Elevating SaaS Customer Success to a Strategic Function

Yesterday, I spoke at the Churn Zero Big Ryg customer success conference in a session titled, “When customer success is a second-class citizen”.

Throughout my time as an entrepreneur and working in startups, I’ve always been responsible for customer-facing functions—sales, support, and customer success. And now, as an outside advisor to growing startups, I am often working with leadership teams on their customer success scaling. 

A really unfortunate reality I see is that for many companies customer success is an afterthought.  Frequently, when working with leaders for the first time, I am introduced to the sales lead, the product lead, the engineering lead, and the finance lead. Where’s the customer leader? Or, there might be a VP-level leader in place for sales, engineering, product, finance, and other key functions, but the highest customer leader at the table is a director.

This happens often in a product-led culture where initial traction comes from a self-serve sales motion and customer adoption & usage are strong. In these scenarios, customer success is not necessarily needed. At least not initially. But at scale, customer success is definitely needed and sometimes it just gets bolted on as an afterthought.

How can you tell when customer success isn’t getting the respect it deserves in an organization?

Here are some symptoms:

• You just “feel” it.
• Customer churn is considered a “customer success problem”.
• The CS team is an afterthought in strategic planning, key decisions, cross-functional communication.
• There is a struggle to get resources, funding & staffing for the customer success organization.
• Net & gross retention is not a shared KPI across product, engineering, marketing, and customer success equally.

It’s not them. It’s you.

My session yesterday provided a healthy dose of tough love because what I often find in organizations who have not yet fully elevated the role of customer success is that it’s not for a lack of willingness to do so. It’s how customer success is perceived, which stems from how the customer success team operates within the organization.

Here are some root causes I see often:

• The nature of the role is often reactive (reacting to things that are outside of customer success’ control even), so it is perceived as a reactive (not strategic) function.
• Anecdote-based communication. We’re relationship people, after all!
• Lack of strategic cross-functional relationships within the organization. We’re so focused on building our external customer relationships, we sometimes neglect the internal ones.
• Ineffective managing up to the leadership team.
• No line of sight into trends and metrics for leadership leads to the perception that customer success isn’t a business driver.
• Learned helplessness. Once a customer team feels marginalized it can become a self-fulfilling prophecy. Patterns & company habits become ingrained and it feels like there is no way to change the dynamics.

The tough love I shared in my session wasn’t with any judgment. I’ve been a customer success leader, I am just as guilty of the symptoms and causes I see now as an outside advisor to companies. That’s why I can speak to them—I’ve lived it too.

The good news is that customer success can usually be elevated to a more strategic level within the company through some pretty simple initiatives that are entirely within the control of the team itself.

Five keys to changing the perception of customer success

1. Work laterally

Working cross-functionally with other departments to meet the company’s strategic objectives is an important first step in elevating customer success in an organization. Customer success won’t be taken seriously by leadership if you aren’t working laterally across the organization with your peers. How to build lateral relationships:

• Set up regular meetings with engineering, product, marketing and sales.
• Conduct strategic planning sessions with leaders from other departments; find cross-functional joint initiatives to collaborate on to meet company goals & objectives.
• Understand what’s important to other departments and provide value to them through insights, information or help.
• Ask for support. Be transparent about your mission to raise the visibility and importance of customer success and ask your peers in other departments to help.

Sometimes the ‘work laterally’ advice can be tricky if the customer success leader doesn’t have a set of true peers (for example, if the leaders of other departments have more senior titles). In these cases, that can be part of the problem. It’s still something to undertake. Try to work upwards to leaders of other departments, even if they are technically above you in the company. If that doesn’t work, find true peers in other departments and start there. Lateral collaboration is critical.

What great lateral relationships looks like:

• Joint initiatives to increase NPS, retention, and expansion
• Open lines of frequent communication with a regular cadence of meetings
• Shared responsibility for customer retention
• Culture of support across leadership —“We’re in it together” and “I’ve got your back”

2. Be proactive

The nature of customer success is often fairly reactive. We’re on the front lines of dealing with customers when things go sideways. That said, there is significant proactive, strategic work to be done as well. Here’s how:

• Post-mortem & learn from every fire drill. Communicate learnings & action plans across the organization (without any finger-pointing).
• Undertake strategic initiatives to improve customer success. Find ways to improve processes and outcomes for customer onboarding, renewal, communication, and product adoption. 
• Share reports & data on a regular cadence. Even if there isn’t an expectation to share information, share trends, patterns and customer insights proactively, without being asked.
• Create the perception of being proactive. Customer success is a hectic, demanding role. But it’s important to never let them see you sweat. Be the calm in the eye of the storm.

