Tips for aligning CS and Sales, whether CSMs should be product experts, the important math of CS

At a high level, the journey from prospect to customer seems very straightforward: start in marketing as a lead, get handed off to Sales once qualified as a good prospect and finally arrive in Customer Success to be onboarded and made successful. But what happens when there is little communication – and even less alignment – between these departments? As many companies have discovered, the impact can be profound; customer happiness suffers, churn rates increase, referrals get harder to come by and sales struggle.

So how to do you avoid this pitfall? As this thoughtful post by The DocSend Blog points out, the secret to success is aligning everyone’s interests.

But what does alignment really mean? It’s become a buzzword, something most companies strives for but that few truly understand. If you strip away all corporate associations, when people align it means “they have a common purpose they are all equally passionate about, which gives them reason (deeper than management alone could ever instill) to work together and achieve the goal that is line with with that purpose.” It’s this purpose, however, that can be the contention point between Sales and Customer Success. Because Sales teams are quota-driven, they will often do whatever is necessary to reach their numbers. This means that it falls to Customer Success to deal with the fallout of potential mis-fit customers, when they should be focused on suggesting products and expansions based on best fit.

Luckily, DocSend has a great idea: Use your Net Promoter Score as a rallying point. It is an ideal metric for rallying because “it’s a measurable statistic your actions directly affect, it’s tied to both Sales and Customer Sucess and it’s a metric that resonates with management and boards.”

DocSend also offers five benefits of aligning Sales and Customer Success, which are great points to have on hand when initiating alignment conversations and strategies at your own company. We recommend checking out the full read but here are the two benefits we believe are most powerful:

• More Upsells – Fact: Customer Success can be a significant driver of account expansion through upsells. RJ Metrics found that the most successful new companies in Shopify’s 2015 Ecommerce Growth Benchmark report all had one thing in common: 20% of their revenue came from repeat purchases in their very first month of business. By the end of their first three years, the majority of their revenue came from repeat buyers.
  • DocSend’s Tip: “Upsells don’t work as well if you try to use traditional account management or sales principles that aren’t grounded in your customer achieving their ideal outcomes. Anything that feels pushy, or like a hard sell, or remotely manipulative won’t just fail, it will undermine the customer’s trust in you, the Customer Success department and your company.”

• Higher Lifetime Value – Lifetime Value is a key metric for a business to track because it encompasses the entire value of a customer from the moment they sign on to the moment they leave. It includes every purchases they make with your business, from first time purchases to renewals and upsells to cross-sell and even the value of their referrals. And DocSend notes that “companies may even see their Customer Acquisition Cost (CAC) metric fall since referrals don’t require any additional marketing spend” (if you’re interested in learning more about CAC, we recommend this read).
  • DocSend’s Tip: “Start the ball rolling by reinforcing the successes they’ve experienced with your product. Work with Success  to agree on milestones in the customer journey that warrant acknowledgement. Celebrating successes serves as a reminder that they are, in fact, reaching their goals (and it’s fun).”

Interested in more on how to align Sales and Customer Success? We recommend check out this read, this read and this read.

Customer Success Around the Web

• To Mark the Spot with Benchmarking or Not? Benchmarking means that you’re making comparisons to competitors or to some standard or average in order to help you understand the relative perception of your business in the minds of your customers. When you benchmark, you’ve put a stake in the ground and have decided that that’s where you want to be as an organization. The problem is, what happens when the benchmark moves while your company remains exactly where it is relative to the benchmark? And even worse, are benchmarks hiding the fact that you don’t have a real strategy? How easy is it to get lost in chasing a number that may or may not be valid anymore? This read explores these and other important questions related to benchmarking and offers pointers for how to more effectively benchmark.

• The Math of Customer Success. This is a quote we for sure have all heard: “If you can’t measure it, you can’t manage it.” This quote is generally attributed to Peter Drucker (although apparently he didn’t actually say it) and has become a part of corporate lore. Regardless of its origin, it does apply to Customer Success. Many customer success leaders are comfortable with the people side of their role but are unsure of how to measure key metrics.  If that’s true for you or even if you just need to brush up on commonly used ratios, this practical post on customer success metrics is for you. The first in a series, this post focuses on basic metrics, covering how to measure the performance of customer success, retention and engagement, as well as red flags.  A great guide to the top line metrics that every customer success team should consider.

Word to the Wise

This week’s wisdom comes from from an inspiring story about how BrightInfo used “radical transparency” to slash their churn rate by 89%. Recently, leadership at BrightInfo performed research that revealed that while many customers loved their product, many were under the false impression that the product was delivering diminishing value over time. So their CEO, Boaz Grinvald, and his team decided to do something extreme in turn: they injected “radical transparency” into their product. They wanted to make sure that the BrightInfo experience would be infused with irrefutable evidence that it was driving ROI. According to Grinvald, many companies – including his own at one point – fail to get the balance of key value elements right when trying to combat churn:

“When looking to curb churn, it all comes down to the delicate balancing act of the three value elements that resonate with customers: product, user experience and level of service. The problem starts when you need to prioritize resources: for example, when releasing a new feature that a major customer is requesting. You make sure it works perfectly, you pay attention to the usability and you communicate the value this feature brings to your services and accounts team. That’s how you minimize the gap between true and perceived value, or better yet, increase the perceived value. For us specifically, we lost sight of the gap between perceived value and value delivered. When we realized our customers were under the impression that we deliver less value than we actually do, we rolled out the ongoing A/B testing as a constant proof of value.”