All Hands on Deck for Customer Success
“Who owns the customer?” It’s a common refrain at enterprise SaaS companies where - in an ideal scenario - the lifecycle of a customer is long and ever-expanding. It’s a question that has become significantly more complicated in recent years with the rise of Customer Success as a standalone function. In the enterprise SaaS world, to achieve the holy grail of negative churn, new customers need a healthy dose of handholding and guidance, requiring input from virtually all departments, including product, marketing, legal, implementation, sales, technical support and account management. So the answer to the initial question is simply, “Everyone.”
But when it’s done right, playing quarterback within that complex web of customer touchpoints is the customer success manager, whose primary objective is to be the customer advocate; to make the customer’s voice heard and make sure he is getting the support he needs to maximize satisfaction, engagement and, most importantly, loyalty to your platform. That loyalty translates into retention and upsell opportunities, the lifeblood of many “land and expand” SaaS strategies. For many enterprise SaaS companies, where cost of acquisition is so high (it can take up to 24 months for an enterprise customer to become profitable), managing customer success effectively isn’t simply a nice-to-have; it’s absolutely fundamental to the viability of the business model.
The critical role of the customer success team was the focus of a recent Primary dinner, featuring Wendi Sturgis, Executive Vice President of Sales and Services at location management platform Yext. Wendi has been managing customer success in one way or another for over 25 years. She traces her customer success roots back to her initial work as a consultant at PricewaterhouseCoopers in the 1990s, and her storied career at tech giants Yahoo and Oracle has given her a truly unique perspective on what it means to put relationships first. As Wendi moved up the management ranks, she witnessed large companies prioritizing stock price and short-term financial metrics over customer loyalty. We all know how that approach tends to work out...
Fast-forward to today, and Wendi is one of the foremost customer-centric voices in the NYC Tech community. She insists that, first and foremost, companies must listen to their customers to understand their needs and pain points, and take those points into account as they find new ways of building buy-in and creating upsell opportunities among existing customers. But doing customer success right isn’t just about listening; it requires defining who is going to listen, who is going to collect and coordinate the learnings from customers, and who is going to coordinate any responses and follow-up. That quarterbacking, in Wendi’s eyes, is the critical role of the customer success team. Only once companies achieve this relationships-first approach will they be able to build loyalty and maintain a respectable gross retention rate - in other words, a viable business. (Incidentally, Wendi asserts that anything less than 80% is unsustainable; Yext aims for - and achieves - over 90%).
Customer success is a relatively new concept, having evolved recently in response to the shift from the traditional, monolithic enterprise software sale - where a contract was signed and the money was wired - to the SaaS model, where vendors must sing for their supper every month if they want to maintain and grow their customer base. As a result of this newness, companies are still defining the function and organizational implications of customer success on their own terms. It’s a historically radical concept for accountability, and doing it right costs a heck of a lot more than traditional account management. Nevertheless, execs now realize that customer success is an essential component of their company’s performance.
Wendi is an expert in this evolving paradigm and, in addition to moderating a robust dinner discussion with us last week, she was nice enough to share her “Intro to Customer Success” presentation, which she uses for onboarding new Yext team members. In this presentation, Wendi outlines the evolution of the movement, and what it takes to build a truly effective customer success organization that measures success in terms of upsell opportunities, retention rate and product adoption. We hope you enjoy it!