Should Customer Success Have a Seat at the Table?
I keep hearing Customer Success leaders talk about how important it is to have a seat at the executive table. A couple of weeks ago, I explored this topic in a conversation with Lincoln Murphy, a Customer Success thought leader & co-author of the book “Customer Success” (@lincolnmurphy), and some Bay Area Customer Success executives. There were several meaningful thoughts and ideas that came out of that conversation; one of them is how a customer-centric culture, led by a CS executive, can positively impact revenue growth.
First, let’s define Customer Success (CS). There are many different definitions, and none of them are technically wrong. For the purposes of this conversation, I define CS as: what you do within your company to advocate for your customers in order to ensure that you are positioning them to get the value that they expect from your product or service. In other words, CS occurs when you help your customers achieve their desired outcomes through their interactions with your company.
CS doesn’t revolve only around renewals, churn, upsell, cross-sell, customer happiness, Net Promoter Score (NPS), advocacy, good deployments, minimal support, and ease of use. All these aspects are important, but a more refined focus should be on CS teams to raise the bar and bring the right mix of value so that they can influence what customers expect. Once you understand how customers get value, you can then set the stage for future business growth together.
Companies are looking for results that include: growing revenue; high renewal rates; steady profitability; strong upsell / cross-sell; and positive customer advocacy. Perhaps your goals are different depending on where you are in your company’s life cycle, but most of us focus on these desired outcomes. Realizing these objectives is not easy; although, having a customer focused culture that is balanced across all functions does improve your prospects.
A strategic CS leader gives voice to the customer needs, while synthesizing and extracting customer inputs to improve value to your customers and your bottom line. When CS has a seat at the table, growth is enabled because someone is providing the customer focused “report card” to every other function on an ongoing basis. Your CS leader is the executive who ensures you maintain a customer-centric culture, and they are essential for driving results throughout your company by leveraging your customers to help you reach your desired outcomes.
Business is full of challenging trade-offs that need to be resolved by creating strategy and executing on company goals. CS is an enabling part of that process and deserves a unique voice. When a CS team lives inside another function in the company, you have the prospect of delegating customer focus to a single group. Operationally it might be ok, but you are missing a strategic opportunity. When CS has an independent seat at the executive table, decisions are informed by a customer view that positively impacts all the other functions. Your CS leader helps Marketing segment the customer base, and brings real world competitive information to the Product team to help them understand actual use cases and how to differentiate.
CS helps Sales to understand which customer profiles best succeed in order to focus and improve revenue growth and sales productivity, and CS enables Operations and Finance to recognize the business processes that need to change to make your company easier to work with. Without an executive leader bringing the customers’ viewpoint, you may have a gap in your strategy, and you risk negatively impacting your own results by not delivering appropriate value to your customers. Your CS Executive is the customer-focused piece of the puzzle that helps drive your business success and revenue growth.
You are in business to make money. Besides revenue growth, you also have to consider profitability and what it costs to provide the expected value to your customers. By bringing the customer focused view to the rest of the business, your CS executive manages both the revenue growth, and the cost effectiveness required to execute on customer-focused go-to-market plans. Without a holistic approach you are likely to have problems that impact your bottom line. If you aren’t seeing them now, they will show up with the next competitor, downturn, or market shift because customers demand value or they leave.
Depending on your business model, it is estimated that it is 5-10 times more expensive to acquire a customer than it is to retain one. By proactively focusing on Customer Success and putting a CS Leader at the executive table, you will get a head start towards improving both your customers’ and your company’s revenue and profit. It seems obvious, so why don’t more companies have a CS leader with a seat at the executive table? Why is it often challenging for CS Leaders to gain a seat at the table? These questions were also part of our conversation and stay tuned, they are the next few topics I will cover in this ongoing blog series.