Can Customer Churn Be Good for a B2B SaaS Business? Sometimes...
Customer churn tends to be viewed negatively by SaaS companies, and for good reason. However, in specific scenarios, it can actually be, dare we say, a positive.
With so little standardization around customer success tooling and process compared to other teams, how do you know when the right time to start using a dedicated customer success platform is? If you want best-in-class growth, the answer is as soon as possible.
When I first talk to revenue leaders and executive teams, I often hear "we're too early for a CS platform." Sometimes they're right. More often than not, though, it's not true. After convincing many of these teams to agree, I wanted to share my thoughts.
First of all, let's disavow the idea that growth needs to be net new business-focused. In fact, if the last few years have taught us anything, it's that the fastest and best growing SaaS companies are all generating more revenue from expansion and net dollar retention than net new sales:
With that in mind, it's never too early to start figuring out how to provide world-class CS. What if every year, your own business was generating 50% of renewal as additional expansion? What would that do for your top-line growth?
The top 2 reasons people say they aren't ready are:
(1) Processes still being figured out, so it wouldn't make sense to bring them all into one place yet.
(2) They want to wait until there are problems to solve them.
These are both worth reconsidering.
1) Your status quo is likely ineffective. Passing on good to better is one thing, but there's a simple fact when your CS team sits in a plethora of 4-10+ unrelated tools - they can't be effective.
Why do we hire CS teams? Sure, everyone's exact strategic goals are different, but I can promise you that you didn't build your team to spend 64% of their time not talking to customers.
And just why do average teams spend 64% of their time not talking to customers? Administrative overhead. This is a pretty obvious problem - if before you can take any customer facing action, you need to have context on the current state of the customer, and that's spread across 5 platforms - ouch.
Moreover, these systems - while in vacuum each may be the best in class at their respective function, each also demands expertise. How savvy is your CS team with running SQL queries to generate their own reports? Hell, how savvy is your business team in general even running and creating the right SFDC reports? I'll leave the questions rhetorical.
Even if your current processes and systems are acceptable, there's a simple, unrelenting truth that can be improved upon - managing disparate systems is hugely inefficient, and your team is wasting lots of valuable time.
2) Waiting for process or pain is a mistake. There is some sort of weird attachment to mapping out the perfect process that is unique to CS teams. As an analogy, sales teams have an ever-evolving set of processes that change dramatically as you scale. And yet, no one ever believes it's a good idea to sit in spreadsheets and put off getting a CRM. Why? Because they agree that continuing to work ineffectively even as processes develop is the wrong way to generate revenue. CS teams should think similarly.
Likewise, waiting until there is a serious problem seems like a uniquely-CS backwards mentality. If you went to a doctor with an ache and they told you to start treating it now before it becomes a serious pain, no one in their right mind would say "no thanks, i'd like to wait until i'm in pain to fix it." By then, it'll be a much more challenging and potentially unsolvable issue.
Ultimately, the longer you wait, the greater the pain will become and the more sunk cost you'll have invested in training and developing a system that ultimately you know won't last, and the harder it will be to rip that out.
Out with the old, in with the new [CS paradigm]. Both these concerns were more legitimate in a time where the only game in town was Gainsight and other enterprise-focused CS platforms - platforms where your minimum investment was already unaffordable both in terms of time and money, and where implementation and training before anyone set foot into the platform could take many months.
Fortunately, that time is past, and increases to be less relevant with each passing day.
Newer customer success platforms like Vitally - and admittedly even many besides our own - have dramatically changed the internal resource burden required to all-in-one your customer success processes and immediately start seeing results.
When it comes to Vitally in particular, our specific goal at the outset was to build a CS platform that wasn't "too early" for any team size and which could be bought, implemented, trained on, and used within just days. In fact, the majority of our customer base today are still teams below 100 employees - teams that in the past would have never considered a CS tool.
Now that those teams have a platform, not only do they worse-case simply have a more efficient workflow, but they also have a base which further investment in compounds upon itself. Vitally can be the place they run CS forever. And as their processes change, adapt, and improve, it's easy for them to make those changes without cross-functional support and resourcing, helping other teams save time as well.
Whether it be Vitally or another platform, if you want to up-level your customer success team and make your customers more successful, more happy, and more valuable, consider exploring what options you have. You may be pleasantly surprised and find yourself a hero for bringing powerful change to your own team.
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