First, the bad news …
The 12-year tech bull market ended with a crash. Inflation is up. Consumer confidence is down. New logo acquisition is likely to fall, putting more pressure on SaaS companies to stay above the line by boosting renewal rates. Growth at any cost is now a thing of the past as investors lose patience with money-losing firms.
The good news?
The priorities that customer success teams live and breathe every day are now the top CEO and investor priorities. In a world of stagnant or declining sales, the work of post-sales and customer success teams has never been more important. According to recent Gainsight surveys of leading SaaS investors and CEOs, efficient and durable growth is what matters most today at the executive level.
As new sales slow and companies shift focus to customer retention and expansion, the install base will need — and demand — more help than ever. We saw this at the beginning of the pandemic, and we’re about to see it again. Your customers will be taking a hard look at which SaaS providers deliver their desired outcomes, and which ones don’t. Those of you who do a great job will not only survive this downturn but thrive — and come out stronger on the other side.
A Durable Growth Playbook
To help ensure that customers view your products as vital to their own success, rather than trimmable “fat,” we’ve developed a Durable Growth Playbook, in which sales, product and customer success collaborate on a set of proven retention and expansion strategies.
Composed of six parts, this playbook has already generated outstanding outcomes for my team:
Related Article: How to Make CX Less 'Squishy' and More Data-Driven
To avoid unpleasant churn surprises, develop a risk management program centered around a customer health-scoring framework — a framework that provides early-warning signals. Where are we doing well? Where are things off track? And, most important, what are we going to go do about it?
I use a health-scoring framework called DEAR (Deployment, Engagement, Adoption, ROI) to determine if we’re delivering tangible business value to the customer and, if not, how we can move the needle in the right direction.
Keep the Customer in Customer Success
Too often, customer success managers (CSMs) take an inside-out view versus an outside-in view of what success means for the customer. And as a result, they sometimes fail to make the customer success journey a collaborative experience.
To leverage every expansion opportunity, SaaS companies need organization-wide strategies for acquiring customers, managing them and driving them to verifiable success again and again. This requires frank customer conversations and an understanding of what you’re doing, why and how to measure the impact.
We’ve learned that customers with current, active verified outcomes will renew 12% to 15% more often than customers without them. To facilitate these outcomes, we’re leaning harder into community to provide customers with more peer-to-peer networking opportunities for sharing best practices and accessing self-service information.
Go on Offense
Don’t be so narrowly focused on renewals that you overlook low-hanging expansion fruit. In today’s business climate, it’s imperative to promote greater collaboration between your sales and success teams to unlock the expansion potential of your install base.
At the height of the pandemic, we saw expansion dollars rise even as net new-logo acquisitions went down. To ensure that history repeats itself, strive to increase the adoption of underutilized parts of your tech stack, and lean into integrated account planning to help your CSMs drive more CSQLs (Customer Success Qualified Leads). Often, there are plenty of opportunities within your customer base to gain more “wallet share.”
Scale Through Digital
Digital-led customer success should no longer be viewed as a segmentation strategy for your lowest-spend customers. To do more with less while delivering a more personalized experience, target your entire customer base with a digital-led program or strategy.
I have a digital-led customer success organization with a dedicated leader who builds customer journeys and workflows using email insights, product analytics (to understand where our customers might be stuck), in-app engagements (to get customers back on track) and community. Do not underestimate the value of community.
Related Article: How Customer Communities Improve Customer Experience
Grow Through Your Product
Everyone on your GTM team should be collaborating to put the customer at the center of the universe. For example, we created a “Product plus customer success interlock” to identify several key initiatives on which we wanted the sales and post-sales teams to partner this year.
One of the biggest things we’ve done is establish “a customer-centric release cycle.” Everyone has coordinated with Product to make sure that customers are ready to consume what we’re preparing to ship. If we haven’t hit certain milestones indicating that customers are ready to adopt a new or enhanced feature, we hit pause until those milestones are reached.
Show empathy to customers. Some of them may be going through a downsizing. Others may be experiencing problems in their personal lives. Displaying a little empathy and creating special moments for them can be a key differentiator between you and your competitors.
We send branded swag to our customers and their kids, distribute fun launch videos and invest in programs such as CS You to help people gain entry into the world of customer success and grow the talent pool for the industry. CS You identifies underrepresented talent and provides full-time training on CS skills and professional abilities, an internship placement in the tech industry and ongoing training, mentorship and community after full-time placement.
Think of ways to surprise and delight your customers. Think of how you can create moments they will remember for the life of your relationship.
Conclusion: Paying Close Attention to Install Base
More than ever, SaaS companies should pay close attention to their install base. Given the rough economic road ahead, now is the time to double down on the strategies and programs outlined above.
Moving forward, these initiatives should be a permanent part of your durable growth strategy for driving retention and expansion — during both the good times and the bad.