The purpose of SaaS is customer success.
No, not the team we have named "customer success."
The customer outcome itself.
When customers achieve what they hoped for when buying your product.
It's the only way to win.
I'll explain myself:
- The cost of entry for competitors is low. Multiple companies are doing the same thing your company does (or soon will be).
- Competitive products look more and more alike. Your competitors are copying your features, and you're copying theirs.
- Customer switching costs are negligible.
- And the kicker? People trust what your customers say more than they trust what you say.
The average software buyer spends only 17% of their time in-market interacting with vendors, and they split that time across all the vendors they are evaluating (stats by Gartner).
They get their information from personal connections, G2, TrustRadius, private communities, slack groups, unsanctioned reference calls, and recommendations from investors.
What does this mean? You have no choice but to focus on customer outcomes because they are the ones telling your story.
A customer alone isn't good enough. You need every customer to become an advocate.
Many SaaS companies have adopted an approach to customer success that is a band-aid for a broken product support process.
Customer success managers fight fires, handle escalations, and chase down technical issues they have little direct control over.
They are a point of contact for customers to bang on until we solve their problems.
Others have conflated it with commercial account management.
In either case, customers don't get the total value, CSMs are burning out, and business growth and profitability are suffering.
It's time for a new strategy. One where customer success teams work to transform each customer into a vocal advocate. Where customer success teams are held accountable to outcomes they can control.
Here's the approach:
- MINDSET: Outside-in
Transition the company psyche from inside-out to outside-in. Make it your company's stated purpose to help customers win.
This messaging begins with the executive team embracing current customers, and holding the entire organization responsible for their part in making customer successful.
- STRATEGY: Programmatic Customer Success
Differentiate inbound support issue resolution from outbound customer success activities and strive to make both processes best-in-class.
Hire a talented support leader and give the engineering team a mandate (and time in their sprints) to resolve customer issues as fast as possible. Measure that.
In parallel, pivot customer success managers to focus on customer engagement.
Yes, one-on-one engagement, but think of everything we do with customers as a customer success program:
- One-on-one audits and consultations (via prescriptive playbook)
- Online customer community
- Facilitated small groups
- Benchmarks and audits
- Virtual office hours
- Product webinars
- User groups
Emphasis on one-to-many programs, where customers connect, interact, and learn from one another. Think of it as crowd-sourcing customer success across your customer base.
Operationalize each program with playbooks and systems to track participation, outcomes, and satisfaction/CSAT.
Treat customer success like account-based marketing programs targeting specific account profiles and personas.
Focus on key messages and activitations that help them realize their potential and your promised outcomes at the point of sale.
Spend as much time on issues outside the product as you do on product-related topics. When we embrace the WHOLE customer, they see us as an ally, a partner, and a trusted advisor versus a vendor alone.
Identify a few KPIs that are measures of customer outcomes.
In other words, NOT renewal rate, NOT NPS, and NOT expansion bookings. These are your success metrics, not your customers'.
How do your customers measure their productivity? What figures do they share with their senior leaders to prove they are winning? These are the customer outcome metrics you want to measure, benchmark, and improve.
Add them to your weekly operating cadence.
Hold customer success accountable for driving them.
In parallel, measure the percentage of customers who engage in at least one of your customer success programs each quarter. Customer success teams can control this outcome.
Handle customer issues end-to-end within Support and Engineering so that customer success can focus 95%+ of their time on outbound customer success programs.
Handle commercial issues with dedicated renewal or account managers.
Build, run, evaluate, and improve customer success programs. Target specific industries and personas, and script messaging. Define a playbook and train your teams on them so nothing is left to chance.
Which outreach programs are driving the most engagement? Which ones do customers talk about on social media after they attend?
Send surveys and take note what customers rave about in feedback surveys. Do more of that.
Every company claims to focus on its customers, and it's never been more critical.
But many are still figuring out how to focus on customers at scale.
What's your strategy for scaling CS? Are you using a programmatic approach to drive customer outcomes and engagement at scale? If so, drop me a line (just reply to this email). I'd love to hear how you're innovating.
Here are a few of my favorite reads and listens from the week:
- Five Tips for Telling Great Customer Stories by Jennifer Dole.
- Using the CURE Framework to figure out who should own renewals by Cassie Young. A great framework to help you determine where renewals should sit within a SaaS organization structure.
- Five Laws of Community-led Growth by Bessemer Venture Partners. "We predict that in the next five years, more than 50% of startups and tech companies will have functional groups and executives dedicated to community by the time they cross $5 million in revenue." Enough said.
Quote of the week is from Marie Farleo, author of Everything is Figureoutable:
"Clarity comes from engagement, not thinking."
When I'm stuck on a problem, I've learned the fastest way to get unstuck is to talk with someone who has solved that problem before. Or better yet, spend time with someone who would benefit from me finding a solution to that problem.
Once I understand their perspective solutions tend to come faster.
Here's Marie on The Diary of a CEO podcast with Steven Bartlett.