...the discourse has shifted toward execution and operations: building process and transforming organizations to capitalize on customer-centric growth opportunities.
We recently had the privilege of attending the JMI Equity Customer Success Round Table for the 3rd year.
The round table was comprised of over 40 B2B SaaS and software companies represented by sales, customer success management, services, and support leaders. The majority of these businesses are rapidly-expanding, growth stage SaaS and tech companies south of $100MM in annual revenue.
Each year, we listen carefully for themes affecting these companies, customer-centric growth and CS leaders. There were, of course, the predictable, perennial challenges:
While many of the day-to-day challenges and opportunities remained consistent with last year’s themes, some new ones did emerge.
Notably, the need to explain the importance of customer retention and account growth (net retention) has largely disappeared. Most growth-stage SaaS companies are clear that focus in these areas is not optional.
However, the discourse has shifted toward execution and operations: building process and transforming organizations to capitalize on customer-centric growth opportunities.
Both the smallest (<$15MM ARR) and the largest (>$1.4B ARR) companies in attendance are grappling with customer-centric growth execution in three key areas.
1. Creating the capacity for ongoing transformation and change
The ability to rapidly build software combined with ubiquitous funding available to early-stage startups means that the competitive landscapes can change overnight.
Whether mid-stage, growth companies or late-stage or publicly traded, all the companies expressed challenges with ongoing transformation. And there seems to be a tipping point around $30-40MM where transformational change becomes a full-time job within the organization.
Many companies are adding executive-level customer success operations capacity. These aren’t system admins. They are change agents who are driving strategic projects across departments that improve process, agility, and scalability.
The best examples of this that we see today are formally implemented. Customer success operations leaders have a formal methodology for measuring the business, identifying gaps in delivery, identifying the root cause, and collaborating with leaders to improve processes.
The key skill set that you need doesn’t seem to be technical or domain-specific to the market you serve. Nope. It’s change management. CS Ops leaders are skilled at earning trust, gaining buy-in, and motivating people to work together for the greater good.
Check out an earlier article we published on Anna Hill if you want to see specifically what I’m talking about here.
2. Driving company-wide alignment around the customer journey
To make the above possible, alignment is required. Alignment comes from a shared focus on execution excellence. In smaller companies (<$50MM) this focus is often championed directly by the CEO.
As companies grow it is often the COO or Chief Customer Officer (CCO) who takes over the mantle.
Tangible value creation and seamless customer experience are no longer differentiators. They are table stakes.
The transition from founders to professional management of marketing, sales, customer success, product and engineering teams can be dicey. There is potential that newer executives with the most experience or political savvy can drive the direction of the organization for better or worse.
However, combining an objective, outside-in, metrics-driven approach with C-level executive sponsorship is the most effective combination of tactics.
Maintaining a tight focus on customer value delivery is a complex and multifaceted undertaking that requires alignment. This level of alignment around the customer journey must come from the top.
All of this leads us to the last big takeaway…
3. Metrics, insights, and automation are the backbone(s) of scalability
As we strive to change as quickly as our companies are scaling, tremendous pressure is placed on data, systems and automated processes.
Many attendees shared that their customer data assets are woefully disjointed. They lacked confidence that their current data and systems can support their growth objectives.
This issue also falls under the category of customer success operations and reflects the data, process and platform level of a systematic customer journey. In other words, the systems that give us the ability to scale.
Customer success platform adoption by end-users (customer success managers and other customer-centric departments) was also cited as a challenge.
This is a consistent theme across all of our clients, and I have found that system adoption is a close cousin to alignment and clear process definition. If the processes aren’t well defined or misunderstood they don’t yield reliable data that can be used to drive decisions.
We’ve found that systems often languish unless they 1) provide direct benefit to the end-user or 2) yield data that helps managers make decisions.
So what, now what
At the end of the day, delivering value to customers at scale is like conducting an orchestra. It takes the skills and talents of many different types to achieve and sustain success.
The three big actions were the following:
Customer alignment, transformation, and systems are the essential ingredients to growth and scale.
Already looking forward to 2020!