The Customer Success Organisation: The SaaS Growth Engine

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The Customer Success Organization is one of the newest functions is SaaS based companies. Historically, the age old version of Customer Support and Account Management were driving Customer Engagement across industries and product lines. While such models have been successful in the past and they continue to do so in some form today, they are being seen to be reactive and not forward looking. Customer Support or engagement has been engaged in problem solving, issues management, tickets closure while Account Management’s primary function was to drive sales for the organization. 

With the advent of Subscription Based Model laid down by SaaS based companies, it became increasingly obvious that the number of companies / users subscribing to these products saw exponential growth. Revenues were based on recurring subscription and hence renewals of accounts became top priority. Growth was see to be driven by upsells and cross sells along with new account acquisition. This necessitated a fundamental shift in the operating model of the SaaS companies and thus Customer Success Organization was set-up.

Below are some of the most important points that make this role the growth engine for SaaS:

The Subscription Model

The SaaS based model hinges on renewals of products and services which are in the subscription format. Since approximately 90% of the revenues may result from existing clients, the CSM role ensures engagement at the highest levels for these clients which has a direct impact on revenue retention. This also highlights the fact that Revenue Retention or Renewal is one of the most important success criteria for the CSM and the function as a whole.

Proactive Engagment

The role of the CSM initiates with the Discovery stage. While the Account Executive may have successfully brought in the deal, its a good practice to pin these customer objectives in paper with clear metrics for success defined along with milestones and a governance mechanism. Periodic checks in the form of operational and executive reviews further enhance customer experience and outcomes.

The Trusted Advisor

The CSM’s primary aim is to establish a rapport with the clients through engagement, product adoption, periodic sense checks and reviews however these are must dos and the CSMs role is far bigger than that. Establishing oneself as a trusted advisor to the client or the decision maker is the pinnacle of Customer Success and the very purpose why the role was instituted. Customer may be king but the king requires advice from experts

Incremental Revenues

The CSM has an additional responsibility of driving up revenues from the existing client base and the same can be achieved through upsells and cross sell opportunities. These business outcomes can be possible only when the CSM is in a position to be regarded as a Trusted Advisor and is able to guide and partner with clients to solve business critical problems through the products and solutions. Parameters such a High Adoption Rates, High Engagement Rates and a strong ROI are seen to be critical to ensure incremental revenues

There is a quote by Lincoln Murphy, a Customer Success thinker who says, “Customer Success is where 90% of the revenue is” and this function’s primary aim is to ensure ensure the 90% of the revenues are retained through customer engagement and ROI. Today the Customer Success function has gathered tremendous momentum and the same is indicated by the report by LinkedIn 2019, that places the role of the Customer Success Manager as one of the top 10 promising roles in the year 2019. Details of the report here. Interesting observation made in the same report indicates that professions such as Account Executives, Product Owners etc which are in the top 10, are related to the SaaS business model.