March 25, 2015
Subscription renewals are essential to the financial health of your cloud company. After landing the initial subscription sale, you must continue to be proactive in driving customer adoption to secure the renewal and minimize churn. To do this, many SaaS companies are investing in customer success organizations to ensure subscription renewals and create fertile ground for customer revenue expansion activities. TSIA has developed a step-by-step framework for cloud companies to use as a guide for establishing and driving customer success. Here’s a sampling of three of the key steps to help you get started down the right path.
While it’s no secret that subscription renewals are a top priority for virtually all customer success organizations, there are actually 3 primary charters that are emerging in cloud companies:
Each of these functions is vital to cloud company performance, but not all of them have to be managed solely by your customer success organization. Before you do anything, it’s crucial to start your customer success journey with a clear idea of your charter. Having clarity and organizational alignment around who will be responsible for these key activities will put your company on the path to success and will allow you to make smart decisions around how you fund, staff, and operationalize your customer success function.
Many customer success organizations lack a clear solution for funding their activities. After all, the staff, technology, and other key enablers of customer success can be a large, and therefore difficult, investment to justify to the executive staff.
TSIA believes that the ideal budget range for customer success organizations can range anywhere between 3 and 20% of total company revenues. To help you make the case for investment, TSIA has developed a model that ties these investments to your customer success charter and outlines the financial results they’ll help you produce for your company.
Once you’ve secured the funding for your customer success organization, the next step is to make sure you get the right team on board to support your charter. This not only means identifying the right skills required to ensure the success of your customer success efforts, but also researching the best talent pools from which you can pull your resources.
While there are many sources for locating skilled individuals, don’t discount the wealth of talent that already exists within your own company. Emerging customer success organizations are taking advantage of the skills and experience of their internal staff for filling customer success roles, including their customer support, professional services, sales and marketing, and product group teams.
While many savvy cloud companies know that developing customer success organizations can help them protect renewal revenues and drive revenue expansion activities, many of them are still unsure of how to begin. To help you get started, TSIA has identified 7 steps cloud companies can take to successfully establish a customer success capability which you can read about in our free guide, “Driving Customer Success at Scale.” Here is a slide-share of my presentation on this topic that I delivered at the recent Totango Customer Success Summit.
You can also watch my on-demand webinar where I will go over all of these same concepts in detail and answer questions about how customer success can help your SaaS organization thrive and grow.
Thomas Lah is executive director of TSIA. Since 1996, he has used his incisive analysis, strategic thinking, and creative solutions to help some of the world’s largest technology companies improve the efficiency of their daily operations. He has authored several books, including, Bridging the Services Chasm (2009), Consumption Economics (2011), B4B (2013), and Technology-as-a-Service Playbook: How to Grow a Profitable Subscription Business (2016).
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