If Your Customer Success Team Isn’t Driving Revenue, You’re Doing It Wrong!

I was consulting a subscription-based ERP product organization. They spent a lot of money and time acquiring about 160 customers in their first year of operations. However, twelve months later, only 60% of them were still using the product, and less than 10% upgraded their subscription.

They were worried about it, and that’s when we decided to dig deeper to understand why there was a drop off of about 40% in twelve months.

We understood that our customer success team was focused on onboarding customers and issue resolution but not on adoption, value creation, and account growth.

We got our customer success teams to have conversations with customers who have opted out of the subscription. They had low adoption because of tacky user interfaces and the inability to configure basic things in the system.

Armed with this knowledge, they sorted out the UI and configurability issues and went back to all those customers who dropped out and got them to subscribe again with a free look-in period of 60 days.

This allowed them to regain, retain, and gain new customers easily.

According to Gartner, 80% of your future revenues will come from 20% of your existing customers.

So, the role of customer success managers extends beyond support and should potentially look at revenue maximization.

Why Does Customer Success Need to Think Like Revenue Owners?

A friend of mine was heading the marketing function of a spend management solution provider.

They were providing their solution as a service to their customers.

I checked with him on their marketing budgets for acquiring new customers, and I was surprised by what he said.

They spend 120% of their new revenues on marketing every year. That’s an enormous sum to acquire new customers.

Don’t we all know that it costs multiple times more to acquire a new customer than to retain an existing one?

So, it makes sense to double down on those people who already chose you.

This is where customer success steps in to grow and deepen the existing relationship.

What Mindset Shift Is Needed for Customer Success Managers (CSMs)?

They Know Their Customers Best

Your CSMs are the ones with their ears to the ground. They are the ones running onboarding calls, troubleshooting problems, helping align your product with business goals, and listening to frustrations and feature requests.

They are the ones who are closest to the customer’s evolving needs. They can detect subtle signs of dissatisfaction or identify moments when the customer is ready to grow.

Let me give you an example.

One of our customers, who is a fintech platform enabler, noticed that whenever their users crossed 100 API calls per minute, they needed enterprise-tier services.

Their CSMs were trained to spot this trigger, initiate a conversation, and close an upsell.

This resulted in a 23% increase in revenue for them without moving a marketing muscle.

They Can Influence Revenue Expansion Organically

Customers don’t want a sales pitch right after a bug fix.

What if you go and say this to your customers after helping resolve a challenge for you?

We’ve seen teams like yours benefit from automating this step using our new workflow tool. Do you want to explore our workflow tool?

This feels consultative and not salesy at all.

They’re Positioned to Reduce Churn

What are the warning signs of a customer churn?

Customers don’t churn overnight. The warning signals are right in front of us, and they come in various signs:

• Fewer logins
• Reduced feature usage
• Support tickets with phrases like “We’re evaluating alternatives.”

Let me give you an example.

In one of the organizations where I worked earlier, we had subscribed to a data collection tool. The subscription was for 15000 credits in the first year. On average, you can download a comprehensive list of 1250 contacts every month.

The first couple of months were going well. In the third and fourth months, the number of downloads considerably reduced, and it was near zero in the fifth month.

Someone from the vendor’s customer success team reached out to see if there were any issues with using it. They realized that after two months, the team that was working on it moved out, and the new team was not aware of this tool, so the usage went really low.

So, the customer success executive scheduled a training session on how their tool can be used to identify newer contacts for their business. They invited the entire team and handheld them to adopt the tool satisfactorily.

This is probably their ninth year of subscription for the same tool.

They Turn Happy Customers Into Revenue Multipliers

The last 10 customers we signed up were all referrals from our existing customers. How do you get referral customers?

For that, you have to guide your existing customers to success first. And who better to do that than your customer success teams?

In our case, we ensure that all the stated and unstated objectives of our customers are met to their satisfaction. This invariably turns our existing customers into advocates of our platform, and they end up referring more customers to us.

This is one of the reasons why we haven’t had a customer churn from us in the last eight years.

They Make Revenue Recurring

Sales teams close deals, but customer success teams renew them.

The magic wand in a subscription business is that you should make your customers see value in your offerings year-on-year. The holy grail is the net revenue retention (NRR).

NRR doesn’t just reflect churn, but it reflects expansions, renewals, and upsells. Customer success is at the center of higher NRR, and it comes from loving the customers you’ve already got.

As an organization focused on customer success, you should ask yourself these three questions:

• Which customers are at risk? What are we doing to address this?
• Who’s ready to grow?
• How are we helping our customers succeed?

In today’s world, retention is new growth, and your customer success team is the secret weapon that lets you help retain customers.

Your customers don’t stay just because you have a great product. They remain because someone in your customer success team constantly proves it’s worth it.

Ask yourself a fourth question: “When was the last time I provided a delightful experience to a customer?”