The Costs of Misalignment on Customer Success
Customer success teams can’t win on their own. Because customer success = right product + right customer + right services. If the product has flaws and you get the wrong customers they are set up for failure.
Flawed customer success services do not affect product-, marketing- and sales teams in 99% of SaaS companies. So, none but CS teams have high stakes in aligning all teams on a single mission and goal.
CEOs have even higher stakes because the lack of alignment costs their company a fortune. But the truth is that 1% of them are aware of it and you’ll find them at companies like Snowflake, Gitlab, or Twilio companies with incredible Net Revenue Retention.
The Power of Net Revenue Retention
On the surface, your NRR measures how much revenue you create from your existing customers which makes it a quantitative metric. But at the same time it’s the ultimate quality metric.
Because it’s virtually impossible to get to 125% and beyond without alignment on customer success. There will be no product-market-fit, mature processes and disciplined execution. If we take it a few levels higher, the NRR measures the quality of the company’s leadership.
A healthy dose of reality
However, it’s up to the Customer Success leaders to keep pushing and advocating for alignment on a single mission and goal.
The most effective way to do that is to speak the language your CEO does – revenue and costs:
– Churn from product issues
– Churn caused by misguided expectations and bad-fit customers
– Lost opportunities as CSMs waste their time preventing inevitable churn
– Contradicting goals and incentives for every team. A prime example is acquiring bad-fit customers to meet the sales quota.
– Working in silos where important customer data gets lost. Like product teams make decisions without understanding the context of the customer needs
It may take some time until your CEO gets it.
But there’s so much at stake that it’s definitely worth the effort.