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.
If your company has goals around building a more customer-centric culture and product roadmap, improving the customer experience, and reducing churn and increasing retention, then hiring a Chief Customer Officer may be a natural next step.
Chief Customer Officer, Chief Customer Success Officer, Chief Experience Officer—no matter which way you spin it, the role’s rise in popularity, especially in the world of B2B SaaS, is undeniable. In fact, 10% of Fortune 500 companies and 22% of Fortune 100 companies now include the role in their business. But why? And does your organization need to consider hiring one? Well, that depends on a handful of factors and the answer to one question—is the Customer Experience a top priority at your organization? It’s not a trick question, but your answer is definitely a leading indicator of whether or not your organization is ready for a role dedicated to Customer Success in the C-Suite—this post should also help shed some light.
So, what is a Chief Customer Officer? In short, a CCO is an executive-level role dedicated to optimizing the customer experience and the processes associated with that experience. They oversee their organization’s relationship with its customers, driving efforts to evaluate and enhance the customer experience at every touchpoint throughout the customer journey. By doing so, CCOs bring the topic of customer experience front and center—at both the executive and board level.
Creating a customer-centric culture and driving top line revenue growth by way of existing customers are the primary goals of a CCO. In order to achieve these goals, the CCO needs to examine, analyze, and ultimately, improve every aspect of how an organization currently interacts with its customers, across all digital and physical channels. We can break these focuses down further:
Build an enhanced view of the customer: In order to unify how all employees view customers, a CCO should produce a complete picture of the customer by identifying their needs, expectations, and perceptions of their experiences with the company.
Identify gaps: Assess and identify gaps in the customer experience at every touchpoint throughout the customer journey. They should leverage this knowledge to develop data-driven solutions to close these gaps.
Lead customer-centric initiatives: Act as the executive stakeholder for the customer experience, leading a company’s customer-centric initiatives, and most importantly, enabling front-line employees to provide exceptional customer experiences.
Drive optimization and consistency: Help drive consistent customer experiences at scale across all channels—both digital and physical.
Get the rest of the organization on the same page: Level set the organization and close the delivery gap—how does the organization think they are doing in terms of the customer experience compared to actual customer sentiment. It’s also the CCOs’ responsibility to manage expectations around what the C-Suite wants and what is operationally possible on the front line.
Prove out the financial benefits: In order to prove out the financial benefits of investing in the customer experience, the CCO is ultimately responsible for top line growth within the existing customer base.
If your company has goals around building a more customer-centric culture and product roadmap, improving the customer experience, reducing churn and increasing retention, then hiring a Chief Customer Officer may be a natural next step. But before you post the job to your hiring board, keep reading to understand just how a CCO can help your organization achieve these goals.
A Chief Customer Officer will collaborate with departments across the organization, from sales to marketing to product, in order to build a customer-centric culture that shapes a higher quality product. An example of this is driving efforts for other teams to gather extensive insights and feedback from customers, leveraging tactics like surveying, to better understand customers and their experiences. In doing so, product and marketing teams alike can eliminate the guesswork around what current and future customers want, and use this data to make changes and improvements more efficiently. For product, this could mean reprioritizing the product roadmap. For marketing, this could mean putting customer stories at the center of their growth strategy.
It’s not just about creating world-class customer experiences, it’s about the ability to repeat those experiences at scale for every customer, every time. An impactful CCO will be able to spearhead efforts that aim to standardize the customer experience. An initiative that exemplifies this is playbooks. Creating best practice playbooks for every customer touchpoint throughout the customer lifecycle will drive brand value, and enable Customer Success Managers on the front line to deliver standardized experiences. It will also allow for continuous optimizations as your product evolves. Best-in-class CCOs and Customer Success teams can take this a step further by leveraging automation to maximize their team’s bandwidth and automate tedious and repetitive tasks.
Perhaps one of the biggest problems a CCO can solve is helping to prioritize the product roadmap. A successful product roadmap is one that prioritizes the needs of current and future customers—and there is no better way to obtain this information than from the customer themselves. A Chief Customer Officer can push a product organization to gather and analyze feedback from their existing customer base. Product teams can then leverage this data to make more efficient decisions about the product roadmap. The CCO will also be there to ensure that the roadmap is validated with actual customer data and feedback, therefore aligned with what customers actually want, as opposed to what product teams want, or rather, what they think the customer wants. Another sign of a great product roadmap is one that is structured enough to meet the goals of the business, and flexible enough to adapt as the needs and wants of customers inevitably evolve.
A company experiencing healthy, steady growth will likely have at least half of its revenue materialize from existing customers. Therefore, the ultimate value of having a role in the C-suite dedicated to Customer Success is being able to tie a significant portion of top line revenue growth to the Customer Success organization. That revenue growth will come in the form of:
Retention: Recurring revenue from existing customers (over a specified period of time)
Expansion Revenue: Revenue from up-sells, cross-sells, and referrals within your existing customer base.
Building a customer-centric culture, improving the customer experience, and shifting the product roadmap to prioritize the needs and wants of the customer are all initiatives that will help a CCO achieve their top priority—generate revenue from existing customers.
Is the customer experience a top priority at your organization?
Is generating revenue from existing customers a top priority?
A great Chief Customer Officer will not only get the most value possible from relationships with existing customers, they'll also be a driving force behind improving those relationships ten-fold by way of creating a customer-centric culture. As a company continues to grow, sustaining a customer-centric culture can be increasingly difficult without the reinforcement of a Chief Customer Officer—keeping the topic of the customer front and center, at both the executive and board level.
If, after reading this post, you think a Chief Customer Officer is justified at your organization check out our guide to setting a Chief Customer Officer up for success.
Schedule a personalized demo today.
We have received your request and will process it as soon as possible.