Why Startup CEOs Start with Customer Success

tldr

• To woo enterprise customers, and outcompete their rivals, B2B SaaS CEOs/founders are employing Customer Success best practices while working directly with their earliest customers
• Next, they’re launching a multi-faceted Customer Success function that partners with Marketing to drive interest, and Sales to accelerate evaluations and close prospects
• The Customer Success function usually has at least one dedicated team member but can leverage a matrix organization
• This function onboards, engages, and grows customers into vocal partners
• Startups leveraging this strategy are banking on long term benefits like accelerating product/market fit; reducing time to activation; lowering logo churn; enjoying higher net revenue; and building a highly engaged team that exemplifies the best aspects of their culture
• This strategic change is the result of companies learning they need a proactive customer experience design that augments their product experience

The Next Generation of Tech CEOs

In the May 2019 edition of HRB, Siggelkow and Terwiesch observed that “A seismic shift is under way….Instead of waiting for customers to come to them, firms are addressing customers’ needs the moment they arise—and sometimes even earlier.” As savvy CEOs and founders of high growth startups move from being product-centric to customer-centric, they are quickly learning how to leverage Customer Success to attract, retain, and grow relationships with enterprise customers.

Ju-kay Kwek, CEO/co-founder of Switchboard Software and former product lead at Google, and Joseph Quan, CEO/co-founder of Twine, are great examples of CEOs/founders who have opted to leverage Customer Success best practice from the beginning. Ju-kay worked extensively with enterprise customers and realized the importance of providing valuable expert guidance to customers early, and is employing this at his company. Joseph had years of experience in delivering value to Fortune 500 companies as a consulting practice manager and made Customer Success one of his founding orgs within his company.

Why don’t all CEOs leverage a proactive approach?

We don’t even have customers yet

In my experience, startup CEOs/founders spend countless hours considering their product design, and go-to-market strategy. What little time they have left is continually consumed by financing and investor relations. Thus, little time is left to think about ensuring customers realize value, and besides, they think, “We don’t even have customers yet…” But one day, something changes. A new pitch resonates. A new feature finds traction and suddenly a few customers appear and they start asking questions. “We need Support!” someone says. Hiring a recent college grad with boundless energy and a loveable disposition appears like an obvious first step since the growing inbox of customer questions demands attention now.

One quick fix begets many long-term problems

This knee-jerk reaction seems like an easy step to buy time, but it has long-lasting, value-limiting consequences. Some of these problems include:

• Avoidable dissatisfaction: A less mature product has more rough edges that customers discover on their own; such problems can frequently be minimized via live onboarding or self-service training.
• Costs are higher: It costs more to make these angry customers happy again as frustration mount, bad memories linger, and need special treatment from more senior team members is needed.
• Relationships become brittle: In failing to continually, proactively engage customers the only human experience they have with a company is Support, which can be transactional and alienating even if it is competent. Dissatisfied customers are open to new solutions.
• Hard to change course: Once someone is hired and a function is established, it’s hard to change directions. Thus, a company hires more Support people, and then a manager. Only several years later when churn is higher than desired and CSAT and NPS are low, does the company begin to analyze the problem holistically and realizes it needs a proactive strategy.

Most regrettably, the company has inadvertently created an organization that feels less important and is not empowered. Support in most young companies is several levels down in the org chart, has no empowered champion, and is frequently an afterthought in product development and release planning–even though this organization has more contact with customers than any other function every day, week after week. In short, it can become a haven for unhappy employees who feel ignored by colleagues and unappreciated by customers.

Let me be clear–good support is required

Supporting customers effectively is a core and critical competency a company should master to achieve acceptable NPS and CSAT targets. Team members who excel in supporting customers can become future leaders in any organization. But staffing Support is not the first step to launching an effective customer experience strategy.

Customer Success is everywhere

It’s much easier now for a startup CEO or founder to design a Customer Success strategy that is proactive and profitable. There are now many Customer Success consulting firms like mine, Customer Kaizen, which partner with B2B companies to define and implement the right strategy.

Customer Success talent and technology is also readily available. For the second year in a row, LinkedIn ranked Customer Success as a top job reflecting the fact that more and more talented, experienced professionals are finding it a preferred long-term career path.

Just a few years ago, there weren’t nearly as many software solutions that Customer Success teams could leverage to effectively partner with internal and external customers. Now, Customer Success solutions that integrate seamlessly with existing B2B sales and service platforms, abound.

Most importantly, customers and vendors are publishing success stories capturing the positive impact these proactive customer-first approaches are having. As one McKinsey report states, “…Companies that excel at lowering gross-revenue churn emphasize several key customer-success best practices throughout their organizations.

Customer Success has arrived and smart companies are leveraging it as a strategic advantage

Moving forward

I launched Customer Kaizen because of the growing interest I received from CEOs and founders who wanted the experience of an expert to help shape their Customer Success strategy. They don’t come to me because they fear they’ll go out of business. They know an effective Customer Success strategy will accelerate and multiply their positive outcomes; they want to be more attractive to prospects; and they want to impress and exceed customer expectations. Leveraging their product and market expertise, and my 20 years of experience, we can rapidly deploy the right, proactive strategy to ensure a more profitable, scalable customer experience.

Ping me to begin a Customer Success Maturity Assessment that will provide recommendations and a roadmap for your proactive Customer Success strategy.