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18 March 2020

Your SaaS Customer Success Strategy Eats Sales, Product and Talent Strategies for Breakfast

Ross Fulton
by Ross Fulton Reading time: 5 mins

There’s no question that company culture is still top dog among the forces that drive sustainable growth in your business. However, in today’s subscription economy, the prioritization of strategies that support this growth have fundamentally shifted. A SaaS customer success strategy eats all other strategies for breakfast.

Your customer success strategy should be driving your sales, product and talent strategies. Companies that do not recognize and embrace this new reality are putting their businesses at serious risk of failure.

How does your customer success strategy fit into your current company strategy?

Is your SaaS customer success strategy simply a set of firefighting processes to extinguish onboarding issues with new customers passed over from Sales? An aspirational value for your otherwise new-logo-driven Sales team? A market friendly buzzword to replace the name of your Support or Professional Services team?

At Valuize we define customer success strategy in B2B software companies as follows:

‘A framework designed to enable customers to realize recurring measurable value through the adoption of the products/services they purchase.’ 

The critical output of this strategy design is how you define the value your company delivers.

This definition of value must be created by reconciling the recurring measurable value that your customers desire with the value you know can be realized via the adoption, renewal and expansion of your products in their businesses.

Your company’s product, sales and talent strategies must be driven by that definition of ‘value’ and therefore by the design of your customer success strategy. Otherwise, why is your product strategy building the feature/functions it is, what is your sales strategy trying to sell to prospects and why is your talent strategy trying to hire that profile of person?

Your customer success strategy drives your company profitability and valuation

The economics of subscription, consumption and other recurring revenue models dictate that long-term relationships based on recurring value realization between vendor and customer are essential. Recurring revenue unit economic metrics are used by private and public investors to value your company. Your board and/or investors are likely asking to see your:

  • Customer Acquisition Cost (CAC)
  • Customer Lifetime Value (LTV)
  • Revenue Churn
  • Customer Churn
  • Net New M/ARR
  • Expansion M/ARR

While we won’t cover the definitions of recurring revenue unit economic metrics in this post, you can learn more about it in this legendary post by David Skok.

When analyzed correctly, the health of your recurring revenue unit economic metrics will guide you on the growth, profitability and valuation potential of your business. The health of these metrics is dictated by the design and execution of your customer success strategy.

Your customer success strategy matches your product DNA to your target customers’ DNA

The type, amount and frequency of value that your company can deliver to a customer is determined by the degree of similarity between the DNA of your product and the customer’s DNA.

Product DNA refers to the features and functions that your product strategy is creating. Customer DNA refers to the strategic goals of your target buyers plus the roles, activities and data that define the ‘jobs’ being done by your target users.

Failure to match these two sets of DNA will result in poor sales, retention and expansion for your business. To establish a solid match, you must define the outcomes that 1) create measurable value for your buyers and users, and 2) can be measurably achieved through the users’ adoption of your current and planned product features/functions.

Your customer success strategy should define these outcomes. At Valuize, we call them ‘value-based outcomes’. These provide your product strategy with clear direction on what features/functions to maintain, develop and retire.

Your strategy provides a common bond across your talent profiles

Diversity is key in any business. The personal and professional DNA of your top salesperson will most likely differ significantly from your top engineer. You can optimize the value of your broader team by channeling this diverse employee energy through a centralized strategy that links all teams together.

So, what should the centralized strategy be that forms a bond across all your teams? You guessed it. Customer success.

Your employees who are fundamentally motivated by achieving financial targets to earn money will or should have targets aligned with your recurring revenue unit economics. These targets and the resulting commissions/bonuses will be achievable (or not) in large part because of your customer success strategy.

Your employees who are fundamentally motivated by seeing and knowing that customers are realizing value from the products they’ve helped design, engineer or implement will want to measure this value. Your customer success strategy should enable the ability to define, deliver and measure customer value realization.

Then, of course, there are your employees who just want to help ensure their employer can keep the doors open and allow them to come to the job they love. An effective SaaS customer success strategy keeps the lights on.

Is your customer success strategy top dog or is it still cowering in the corner?

Learn more about how to define the outcomes that drive measurable value for your customers.

Ross Fulton
Ross Fulton

Prior to founding Valuize, Ross spent over 16 years growing software companies and their partners in go-to-market strategy, sales engineering and customer success leadership roles on both sides of the Atlantic. An Englishman by birth but not by nature…he’ll take an espresso over tea every time!