Everyone in SaaS is battoning down the hatches and preparing for an economic storm. But now is the time to set yourself up for smooth sailing once we reach calmer waters.
The technology industry, specifically SaaS, is in a tricky position, but the companies that emerge stronger after the downturn will be the ones that take initiative now and preemptively prepare. Ready to learn how?
To help you prepare for the mindset shift and future financial uncertainties, Gainsight published a new ebook, The Essential Guide to Budgeting for Customer Success and Durable Growth. Here are our top three secrets from the ebook.
1. Position Customer Success (CS) as an Efficient Growth Engine
Business author, speaker, and advisor Geoffrey Moore said, “B2B tech actually has the opportunity to thrive in a downturn if it focuses on solving urgent problems that have a short time to pay back.” Gainsight CEO Nick Mehta echoed this in a recent WSJ Business article, The Best Indicator of SaaS Success? Durable Growth. Mehta stated that the SaaS mindset has shifted to accommodate the expected financial downturn. He said, “A change in market multiples shows that the ‘efficient growth’ mindset has displaced the ‘growth at all costs mindset.” And that is where you need to be.
Gone are the days of indiscriminate spending chasing new logo. While it’s important to bring in new customers, SaaS experts suggest that businesses need to compensate for forthcoming economic “lean times” by focusing on increasing customer retention and expansion, which is the prime responsibility of the Customer Success organization.
But how do you convince your Chief Financial Officer (CFO) and the rest of the C-suite to be more inclined to invest in customer retention by investing in CS? Start by telling them it will cost your company more than double to acquire new customers (CAC) versus generating additional revenue from existing customers, according to a recent KeyBanc study.
Bottom line: Who finds revenue opportunities in your install base? Customer Success teams.
2. Articulate How CS Team Goals Directly Impact Revenue
In today’s market, it’s critical to prevent customer churn and lower customer acquisition costs (CAC). But that’s not all Customer Success does.
CS plays a huge role in adoption and guiding customers along their journey with your company.
They help customers find value in your product, become successful, attain their goals, and meet their expectations, while keeping them satisfied. Increasingly, they also manage digital customer success efforts: scaling your digital, automated, and self-service endeavors. Lastly, there is the responsibility of driving outcomes and improving cross-sells by generating qualified leads from your install base. Who better to lead in these efforts than Customer Success teams?
The truth is that CS is essential for your business, especially to hit your goals for the next year or two. This guide will help you armor up to step into any meeting and justify CS budgetary spending and prove its value and ROI.
3. Move From a Reactive to a Proactive Stance
There has been a long-standing understanding in customer success that to be effective in retaining customers CS should move from a reactive to a proactive motion. Unfortunately, right now, you can no longer wait for customer retention to happen organically through basic CS motions. You must pursue it and prevent attrition of your customers by planning your budget for the future. Never has there been a more imminent time to do this.
Gainsight’s new guide will demonstrate how to use the evidence found in data to get CFOs to agree to CS budgetary proposals for new team members and initiatives. Remember to prepare to answer this question from your C-Suite: “How can this help me right now in terms of retaining revenue or cost?”
As Nick Mehta, CEO of Gainsight, recently stated, if you aren’t securing funding for CS, you may not be making the right pitch. CS is well-positioned to become an efficient revenue driver during lean times, but CS leaders need to make a data-driven case for the new hires and technology they need.