Insights from Pulse 2022: CS Is the Foundation of Sustainable Growth
Durability is top of mind for organizations in 2022. Over the last several years, we have endured a pandemic, a significant transition in our daily lives, and growing uncertainty in the economy. How can we foster resilience and help create an unstoppable organization that comes out ahead?
At Pulse 2022, the common theme from keynotes to breakouts was “a durable business is an unstoppable one.” The conversations and sessions at Pulse made it clear that Customer Success is key to sustainability and growth for SaaS organizations. With the needs of customers increasing at the same time that budgets are being scrutinized, a golden opportunity emerges for companies to lean into Customer Success as a competitive advantage.
Below, we’ll outline some key trends from our time at Pulse that, if adopted, can enable resilient growth for your organization, across a diverse set of challenges.
Your starting lineup includes Customer Success
Across all segments and industries, it’s clear that customer success is critical to enabling, sustaining, and growing revenue. Recently, Gainsight polled investors to see where they recommend companies decrease spending given the uncertain economic climate.
The most prominent recommendation (at 68%) was to decrease spending in marketing, followed by sales, R&D, and finally, CS, where only a mere 14% suggested cuts. In another study, Gainsight found that 84% of investors and 82% of CEOs said they will be investing in customer success this year.
Why? Net Revenue Retention (NRR) is highly correlated with company value, and customer success is best positioned to drive outcomes directly tied to this key metric.
A shift to play more offense
Another major trend is the evolution of the CS function playing more offense in addition to defending existing revenue. In Stephen Fulkerson’s TSIA presentation, he noted that their data set showed 61% of companies have customer success organizations that drive expansion in 2022; in 2015, that was only 10%.
With the responsibilities of Customer Success evolving from adoption and retention to include net-new revenue, this will enable organizations to be both responsive and resilient. In addition to the data shared by TSIA, here are a few ways we are seeing teams shift their approach to expansion revenue:
- Customer Success owning shorter, transactional sales cycles
- Account Managers focus on expansion while Account Executives focus on net new sales
- Strategic price uplifting, up-selling from more usage, and cross-selling with new offerings
Community-led growth is the new star player
We couldn’t keep count of the times we heard community come up at Pulse! The research from our own ScaleUp Guide to Community-Led Growth found that interest in this area is accelerating. The majority of companies have already secured budget for community, representing almost 9% of marketing spend. While only 25% have established communities to date, over 50% of companies plan to test this next year. Pulse further validated these findings across sessions: Building out a robust community is a primary lever to drive sustainable growth. Many scaling organizations have found success with active community members disseminating best practices, contributing to documentation, and even providing support to other members. If you’re getting started building a community, we recommend incorporating these four components:
- Invest in a dedicated community manager for focus — it can’t be somebody’s side hustle.
- Start with your current customers, they are your biggest fans and can add value quickly.
- Focus on end users — the practitioners. Economic buyers are generally better suited for a CAB.
- Align with broader knowledge gaps to attract users who are in the market for solutions that your product aims to solve.
One team, one goal
To drive resilient growth, organizations must apply a customer-centric approach, break down silos, and be unified towards a shared goal. This can be Net Revenue Retention (NRR), Gross Revenue Retention (GRR), Logo Retention, or what makes the most sense for your business. In every scenario, Customer Success is the engine that powers the organization with consistent customer data and feedback. In practice:
- Marketing, in addition to lead generation, provides the infrastructure and air cover to support key touchpoints in the post-sales lifecycle — generating new opportunities and growing existing business.
- Sales extends beyond winning the deal; they build multi-threaded relationships and nurture customers with the highest Lifetime Value (LTV) profiles.
- Product’s remit expands outside of new feature releases. The customer experience with any product provides opportunities for expansion and informs the likelihood of retention.
By keeping these insights at the forefront of the organization, you've aligned the organization for growth.
The playbook is designed to bring customer value
Customers aren’t buying a product; they are buying a solution to a problem. By focusing on the use cases and narratives over product features, you can focus on the experience and perceived value to actively diagnose where value may be trapped. In a session on Prioritizing Insights, Matthew Wasley from Autodesk introduced the desired path to revenue. While users of the product may stray from the designed path, data can be used to construct a guided journey that nudges users back onto it. Across sessions, we saw that companies were increasing investments in digital-first and augmenting with human touchpoints as needed:
- Telemetry for usage data to drive in-product tips, automated customer emails, or calculating customer health
- Investing in self-service support capabilities (e.g., knowledgebase)
- Time-based email cadences as a starting point
CS Ops is on the rise
A variety of sessions at Pulse were devoted to CS Ops, from building your team to doubling down on data to drive decision-making, and more. It’s clear this function is more critical than ever before. To be successful with CS Ops, there needs to be an owner for every stage: strategy, planning, management, and execution. What are the primary focus areas now? Though there are a variety of responsibilities, health metrics, revenue (both gain and loss), renewals, and operational adherence seemed to be common. Regardless of the stages of maturity of CS Ops, we heard across the board that change management is critical for success, with processes being reinforced across customer success teams.
The final score
If there is anything we’ve learned from the challenges we’ve faced over the last few years, it is that we cannot predict what will come next. Responsive and resilient teams are powerful forces for an organization’s ability to navigate uncertainty. We are excited to see how these key insights and approaches will help enable growth with customer success as the driving force. To learn more about driving resilient growth, be sure to check out our session “An Investor’s Perspective on Game Changers for Sustainable Growth” in the Gainsight Pulse Library.