Whether you’re a parent, a pet parent, or the founder of a business, you know there’s nothing more satisfying than watching someone or something you love grow into maturity.
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Which is why here at Gainsight, we are delighted to announce the findings of the Customer Success Index EMEA 2023. Based on the results of our latest survey of European companies, it is clear that the field of Customer Success (CS) is all grown up—and strategic.
That’s right: CS is past its immature, reactive, “firefighting” era. CS is now a revenue engine for the organization. This inflection point couldn’t have come at a more opportune time, as a challenging economy has forced SaaS companies to focus on maintaining and growing revenue from existing customers through retention and expansion. To execute that strategy, a proactive, nimble, and strategic CS team is a must.
That’s the high-level story, but there’s a lot of nuance and depth in the final report. Let’s dig into the findings and see what it all means.
Customer Success Has Matured into a Growth Engine
A whopping 98% of companies in our survey are maintaining or increasing their investment in CS and that doesn’t just include hiring Customer Success Managers (CSMs). CS Operations are becoming more important and more common in companies with 20+ CSMs. CS Operations is growing because it drives efficiency and squeezes more ROI from the CS organisation.
The Responsibilities of CS Teams Are Expanding
As in previous reports, CS is responsible for reducing churn, achieving customer outcomes, increasing product adoption, and identifying expansion opportunities. Expansion is becoming more and more a part of a CSM’s primary responsibilities, as they have the insight into whether an account is ready for an upsell or another product suite. It also highlights how CS is now driving growth and shifting away from Customer Support—down to 36% in this year’s report—showing that manual tasks are increasingly automated. This means CSMs are freed up to focus on more strategic conversations.
CS Metrics Are Also Maturing
As CS matures, the way that results are measured is becoming more sophisticated. Logo retention (66%), Net Revenue Retention (NRR) (53%), and Expansion Revenue (53%) are the three most commonly used metrics. This makes sense, because these metrics reflect the desired goal of companies to generate more revenue from existing customers.
Net Promoter Score (NPS) Is the #1 Non-revenue Metric
NPS is the number one non-revenue measure of CS organizations in Europe (64%). But while NPS is popular, the use cases vary quite a bit. Some CS organizations use NPS as an early signal of risk or opportunity. Others use this sentiment measure to drive advocacy by guiding promoters to leave a review, provide a case study, or be a reference. The key is to remember that NPS is primarily a measure of customer experience, rather than customer outcome.
For SaaS companies, existing customers are becoming the primary driver of revenue growth. They are much more likely to buy, and they buy much more quickly than a prospect, because they already have a relationship with the company. As this year’s Customer Success Index EMEA has shown, companies in Europe have adjusted to this dynamic and are shifting the role of their CS organizations accordingly.
At many companies, CS started out in a defensive, firefighting position, focused on customer support. But as the discipline has matured, and the business landscape for SaaS has changed, an immature CS function is no longer sufficient. Retention and expansion are the new charters for Customer Success.
CSMs and other Customer Success professionals are taking on a strategic, leadership role within their companies, as evidenced by the increase in investment, the expansion of their responsibilities, and the importance of more revenue-centric metrics. Customer Success is ready to take a seat at the adult’s table, and we couldn’t be more ready.
Want More Findings?
Register today for From Reactive to Proactive: Findings From the 2023 EMEA Customer Success Index Report, a conversation with Remco de Vries, Global VP of Gainsight and Ray Rike, Founder of Benchmarkit as they discuss key findings.