Why and how 2023 can become the year of Customer Success

As the downturn starts to bite and every dollar matters more, many CEOs are asking the same question. How should I wrangle a constricted company budget to outlast 2023?

For subscription businesses, the focus is clear: retaining customers. Older research from Fred Reichheld of Bain & Company showed that, in financial services, “a 5% increase in customer retention produces more than a 25% increase in profit.” When times are challenging, and the sales pipeline slows, the disparity between the cost to acquire and retain customers tends to grow.

Who drives retention? It’s a company-wide goal, but the team in the spotlight is customer success (CS). As your sales team is in the business of influencing prospects to buy, the customer success team influences customers to stay and should understand why your accounts churn, renew and expand.

In a growing market, your sales team takes the lead in bringing in new sales. This year, I believe customer success is the team that will make all the difference. But, unlike sales, customer success is a developing function, and its organizational charter varies from business to business. Its tech stack is new. Its teams are often underfunded, underequipped and under-operationalized.

According to new research from my company, however, things are changing—and not a moment too soon. As the CEO and co-founder of a customer success software platform, I believe the SaaS and subscription businesses that have activated the transformative power of customer success, and the compounding effect of net revenue retention (NRR), could now be the best placed to weather 2023’s downturn and emerge stronger on the other side.

It isn’t too late to catch up, but time is of the essence. Based on the facts above and data from my company’s survey, the following recommendations apply widely.

1. Don’t let your customer success team go into 2023 with substandard tools.

You wouldn’t expect your sales team to sell without their CRM or your marketers to drive leads at scale without marketing automation. Yet less than half of the customer success teams we surveyed have a purpose-built platform to manage the work of driving onboarding, adoption, retention and expansion.

If your team is still working from spreadsheets and piecemealing their operations, 2023 could be the year to equip them with more effective technology. Train them to use platform analytics so they can spot customers at risk of churning. Leveraging automation, repeatable plays and codified best practices can help streamline, scale and enhance their workflows.

When choosing your platform, think beyond your customer success team. Customer insights can enhance your whole business, so look for a platform that integrates seamlessly with your existing tech stack. Also, look for a platform that non-CS people can leverage to meet their specific needs.

2. Operationalize your customer success team.

Does your CS team have a dedicated operations role yet? I believe this role is essential to maximizing efficiency, actionable customer insight, and the ROI of your CS platform. CS operations can also give you agility, or the ability to make small, well-informed moves quickly based on up-to-the-minute data from your customer base.

Navigating a downturn is like driving on ice: Oversteering has consequences. Rather than swerving at the first sign of customer churn, anticipate which customers are most at risk, understand how they’re affected in real time, then help them proactively, a strategy I’ve written about previously. In fact, according to Deloitte research, “A mere 25% of customers today consider solution providers to be their trusted advisers…CS teams that hold regular business reviews with customers and help them track value are twice as likely to be trusted and make customers their advocates.” You may need to recalibrate your health scores or build new plays to assist an ever-evolving cohort of at-risk accounts.

A good CS operations person will keep you on the road. When hiring for the role, look for strong organizational and prioritization skills, adaptability and dynamism, outstanding communication skills and the ability to apply data in a meaningful way. Crucially, they should understand not just individual data points but also what multiple data points suggest in combination, and they should be able to follow up quickly and effectively.

3. Empower customer success to champion your customers inside your company.

No other team understands your customers like your customer success team. If you aspire to become a more customer-centric business—not just now but also in the long term—your CS team should collaborate more with other departments.

While 83.1% of customer success teams we surveyed collaborate regularly with product teams, for example—bringing customers’ voices and perspectives to product roadmaps—just 44.9% collaborate with finance teams. That’s concerning because CFOs hate surprise churn at the best of times.

When CS teams collaborate cross-departmentally, departments that might otherwise lose sight of your customers and their challenges become more invested in what customers value. Ultimately, one of the best ways to ensure that your customers’ voice permeates your whole organization is to bring customer success into your C-suite.

Invest in a long-term competitive advantage.

Every downturn is different, but the need to know and understand your customers is constant. If you haven’t started already, make 2023 your year of customer success.