What role does Customer Success (CS) play? While a CEO or CFO’s remit is largely consistent company-to-company, the picture becomes increasingly hazy when talking about Customer Success. For example, do renewals fall under the CS team’s remit or within Sales? Who does the CS lead report to? What are the CS team’s priorities and targets?
Given the wide array of customer touch points, the CS team can easily become overwhelmed without a clear definition and purpose. Therefore, it’s crucial to define a CS charter – or mission statement – which outlines where CS sits in the business as well as the team’s roles, responsibilities and reporting lines (the charter should also define what CS does not do). With a charter in place, the CS leader will spend more time focusing on customer retention and less time firefighting for other departments.
It’s all well and good having a clear mission and strategy, but if others in the company don’t understand or appreciate what the Customer Success team is trying to achieve on behalf of customers, then what’s the point? Conceptually, c-suite executives understand the importance of Customer Success, but in practice it can quickly become an afterthought or catch-all. As such, it’s imperative to get backing from across the executive team, ensure all departments are aligned to the same outcomes and make sure all parts of the business know their roles in driving customers’ success.
For example, who is responsible for writing and sending out customer communications? Where does the product team come in and where do you need assistance from sales and marketing? When the whole company is aligned and understands how they contribute to creating valuable outcomes for customers, this drives accountability across the business and expedites growth.
Customer Success is not a department, it’s a culture. Whether it’s for products, services or messaging, all businesses have customers in some form or another and if you’re committed to getting more customers, you need to listen to your current clients and implement structured decisions based on their feedback. That’s where CS comes in.
Investing in CS early is more than just capturing customer insights and bringing them back into your business. In small companies where the founders are playing every imaginable role, CS might seem a luxury resource, but the sooner you invest, the quicker you will grow. That’s because knowing how much you are keeping and growing your customers is the baseline to driving customer and net dollar retention; two key metrics that Series B investors will certainly be looking at.
I’ll say it again: customers are a key part of a company’s success. Yet, far too often, CEOs, CFOs and investors prioritise top-line growth figures and dreams of sky-high valuations over Customer Success. This is especially true in tech companies where there is a strong sales focus, but a relatively weak post-sales focus.
However, existing customers provide predictable revenue. Although investing in CS might cost a little extra, this additional focus on current customers will lead to higher retention and eventually faster growth. It’s much less costly to retain and expand customers than to land new logos! This drives high net dollar retention which ultimately results in, yep you guessed it, that dream valuation.
I often see companies investing in a CRM to get solid data, but then completely forgetting to do the same for Customer Success. Whether it’s qualitative feedback from carrying out surveys or quantitative info from analysing churn trends, CS revolves around data and companies need to not only invest in gathering the right metrics and building good reporting, but also ensure they are monitoring the trends regularly. For example, if you lose one customer per month, but gain 10, you might think you’re doing ok. However, if you lose two customers the following month and three customers after that, then you know that something probably needs to change or at least requires more analysis.
Secondly, the CS team needs to communicate through this data. CS people tend to be quite empathetic with a high EQ, which is what makes them great at building relationships with customers, but when communicating to other parts of the business, they need to be as objective as possible. How can you do that? By using data that relate to your business goals and those of your customers’.
Customer Success is not a standalone department. Customer retention is not a standalone metric. While many see the link between CS and sales & marketing – i.e that customer advocates are the best sales people – less people acknowledge the relationship between the customer and the product. At the end of the day, customers decide whether products fit the market, not the product development team. As such, building relationships with customers and finding out what they like and don’t like is key to improving your product and ensuring market fit. The more products you get in front of the customer, the better the feedback loop.
What’s more, customer retention also helps you figure out where your company fits in the broader market and thus defines your total addressable market. This will help the evolution of your product or the delivery of your service, which is key to keeping and growing the customer base and ultimately nailing your net dollar retention and overall business growth.
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