3 Focus Areas for Customer Success Leaders in 2023
By Kristen Hayer
Happy New Year! Welcome to 2023.
Unfortunately, it looks like at least the first part of the year is going to continue the trend of an uncertain global economy and companies concentrating on staying lean to prevent major financial issues down the road. In Q4 of 2022, we saw many CS teams cut substantially or moved into their company’s sales organization. We also saw many CS leaders being asked to cut their budgets for tools, headcount, and employee enablement.
Overlayed on this uncertain economic landscape is the human side of things. According to the United Nations, since COVID first hit there has been a 25% global increase in mental health diagnoses, which is likely understated since there is still a stigma around seeking support for mental health issues in many cultures. This is having an impact on job satisfaction, and while there are reports that the “quiet quitting” trend is over, employees are continuing to set limits at work in order to support their own mental health. This is throwing off old staffing models and forcing companies to shift their thinking on how to build an engaged team.
With all this uncertainty and change, it can be tough for CS leaders to know where to focus in 2023. Here are my top 3 suggestions:
Proving the ROI of Customer Success
While the best customer success teams are excellent at demonstrating the ROI of their company and offerings to customers, CS leaders often forget they also need to continually demonstrate the ROI of their team to their own company. While customer success has been around for a while now, I still run across many executives (CEOs, CFOs, CROs) who are unclear about the purpose and value of a customer success program. Often these leaders equate customer success with support and think of it as a cost center rather than a value producer. When a company is making cuts, which are they going to cut first? A cost center, or a value producing team? The cost center, of course. To secure your program so that you can continue to provide value to your customers, you need to demonstrate that customer success provides value to the company. How do you go about doing this? Here are 3 suggestions:
Interview your company’s senior leaders. I have always found this really enlightening for both parties and it helps to reinforce the value your program brings to the company. Ask questions like: How do you see the role of customer success? What value do you think we bring to the table? What are things you wish you saw from our team that you aren’t seeing today? Their answers will give you a baseline understanding of where you have relationship-building work to do.
Develop a CS elevator pitch. Teach it to everyone on your team. Any time someone from outside of your team asks what is going on in CS, they should give the elevator pitch. This will ensure everyone on the team is sharing the value of CS across the company and will support your efforts at the executive level. I wrote another article on how to write an elevator pitch that outlines the process.
Track value in any way your team creates it. Not every CS program directly drives revenue. However, every CS program indirectly drives revenue. Are you handling renewals and closing those deals? That is money you are directly driving for the company. Are you handing off potential leads to your sales team to close? You are indirectly driving the revenue of the deals they close. Are you creating references? When the sales team closes a deal using your referenceable customers, your team helped to drive that revenue. Count all of it and share it with the rest of your leadership team. It is OK for you to claim credit for the revenue you are helping to drive, even if it makes the sales leader uncomfortable.
Building a Lean CS Program
Don’t forget that the “I” in ROI represents the investment the company made in your team. This is the cost of your team. In both good times and bad, smart CS leaders keep their CS programs lean. This means keeping staffing levels aligned with your segments and customer journey, making sure you don’t overbuy on technology, and continually looking for ways to automate parts of the customer experience. Here are 3 things you can do today to make sure your program is as lean as possible:
Look at the small technology your team is using (or not). As you grow your team and get ideas for tools that would help them with their work, it is easy to end up with a bunch of smaller tools that half the team isn’t really using. Do an audit on the little subscription products your team has (think Calendly, Canva, Miro) and figure out which ones are actually being used. Cancel subscriptions for the rest of the tools. This can potentially save you hundreds or thousands of dollars a month.
Automate easy parts of the customer journey. The book, The Effortless Experience, makes the point that customers aren’t always looking for a high-touch experience and would be happier with a self-service approach. While that may not be true for all your customers, look for segments where you could automate pieces of the journey. Do you have your CSMs call your customers to schedule an introduction call? An email with a calendar link could save a bunch of back and forth. When it is time for a contract to renew, do you have the CSM reach out to go over the agreement? Could that be an email instead? Any time you can automate part of the journey, you free up CSM time to focus on additional customers and reduce your headcount needs.
Evaluate your CSM/Customer ratios. This ratio should be different for every segment of your customer base, but those segments can shift over time. At least annually, revisit your ratios to make sure that the changes in your customer base align with the number of customers you assign to each CSM. As you automate different segments of your base, you should be able to add customers to the CSMs. Even if you’re only adding a few extra customers, that can reduce your hiring needs.
Team Mental Health and Self Care
When you keep your team lean, you need to balance that with a focus on the mental health and wellbeing of your team members. High levels of turnover will increase your costs – the opposite of what you need in a year like 2023. Quiet quitting will also hurt your team, and it buries the real issue of low engagement. What does it take to create an engaged team that feels supported by your company? One of my favorite books on this topic is called The 12 Elements of Great Managing. It is a well-researched book about what it takes to create employee engagement. While some of the concepts may seem obvious, I see a lot of companies and CS teams failing at the basics. Now is the time to make sure you are providing your team with the support they need, and if you aren’t getting that support from your company, you need to deliver it yourself. Here are 3 ideas:
Don’t skip management basics. You get busy as a CS leader, and it can be easy to push off a one-on-one meeting or skip a coaching call. Don’t forget that the most important part of your job as the leader of your team is spending time leading them. In his book The Effective Manager, Mark Horstman talks about the 4 pillars of being an excellent manager: weekly one-on-one meetings, regular discussion about goals and performance, active coaching, and delegation. This book is worth a read if you haven’t implemented some or all of these pillars.
Consider alternative working days or hours. Studies have shown that 4-day work weeks or 6-hour workdays are often more productive than the traditional 40 hour week. By providing extra personal time during the week, you could potentially end up with a more engaged team. Of course, there would need to be some guidelines and checkpoints around the actual time spent working, but those logistics are worth it for a team that feels like they have the time they need to support their mental health.
Take time for self-care. You may think, “I don’t have time for self-care. I am running around like crazy to prove the value of my team, cut costs, and keep everyone engaged. How would I find time in my schedule for this?” Well, you’re also a human so all the mental health articles I shared earlier also apply to you. If you are tired, sick, or burned out, you won’t be as creative, you won’t be as available, and you won’t be able to lead effectively. It doesn’t have to be anything big. A 15-minute walk to get away from your desk or 20 minutes of stretching might be just what you need to recharge. A glass of water never hurts. Whatever it is, scheduling it on your calendar will help you remember to actually do it.
These are the areas I would recommend CS leaders focus on this year. I have high hopes that this year will be great, and that some of the issues we are facing early in the year resolve in the next quarter or two. In the meantime, it is smart for us to focus on ROI, keeping our programs lean, and prioritizing mental health for ourselves and our teams. Best of luck to you all in 2023!
The Success League is now offering a CS Leadership training, helping leaders guide their teams to face the recession and win. For our full list of offerings, please visit TheSuccessLeague.io
Kristen Hayer - Kristen founded The Success League in 2015 and currently serves as the company's CEO. Over the past 25 years Kristen has been a success, sales, and marketing executive, primarily working with growth-stage tech companies, and leading several award-winning customer success teams. She has written over 100 articles on customer success, and is the host of 3 podcasts about the field: Innovations in Leadership, CS Essentials with Gainsight, and Reading for Success. Kristen serves on the boards of the Customer Success Leadership Network, the Customer Success program at the University of San Francisco, and the Women in Leadership Program at UC Santa Barbara. She received her MBA from the University of Washington in Seattle, and now lives in San Francisco.
