Clarifying Customer Success - From Confusion to Cash Cow

Chasing your revenue targets is tough these days. We all face an era marked by inflation and macroeconomic uncertainty. Start- and scale-ups are now compelled to focus on efficiency, cost management, and a clear return on investment across all functions, particularly in Customer Success.

The Challenge of Definition

Despite CS's growing prominence over the past few years, confusion around its definition continues to plague many founders, investors, and executives. This ambiguity frustrates CS teams, who often lack visibility and influence in critical executive discussions. The absence of a clear understanding can jeopardize budgets for headcount and technology, putting the very existence of this function at risk.

When asked to define the purpose of a Sales team, most people can provide a coherent answer. In contrast, inquiries about CS often yield vague or varied responses. Practitioners frequently describe their roles in terms of activities—like quarterly business reviews or customer health checks—rather than articulating a clear purpose. Terms like “trusted advisor” or “delivering value” are common, yet they lack the specificity needed to foster stakeholder credibility.

Cultural Aversion to Revenue

There is still a belief within the CS community that revenue targets undermine customer trust. Consequently, many professionals in this space distance themselves from sales responsibilities, focusing solely on relationship management. While this approach may seem noble, it can exacerbate the credibility crisis. Founders and executives, already grappling with an unclear definition of CS, may question the return on investment for a function that appears disconnected from revenue generation.

This disconnect sends a subtle message to other departments: any negative impact on customer experience is the sole responsibility of Customer Success rather than a collective concern. Such an environment stifles accountability and collaboration, ultimately hindering customer satisfaction.

Pathway to Clarity and Credibility

Establishing a standard definition of Customer Success is essential to combating this confusion. At its core, the Customer Success team should be seen as a revenue function—helping customers derive value from their purchases as quickly as possible. This not only enhances customer satisfaction but also extends the window for identifying new revenue opportunities. This definition not only clarifies the role of Customer Success but also aligns it with priorities that matter to founders and executives: revenue, speed, and customer value.

Embracing Revenue Leadership

In this economic landscape, Customer Success professionals have a unique opportunity to redefine their roles as revenue leaders. This doesn't necessitate becoming sales experts; instead, it involves shifting perceptions and fostering a culture that accepts the connection between revenue generation and customer trust. I wrote about the new skillsets of CS leaders here.

Sales engineering teams are a great example of how this transformation can work. They are tasked with demonstrating value to prospective customers while being accountable for revenue without directly managing the sales process. By adopting a similar framework, Customer Success teams can effectively position themselves as integral to revenue generation.

CSM roles have changed

Customer Success Managers should adopt a proactive approach focused on winning and achieving customer success rather than merely avoiding failures. They must prioritise customer needs over internal goals. Enhancing skills in active listening will help CSMs better understand customer needs. They should improve their problem-solving abilities to address issues with tailored solutions and focus on knowledge management to share relevant information that empowers customers. Engaging in customer discovery is essential to understand their challenges. CSMs should create success plans that outline customer goals and paths to achieve them, provide quality content that addresses pain points, and monitor customer progress to identify areas for improvement. Analysing churn will help understand and mitigate reasons for customer attrition, while consistently demonstrating the ongoing value of products or services will reinforce customer engagement.

Evolving CS Community

To truly earn a “seat at the table,” Customer Success must shift the narrative within its own community. And I see this happening already. LinkedIn has CS influencers like Daphne Costa Lopes or Kristi Faltorusso - they promote an environment that positively discusses sales and revenue targets, reinforcing the idea that generating revenue is a natural extension of managing customer relationships.

Thought leaders and practitioners must challenge the status quo, ensuring that discussions and literature reflect a dynamic understanding of Customer Success as not merely a cost centre but a vital driver of business growth.

In summary, the uncertainty surrounding Customer Success is not impossible to overcome. By defining its purpose, taking responsibility for revenue, and improving community discussions, Customer Success teams can boost their credibility and solidify their position in important business discussions. In this economic environment, clarity and flexibility will be crucial for long-term success.

If you want to discuss your Customer Success approach with me in-depth, please don't hesitate to reach out. I offer your first 30-minute consultation for free, and I always start with a thorough diagnosis of your situation.