10.6.2024 Digital BIAS
Hey founders, we need to have a chat. We work with a lot of you and we consistently see you getting one thing fundamentally wrong: putting your Customer Success (CS) team on the back burner. We understand that pressure to deliver revenue from your investors and your need to protect your run/burn rate is top of mind, but trying to save a relationship at the point of churn is already too late. It’ll cost you in subscription discounts, pledging more time from your CS manager than available or allow your customer to bully you into whatever they want from you. So hear this - it’s a major mistake not including CS as a part of your revenue team from go-to-market (GTM).
Which is why we’ve pulled together four powerful reasons you need to be launching with Customer Success front and centre.
1. Net retention: We know that gaining new customers is a top priority for SaaS businesses. New customers equals growth, and growth is everything. Plus, existing customers in this space don’t tend to pay additionally for post-sales support, so once acquired, they get shoved down the long list of things founders need to focus on when they go to market.
However, top performing SaaS companies prioritise net retention, resulting in 20% annual growth alone - without adding a single customer. If you haven’t given your onboarding experience any thought (and by that we mean a potential customer’s first touchpoint with you through to becoming a customer and beyond), you’re leaving money on the table. If you’re a customer that doesn’t feel the love, but a competitor is flirting with you, you’re more likely to have your head turned. Hello, churn. Not to mention, 93% of respondents in a recent G2 study found that the quality of onboarding had a significant influence on their decision to renew.
We know it costs less to keep customers than to get new ones, but net retention isn’t just about cost (for instance is it better to keep a customer than may not be the right fit versus replacing them with one that is?). According to Peter Fader, Professor of Marketing at Wharton, analysing a customer’s lifetime value (CLV) - or their future value - is key. This allows you to focus your your efforts on the customers that truly matter. We believe that this also allows you to hone your ICP, so your efforts and investment across revenue teams (Sales, Marketing and Customer Success) are more efficient and deliver greater ROI.
Circling back to the growth point. Businesses with retention rates over 85% grow 1.5-3x faster. You need faster - straight out the gate.
2. Expansion revenue engine: A great sales team is the lifeblood of any start-up success. But in our experience, they are often considered the sole revenue team within the business, and therefore the only ones with revenue targets. This doesn’t make sense and doesn’t set you up for success. Why?
Firstly, you’re ignoring the vast amount of knowledge about your customer that sits within your CS team. These insights can be mined to empower and enable your Sales reps, but also serve to personalise and really care for your existing customers. Which leads to my second point: how do you anticipate your chances of a successful up-sell and/or cross-sell to a customer that hasn’t heard from you since the last time you sold them something?
We see this time and again. A rep makes a sale, never to be heard from again until it’s renewal time. A person who only appears to put their hand in your pocket doesn’t create a great customer experience. And excellent customer experience helps companies grow 4-8% above their market. The person who knows you, understands you and has spent the last year solving your problems and giving you advice is far more likely to have your trust and loyalty. Customer Success is a natural additional revenue generator - one you must champion from the start.
3. Team alignment: Yes, we’re banging the alignment drum again. But as you can see, this is the natural outcome when you position CS and Marketing as part of your revenue teams from GTM. Customer acquisition and retention isn’t a siloed team win. It’s a culture, the thing that should be on everyone’s mind and what everyone’s efforts are aimed at achieving.
You need to be enabling this culture of success with a 360-degree view of your customer on one single source of truth CRM. Here at BIAS, we do this via our ARISE approach. A single framework, optimised across all teams, on HubSpot with revenue-based metrics, reporting and KPIs. This ensures everyone is 1) clear on how they are contributing to the business’ objectives 2) can see all target and customer information for a smoother, better, more personalised experience 3) can make accurate, data-driven decisions, such as better accuracy in forecasting revenue.
4. Acquisition is getting harder. Let’s start with Marketing. Now we recommend the blended ABM approach which increases your marketing effectiveness and account conversion, but there are forces at play outside your control that your Marketing team is battling. HubSpot sees several trends that are making marketing less impactful without significant investment. 1) Changes to Google algorithms and content features is pushing organic search results down the page 2) Social media platforms are now overly ad-heavy so brand content is having a harder time competing 3) Market share is diversifying 4) Content marketers are commanding higher salaries because it’s more difficult to create valuable content.
Now on to Sales. According to Gartner, your sales reps have only 5% of a customer’s time during their B2B buying journey. 77% of those surveyed said their purchase was difficult or complex, in part due to bigger buying committees (now made up of at least six individuals) and the amount of independent content they each bring to the table as a part of their research. Nearly 70% prefer to research on their own online, making the job of your sales rep that much more difficult.
When you prioritise Customer Success and the customer experience as a part of your GTM strategy, as we do with ARISE, you not only spread the burden of growth across your team but you turn your customers into your biggest advocates. And this is big. Why?
1) They’re more likely to stay and spend more money. 2) Because you drive a strategy that operates like flywheel (continuous) instead of a funnel (it has an end) and capitalise on your success to feed your marketing and sales efforts; this looks like referrals, testimonials and case studies that bolster your acquisition efforts and market trust while reducing your costs. This is a win whichever way you look at it. 3) Referrals and influencers have an outsize impact on B2B sales today, a trend which is growing with no end in sight. You need them.
As McKinsey outlines, “By looking at customer success and related efforts as an investment in growth rather than as a cost centre, companies can protect their installed base and gain scale and efficiency”. Ignore Customer Success in your B2B go-to-market strategy to your detriment. Give your start-up the foundation for growth you need to survive - and thrive. If you’re looking for support, let’s chat.
