Allison Pickens is the founder and general partner of The New Normal Fund, partnering with B2B SaaS CEOs across all stages. Here are some of the lessons she shared at the recent Fivetran sales kickoff.
It wasn’t long ago that the term “customer success” conjured up a very different image from what it does now. As late as 2014, many folks in the field saw their job as an art, not a science. And the title Chief Customer Officer was almost unheard of.
Today, fueled in part by the wealth of data collected across every point of the customer journey, customer success has become a discipline of its own. In a high-achieving company, the customer success function holds just as much weight as marketing, sales or product — and it’s just as critical for long-term success.
For the growing number of companies that operate with a consumption-based pricing model, customer adoption equals revenue. That means the health of your customers is very clearly the biggest driver for growing your company. As a result, VCs now expect to see impressive adoption and net retention rates.
In my time as a board director and advisor to B2B SaaS CEOs, I’ve seen businesses destroyed by the silent killer that is customer churn. Consider this:
- If you’re landing customers but not retaining them, you’re essentially trying to scoop up your revenue stream with a leaky bucket. You can’t grow fast that way.
- Churn limits your expansion opportunities, because you can’t upsell a customer who has churned.
- Cycling through customers inhibits your ability to create true advocates: customers who are so wowed by the experience you offer that they tell all their friends — your future new customers.
As I wrote in my book, The Customer Success Economy, tech leaders must nurture a customer success mindset across their organizations, or else put their companies at risk. Here are three things to focus on as you go:
1. Look outward, not inward
I frequently see an overarching theme in high-performing go-to-market teams: They are outwardly focused — championing their customers and putting them first — instead of inwardly focused.
Ask yourself: What do you celebrate as a company? It's commonplace to bang a gong when you close a deal. But do you also bang a gong when a customer achieves a big milestone?
Are your various customer-facing teams territorial about which internal function “owns” an account, or do they collaborate to solve problems in service of the customer? If I'm a customer, I don't want to be thought of as being “owned.” I just want the people working at my vendor to coordinate amongst themselves and ensure that I have a great outcome.
2. Define your purpose
At Gainsight we spent a ton of time designing our purpose statement. Think of it as a permanent North Star that you're perpetually striving toward — a promise that you want to honor in every moment.
Fivetran defines its purpose, for example, as making data as accessible as electricity. At Gainsight, we defined our purpose as “proving you could win in business while being human-first.” For us, “human-first” meant thinking first and foremost about the impact of our product and our actions on other people, including customers and employees. And our mission was to help other companies become human-first as well.
A company’s mission is usually all about helping your customers. People want to work for mission-driven companies -- it inspires them -- and so being customer-focused can foster employee engagement.
3. Foster well-roundedness among team members
Look to develop three critical qualities in your employees in customer-facing leadership roles: IQ, emotional intelligence (EQ) and grit.
- In terms of IQ, can you analyze your business from daily activities and metrics to the outcomes that clients experience? Being able to map that journey from cause to effect is an increasingly important skill set for executives to learn, because data has become universally available. You need to be able to make sound decisions based on data.
- On the EQ side, having both self-awareness and awareness of what other people are going through is vital — especially in these difficult times. Empathy helps you grow as a leader.
- And finally, you need to help your employees to develop grit, or resilience. This is important, especially in a company that’s growing fast.
Customer success isn’t just about a function. It’s a way of life for a company. Consider orienting your company around serving others with a thoughtful purpose and well-rounded team members.