- Customer Value Led Growth
- Why Customer Success Teams get so little credit
Why Customer Success Teams get so little credit
and how you can solve it
Hi, Markus here. Welcome to a free edition of the Customer-Value-Led-Growth Newsletter.
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It’s painful to see that so many CS teams are still underappreciated, underbudgeted, and underpaid.
In the past few weeks, I have been asked about the “why” quite often and it’s not a surprise.
It’s certainly not what I expected for 2023 either. After the free-venture-capital party came to an abrupt end in 2022 there was only logical alternative for me:
A different business model with CS teams at the forefront. Instead, many companies reduced the size of the CS team.
Some even eliminated their whole team. Sure, we can point out that they are likely digging their own graves. But “told you so” is a poor consolation prize.
I have given this issue a lot of thought and think I have a reasonable explanation and a viable solution.
When people asked me they further raised the question of whether this is a company problem. Yes, but in my conclusion it goes even deeper.
The lack of credibility for CS teams is rooted in our society. More precisely, how we have been conditioned by social engineering.
People have been trained to choose 1$ now over 10$ in a year. They have been trained to choose instant gratification over long-term success.
Customer Success is the exact opposite.
Customer Success does not have the sex appeal of a sales pipeline that’s moving every day. It’s the boring nerd of SaaS together with Customer Support.
Customer Success is invisible unless things are going wrong and customers churn. Because then they are to blame.
I often get the feeling, that many leaders believe that the only requirement for customer retention is to acquire them in the first place.
And no matter what’s the issue, the CS team could have fixed it.
There’s another problem
The required solution is pretty clear: Show your leadership that it’s worth delaying gratification for higher gains.
But now the next problem emerges. Customer Success teams have lived as a perceived cost center, a necessary evil, for quite some time.
It has caused them to build the wrong mindset about their purpose and how to best operate.
And consequently, almost every form of training and education has been built accordingly.
Namely, how to “manage” customers with the least effort in a defensive role. Following this mindset, you will never get a seat at the table.
It also affected how they were using certain tools like QBRs that are highly effective by design but executed poorly.
Naturally, customers were not eager to waste their time listening to boring presentations instead of conversations featuring content they didn’t care about.
Ultimately leading to the widespread conclusion that QBRs “are dead” which is completely garbage.
There’s no point in sugarcoating it: Customer Success needs to be reinvented.
Here’s what CS leaders need to do to turn the table in 2024:
1. Demonstrate value
Your leadership does not care about product usage, health scores, or NPS. Even when they say they do. Growth and revenue is the language spoken in SaaS.
If you don’t create revenue, you are automatically a cost center. It does not matter whether it’s fair or true. What matters is how your leadership sees it.
Create a report that outlines all the revenue contributions of your team and share it with your C-suite every month. Break down your results into:
When you get the chance, to present your results, add compelling customer success stories.
Explain how exactly you helped a customer double their sales or cut their costs in half and how it impacted your revenue.
Always remember that getting buy-in from “non-believers” is a long-term uphill battle.
Don’t expect one monthly report and presentation to do the job. Continuously expose them to everything you bring to the company.
2. Monetize customer value
One of the worst things about the “old ways” is that many CSMs have been made afraid of becoming “too commercial”.
As a CSM you are responsible for like 98 or 100 steps toward a successful renewal, expansion, or upsell.
Then sales come in, completes the last 2 that are more or less formalities and gets all the credit and commission. In what universe does that make sense?
Don’t get me wrong, Customer Success and Sales teams should be working closely together.
But it’s absolute garbage that how post-acquisition sales are handled. If you have the opportunity to own a revenue number, you should take it.
Does that add more pressure? Yes, most likely but at least you now have something to measure performance transparently.
And you have something to win. Before you were left in the dark and had only something to lose at any time (your job).
If you don’t have the opportunity to own a revenue number, keep track of the revenue from expansions, upsells, and referrals.
You may not have closed any of these deals but you have certainly sourced them.
3. Delivering and tracking value
Many services and content pieces I have seen from CS teams are of underwhelming quality.
The most common approach seems to be compensating the lack of quality with quantity. Hoping customers will find the answers they need because everything has been covered, hasn’t it?
Like long boring tutorials that educate customers on the 348 customization options of every feature.
What’s missing are 2-3 minute long ones that guide customers to a specific task or solution highly efficient.
On top, the performance of inputs is rarely measured accurately because they are not built with a certain goal in mind.
Consequently what’s measured are the number of downloads, views, opens, etc. But that does not matter.
What matters is how many customers were successfully able to implement what they have learned in your webinars, training sessions, or guides.
Your customers’ bottleneck is their skills and knowledge. Your inputs must turn into the projected outcomes at high accuracy (95%)
Similarly, overall tracking of customer results and progress is still a big issue.
Too many CS teams still rely on inaccurate metrics like health scores, NPS, or product usage.
Let’s assume that in 80% of cases, high product usage equals high-value outcomes. But what about the other 20%?
Can you afford to miss detecting these churn risks? A rhetorical question, of course.
Even if you can save half of them before they churn it’s a serious blow to your ability to monetize and demonstrate value.
4. Skills & Knowledge
I have met many CSMs with extraordinary communication skills. Lots of CSMs that are well organized. Plenty of CSMs able to create epic-looking stuff.
But none of it matters if you lack the very fundamental skills and knowledge. Like
how to identify customer needs
how to solve complex problems
the lack of subject expertise to create quality content and give sound advice
active listening and getting meaningful feedback.
The most important skills are the ones required to take customers from their starting point to the promised land. Everything else is a bonus.
You need to make sure that your CSMs are well-equipped for the job they need to do.
5. Training and Enablement
Marketers and Sales reps acquire skills and CSM certification. This is one of the strangest things about Customer Success.
Ok, they are looking good on your resume but your customers could not care less about it.
There’s a huge gap between how CSMs were “built” before 2022 and what is required now.
You need to build training and enablement programs focused on the skills and knowledge your team needs in the Customer Value Era.
Covering critical tasks and challenges like
Building viable CS plans
Transferring knowledge effectively
Measuring customer outcomes
Data & Analytics
Customer exit interviews
Tip: Break down the customer success journey and create a list of required skills and knowledge. Identify the gaps and build correlating training and enablement plans.
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