Adam O'Donnell, co-founder and president of Successly Live, joins Helping Sell Radio to share what he learned from interviewing more than 200 customer success leaders. Adam and his team discovered some surprising insights about how many teams are using CS platforms (hint: it's way less than you probably think), the maturity of the CS industry, the most common reasons CS initiatives fail, and more.
Actually, Adam told us, he interviewed 280 customer success professionals.
Why did he do it, you might ask?
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Among the many reasons, he took on this project because in the previous three companies he has founded, success came down to retaining customers.
"Sales used to be a heroic act," Adam said. "The focus on any business, new businesses in particular, is sales that drives new customers. But in a SaaS world, it is easy for customers to trial competing products, which means your customers can simply "drift away ... their habits change." Adam explains, "We have got to stay in front of customers and keep them excited or we're not going to have a business."
So, this research project was inspired by a need to understand what the best customer success organizations need to help grow the business.
Customer success maturity is low
After 280 interviews, one over arching theme stands out to Adam, and that is how immature the customer success industry is. By immature Adam means that the industry is just getting started and that there is an enormous opportunity for companies to realize big returns by improving customer success operations.
Evidence of this immaturity is that Adam sees a lot of companies just trying to improve NPS and calling that customers success, or just doing traditional account management and calling that customer success, or focusing on churn and calling that customer success. Those things by themselves are not customer success. They are just programs.
One of the best stories Adam has that vividly expresses this so-called immaturity is from a VP of customer success who told Adam:
"The worst part of my job is following the VP of sales in any meeting with our CEO because the VP of sales says, 'If you give me $1 million, I will give you $5 million.' I then proceed to tell our CEO, 'We're working on retention, and we're working on expansion,' which of course is embarrassing."
Naturally, we asked Adam what companies with mature customer success functions do that others do not?
What the mature do
Mature companies have two things in common.
First, there is total CEO buy-in.
"To be mature. It has to be an initiative from the CEO," says Adam. "She has to be completely bought in and trust the VP of customer success whole heartedly. "
Second, there is a focus on net expansion.
"Companies focused on churn are taking a short-term view. If you are focused on churn, you are not understanding the big picture." Adam explains, "Focusing too much on churn will put to much attention and resources on retaining customers who perhaps should not be your customers."
That is a waste of time.
A net expansion mindset steers a teams attention and resources to maximizing relationship, which includes growing existing customers and adding new customers mostly likely to become better customers over time.
A net expansion mindset is a growth mindset.
Follow Successly Live
Adam found that these interviews were so good, he started sharing them. In fact, he turn it into a show. To watch these interviews, go to the Successly Live website.
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