Last week, we covered Why Your RevOps Team is Essential. Similarly, Customer Success has become an increasingly important function in recent years. Your Customer Success team ensures that customers achieve their desired outcomes when using a company's products or services. It requires a proactive, data-driven approach to identifying and addressing customers' needs and goals.
According to Gainsight’s 2022 Customer Success Index, Customer Success “is well-defined or present in 95% of companies” and “is responsible for renewals in 45% of companies surveyed”. Here, we cover how your CS team positively impacts your business and why you should think twice before trimming it down.
Why Customer Success is Important
What does a customer success team do?
A customer success team is responsible for ensuring that customers are achieving their desired outcomes when using a company's products or services. This involves onboarding, engagement, adoption, support, renewals, and expansion. Most cases of spend increase are a result of your CS team.
Customer retention
In a subscription-based business model, customer retention is essential for long-term profitability. By ensuring that customers are achieving their desired outcomes and are satisfied with their experience, customer success teams can help reduce churn and improve retention.
Upselling and cross-selling
When customers are successful with a company's products or services, they are more likely to become advocates and recommend the company to others. They are also more likely to be interested in upsell and cross-sell opportunities, which can help increase revenue.
Competitive differentiation
In a crowded tech market, providing exceptional customer success can be a key differentiator. By showing a deep understanding of customers' needs and goals and providing tailored support and guidance, companies can set themselves apart from the competition.
Data-driven decision-making
Customer Success teams rely on data to identify opportunities for improvement and track progress. This data can also be used to inform product development and strategic planning, making customer success a valuable source of insights for the organization as a whole.
Don’t Scale Down Your Customer Success Team
Risk of Churn
Customer success is responsible for ensuring that customers are achieving their desired outcomes with your product or service. If you don't have a dedicated customer success team, there is a higher risk that customers will not receive the support they need to be successful. This can lead to increased churn, as customers may become frustrated with the product and decide to switch to a competitor.
Negative Impact on Reputation
If your customers are not receiving the support they need to succeed, they may share their negative experiences with others, negatively impacting your brand reputation.
Decreased Insights & Feedback on Product
Customer success teams are often responsible for gathering and analyzing customer data to identify trends and insights that can inform product development and other business decisions. If you don't have a dedicated customer success team, you may miss out on these valuable insights, which can affect your company’s growth and impact revenue.
Missed Growth Opportunities & Impact on Revenue
Customer success is not only responsible for ensuring customer satisfaction and retention, but also for identifying opportunities for upselling and cross-selling. This is where Net Recurring Revenue (NRR) comes into play. Many Customer Success leaders are held to their metrics.
Your CS team’s metrics are essential to helping you understand your product’s performance and without them, you may struggle to measure and accelerate your growth. If you’re interested, you can learn more about CS metrics from this Forbes article and Staircase's CS metrics-to-know-about. If you don't have a dedicated customer success team, you may miss out on these revenue opportunities and may not be able to achieve your full growth potential.
Overall, cutting your customer success team in the tech industry can have significant negative impacts on your business. It's important to recognize the value that customer success can bring and to invest in this function to ensure the long-term success of your business.