3. Communicate 

Customer success needs to be the voice of the customer within a company, and that starts with effective, regular communication. Find ways to share information about the customer base including:

• Reports & insights
• Notable wins, expansions, renewals and at-risk saves
• Adoption challenges customers face
• Challenges customer success is facing in engaging the customer base

What great looks like

Send regular emails, post regularly in Slack and find a communicate template and cadence that works for your specific company. That can include:

• Monthly customer success highlights email sent to all staff—wins, challenges, “did you know” customer insights.
• Standardized monthly reports to the leadership team—wins, expansions, a post-mortem on notable losses, trends, gross & net retention, health scores, at-risk customer interventions, etc.
• Quarterly CS business review to leadership.
• Educational content like customer success benchmarks stats, information, article summaries, etc to help raise awareness and about the business value that customer success delivers.

4. Think data first

Customer success is a relationship-driven function. We tend to share information in anecdotes and stories. And this can backfire because it’s not the way the broader organization communications. Does any of this sound familiar?

• “Nobody likes how we handled the last feature release.”
• “Everyone’s been asking for the XYZ integration lately.”
• “We’ve got a bunch of new expansion opportunities in the pipeline.”
• “Churn’s increasing this quarter because of Covid.”
• “When I talked to Jane Smith last week she said…”

Raising the profile of customer success in an organization means we have to be a strategic partner and that starts with communicating in more quantitative ways.

• Anecdote: “Nobody likes how we handled the last feature release.”
  • Data-based communication: “We received 250 negative sentiment tickets about the last feature release, which represents 85% of all the tickets about the release. We also received 17 negative calls and 134 negative emails across the customer success team. And NPS dropped by 15% in the 2 weeks following the release. Here’s the feedback we collected…”
• Anecdote: “Everyone’s been asking for the XYZ integration lately.”
  • Data-based communication: “We received 29 requests for the XYZ integration last month, up from 15 the month prior. The customer success team tracked 12 times it was mentioned on calls this month, up from 5 the month prior. Our three largest customers have also asked about it every QBR for the past 3 quarters.”
• Anecdote: “We’ve got a bunch of new expansion opportunities in the pipeline.”
  • Data-based communication: Expansion opportunities are up 50% over last quarter, due to…”
• Anecdote: “Churn’s increasing this quarter because of Covid.”
  • “Of the 24 churns this quarter thus far, 18 have cited Covid…”

There is so much fantastic data available to us in customer success. Health scores & trends, NPS, feedback, customer segmentation, churn and retention trends across customer segments. The list can go on and on. Think about data as the “meat” of your communication, and make anecdotes the “salt & pepper”.

5. Managing up

Managing up to your leader, or a leadership team means understanding their cadence, communication, priorities, strategies & goals. Thinking about what they want and need to know and proactively providing it. Here are a few tips.

• Be the source of truth. Don’t wait to be asked for insights and data, provide it proactively on a regular cadence of reports and communication.
• Provide post-mortems on major churn with insights, learning and action plans to help save customers moving forward. Don’t be afraid to own mistakes made in the customer success organization and avoid finger-pointing or blaming other departments.
• Identify problems, trends, and ideas worth discussing and surface them. But be cautious about surfacing problems without solutions and suggestions to help make improvements.
• Brevity usually wins the day. Summarize your messages and reports succinctly.
• Align on their expectations for customer success.

The #1 way to manage up

I find one of the most important, and overlooked, aspects of managing up is surfacing churn risks with insights and action plans. If there is just one thing that can make the biggest impact on elevating customer success to a strategic level within a company, it’s this.

Start to look at churn risks 6+ months ahead of renewals, have quantitative data you evaluate to assess the level of churn risk, and documented “at-risk” save plays in your customer success playbook. Prepare a monthly report on churn risks, including reasons, potential revenue lost, brief history of the account and the at-risk plays your team is running to intervene to save the account.

Doing this alone can transform how customer success is perceived and makes the biggest single impact across everything suggested in this article.

The 6th key is mindset

When customer success isn’t viewed as a strategic aspect of the business, or has been marginalized, it can create a feeling of learned helplessness across the customer success team. “This is just the way it is.”

It can be solved, and it’s best solved by customer success taking the responsibility to up-level their organization. I hope the ideas shared here are helpful!