Voices from the Customer Success Space, Part 3

by Anya Breen

‍This past year has been a tumultuous one for the tech sector. We have seen a stark drop in venture capital funding, and the resulting increase in investor pressure has hit Customer Success (CS) particularly hard. 

One of the primary reasons for this is a lack of understanding of the value of the organisation. Whether this is as a result of the function’s relatively recent rise within the tech space, the mid to long-term value realisation contrasted with investor short-termism, or failure to articulate/ understand this value on both sides. 

The first two parts of this three-part series explored the questions ‘Why are Customer Success organisations being so badly impacted by layoffs?’ and ‘How do Customer Success organisations contribute to profitability?‘. I spoke to executives across the CS space who shared with me some of the challenges facing their organisations in today’s climate. In this third and final instalment, I asked 10 CS leaders for their views on how the value of CS can be better articulated moving forward.  

One of the key themes that came up in these discussions was the alignment of CS with other functions in the organisation. As Simon Smith at ENSEK highlights below, integrating the CS function into the existing messaging of your sales function works to highlight its key contribution to commercial goals and foster an environment of customer-centric cross-functional collaboration.

“A lot of the sales strategies have really good messaging, such as MEDDIC {Metrics, Economic Buyer, Decision criteria, Decision process, Identify pain, and Champion}. This can be translated and transitioned across the whole customer journey and lifecycle. How can CS leaders help to articulate this?” Simon Smith - Head of Customer Success, ENSEK

Conversely,  Leonardo Neves of Shutterstock proposed aligning CS more closely to marketing due to the alignment in CAC and CLV metrics:

“The CS organisation should not be completely separate, nor should it be part of the Sales organisation as we often see. The CS organisation should be housed within the Marketing organisation to make sure the CAC and CLV metrics, among others, align with the CS organization's goals and metrics. This assists in positioning CS because it's directly tied to revenue and profitability as well as to the sales funnel.” Leonardo Neves - Senior AM Team Lead EMEA, Shutterstock

Across all the conversations I had, one message was clear: data is everything. The more you can articulate the figures around your CS organisation the better the understanding of its value will be at the executive level. 

“Data, data, data; data is a critical tool for any customer success organisation internally and externally. Use this to drive home the value that CS is bringing and the quantitative value that it correlates toward profitability” Billal Malik - Customer Success Director, UK & I, Onfido

“As a CS leader, attach your work and the work of your team to the metrics that matter for your organisation - things like Net Retention, Gross Retention, and Expansion Revenue.” Rosanna Zrnic - Former Director of Customer Success, Security Compass

Where there isn’t a dedicated reporting function in place within the CS org, this can, however, be difficult for CS leaders to juggle alongside their day jobs. Additionally, identifying these key metrics is far easier if you have a very commercially focused CS organisation, which is the case within a growing number of businesses. 

“The more commercially leaning the organisation, the more you have hard facts and hard numbers around that. If you have a more technical CS organisation, then it’s more that you have to believe that what you are doing is the right thing, because you only will understand what value the CSM brings to the client when you let them go. This is why the notion of having success plans in place whereby these fund a premium service for the customer can be so beneficial.” André Krüger - Head of Customer Success EMEA - DACH & EE, CyberArk

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Paid success plans are one route, but as CS leader Matt Lane highlighted, there are other ways to demonstrate value:

“If you have accounts/territories without a CSM, compare the net recurring revenue of these customers against those that do have CSMs actively engaged. List all the tasks that CSMs own on a daily basis - it will be a long list - and explain how each of these tasks contributes to helping customers succeed; and the impact of not doing them. Ask who will do this if not CS.” Matt Lane - Director of Customer Success

Ciaren Diante at Capsule highlighted the importance of aligning CS efforts with the organisation’s strategic goals, as did Joe Christian Balcazar at Portage. Further suggestions for the articulation of impact on profitability included customer testimonials, especially when reported on with frequency, the importance of creating a customer-centric culture, and inviting executive leadership to participate in quarterly or bi-annual reviews with key customers. Finally, and if all else fails:

“Sometimes bringing in external consultants or industry experts to explain the value and impact of CS can also provide a different perspective and reinforce its importance to executive leadership. Joe Christian Balcazar - VP Operations, Portage CyberTech

Multiple reasons have led to a lack of understanding of the value that the CS function brings to an organisation and its contribution to profitability. These include the relatively new rise of the term, the fact that pretty much every organisation defines and positions CS differently, a failure of CS organisations to quantify and communicate metrics and results, and finally, a corresponding failure of executives to actively try to understand this value. This has all been thrown into the limelight by the current economic climate to the detriment of CS in many companies. 

However, the leaders I spoke to and whose suggestions are collated in this article, had a wide range of suggestions for what CS organisations can be doing to articulate their value to organisations. There is, in fact, more we can all be doing to ensure CS’ seat at the table as we move towards the close of a tumultuous year and look ahead to longer-term longer term sustainable growth.

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Thank you to Billal Malik (Customer Success Director, UK & I at Onfido), Joe Christian Balcazar (VP Operations at Portage CyberTech), André Krüger (Head of Customer Success EMEA - DACH & EE at CyberArk), Simon Smith (Head of Customer Success at ENSEK), Rosanna Zrnic (Former Director of Customer Success at Security Compass), Leonardo Neves (Senior AM Team Lead EMEA at Shutterstock), Matt Lane (Director of Customer Success at Cyncly), Katie Savino (Customer Success at Planhat), Diana May (Director of Customer Success at Bonterra) and Ciaren Diante (Head of Customer Success at Capsule) for your invaluable contributions to this article.