Customer Success Leaders Share How to Earn a Seat at the Table  

Editor’s Note: Escalent sat down with 20 Customer Success leaders from global tech firms to discuss the most pressing issues facing Customer Success organizations today. This is the second blog post of a multi-part series that explores the tectonic shift in the technology industry’s approach to Customer Success. SaaS companies in particular witnessed explosive growth when the pandemic hit and the world went hybrid/remote, followed by a slower period in the last six months which has created scaling issues around capacity management, resource allocation, and more. This is direct feedback from Customer Success leaders on what’s needed to thrive.

Customer Success Teams Must Balance Trust Between Internal & External Stakeholders

Customer Success teams face a unique duality: They must focus on opportunities and deliver growth for the company, and they must preserve trusted relationships with their customers. It is a delicate balance that is often hard to strike, but it is possible. A customer success manager’s (CSM) primary goal is to help clients achieve value with their product. A good CSM will do what they say they will, ensuring success by solving with the customer and guiding them to value. In this process, they proactively engage with the customer while answering hard questions and addressing potentially risky situations, which in turn, helps build a degree of trust that is unique to the CSM. Their perspective is often the most representative of the customer’s reality and should be a critical part of strategy planning.

Customer Success leaders can also use this voice to gain trust internally. Customer Success owns this very intimate relationship with the customer that no other part of the organization can match. If the C-suite trusts the voice of CS, they are more likely to engage with them as a key stakeholder during strategic discussions alongside sales and account management. When done right, Customer Success teams can be a considerable driver for product and marketing innovation, given the rich insights they bring to the organization based on their nuanced understanding of how customers are engaging with the product.

During the various stages of their lifecycle, across onboarding, implementation, and then ongoing engagement, these hands-on users provide invaluable learnings that the most effective Customer Success teams can systematically share with other functions like product development and marketing. Whether the product already has usage and telemetry built in, inputs from Customer Success teams help prioritize what truly matters to users and guide the most meaningful initiatives to driving growth and satisfaction.

“Customer Success management is a business mindset that can create a ripple effect from the core to the outside. CS might be a new business function, but it should be a critical business function—it absolutely should be the strategic driver.” —Jenelle Friday, VP of Customer Success, Forecastable

Trust-based relationships give way to opportunities with the client and for the business. By proactively offering and demonstrating the value of relevant solutions, CSMs can increase the customer’s lifetime value while continuing to achieve customer goals. Successful customers become advocates. Advocacy not only strengthens your company’s reputation but also generates new business opportunities and leads. As a result, Customer Success is uniquely positioned to help stitch together a cohesive, cross-functional strategy with the customer’s voice at the forefront.

But how do you ensure that your team is able to leverage this as a key strength and be a driving force behind strategic decision making?

Customer Success Leaders Must Be More Vocal About Driving Growth

A number of Customer Success leaders we spoke with believe there is still a long way to go for the CS function to demonstrate strategic impact and find its place in executive planning. Given how the function has evolved over the past decade or so, many organizations still approach Customer Success as primarily a cost center. Traditional on-premises software companies have had to retrofit and invest in developing a Customer Success capability to meet the needs of the current cloud-first landscape. Adding new headcount without explicitly tying Customer Success to revenue generation has given rise in some organizations to the impression of the team as a cost center instead of the source of growth it truly is.

Considering CS as a cost center severely limits its potential as a true growth driver for the business. Customer Success leaders need to promote the specific ways their teams contribute to the success of the organization and move away from being perceived as an operational expense. The somewhat obvious and most popular approach to changing those perceptions and demonstrating the strategic contributions of the team has been to hone in on the topline impact to the executive leadership, both in terms of retaining and expanding revenue.

“If you don’t look at your customer success organization as your growth engine, you’re doing something wrong. If your customer success leader is not at the revenue table, something is wrong.” —Jenelle Friday  

As a key function responsible for driving retention, then renewal and growth, Customer Success should be viewed as an integral part of the revenue-generating resources in a business. Customer Success doesn’t need to own revenue as its sole focus, like sales. However, its role is directly responsible for creating revenue opportunities and sustaining incremental growth, including preserving the strength of its current customer base. Demonstrating the clear impact Customer Success has on revenue will ensure its voice is heard alongside sales, marketing, and other functions as the business goes after future strategic growth opportunities.

The Customer Success Function Thrives With Executive Sponsorship

A critical factor in promoting the role of Customer Success in strategy planning is the reporting structure and the sponsorship the team has at the C-suite and board level. Many experts agree that Customer Success leaders are best served reporting to the chief revenue officer (CRO) with the idea of enabling stronger partnership and synergy between sales and Customer Success. With shared leadership and reporting lines across both functions, successful SaaS companies can reduce friction between the teams, and drive increased growth through a collaborative process.

“The best structure is when we report to the chief revenue officer. Sales, marketing, and customer success all roll up to the CRO because we are revenue generating. When you have the same leader, there tends to be less friction between sales and customer success.”  —Customer Success Director at a computer security company

The experts we have spoken with have consistently noted it is critical the organization clearly defines the mission for Customer Success with a clear charter. A charter clarifies the priorities of Customer Success while noting contextual nuances related to the organization’s structure. Reporting structures can be varied because of factors related to maturity of the product and organization and should recognize the contributions you expect from Customer Success in the development stage you are in. To help ensure your place, be clear about how you contribute to business growth. Customer Success is more likely to be a strong contributor to strategic planning when its role is intentional, and it is crystal clear to the organization how the team contributes to product and revenue growth.

“CS leaders tend to describe what they do internally and externally in generic terms like ‘trusted advisor,’ so board members can’t draw a line between what that means and how it helps the bottom line and our customers.”  —Rav Dhaliwal, Board Member, Venture & Limited Partner at Crane Venture Partners

When all is said and done, Customer Success solidifies its role in strategy planning when CS leaders clearly demonstrate how the team directly impacts revenue and drives business outcomes. Similarly, CS team goals should be tied to an integrated revenue strategy that incentivizes business functions to work together toward a shared goal. When the precise impact of your team on the business is clear, so is Customer Success’ seat at the table.

If you would like to be part of this ongoing research series with our Customer Success practice, connect with us below. In the meantime, we invite you to read the first blog post of this series, “Five Hallmarks of a Strong, Purpose-Built Customer Success Organization.” Our next installment will unpack how to operationalize customer segmentation so you can define the customer journey and your team structure.