Letter From the CEO: What It Takes to Survive (and Thrive) in Customer Success

Since the market downturn in 2022, the Customer Success industry has undergone rapid transformations, and last week marked a significant moment in our industry. In this letter, I wanted to take a moment to share my perspective on this change, how we're embracing it, and milestones we've recently achieved.

First, a bit of reflection. We’ve been building Vitally for over seven years now. Success in this market is not realized overnight, or even in your first few years. The reason for that is simple: It is incredibly challenging to build a Customer Success Platform. 

The technical complexity of a CSP is truly hard to describe. It processes hundreds of millions of data points daily, all being fed in from dozens of different, disconnected systems. That alone is a massive challenge.

But a CSP’s job doesn’t stop there. It has to power reporting engines, automated workflows, project management capabilities, and more. It needs to continue building integrations as well as APIs to extract that massive dataset from the platform. Then when you layer enterprise permissioning and segmentation on top of that, you end up with an incredible technical challenge.

Getting over the hill in this industry — reaching product-market fit and being truly competitive — takes time. Many don’t make it. In my opinion, Vitally achieved this milestone when we raised our Series A in April of 2021. More than four years after our incorporation, we crossed 100 customers and secured significant investment from one of the world’s most renowned investors — a16z. We also did it with just six team members. Operational efficiency is one of our core strengths 💪

Post Series A, we grew incredibly well. Our growth rate was above 200% the year after. We also did it with cost efficiency. Revenue growth exceeded capital spent, which is no easy feat in a competitive market with the infrastructure and GTM complexity ours has.

That said, in mid 2022, I knew there was more to achieve — another level to the business we hadn’t quite unlocked. I also knew our next fundraising round was not far off. Making things more difficult was the fact the fundraising market was all but closing its doors to growth rounds. In the year prior, venture capital was free flowing, with companies raising at insane valuations, sometimes even with no revenue. A course correction was inevitable, and paired with macroeconomic conditions, that correction hit hard in the summer of 2022.

These difficult times brought us to a crossroads in our journey. Both Vitally and Customer Success needed evolution. We both needed a new strategy to fuel continued success in a dramatically changing market. Since we serve Customer Success, it was a unique opportunity to create one solution that would benefit all parties.

Building a CSP worthy of modern CS teams

Customer Success has historically been heavily relationship-focused. CSMs would form tight relationships with their customers and, backed by some data and automation, would focus on surfacing early-warning signals for customers in need. A critical function, for sure. But there is so much more it can be, and often is.

The best Customer Success teams in the world are one of, if not, the most essential functions to their business. Not because they’re the best at detecting these early warning signals (although they are), but because they are uniquely strategic and influential to every aspect of the business:

  • CS teams directly increase win rates. They partake in sales, positioning their post-sales process as a true differentiator to winning business. They strengthen the sales pitch by educating reps on key use cases and the quickest path to ROI. 
  • CS teams influence product decisions. They are an essential voice to the product roadmap. They vocalize customer pain and articulate common themes, helping product leaders build a better experience aligned with customer needs. 
  • CS teams directly drive top-of-the-funnel growth. They fuel a good portion of the marketing team’s efforts by creating relationships that lead to success stories and referrals, driving positive online reviews, and sharing use cases that allow marketing to speak more directly and personally to target segments. 
  • CS teams drive a company towards profitability. They help finance and revenue leaders determine which segments should see more investment by surfacing those that are more successful and perform more cost efficiently. 

A CS organization’s influence doesn’t stop there though. The data they possess — data that unifies customer health, revenue, product usage, communications, and feedback — is more valuable than any other company data. It is data that has answers to almost every challenge the company has faced and will face. And guess where that data lives? In the Customer Success Platform.

But here’s the problem with the traditional CSP: It doesn’t realize this. Instead, CSPs still live in the “before times,” where focus was on the customer relationship. CSPs are built with one user in mind — the Customer Success leader. Given the CS leader makes the final purchase decision, that’s understandable. But that strategy truly limits the impact of the CSP and the team using it.

So back in mid-2022, as we plotted our path towards raising a growth round in one of the worst venture markets since the dot com bubble, I asked myself the question, “what does a platform look like that powers these world-class CS teams?”

To do that, we had to deconstruct our platform. As the traditional CSP is built for the CS leader, everything it presents assumes a CS user. That assumption had to be removed. 

Learning from other cross-departmental productivity platforms like Notion and Clickup, we reinvented Vitally. We added capabilities that allowed every team to work independently, but collaboratively with other teams. We added productivity tools to fuel new workflows, both in and out of Customer Success. We added collaboration capabilities that allowed a business’s most valuable asset — its customer data — to be shared with external stakeholders and also directly with customers.

This is what I went to fundraise on in November 2022 — a terrible time to raise a growth round. But two weeks after my first investor meeting, I had four term sheets. I signed one led by Next47, and our $30M round was closed shortly after.

Backed by that Series B, we introduced this new platform to market in the middle of last year. Today, every Vitally customer uses the new incarnation of our product, which offers dedicated workspaces (Hubs) not only for Customer Success but for implementations, support, marketing, product, finance, and sales. 

This is the next generation of Customer Success. One so clearly essential to the business due to its influence, strategy, and data that it drives the success of literally every department.

Thoughts on an eventful week in the CS Industry

Some “leaders” in our industry have said Customer Success is struggling in the current market. Some even say “dying.” That seems defensive to me — defensive in the sense that their inability to evolve results in the age-old human instinct of rebelling against the change that is causing them difficulty. But the best businesses don’t complain when their market evolves. They evolve with it.

Customer Success is not dying. Far from it. It is simply evolving.

So while some exit our market and others merge and look to tackle the incredibly difficult challenge of merging competitive businesses and products, we’ll be doubling down on our position and continuing to serve our customers. While others now have a world of distractions ahead of them, we remain steadfast on innovating and on our mission: to prove that every Customer Success team is the most critical function to a business’s long-term success.

Last week, while chaos ran rampant in our market, we acquired our 500th customer and grew revenue by the most in a single month in company history. Although the downturn is still active, we see promising signs. We easily exceeded our past monthly record for expansion revenue last month and saw the lowest amount of churn in a year.

We also remain the productive and cost-efficient company we have always been. In 2023, our revenue growth was in the 95th percentile of all SaaS companies.

In what amounted to one of the toughest years for tech in recent memory — a difficulty on full display last week — I’m incredibly proud of the progress our team has made and our ability to evolve as times change. No complaining — just world-class execution.

But we have so much more to do. In the coming weeks, we will be launching two major new features: Goals that help you measure the impact of your team’s efforts on customers at scale and Surveys that allow you to gather and act on customer feedback. We are in this for the long haul. As some of our longtime competitors face an uncertain future, we remain steadfast and excited for the road ahead.

If you’d like to join us, the next milestone is our 1,000th customer. All are welcome, from early-stage startups to public enterprises. We’d love to work with you, so please don't hesitate to reach out to me at jamie@vitally.io. Or shoot me a personal note on LinkedIn.

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