ZIRP Survival Guide for Startups Part 2: Aligning Product and Customer Success

ZIRP Survival Guide for Startups Part 2: Aligning Product and Customer Success

In the first a part of my series, I wrote about the economics and business dynamics that have brought us to the point of commoditizing the market for SaaS firms. I didn’t write this series to speed up the panic spiral, so let’s focus on the positives.

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Product-led growth tactics i product virality have reduced customer acquisition costs for many firms. Overall, it’s positive that customers are in control. At the same time, in the pandemic era, software purchases have fallen by the wayside, often resulting in delusions of grandeur. Software expenses during this era exceeded the general inflation rate for 4x. Moreover, low-cost VC money inflated valuations and gave many emerging startups a false sense of each growth opportunity and security.

Bryan House, president of Elastic Path

As a results of this market frenzy, buyers ended up with a lot of software and began wondering: Is this what I would like? Do we use it at all? Does it produce any results and at what cost?

In other words, just because a customer bought your product doesn’t suggest they really “bought” it.

Fast forward to today. Most firms focus on profitable revenues slightly than growth. With the economy deteriorating, this revenue is not primarily coming from net recent logos, as buying recent stuff has been the exception for the past eight quarters. During this era, expansion and maintenance revenues became much more critical. Customers who truly buy into your solution and take the time to get to know you well are much less prone to churn. In the next two articles, I’ll focus on the most vital ways to build relationships from the very starting.

Deep connection between product and customer (and sales) success

I strongly consider that the product and the customer needs to be successful in the same team. Both product and customer success functions ultimately care about CX, or customer experience and value realization. Bringing each teams together around shared goals and customer service-focused incentives helps build higher products, nurture completely happy customers, and increase expansion revenues.

It is best if the customer relationship begins before the transaction is finalized. Sales team members should bring product and customer success experts into the process to know the prospect’s unique requirements and educate them on what true partnership can seem like. The sales process is a great opportunity to ascertain your organization as an extension of your customer’s team with a product that is designed (with their opinions in mind) to resolve their problems.

Once the deal is finalized, the most vital part is keeping the guarantees made during the sales process. Marketing agencies and system integrators are notorious for putting their best people on the field and then disappearing once they get the business. Don’t let your team operate this fashion. Experts are involved in sales to make the transition to onboarding and customer success even smoother. In addition:

  • The product should talk over with customers commonly (and I do not just mean the quarterly client advisory board). Customers should feel they are a part of the product development process, including regular roadmap updates, requirements gathering sessions for recent products, and product usability sessions. If your team responds to customer needs, the risk of customer departure will likely be much lower.
  • Customer success needs to be the driving force behind expansion revenues. Many firms treat expansion sales generated by the customer success team as one other source of leads for the sales team. In fact, customer success needs to be entirely driven by these relationships, so the focus needs to be on net retention, lifetime value, and product adoption. Customer success teams are on the front lines of the relationship and can most effectively communicate with the product team about what must be delivered to satisfy the customer.
  • A connected CX team should share a common goal of making customer value. The customer support team is responsible for the successful implementation of the product, in addition to for every turning point in the entire customer lifecycle – product consideration, implementation, product adoption, launch readiness and expansion. This dynamic works best when there is a leader who can assist the customer navigate each of those phases to successfully bring the product to market and beyond.

In the final article in this series, I’ll conclude with two additional ways to speculate in customer relationships to enhance revenue potential for expansion and retention.


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