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It can feel like a knife fight on the front lines trying to hit a sales quota, let alone move a prospective qualified lead down the funnel. The tech market, specifically SaaS, is experiencing a shakeup and the battlefield is ruthless.
As co-founder and co-CEO of Totango + Catalyst, a merged organization of two customer success (CS) software companies, I’m privy to raw conversations with companies thinking about expansion. Boards, CEOs and revenue leaders know that growth at all costs is out and sustainable revenue growth is in, leading to a frustrating truth: They must flip their GTM strategy and focus on protecting and growing revenue from their base.
TSIA World INTERACT 2024, a conference we attended, highlighted that companies are distributing revenue responsibility across all GTM functions, including sales, marketing, CS and product teams. TSIA research also revealed that CS leaders are prioritizing expansion (68%) alongside adoption (95%) and retention (83%).
Most companies lack adequate tools to implement this shift. Attempts to adapt existing customer relationship management (CRM) software or cobble together spreadsheets with internal models fall short and are ill-equipped to handle a new, integrated approach to revenue responsibility. This is something my organization is uniquely equipped to address. In light of this, here’s what I tell CXOs looking to propel their own companies forward:
Make the CS team your CFO's secret weapon for growth.
CFOs urgently prioritize sustainable growth in response to economic uncertainties and a predominant factor in pushing the responsibility of revenue generation beyond the sales team. Many post-sale teams who lead onboarding, adoption and engagement are stepping up to lead this charge.
CS professionals used to be able to ignore upsell opportunities, but now they're spotting leads and closing them directly in their CS software. Businesses recognize maximizing customer lifetime value (LTV) as the key to sustainable growth, and CS is the linchpin.
As a result, smart companies are revamping CS compensation structures to align with bottom-line revenue impact adopting practices—like variable compensation tied to expansion revenue, CS-qualified pipeline or SPIFFs (sales performance incentive fund formula).
To unlock sustainable growth, let the CS team be your secret weapon. Align their goals with your financial priorities, give them customer growth software that fits the job, and get creative in incentivizing new practices and new growth targets.
Chase LTV instead of short-term sales metrics.
Acquiring new customers is increasingly challenging and costly, so prioritize long-term value over short-term gains. CS is best equipped to play an outsized role in this area, cultivating customer loyalty and reducing churn. Customers who see value in a business's products and services stay longer and generate more value.
Rather than offering all features upfront, many organizations are restructuring their packaging and pricing to create upsell opportunities, facilitating the right level of product scaling versus just sales based on more seats. This demonstrates a better understanding of current customer needs while creating future paths to increase revenue.
Squeezing money out of customers doesn’t create value for them; it distracts them from reaching their goals and, in the long run, threatens opportunities for durable growth. Be agile and adaptive to customers’ current needs and cultivate the loyalty that will maximize LTV and revenue growth over time.
Bring insights from CS into the C-suite.
By taking on revenue generation through upsells and increasing customer LTV, customer success leaders are rightfully earning a spot at the executive table. The proof is in the rise of strategic influence and partnership with CXOs, as 25% of companies have a chief customer officer representing CS insights to guide strategic business decisions.
Forward-thinking CS leaders are rolling up their sleeves and collaborating with every function—from engineering to product to marketing and sales—in an effort of activating revenue expansion and elevating customer relationships. CS garners unique, data-driven insights into the areas where businesses are seeing traction, growth and attrition, providing intelligence into products, services, verticals, customer segments or any combination needing attention or having viable opportunities for growth.
But here's the thing: If you want your CS team to be a revenue driver, you must go beyond asking them to hit a number. C-suite leaders have a responsibility to work together to shift the mindset and recognition of the value CS brings. Take these CS insights into the boardroom; use them to inform decisions about product and customer areas that need attention and prioritize the opportunities with the greatest runway.
The CS role is constantly evolving to help companies thrive. Leading businesses will be the ones that have elevated CS and focused their GTM strategy to win at customer LTV without ever having to step foot in a front-line fight.
