Making The Business Case For Customer Success

The Business Case for Customer Success

There are two lenses through which most company leaders view the companies they are leading:

“I want to make this business successful” or “I want to make our customers successful”

Yes, many people would probably want to combine the two into something like “I want to make this business successful by making our customers successful,” but just for the sake of argument, imagine that there are only the two binary options as described above. 

Which one would your company leader lean towards?

If you’re confident it would be the second option, then you are in great hands, and you will have a much easier time getting buy-in for Customer Success initiatives.

If however, you are not certain, or you think the first option is where your company leader might lean, then you have a much steeper climb ahead of you.

If the success of the company is being measured by the success of its customers, then Customer Success is an obvious investment. If you have ideas for initiatives that will speed up the rate at which your customers become successful, or projects that will help your customers to derive much more value out of your product or service, you will most likely get the green light.

If on the other hand, the success of the company is being measured by the company’s bottom line or its valuation, you will have an extremely difficult time getting the “go-ahead” for any projects or initiatives that will not directly and immediately have a significant impact on the company’s revenue. 

If you propose building a new feature, leadership will want to know what they can charge for it, how many customers will buy it, and in all likelihood, they’ll begin selling it to your customers before it even exists (which will increase churn rate). 

If you request to go on-site to visit a customer in person, the only way they’ll say yes is if you can tie the on-site to an upsell, expansion, or contract renewal.

And if you are currently doing Customer Service (reactive) and want to hire someone to do Customer Success (proactive), all they will want to know is what it will cost to hire someone, and what projects they’ll be taking on in their first 3 months that will directly result in a bottom-line increase.

When it comes to making the business case for Customer Success, especially to someone whom you suspect will not immediately understand the value, here are some methods that will help you to get the ball rolling:

  • Begin by understanding what is important to your company’s leadership, and framing your proposal in a way that aligns with their goals. For example, if monthly recurring revenue (MRR) is the most important metric to them, you’ll want to use that information to shape your proposal. 

  • Determine what projects/initiatives you (or a new hire) could take on in their first 1-3 months that would impact the metric you’ve chosen. 

  • Do some projections to clearly illustrate the ROI of the projects/initiatives you’ve chosen.

  • Find case studies and examples from other companies that support your projections and recommendations.

It is important to remember that your proposal should be formed in such a way that the ROI is irrefutable, and that all your company leader has to do is say “yes.” If your proposal is too complicated, or leadership thinks it will be too much work to implement your recommend changes, they will disengage. 

Keep things simple and make saying “yes” a no-brainer.

If you aren’t sure which projects to recommend starting off with, here are some ideas to think about:

  • How long does it currently take your customers to get set up on your platform? If the setup process were sped up, would it affect your upsell and expansion opportunities?

  • How key are case studies to your sales process? Could someone in Customer Success generate more case studies, faster?

  • How many customers come through referrals? Could that number be increased by someone in a dedicated Customer Success role?

  • What is your monthly churn rate? Could someone in Customer Success reduce that number? If so, what amount of revenue would you be retaining each month?

  • What resources are currently going into Customer Support? Could Customer Success (through onboarding and training) reduce support costs by providing more in-depth training and resources up front? 

  • How are you doing your projections right now around expansions, renewals, and upsells? Could Customer Success help to improve the accuracy of those predictions?

Finally, consider speaking with other team members to see if they would like to support your Customer Success efforts, and if they have other ideas around the value that could be created in the first few months. Often, looping in Sales, Product, or other departments, will bring valuable new perspectives that can make your proposal even more convincing. 

At the end of the day, no company can succeed without caring about the success of its customers, but many startups can be so focused on immediate returns, that Customer Success can get de-prioritized. That’s why it’s critical to advocate and build a strong business case for Customer Success early-on. 

Good luck!

Ben Winn