How to Drive Growth with Customer Success Metrics
Aaron RossPredictable Revenue Jason Lemkin
Storm VenturesTomasz TunguzRedpoint Ventures
Brian StaffordMcKinsey
Aaron Ross
Author, Predictable Revenue
• #1 best-seller, called “The Sales Bible Of Silicon Valley”
• Created outbound sales machine @ Salesforce.com • Helped multiple clients break $100M in revenue• 4 kids + 4 more on the way
Lessons From $1B+: What Customer Success Isn‘t
• It’s not about customer satisfaction
• It’s not free help
• It’s not an afterthought
It‘s A Growth Driver On Par With Sales &
MarketingScalable LeadGen Drives Growth
1. Seeds = Customer Success2. Nets = Inbound Marketing3. Spears = Outbound Prospecting
Show, Don‘t Tell, How You Make Money
Example, @ Gild:1. Renewals2. Upsells3. “90 Day Adoption”4. Product roadmap feedback
Jason M. Lemkin Managing Director, Storm Ventures
• Managing Director, Storm Ventures -- $650m Investor in SaaS/Enterprise
• SaaStr – Largest Web Community of SaaS Founders – 600k+ views month
• CEO and co-founder, EchoSign/Adobe
Job Title, Company
Hire Early in Customer Success – It Always Works
• One CSM per $2m – But Hired in Advance, Not
Arrears
• Will more reps work? Maybe
• Will more marketing spend work? Maybe
• Will making your customers successful work?
Definitely. Always.
Secord Order Revenue – The Key to Long Term Success
• Customer Success is the Most Accretive
Thing You Can Do – In the Medium Term
• All great companies’ customers come from
one main source – Word-of-Mouth
• This is accelerated, and much more
measurable, in reccuring revenue models
Customer Success is 5x More Important than Sales
• Sales is only there at the very start
of the relationship.
• CEOs and Founders – Get on a
Plane and Visit your Customers,
Not Just Your Prospects
I Never Lost a Customer I Visited. 5 Visits + 2 Badges Rule.• Unhappy customers don’t (always)
churn.
• Unvisited customers that never complain
-- do churn. Need attitudinal, not just
behavioral, loyalty.
• Required: 5 on-sites / month, period. 2
badges from your customers.
If You Can‘t Measure It, It Doesn‘t Exist
• Whole point of Customer Success =
Increasing Net Negative Churn
• Need tools, processes to measure and
improve here
• Can’t be a soft science. Cannot be. No
best efforts.
Tomasz TunguzPartner, Redpoint Ventures
• I write about SaaS startups at tomtunguz.com• Redpoint works with many as-a-Service companies
including Stripe, Twilio, Zendesk, Looker, Infer, Tidemark, and Expensify
• Former PM at Google; statistics nut
Why CS Is CriticalHappy customers, better productGrow fasterDecrease capital needs
Hypothetical SaaS Company$50k in MRR50 customers at $1k ARR each$1250 in CAC, Sales Efficiency of 0.8Growing 15% m/m
How Much to Spend on CS?Expected Value = Save Rate x Value of Extension =30% x 12 months x $83/month = $298 or about 30% of ACV
Return on Investment?2 pp decrease in churn- Increases revenue by 50%- Decreases S&M spend by 30%
Brian StaffordMcKinsey
Q & A