How to weave CS into the Fabric of your Organization

There’s funny meme going around that I think encapsulates our present reality:

If 2020 was a math problem….

You’re paddling down the creek at 2 m.p.h and your kayak loses a wheel, how many cantaloupes would it take to re-shingle your roof

Attempting to grow your business in 2020 can feel similarly non-sensical. Add in the high cost of customer acquisition and perils of low customer loyalty associated with the en vogue subscription model and you get a sense of why more and more business leaders are turning to Customer Success for guidance. Whether the focus is solving for churn, adding organic expansion opportunities or increasing customer loyalty, Customer Success can be viewed as the beacon on the hill for challenged organizations. Interestingly enough, the data is validating this viewpoint. The SEG (Software Equity Group) recently held a webinar discussing the relationship between retention and exit multiples which amongst other findings, revealed maybe not surprisingly that your ability to keep your customers will have a bottom line affect on your business value.

“SaaS companies find that growth and net retention play a large factor in the exit multiple. Three SaaS companies driving 40% growth, but varying levels of net retention, will very likely experience a stark different in exit ARR multiple.”

Figure 1: SEG Net Retention Wave

With data to confirm its value, the challenge is identifying how to effectively respond to this need for Customer Success in a way that thoroughly unlocks its value. Many companies attempting to harness this power are finding that they simply don’t know how. Some stop at changing the titles of their Account Managers to Customer Success Managers or bringing on a Chief Customer Officer wherein after the box is checked they sit back and wait for the associated benefits to fall into their laps. Unfortunately the reality of the situation is more nuanced and requires an organization to build a customer centric culture where customer success is woven into the very fabric of their organization.

While this clarification can seem a challenging proposition, Rav Dhaliwal of Crane Venture Partners dives into this issue in his article “There’s no such thing as post sales” where he provides 3 wonderfully pertinent insights that he derives from his conversations with founders and executives who have built customer centric organizations:

2. Ensure Organizational Alignment

Another key pattern that emerged from the breakfast session was that each of these companies has a very tight alignment between their Sales and Success teams. This has less to do with reporting lines and org structure and much more to do with using territories and incentive structures to drive the right (long term) behaviours.

By aligning their Sales and Success teams by territory, customer segment or industry vertical they then create a more collaborative environment which requires less hand off, where a community of customers are managed by an account team made up of both Sales and Success representatives. This also allows for more organic introductions through prospecting to accomplish #1 (close the gap between buyers and deployers) as well as paving the way for more effective incentive alignment that can drive the right team behaviors. Rav goes on to detail how one company aligns both CS and Sales incentives to a level of deployment or the customer reaching some milestone associated with time to value. This idea while simple, ensure incentives are in place to motivate the right behavior from your critical functions (Sales and CS) and ensure everyone in the organization is focused on time to value (the holy grail metric for complex B2B solutions).

3. Build a Customer Success Company

As hinted earlier, maintaining organizational focus on what would traditionally be considered “CS metrics” is a critical part of interweaving customer centricity into your organization’s DNA. This truth is no more relevant than now as companies are increasingly silo’d with finance watching cash flow, operations tracking uptime metrics and product building features. In this reality, its easy for an organization to become more like a group of symbiotic animals where interactions are motivated by mutual benefit, rather than a single organism where every movement is a coordinated response from all functions working towards the same goal. Reversing this trend, Rav describes how the companies who have recognized this need are shifting their narrative on what “go to market” means to help realign their organization’s new focus.

In particular their view of what “Go to market” means is not just how to market and sell effectively, but how to ensure that everyone is organised, aligned, measured and incentivised to create the conditions to keep and grow revenue from every single customer.

2020 is weird, and at times attempting to grow your business during these weird times might feel like playing Russian roulette while running through a gauntlet. However with the right perspective on the challenges, this can be a time where you reinforce the foundation of your organization by repositioning the focus of your Sales and CS teams. To do this effectively, Rav has shown in his article that its critical this conversations starts with your customers. Reviewing your processes, organizational alignment and incentives through the lens of your customers with these three insights can help you quickly move the needle for your teams.

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Stephen Poppe is the Editor/Owner of the Chicago Customer Success Podcast. He is currently the Senior Manager of Customer Success at Label Insight.