May 19, 2024 | Read Online
{{OPEN_TRACKING_PIXEL}}
Welcome to your Sunday morning edition of the GrowthCurve.io newsletter. We exist to help SaaS executives level up.
This Wednesday, May 22, we're holding a workshop on three key subscription business metrics you need to understand better: ARR/MRR, Gross Retention, and Net Retention.
It's free to register. Click here to sign up.
Discover 3 key steps B2B Sales & CS leaders use for revenue growth: shared goals, data visibility, and team-focused customer experience.
Get insights from JLL, Braze, and Schneider Electric in our CRO guide.
Customer success isn’t a team, it’s the purpose of a SaaS company.
It’s raison d’etre.
It’s mission.
Virtualization, cloud, multi-tenancy, and of course, now AI, are technical innovations that enabled SaaS companies over the past two decades. But the subscription business model is one of the greatest and most disruptive innovations we've ever seen in tech.
It democratized software, allowing companies of all shapes and sizes to benefit from automation, analytics, and integrations previously only available to large businesses. Businesses that could afford large-scale capital investments in tech.
With no big, upfront hardware purchases (yes.. that used to be a thing), lower switching costs, and multiple competitive offerings in every category, B2B technology buyers now have an upper hand.
What does this mean for us as technology providers?
The only way to win is by making successful customers our mission and working as one team to fulfill that mission every single day.
In the early days of SaaS, customer success focused almost exclusively on adoption. Multi-tenant databases allowed us to measure adoption across the entire customer portfolio and monitor which customers were or were not utilizing our products.
With these insights, we we could intervene and nudge (or sometimes, shove) customers in the right direction when utilization was low. Conversely, we could identify high usage customers and target them for upsell, cross sell, or opportunities to help us out with marketing.
This was a novel capability for companies that weren't cloud-native. Sadly, it still is novel, even for some born-in-the-cloud companies, who don't understand the opportunity these insights present and properly resource them. I digress.
As SaaS has matured, it's become clear that customer success is about more than adoption. Adoption is only a means to the real end: outcomes and results. As machine learning, automation, and cloud-based product integrations continue to improve, it turns out that the best product usage is no usage at all.
Imagine that. Customers paying to not use our products.
In the future, business users will judge products not by how easy they are to use, but by how much they have to use them to get a job done.
Less is becoming more.
Instead of high utilization, buyers judge their ROI on productivity gains.
The only way we as software providers can offer that type of ROI is by defining the specific customer outcomes at the core of the company’s mission. And by aligning go-to-market teams - product, sales, marketing, and customer success - around them.
Consider Hubspot. They educated an entire generation of marketers on a new demand creation and capture model called inbound marketing. In doing so, they helped thousands of small companies grow, and in turn have turned Hubspot into a multi-billion dollar juggernaut.
Their purpose?
“Helping millions grow better.”
Their mission?
“There’s this notion that to grow a business, you have to be ruthless. But we know there’s a better way to grow. One where what’s good for the bottom line is also good for customers. We believe businesses can grow with a conscience, and succeed with a soul — and that they can do it with inbound. That’s why we’ve created an ecosystem uniting software, education, and community to help businesses grow better every day.”
What does outcomes as mission imply about how we work, organize, and build our products?
When outcomes are the mission, we design products that require minimal usage. We don’t accept useless clicks, bugs, and feature bloat that make products harder to understand and more cumbersome to use.
When outcomes are the mission, we sell to specific customers with specific problems. It’s easy to see what deals are inside and outside of our ideal customer profile (ICP), and we optimize our marketing and sales motions for those with the best lifetime value potential.
When outcomes are the mission, top-of-funnel brand marketing focuses on education. It calls attention to customers’ common problems and offers strategy, people, process, and technology solutions. Not just a product a product pitch.
When outcomes are the mission, companies optimize time-to-launch. First, from a product perspective, making it prescriptive and pre-loading with intuitive defaults. These products work out of the box, and offer more advanced settings after initial setup and launch.
When outcomes are the mission, the customer success function delivers education, training, and consultation at scale to ensure that every customer, regardless of size, has access to both industry knowledge and product best practices to give them the best shot at success at whatever it is they are looking for your product to help them accomplish.
When outcomes are the mission, the leadership team aligns around end-to-end metrics that represent the virtuous cycle of customer success. As my old CFO used to say, ”leads to demos to closes, bookings to revenue to EBITDA.”
But that’s not how the story ends. We have to close the loop, and so I’ll add another line to his poem:
Leads to demos to closes
Bookings to revenue to EBITDA
Outcomes to retention to advocacy
And so the virtuous cycle continues on; the modern formula for a winning SaaS company.
How are you making customer success more than a team?
Is it your mission?
🤘
Whenever you're ready, there are 2 ways we can help you:
GrowthCurve.io is a weekly newsletter for SaaS sales, marketing, product, and customer success leaders.
Join over 3,000 subscribers who are leveling up their companies and their careers.
Update your email preferences or unsubscribe here
© 2024 The Chief Customer Officer
2070 Sam Rittenberg Blvd Suite B-272
Charleston, SC 29407, United States of America
We’re grateful you choose to read each week.
When you’re ready for more, there are a couple ways we can help:
» Cover Your SaaS is a financial literacy course for go-to-market leaders. Grab your copy here.
» Promote your product and services to over 4,000+ senior SaaS Sales, Marketing, and Customer Success pros by sponsoring our twice-weekly newsletter and podcast.
