SaaS Tattler Issue 55 – Scaling Customer Success
On Monday of this week, Amity was fortunate to host a powerful webinar given by Paul Teshima (CEO, Nudge), on how Eloqua created and expanded their customer success function as they grew from $0 to $1B. Paul was an early employee at Eloqua, and led their customer success organization from the beginning until after their IPO. If you missed Paul’s talk, you can watch it here. We also published a white paper by Paul on the same topic. You can download it here.
This week’s edition of the Tattler will continue with the theme of Scaling Customer Success.
Funding Customer Success
A key topic Paul covered was getting customer success fully funded by aligning customer success goals with business goals AND getting customer success metrics on management dashboards. Judith Platz, of the Technology Services Industry Association (TSIA), builds on that theme with this blog post.
Here are a few questions to help you get started in building a customer success funding model that works for you and your company:
1. What is the target financial model your company is attempting to achieve?
To answer this question, you’ll need to determine if the model is sustainable and can be profitable. Decide how much can you afford to spend on sales and customer success and still be a profitable company.
2. Will the customer success organization have responsibilities for traditional support activities?
3. Will the customer success organization be responsible for adoption?
4. Will the customer success organization be responsible for renewing the customer subscription?
5. Will the customer success organization be responsible for cross-selling and upselling existing customers?
The answers to these remaining questions will determine whether or not the funding aligns with your team charter. Are they responsible for Adoption, Retention, and Expansion? Depending on your company, these teams can be responsible for one, or even all three of these charters. In many SaaS companies, for example, the allocation from subscription revenues is larger if the charter includes all three.
You should also consider if there are other tasks your customer success team is responsible for, such as support activities, which could also impact the funding for CS. The charter of the customer success organization undoubtedly has the heaviest impact to the amount of funding needed.
Aligning Customer Success
Joel York continually publishes some of the highest quality materials on the SaaS business model. I recommend everything he has written. His latest post on Aligning Customer Success fits perfectly with our theme.
If They Use It, They Will Stay
There are many potential causes of SaaS churn. SaaS products that don’t deliver enough value to justify their use. SaaS products that are so hard to use, such that SaaS customers never really get up and running. SaaS products that are so casually used that SaaS customers don’t incur any switching costs. Or, SaaS customers that simply go out of business. Whatever the root cause of SaaS churn, its impact is always measured by use. They might not come if you build it, but if they use it, they will stay.
Its a bit of a tautology to claim that SaaS product usage is the best predictor of SaaS churn. In one sense, churn is simply non-use. Over time, however, SaaS product use tends to deepen switching costs as SaaS customers put more and more of their data into the SaaS product, invest more of their time learning the SaaS product and bake the SaaS product into their business processes. The cumulative impact of ongoing SaaS product use creates an economic hysteresis that makes it easier to go forward and renew, than to go backward and churn.
From Internal System to Corporate Brand
The two early pioneers of customer success were Eloqua and Salesforce.com. At Salesforce, customer success went from a small internal team to being the tagline of their corporate brand. Today, Salesforce’s ‘Customer for Life’ program is the most complex customer success strategy and organization on the planet. Jaques Pommeraud is the SVP / GM of Success Service at Salesforce. He gave a great talk at a TSIA event in May. If you want to know how customer success operates within Salesforce, this talk is a gem.
Interesting SaaS Tools this Week
AtomicWriter – Smart editing tool that adapts your writing to your audience.
Reply – Send cold emails that feel warm.
ProdPad – Gather ideas, surface the best ones and turn them into product specs.
Other Interesting Reads this Week:
Most SaaS products’ onboarding practices miss a crucial step. Find out What SaaS Startups Miss About User Onboarding.
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#SaaS Tattler - #Scaling #CustomerSuccess w/ articles by @chaoticflow, @TSIACommunity and more!
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