Can Customer Success ever go out of love?
For enduring companies, customer love and an engaged, vibrant community is a must have. Look no further than Hubspot, Amazon, DataDog etc.
As Navin Agarwal and I embark on building an amazing CSM CoPilot experience, I wanted to share my perspective on the Customer Success function, reflecting over a 100 conversations I have had with Customer Success leaders and CSMs: Three specific things:
- Imminent demise of Customer Success is overrated: Jason Lemkin has talked about it. Frank Slootman pronounced CS is dead!
My Take: Customer Success is here to stay!
The massive push to efficiency spans GTM teams across Sales, Marketing, CS, Ops and not just CS.
Why? We entered 2023 with a massive SaaS overhang given lack of fiscal discipline, lax SaaS Governance, and employee-friendly COVID SaaS purchase policies. This resulted in apps without a clear business case, poor implementation/adoption, and limited RoI.
The decrease in GRR can not be attributed as a CS failure. The default answer - if you can not justify RoI to CFO is churn. It’s not just about CS - did we build the right product? Sell for the right use cases? Have the right executive sponsorship?
Why should this be the demise of CS?
On a positive note, why do we need Customer Success?
I will go back to first principles. Customer Success exists as a function in Enterprise Software companies to bring together technology and people - to drive behavior change. When you sell software, you sell a promise of change.
Customer Success translates that promise to a well implemented solution, to product adoption, to strong executive engagement, and to quantified business outcomes in line with the original business case behind the software purchase. When you do all that, you can confidently forecast renewals and pursue expansion opportunities. That is the raison d’etre for Customer Success
However, most companies will establish and incentivize clearer customer value metrics.
2. The Massive Push of CS into a Sales Function:
My Take: This won’t work!
In the spirit of efficiency, there is a push to eliminate redundancies between Customer Success and Account Management teams. In my opinion, the only case for CS to be pushed into sales is that many customers need to be resold.
However, pushing CS into a Sales function will not work. Why?
- Sales is about driving customer-level business change, it leads to near-term company growth
- CS is about driving customer-level behavior change, which leads to increase in customer lifetime value
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These are discrete skills. Moving CS into a Sales function will likely cause higher churn. The right things to do: push renewals to CS or have CSMs supported by Renewal Specialists who own commercials and negotiations while CSMs own outcomes delivery and relationships.
That said, continued scrutiny around software spend is bound to drive tighter alignment between Sales and CS teams around measurable customer outcomes. We will likely see elevated churn in 2024 till we get past software purchase excesses of the 2020-2022 era.
Catalyst made a big push for this but anecdotal evidence suggests they did not see much success here and ended up merging with Totango.
3. GenAI will have an incremental impact on CS processes and tools
My Take: AI will fundamentally transform Customer Success
Most current CS tools are form-based systems built with yesteryear web technologies and are restricted by a predefined set of static fields.
And all customer content is human-input
Customer Success tools today are systems of accountability and process standardization they turn CSMs into mindless robots
They use one-size-fits-all health scores which are inaccurate (primarily based on product metrics and detached from customer goals and outcomes)
They manifest methods to automate relationships: optimize for scale versus personalization
And are built on rigid Calls To Action I.e. playbooks which do not adapt for customer needs
Relationships and outcomes is where humans excel - there is nuance baked into building trusted relationships. Unshackle your CSMs to focus here!
Insights and Automation is where AI excels – GenAI makes it possible today. Yet you need more than ChatGPT for sporadic use cases.
You need a system – a new kind of GenAI first workflow for CSMs. And that’s what we are building.
Curious or excited about what we are building? Sign up for our waitlist at www.statisfy.us
And check in here next week for more Customer Success insights with leaders!
Customer Success Leader, Advisor, Investor
5mo"When you sell software, you sell a promise of change." Just one of many valuable perspectives in this article. Thank you for sharing this Munish! Sharing with my teams/peers.
Founder & CEO at [Stealth] | Revolutionizing B2B SaaS with AI-Driven Post-Sale Customer Management Solutions - ex-Servicenow, Cisco, eBay, Microsoft, HP
5moAgree on all three building something similar !!!
Developing world-class Customer Success orgs and leaders; ex-Bain and Gainsight
5moCongrats on this milestone Munish Gandhi. It's been a pleasure to work with you over the last couple of years and see your own pain points as a CS leader turn into an exciting vision and now a reality. We are overdue for an AI-first CS solution and I'm very excited about what you're building - CS is here to stay, for sure!
Founder @ SuccessLab | AI for CS/CSS/CX
5moLike Sales, Customer Success (CS) is pivotal in bridging technology with people to drive behavioral change. While there's a healthy debate about CS's reporting structure, Munish Gandhi is spot on, emphasizes CS's permanence and evolving role. With GenAI, CS is set to become even more personalized and dynamic, adeptly aligning with customer needs.
CEO, Alcor Solutions, Inc.
5moA strong focus on Customer Success is the only reliable way to grow a sustainable enterprise. Very excited to see what Statisfy is building! :)