Leaders in the C-Suite are in a unique position to guide company-wide strategy and priorities. How should team members present the benefits of being centered on customer success, though?
In our webinar, A View From the Top: Customer Success for the C-Suite, we talked to experts about the role of customer success at the highest levels of a business. Chris Doggett, Mary Poppen, and Chris Ramsey all contributed their insights on topics like:
- How to drive investment and buy-in on your customer success strategy
- The customer success metrics that are most impactful to executives and investors
- Real examples of how cross-departmental alignment helps to drive business success
Here’s what we learned.
Customer success caught the attention of leadership when the focus changed to retention
Chris Doggett, Chief Revenue Officer of Acquia, started his career working in shareholder support calls at a mutual fund. However, as he transitioned to SaaS and saw the industry evolve, he noticed a shift from reactive to proactive customer support.
“[The customer success] focus developed initially with software companies and then later with SaaS companies around renewal, cross-sell, upsell and the need for revenue retention, since it’s not a one time sale anymore like it used to be.”
Similarly, Mary Poppen, Chief Customer Officer at Glint, Inc., saw that CS needed to become its own team because it couldn’t be handled by sales.
Mary shared that “with the rise of software as a service came a realization that customers could pretty easily move from one provider to another, right? It was no longer building houses with on-premises software, but really moving to renting apartments, using the software as a service model. Without someone in the company tracking the success and value for those customers, the risk of them going to a competitor was just so much more likely. So really, the customer success role and function grew out of the gap that existed between sales.“
There are different ways to get executive buy-in for CS investment
Even though some members of a company may see the value in investing in customer success, you still need buy-in from the C-suite. The panelists have seen different catalysts or methods work to move the company forward.
First, Mary saw executives grapple with the idea of “Why should I invest in additional resources for revenue I already have?.” To this, she replied, “Because that’s not revenue you’re necessarily going to have next year.”
Mary continued that “that realization really sparked the resources and the model shift and the mindset shift to implement customer success as really a central part of the operating process at SAP.”
Chris Doggett has used two different approaches for demonstrating the value of customer success to executives: proof-of-concept and business cases. First, Chris shared his experience with creating an AI model to reach out to existing customers proactively.
He said that “We ended up doing essentially a proof of concept of new technology to see what the results were. The good news is, it was so successful that we ended up having to switch it off. We switch it on, then we get flooded with inbound requests and switch it off, respond to the requests with this little team that we had and then turn it back on for a little while.”
Based on the overwhelmingly positive response, Chris was able to invest in more people for the CS team.
Alternatively, he’s used business cases to present customer success as a vital revenue lever. “If you’re working for a SaaS company, there’s this concept of the Rule of 40, which [states that] your revenue growth rate plus your EBITA margin should be 40% or more. That becomes really tied to the [company’s valuation] and how the company’s evaluated by investors.”
“When you develop a business case around the cost of acquiring new customers versus working with your existing customers, and you look at how much easier it can be to expand, you can have a lot of leverage there financially.”
The link between customer success and revenue can be measured in a few ways
With the shifting focus from one-time sales to proactively helping customers grow within a company came the realization that CS and revenue are linked.
Mary noted that “A lot of people don’t think about customer success as driving revenue, but it truly is. It’s driving and retaining revenue on a daily basis.”
Chris Ramsey, Chief Revenue Officer at LeaseQuery, witnesses the importance of customer success on a company’s financials every day. He noted that as companies grow and transition from “acquiring customers and then keeping customers, and going from a single product to a multi-product, as the CRO and responsible for revenue, you have to be aware of these things and mindful. To make sure it gets the care and attention to need, you have to have a great customer success organization, [and] it’s hugely important the longer your company exists to make sure that’s a big focus of your time.”
How do you translate that connection to a report than can be shared with investors or at a board meeting? Our experts have a few different ways.
Chris Doggett splits metrics into two categories: customer-relationship and financial.
“On the customer-relationship health, some examples are the satisfaction survey results coming out of a customer support inquiry.” Other metrics Chris has looked at include survey response rates, what percentage of an organization’s user base is using the app regularly, and more.
For financial metrics, Chris added that “financial metrics that we typically would look at are things like, what’s the logo renewal rate in terms of how many companies, distinct customers, are renewing with us. And of course, we talked about the Rule of 40, and revenue retention is really important.”
Alternatively, Chris Ramsey likes to use data to share stories. “You know, there’s a lot of studies out there about statistics, but what people will remember is a story” he noted. These stories come in the form of magic moments. Chris noted that these moments vary based on your product and persona, but they’re rooted in understanding how people use your tool.
“So we understand that [our persona]] don’t want to have to spend a lot of time in our application. They need to use it consistently, but they don’t want to spend a lot of time in it. So, once a month, people have to do their financials, and we need them to use it every month, but if they’re in it longer than 10 minutes a month, that means their application’s too difficult to use.”
For many companies, putting customer success at the forefront of their strategy is an evolution, not a flip of a switch.
If you want to hear what else the experts had to say about customer success for investors and executive leaders, access A View From the Top: Customer Success for the C-Suite here.