Building Your Success Team: Customer-Led Growth Principle Two
Customer-led growth is your strategy to survive (and even outpace) today’s down market. Here’s how to unlock this untapped revenue growth.
Customer Success is a revenue generator — CEOs & CFOs must view investments into people, processes, and technology not as a cost center, but as a lever to enable Net Revenue Retention and Gross Revenue Retention.
When you take the necessary step towards embracing customers as your #1 go-to-market asset, the people who manage them–Customer Success–become a critical investment for growth.
Companies that effectively organize and manage customer experience can realize a 20 percent improvement in customer satisfaction, a 15 percent increase in sales conversion, a 30 percent lower cost-to-serve, and a 30 percent increase in employee engagement.
- McKinsey & Company
The Bottom Line with Customer Success
The Customer-Led Growth era has arrived. Organizations are waking up to the reality that their Success team is a massive source of untapped revenue potential. And, Customer-led growth is not just a ‘nice-to-have’ strategy for more revenue... it’s also critical to helping you get ahead of the ‘churn snowball effect’ as outlined below.
Image source: OnlyCFO
In this analogy coined here by OnlyCFO, SaaS companies are stacking ARR snowballs at the top of a hill. If they’re not managed by Success, these snowballs will not only roll away, but pick up more lost revenue as they go down. This can include lost second order revenue, lost referrals, limited expansion opportunities, higher operating costs to manage churn risk, and more. In sum, the article states: “A dollar of churn does not equal just one dollar of lost revenue. The impact of churn is much greater than the year’s churned revenue.”
In 2023, if you can align even one team with another to drive toward stronger customer retention, growth, and advocacy—you’ll be in a stronger financial position to survive (and even outpace) this down market.
Building a powerful CS team
First and foremost, investing in this foundational growth lever requires the right leader who understands the nuances between both protecting and expanding revenue.
1. Protecting revenue is all about planning, executing, and collaborating across GTM teams to drive customer value at every step of their journey.
2. Expanding revenue requires a strategic approach to building trust while proactively sharing growth opportunities throughout their journey to value realization. Modern Customer Success leaders balance both strong business acumen and emotional intelligence—a winning combination that every CEO and CFO needs to drive their sustainable growth engine.
In addition, as Forrester Research puts it, customer-led growth is a team sport. It is essential to invest widely across your customer revenue optimization team including Customer Success Managers, Account Managers, Implementation Managers, and Renewals Managers. Driving customer adoption, retention, expansion, and lifelong advocacy is not an easy task and should be your top priority to create growth now and well into the future.
Value-based selling is the new sales methodology. Customer Success uniquely understands how to sell based on customer value, and this knowledge and practice needs to permeate across all teams to successfully drive growth in this new revenue era.
- Scott Dzalio, VP of Customer Success, Braze
Creating the right processes to support customer growth
Why is Sales always optimized first for growth? Or better yet, why is Customer Success always an afterthought when it comes to managing new business revenue?
As a CEO or CFO, here are a few ways to start thinking about building your processes for customer growth:
- Sales-to-CS handoff: Is Sales providing an effective pass-off to Success to increase customer time to value?
- Internal nomenclature: How do you define upsells, cross-sells, and true-ups? Is there clear ownership across who owns them and how to target those opportunities?
- Onboarding timelines: How is your time to implement and/or onboard customers? Are your onboarding costs impacting profit margins?
- Upsell leads: Have you implemented a CSQL (Customer Success Qualified Lead) process to increase sales leads from your customer base?
- Expansion reporting: Do you have the right reports set up to monitor and target opportunities for customer expansion?
- Product roadmap: Are Success and Product aligned to jointly own new feature adoption and churn risk due to product?
- Customer insights: Do Sales and Marketing gather insights from Success and Product on your ideal customer profile (ICP) to effectively identify and target the right prospects?
- Customer references: Do you have a referenceable contact process to easily locate deal references for Sales and candidates for case studies, testimonials, and more in Marketing or Product?
- Pricing strategy: Does your pricing, packaging, and compensation support customer-led growth?
Overall, having the right processes in place will heavily rely on aligning more operational time, resources and budget to Customer Success. PS—You can learn more here about tracking customer success efficiency using the CS magic number.
Accelerating your strategy with the right technology
Finally, with the right people and processes in place, CEOs and CFO need to invest in a platform that will truly power this revenue-generating machine. At a high level, this means your technology needs to:
- Connect disparate systems into a holistic view of the customer.
- Center your revenue strategy around customer value realization from prospect to advocate.
- Scale your revenue engine efficiently with workflow automations at each step.
- Provide intuitive reporting for all users to quickly drive customer retention and growth.
- Aggregate top-level business metrics to assess and optimize your long-term performance.
Simply put: you need a Customer Success Platform like Catalyst to bring all of your time and investment into the right people and processes into a unified engine for growth.
PS—You can learn more about how Catalyst can power your Customer-Led Growth at each step of the GTM team in the Definitive Guide to Customer-Led Growth.
Bring together your revenue optimization dream team
The primary takeaway from this principle is that Success teams are the central core to the modern growth engine. Sales and Marketing have critical roles to play in getting new customers, but their role has shifted in two ways: the first is a focus on expansion with current clients and the second is a collaboration with CS to fully understand and responsibly target growth through your ICP (a.k.a. the customers who expand and grow with your business).
Stories, best practices and thought leadership from the customer success community.