Our customers love us is a truth that will stall growth in SaaS.

There is a lot of press these days on the demise of Customer Success as a function within SaaS companies.

My view has always been as an advocate of CS as I believe that “happy customers” can churn — “successful customers” don’t.

I remember the first Customer Success team that I created. It was 2009 and CS was a rare and misunderstood function in business (I think it is still misunderstood but no longer rare). I was the newly hired CMO at a company that was struggling with its business model — was it a vertical SaaS, online media, services company, did it sell to enterprise or SMB, etc.? I know that didn’t matter to our customers, what they wanted was to achieve the success with our product that they envisioned and were promised during the sales process.

Support ≠ Customer Success

We had a Support team. The people on this team had built careers in what I would call service support not technical support. They were reactionary. They answered the phone or email and managed questions that customers had… mostly about logging in, passwords not working, new user registration, etc.

I knew that our customers didn’t know the questions to even ask this team when it came to how to use the software more effectively or efficiently. I also knew that customers who are not regular users, either because they don’t know how to use it or haven’t incorporated it into their daily activity or both, will not see the value in the solution and will eventually churn. Not because they didn’t like our Support team but rather because they would not be able to defend the expenditure on the product to their business leaders.

It was a problem.

Saves ≠ New Sales

Another issue with the way we were managing customer interaction was when a customer canceled. The support team had not been trained on “saves”, so they would accept the cancellation, process it and then send a note to a sales rep of the cancellation. Not only were we unnecessarily losing customers but the reps were saving a certain percentage and were being paid on these “saves” like they were a new win. Some of them counted on these cancellations to make quota each month. Not a great outcome all around.

Happiness ≠ Success

It is possible for customers to love you and still churn. More times than not both can happen at the same time.

Most customer’s churn because they believe the product does not fit their needs. This can happen for a host of reasons but fundamentally you no longer have strong Market <> Product fit with that customer. They still like you… they just don’t need you.

Successful Customers = Growth

Now, as I mentioned in the opening of this article, I was head of Marketing and the Support team was not part of my domain, they reported to the Head of Operations. So, why did I care? Because I knew that the only way to hit our numbers of customer growth was to stem the tide of cancellations.

I also knew that the primary driver of new customer acquisition is having successful customers. I remember Geoff Moore saying “People buy when they think people like them use your solution.” As a vertical market software provider, our success was dependent on how hoteliers talked about us to each other. We needed our customers to tell other hoteliers that our product eliminated the pain caused by certain problems. In other words, they had found success with our solution. This network effect was important to growth.

I’ve always believed the purpose of CS is to make customers successful with your solution and keep them that way. It is not to expand revenue, upsell or manage support tickets. There is value in successful customers and so long as CS is keeping them successful there is a role for the function in a SaaS business.

So, as we debate the future of CS, keep in mind that the primary driver of sustained revenue is successful customers. The more success your customers achieve from using your solution the greater that lever of your flywheel will contribute to growth.

Thanks for reading. I’m John McAuliffe and I help companies accelerate growth more consistently and with greater predictability.

I am a learner. I find myself constantly reading on a variety of topics with an insatiable appetite for continuous learning. My thoughts on business have been influenced by many. You may feel a bit of déjà vu in reading some of my thoughts because of this. When it comes to strategy and business management systems I follow the likes of Jim Collins, Roger Martin, Gino Wickman, Verne Harnish amongst others. On consumer insights, marketing and sales I am influenced by the likes of Adele Revella, John McMahon, Geoffrey Moore and many others. Thanks for reading.