The Customer Success Economy

Why Every Aspect of Your Business Model Needs A Paradigm Shift

Nick Mehta, Allison Pickens

• Publisher: Wiley
• Year: 2020
• Print ISBN: 9781119572763
• eBook ISBN: 9781119572732
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

If leaders aren't integrating their digital offerings into a philosophy of Customer Success, they will be defeated in the next decade, because technical excellence and other traditional competitive advantages are becoming too easy to imitate.

The Customer Success Economy offers examples and specifics of how companies can transform. It addresses the pains of transforming organizational charts, leadership roles, responsibilities, and strategies so the whole company works together in total service to the customer.

• Shows leaders how their digital implementations will make them more Amazon-like
• Helps you deliver recurring revenue
• Shows you how to embrace customer retention
• Demonstrates the importance of "churning" less

Get that competitive advantage in the most relevant and important arena today—making and cultivating happy customers.

PART I
Why Customer Success Became Standard

1
Customer Success: What It Is and Why It Affects Everything

When you are finished changing, you are finished.

—Benjamin Franklin

What really matters in business? Every day we receive hundreds of emails, calls, and meeting invitations; knowing what's important can be a challenge. And every 24 hours, the world around us changes in infinite ways. Dissecting the most important trends can be hard. If you're like us, picking out the signal from the noise is a huge chunk of the job of leading a business. And it can be overwhelming.

That quest for what matters most in business brought both of us to the field of Customer Success, from different starting points. We'll each tell the story of how a discovery of Customer Success pushed our own thinking on what mattered in business. And we think these stories will resonate with you. Let's start with Nick.

Making and Selling Aren't the Only Things That Matter Anymore, Dad

When I was 8 years old, I vividly remember a “take your child to work day” with my entrepreneur dad. The thing I recall best from that event is him saying, “Nick, there are just two jobs that matter in business: the jobs of the people who make the stuff you sell and the jobs of the people who sell the stuff you make; everything else is overhead.”

As oversimplified as that may sound, my dad was accurately describing the business model of pretty much every major corporation from 1900 to 2000. Making stuff and selling stuff drove the global economy. The sale was a one-time activity, and anything “post-sale” was a cost to the company (customer service centers, repair people dealing with broken machines, fleets of company vehicles, etc.). My dad's advice fared well for me in my early career as a leader in enterprise software.

Then in 2008, during the depth of the financial crisis, I was hired to run a company where we sold our software “as a service” (SaaS). I was finally in the cloud! I remember my first day meeting the employees and recalling my dad's advice. I wanted to immediately talk to the leaders of Sales and Engineering, the people who “sold stuff” and “made stuff.”

I also met Steve, the person responsible for making sure our existing customers were successful. I thought to myself at the time, “Great. Steve's got that covered so I don't have to worry about it.”

But what I learned over the four years of running that company was that the SaaS business model had fundamentally shifted power to our customers. They weren't “buying” stuff anymore, they were renting it. This changed the way I needed to operate as a CEO. Making and selling still mattered a lot. But our customers now had the “power of the purse.” If they weren't satisfied, they could leave us at any time. As the CEO of this customer-powered company, I ended up spending way more time with Steve than I did with his counterparts in Sales and Engineering.

And that shift that I observed toward customer-centricity is why I was excited to join Gainsight and help launch the company in 2013, with our mission being to enable businesses to embrace Customer Success as the leading strategic differentiator of the next phase of the economy. And if you follow me online, you know I am fired up about the Customer Success movement!

But, that's not just my story and my irrational enthusiasm. That's an industry story—actually, that's the entire economy's story. Up until now, the history of business can be condensed down to two phases: the making stuff phase (starting with the industrial revolution), followed by the selling stuff phase (the Internet has pushed this last phase by making it possible to market your stuff globally, instantly, constantly). Now we've moved into a third phase. We still need to make and sell, but that's not enough. Our customers in the modern economy are looking for success—for their goals to be achieved—not just for “stuff” to be purchased.

And if you're reading this, it's probably your story, too. You may be dealing with “vendors” that don't seem to have a clue about what you really want. You might be running a sales organization and realizing that the end-of-quarter heroics can't go on much longer. You may be in the Customer Success profession and trying to get your company to wake up to the movement.

But no matter who you are, you probably cringe at the tools and systems you use at work, only to hop into an Uber or Lyft and be magically whisked wherever you want once you step outside of the office.

In short, we all know the story needs to change.

The Business of Business Is Helping People

Here's how Allison found herself at the dawn of the Customer Success movement, which fundamentally changed her outlook on business.

When I was in college, I spent much of my day poring over ancient philosophical texts, searching for the secrets of “the good life” and for the pillars of a healthy society. Like my peers, I hoped to do good in the world in some way. When an internship on Capitol Hill proved to be more about mailing form responses to constituents—leveraging a mechanical contraption to replicate my Senator's signature—than creating innovation, I realized that my eagerness to build things that helped people might be better suited at that point for the private sector.

Two subsequent jobs in management consulting and private equity investing offered an incredible bootcamp in business knowledge and membership in a community of talented, inspiring people. But something nagged at me. How could I translate the skills I was learning into the positive societal impact that motivated me at my core? In an attempt to get back to my roots of trying to “do good,” I recruited a friend to help build a tech product with the aspiration of helping industrial workers—often underdogs in our economy—showcase their skills to get jobs more easily. But the market wasn't ripe. I was back to the drawing board and told myself I was too naive to think that business could be anything but that—business.

Soon after, I met Nick after my old investment firm led an early funding round, when Gainsight had about 30 customers in a new market called Customer Success. As I learned about the industry, I soon realized that this was a new group of underdogs. Here was a fledgling community of people—many of them women—who knew they had greater value than their companies and investors recognized. Tectonic shifts in the market were in their favor. They just needed some support.

I soon joined their ranks as I took on the Customer Success team at Gainsight. We incubated ideas for how to make our own customers successful and shared the results of our experiments—the good and the bad—with the CS community in hundreds of blog posts and podcasts. (In one experiment, we accidentally sent a “welcome email” to all of our clients, even the tenured ones. Whoops.) We also learned a great deal from our clients and other friends in the field, who conducted their own experiments and gave feedback on our ideas as well.

The biggest learning—to my happy surprise—was that doing good didn't have to be at odds with building a great business. In fact, it could be a differentiator. Genuinely helping your clients propels stronger revenue growth, market leadership, profitability, consistency, employee retention, and valuation multiples—as we witnessed across the Customer Success community. Now the underdogs (CS professionals) were helping other historical underdogs (clients) and generating incredible business results.

So back to the question: What really matters in business? Doing good for the human beings who are your clients.

That might sound soft. But actually, it's the hard reality ...

Table of contents

• Cover
• Table of Contents
• Foreword
• PART I: Why Customer Success Became Standard
• PART II: Baking Customer Success Into Every Aspect of Your Business Model
• PART III: Implementation Issues
• Notes
• Acknowledgments
• About the Authors
• Index
• End User License Agreement