts will keep customers from churning

If that would be all it takes, no company would suffer from a high churn rate. Because of all potential churn countermeasures, there’s nothing more easy.

There might be exceptions where giving discounts works like customers narrowly missing their targets. So it’s tipping the scale in your favor.

But even if it surprisingly works, it’s questionable whether you should do it. Because you are giving discounts from your margins.

If the discount turns margins negative, you are losing money every month the customer continues to stay.

However, the reason why discounts do not work is because they can’t compensate customers for missed goals.

Customers don’t care about paying less for less and will start looking for alternatives to get what they want.

And if it works against all odds, you will send the wrong signal. If customers see that you are trying to keep them at all costs, how likely are they going to pay the full price ever again?

5. Health scores, CSAT, and NPS are Customer Success metrics

This one is going to hurt. Life in Customer Success would be so much easier if that was true. Because these metrics are easy to gather and track as they perfectly scale.

You don’t even have to talk to customers. But that’s exactly the problem. None of them provides any context.

Ok, it’s easy to detect churn risks if you get low ratings and customers’ health is deep red.

But the problem is at the other end. Customers with all-green health scores, high CSAT, and NPS churn all the time.

Even if 70% of your predictions are correct, you simply can’t afford to miss 30% churn risks in your top segment(s).

And that’s assuming your customers might be even responding to your NPS and CSAT surveys and your health scores are built accurately (most of them are not).

The data is even less accurate in identifying “CSQLs” many SaaS companies are hunting for.

Have you ever measured how many referrals your top Net Promoters drive?

If you want to measure customer success accurately you need to understand how your customers are evaluating their ROI.

You need to track and benchmark actual- vs projected results based on their metrics.

6. The Sales Handoff covers all relevant information

The discussion between CS and Sales about the information the handoff needs to contain is age-old.

It certainly, should cover basics like company information, stakeholders, goals, and problems to solve. 

But as a CSM you need more information. Insights that your sales colleagues are unlikely to be qualified to determine.

For starters, it’s questionable whether they can uncover the roots of the customer problem. It would require deep subject expertise.

Your mission is not to solve your customers' problems. Unless you are specifically tasked with it.

It’s to enable your customers to solve them on their own through education and training services and content. But what exactly do customers need?

Sure, you could try to push your customers through your entire success program. Following a one-size-fits-all approach that leaves no gaps (theoretically).

But what happens if your customers repeatedly move down the wrong lane before they find what’s relevant for them?

The handoff should be used as the starting point to follow up and determine the content and services your customers need.

Whenever you are ready, here’s how I can further help:

1. The CVLG Community: Study the unique CVLG framework. Deepen your knowledge in weekly events. Connect with peers, inspire and elevate each other, and unlock your full potential.

2. The CS Creator Course: Identify, deliver, and demonstrate Customer Value. Build meaningful customer relationships. Improve your performance and grow your impact.

3. The Growth Program: Work with me 1:1 and turn Customer Success into your company’s most powerful growth engine.

4. Shopify Store: Get Ebooks, Templates, and actionable Guides.

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