Customer Success for Company Success

Continuing with yesterday’s post on Second Order SaaS Revenue, it’s important to drill into the role of customer success and how it drives company success. There’s an excellent slide deck titled How to Drive Growth with Customer Success Metrics that covers the topic well. Here are a few notes from the slides:

  • Customer success is a growth driver on par with sales and marketing
  • Show, don’t tell, how you make money
    • Renewals
    • Upsells
    • 90 day adoption
    • Product roadmap feedback
  • One customer success manager per $2 million (hired in advance, not in arrears)
  • Second order revenue – the key to long term success
  • Why customer success is critical
    • Happy customers, better product
    • Grow faster
    • Decrease capital needs
  • How much to spend on customer success?
    • Expected value =  Save rate x Value of extension
    • Example: 30% x 12 months x $83/month = $298 or about 30% of annual contract value

Pre product/market fit, customer success is often ad hoc. As the company grows and finds a repeatable customer acquisition process, customer success is critical.

Entrepreneurs need to understand how customer success drives company success.

What else? What are some more thoughts on customer success?

2 thoughts on “Customer Success for Company Success

  1. If CSM cost is 30% of ACV doesn’t that automatically start you at 70% gross margins? Assume that’s “added ACV” in the period so if we’re going to add $1mm in net new ARR in June, we want to spend $300k on CSMs?

    Kyle Porter | SalesLoft CEO 678-810-1982 http://www.salesloft.com

    On Sun, May 28, 2017 at 7:34 PM, David Cummings on Startups wrote:

    > David Cummings posted: “Continuing with yesterday’s post on Second Order > SaaS Revenue, it’s important to drill into the role of customer success and > how it drives company success. There’s an excellent slide deck titled How > to Drive Growth with Customer Success Metrics that cover” >

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