The 2023 planning season is upon us.

The board just handed you targets for the coming year.

They want to see the company improve gross retention by two percentage points and net retention by six.

A tall order.

How will you help the company succeed in achieving these objectives?

Of course, we will focus on value, relationships, and engagement, but a generic answer won't suffice.

The best leaders know that they must deliver business results; to do that, they need a strategy.

What's yours?

Let's explore together.

What exactly is strategy?

We all have goals to achieve.

Customer renewal targets, new logo bookings, up-sell bookings, advocate recruiting, gross margin, etc.

Strategy connects our goals with the actions needed to achieve them. In his book, The Advantage, Patrick Lencioni describes strategy as follows:

“An organization's strategy is nothing more than the collection of intentional decisions a company makes to give itself the best chance to thrive and differentiate itself from competitors.”

I also like this definition:

“Strategy is an action managers take to attain one or more of the organization's goals.”

Here's a simple example of a strategy we can all relate to:

Let's say I have the goal of becoming a healthier person.

My doctor told me that my resting heart rate is a good measure of overall health and that my ideal target is 60 beats per minute.

To reach this ideal resting heart rate, I may choose a healthy lifestyle involving regular exercise, regulating what I eat, and improving my sleep patterns.

Given this strategy, I'll use the following tactics:

  • 30 minutes of cardio per day
  • Drink 2 liters of water per day
  • Consume less than 10 grams of sugar per day
  • Get at least 8 hours of sleep each night

The goal is clear, the strategy is specific, and the tactics are measurable.

The next step is to execute this plan, monitor my progress, and iterate my tactics as necessary.

I'll be well on my way to a healthy 60 bpm in no time!

In business, a company-wide strategy is critical.

Still, it's essential for functional leaders – sales, customer success, professional services, etc. – to have strategies of their own that "ladder up" into the broader company plan.

Departmental strategies will answer the following question:

What will my team focus on, and what actions will we take to help the company meet its measurable objectives?

In my experience, all teams benefit from a clear strategy, especially customer success.

A clear strategy will help a customer success team avoid becoming a catch-all for work that other departments cannot or do not want to do themselves.

More importantly, customer success is an asset to any business. A clear strategy will help maximize its leverage, and your ability to define and execute a strategy will set you apart as a business leader.

Here are five steps to get you on the path to your plan for 2023:

Step #1: Seek data

When we hire business consultants to develop strategy, the first thing they do is gather data about the current state of the business, the market, and what's happened over the past several years.

For customer success leaders, this could be the customer list, including ARR, initial purchase date, next renewal date, product attachment, health scores, sentiment (NPS/CSAT), market segment information, open upsell opportunities, and more.

It should also include a history of churned accounts, complete with cancellation reasons for each customer and recent closed-won and closed-lost upsell opportunities.

This data comes from your CRM, accounting system, customer success platform, or spreadsheets. You can usually find something to work with.

In my first VP, Customer Success role, this data didn't exist. I had to create it from scratch.

It became a project where a small team inspected our customer agreements (for over 500 customers) and extracted the data we needed to track and analyze the customer base.

Painful, indeed, but I gathered the data I needed to understand my customers.

Data is critical to building a plan. You cannot and should not operate without it.

Step #2: Analyze, segment, and prioritize

This is where critical thinking about your business happens.

Combining the data you harvested and your firsthand knowledge of customers, begin to group them into buckets by market segment, the products they use, how much they pay, or even how healthy you perceive them to be.

What patterns have you seen in the course of running your team?

Do you see specific customers churning at a higher rate than others?

Which customers are more likely to buy add-on products?

Use data and determine if your perception of your customers is accurate. In 2018 I worked with a company that was experiencing a high percentage of first-year churn, meaning customers didn't renew at their first opportunity.

We knew the product was solid and offered a strong value proposition, so we hypothesized that onboarding was a problem. When we broke down the data further, we learned that most of the first-year churn came from the small-to-medium business (SMB) segment.

Because these were small customers, onboarding was mostly up to the customer via the company's product and self-service tools.

We learned from surveying current and former customers that they did not feel prepared to use the product as they exited their onboarding period.


Our analysis gave us a quantifiable area of focus which enabled us to make a statement like this:

"We believe we can improve first-year retention by as much as ten percentage points by improving customer onboarding experience. As a result, we can move company gross retention from 89% to 91% over the next twelve months."

If you want to build the confidence of your board and capture investment for your initiatives, develop a plan that demonstrates a material impact on the top-line growth of the business.

Analyzing and segmenting allowed us to identify and quantify the best opportunity to improve business performance. The added qualitative research (the customer survey) validated our hypothesis and convinced us we could solve this problem.

Step #3: Define the approach

In the case above, our goal was to improve first-year retention in the SMB segment.

Our strategy was to create an onboarding experience that would welcome customers, engage them, educate them, and ensure they completed the critical steps required to become successful product users.

After we chose the strategy, we designed new tactics. For example:

  • Send each new customer a physical welcome package
  • Develop an onboarding workshop for new customers to get acquainted with the product, meet peers from the community, and set up the product
  • Track participation and drive enrollment in a workshop via email campaigns and proactive calls to customers who haven't completed onboarding

We also had to decide who would do the work and how it would get done. We answered questions such as:

  • Who will design the new programs?
  • Who will manage them day-to-day?
  • What will the individuals on the team do, and how will we measure their work?
  • How many people do we need to do the work?
  • What do we do with the existing workload of people who will transition to doing the new work (i.e., what should we stop doing to focus on this)?
  • What change management steps do we need to take to implement this?

We begin to pivot out of strategy and into an execution plan by answering these questions.

Step #4: Socialize and refine

Early in my career, a mentor told me, "If it isn't written, it wasn't said."

A leader documents their assumptions, analysis, research, hypotheses, and plans in a way they can share them with various constituents. They share analysis and preliminary plans with their peers and leadership often and early.

It is tempting to skip this step for practicality's sake, but we do so at our peril.

When our peers, leadership team, and team members feel like we are using their input to co-create a plan, they are much more likely to support us when it's time to execute it.

Take note of the questions they ask.

What do they understand about your plan?

Where do they get confused?

Use these discussions to refine both your plan and your pitch.

Step #5: Operationalize

This is the execution part, where the rubber meets the road.

Putting a plan into action requires determination and diligence. It involves documenting tactics in playbooks, setting up new processes, enabling people, and measuring results.

As a leader, this isn't a "set-it-and-forget-it" exercise.

When it's a new strategy, we must monitor progress weekly by reviewing data, engaging with the people doing the work, seeking insights, and coaching the team on the quality and consistency of execution.

Yes, it takes time, but if you've built conviction around your strategy, it's worth your time each week to ensure that the plan is on track.

Per my LinkedIn comment above, there is no rocket science here, just hands-on, sleeves-rolled-up work and dogged determination.

How are you designing your 2023 strategy?


Some of my favorite content from the past week: