Why Customer Success Teams receive minimal recognition?

It's disheartening to witness the continued lack of recognition, funding, and fair compensation for many CS teams. Recently, I've frequently been questioned about the reasons behind this, and unfortunately, it's not shocking. This certainly wasn't the scenario I anticipated for 2023. Following the sudden halt of the free-venture-capital era in 2022, I found myself with no other plausible option.

Customer-funded growth

An alternative business model places CS teams at the forefront. However, numerous companies opted to downsize their CS teams, with some even eliminating them. While it's tempting to say that they're essentially sabotaging themselves, offering hindsight wisdom provides little comfort.

After much contemplation, I believe I have a reasonable explanation and a practical solution to this issue. When questioned about this matter, some have asked whether it's solely a company problem. My conclusion suggests it runs deeper.

The lack of recognition for CS teams stems from societal norms, particularly our conditioning through social engineering. People have been indoctrinated to prioritize immediate gains of $1 over potential future gains of $10. Instant gratification often takes precedence over long-term success.

Customer Success represents the complete opposite

Customer Success lacks the allure of a constantly progressing sales pipeline. It's often viewed as the unexciting counterpart to SaaS, alongside Customer Support.

Customer Success goes unnoticed unless there are issues or customer churn, in which case they're held responsible.

There's a prevalent belief among many leaders that simply acquiring customers initially is sufficient for retention.

Regardless of the problem, there's a common assumption that the CS team could have resolved it.

The necessary solution becomes evident: Demonstrate to your leadership the value of postponing immediate gratification for greater long-term benefits. However, a subsequent challenge arises. Customer Success teams have long been perceived as a cost center, a necessary but undesirable aspect.

This perception has shaped their mindset regarding their purpose and operational strategies. Consequently, their training and education have been tailored to manage customers with minimal effort in a defensive capacity. Adhering to this mindset prevents them from attaining a seat at the decision-making table.

This mindset also influences their utilization of certain tools, such as poorly executed Quarterly Business Reviews (QBRs), despite their inherently effective design. Naturally, customers are disinterested in wasting time on dull presentations devoid of relevant content. This widespread dissatisfaction has led to the erroneous conclusion that QBRs are obsolete, which is entirely unfounded. There's no point in glossing over it: Customer Success requires a reinvention.

Here's what CS leaders must undertake to transform the landscape in 2024:

Demonstrate value

1. In SaaS businesses, revenue-focused metrics often overshadow other measures like product usage or NPS.
2. Your contributions may be undervalued if they don't directly generate revenue.
3. Present compelling customer success stories to showcase tangible outcomes and their impact on revenue.
4. Winning over skeptics takes time; consistently demonstrate your value to the company.

Monetize customer value

1. Traditional approaches in Customer Success discourage embracing a more commercial mindset.
2. Customer Success Managers (CSMs) often handle the majority of steps toward renewals or upsells, but sales receives credit for the final steps.
3. CSMs should seize opportunities to own revenue figures for transparent performance evaluation.
4. Even without direct ownership, CSMs should monitor revenue from expansions, upsells, and referrals as indicators of their contributions.

Delivering and tracking value

1. CS teams often prioritize quantity over quality in their services and content offerings.
2. Lengthy tutorials and content lack succinctness and efficiency, hindering customer guidance.
3. Metrics like downloads and views are tracked but don't accurately measure success; true success lies in effective implementation of knowledge.
4. It's crucial for CS inputs to yield intended outcomes with high accuracy (aiming for 95%).
5. Tracking customer results and progress remains challenging, with overreliance on metrics like health scores and product usage.
6. Even if most customers benefit from high product usage, overlooking the remaining churn risks significantly impacts monetization and value demonstration.