The Evolution of Customer Success 2024 By Dr. Maceo D. Wattley

The New Era of Customer Success: Adapting to Transformative Changes

By Dr. Maceo D. Wattley

As we journeyed through 2023, it became unmistakably clear: The landscape of Customer Success is undergoing a profound transformation. The way we once approached customer success is evolving, and it’s imperative we adapt to stay ahead.

The Key Transformations Shaping Customer Success

Three pivotal shifts have dramatically reshaped the field:

1. The Unrelenting Pursuit of Efficiency

Efficiency has become the cornerstone of modern business strategy. With nearly every public SaaS company achieving cash-flow positivity and streamlining their operations, customer success (CS) has faced significant restructuring. Companies now operate with leaner CS teams, heavily leveraging automation, knowledge bases, and community support. The days of allocating $1 million per CSM are fading. Recent data from Pilot illustrates that CS has been disproportionately impacted by layoffs, highlighting this trend.

2. The Fusion of CS and Sales

A monumental shift has been the integration of CS into the sales function. CS teams have been strategically repurposed to handle challenging renewals and drive aggressive upgrades. This integration has redirected resources from focusing solely on customer success to also generating revenue. The increased emphasis on revenue through price hikes has further diluted the core mission of CS.

3. Decline in Positive CS Outcomes in 2023

These changes have led to noticeable declines in key performance metrics. Net Revenue Retention (NRR) has fallen across the board in 2023, undermining traditional measures of CS success. When adjusted for price increases, the figures are even more concerning. Although comprehensive CSAT data is unavailable, it’s unlikely that customer satisfaction has improved under these conditions. Consequently, CS concluded the year with declining NRR and CSAT, making it challenging to advocate for increased budgets.

The Path Forward: Embracing Change and Innovation

Looking ahead, a gradual reboot of the CS function is underway. The reliance on AI and automation will increase, although their effectiveness, especially in complex enterprise environments, remains limited. CS is likely to remain intertwined with sales, focusing on revenue-driven activities. Budgets have shifted from independent allocations to being part of the Chief Revenue Officer’s (CRO) domain. This significant change implies a future with less genuine “customer success.” We've adapted to lower NRR and CSAT, accepting these outcomes as long as cash flow remains positive.

A Call to Action: Redefining Customer Success

As a staunch advocate for customer-centric strategies, I am deeply concerned by these developments. Interacting with automated systems instead of knowledgeable human agents who can resolve issues is a subpar experience. A CS function focused solely on upsells does not serve the customer's best interests. I long for the days when Customer Success was dedicated to ensuring genuine customer satisfaction and success. While I hope for a return to that model, it seems improbable. The function has evolved, and so have we. We are no longer the knowledge workers of the 2011-2019 era. As we transition into the next phase of Customer Success, I remain cautiously optimistic but also concerned.

Seizing the Future: Innovate and Adapt

As we navigate these changes, it is essential to remain adaptable and forward-thinking. The future of Customer Success will undoubtedly look different, but with strategic adjustments and a focus on balancing efficiency with genuine customer support, we can strive for a new era that continues to value and prioritize our customers.

Let’s tackle this new era with determination and innovation. While the landscape of Customer Success has transformed, our unwavering commitment to our customers’ success must remain at the forefront. Together, we can redefine what it means to truly succeed in this evolving field. #CustomerSuccess #CSM #CustomerExperience #CustomerSupport #SaaS #TechIndustry #BusinessStrategy #CustomerRetention #Efficiency #Automation #AI #DigitalTransformation #Sales #RevenueGrowth #ClientSuccess #CustomerEngagement #CustomerJourney #CustomerAdvocacy #CustomerSatisfaction #CSAT #NetRevenueRetention #NRR #Innovation #Adaptability #FutureOfWork #BusinessGrowth #Leadership #ChangeManagement #BusinessEvolution #TechTrends #EnterpriseSolutions #ClientRetention #CustomerFirst #BusinessDevelopment #IndustryTrends #StrategicPlanning #CustomerCentric #TechInnovation #GrowthStrategy #CustomerRelationships