It’s no secret that 2022 was a little bumpy for business, yet we saw many Customer Success leaders meeting industry challenges head-on. While it’s hard to predict what will happen in 2023, we all still try to plan ahead as much as possible. For many of us, that means taking stock of our near and far-term goals and choosing New Year’s resolutions to help us hit the ground running in the new year.
We know how hard it can be to distill our CS objectives into one or two neat little boxes for the year. Customer Success leaders are pulled in so many directions that prioritizing our aspirations can feel impossible. Many people find New Year’s resolutions helpful because they act as touchstones throughout the year. Even in the middle of the everyday chaos that tends to define Customer Success, resolutions can help us refocus on what we hope to achieve if we ever get lost along the way.
If you’re thinking, sure, that sounds good, but what resolutions will really help me meet my goals and make my Customer Success organization better – I’ve got the answer! We put together five top-notch New Year’s resolutions for Customer Success in 2023. Feel free to take one or two on as your own or use this list as a jumping-off point in your 2023 goal setting.
I will…
1. …fight for a bigger budget to support scale.
Not too long ago, Customer Success was a brand-new industry, still working to prove its worth as a crucial function in the brave new world of subscription business. This is not the case anymore. Everybody’s heard of Customer Success, and the industry is growing. Yay! However, Customer Success leaders are still struggling with too-small budgets, low headcounts, and a critical lack of infrastructure. If there’s one thing we learned from the 2022 Customer Success Leadership Study, it’s that businesses need to invest more in the growth of their CS organizations.
Surprisingly, 64.1% of Customer Success teams have non-headcount budgets of less than $200,000. Our budgets tend to be a much smaller percentage of revenue than our sales and marketing colleagues receive. If CS organizations are going to become growth engines of the business, we need to convince our executive leadership to invest in us more. With 78.5% of Customer Success teams now reporting directly to the C-suite, CS leaders can work on leveraging their rising influence to increase their non-headcount budgets.
2. …define a data strategy.
Access to data has always been a thorny subject for Customer Success. We usually need to convince other departments to share data with us, and, in the end, collecting it from them is not the most efficient process. But we need data if we’re going to deliver on the promise of customer-centricity at scale.
One thing we can do to pave the way toward better data sharing is for CS leaders to work with other departments to define data strategies that encourage more robust governance around access and hygiene. In 2022, 21.7% of CS teams have fully implemented standardized processes for tracking customer data that is available for all customer-facing roles. This is a good start, but we can do more.
3. …boost Net Revenue Retention (NRR).
For a while now, we’ve been saying that Customer Success leaders should align their team goals with company revenue. We can take this further by embracing Net Revenue Retention (NRR) as a critical CS metric. As the percentage of recurring revenue retained from existing customers over a period of time, NRR is one of, if not the most vital KPIs for connecting your team’s efforts to the business’s bottom line.
In this year’s leadership study, respondents ranked industry metrics by importance, and NRR ranked at the top of that list. If your Customer Success New Year’s resolution involves driving this metric higher, focus on activities that improve expansion. Work to include expansion opportunities in your CS charter, and prioritize actions your team can take that personalize and enhance the customer experience – even as you scale.
4. …invest in more purpose-built technology for my CS team.
Speaking of NRR, teams with a dedicated Customer Success platform are more likely to report one that’s greater than 100%. Yet, so many CS organizations out there are still wrestling with Customer Relationship Management software that’s not tailored to the needs of Customer Success. More businesses are recognizing the positive impact of Customer Success Operations but are still significantly underinvesting in the tools CS Ops needs to deliver insights and increase efficiencies for the CS teams they support.
We must do better. CS teams need technologies that will enable them to do more with less, build systemic processes that expand customer-first methodologies, and automate lower-level tasks to give them more time to spend on building customer relationships. None of this is possible without a robust tech stack that supports maturation and growth.
5. …coordinate and cooperate better with other departments.
I put this one last because it is a doozy. Cross-functional collaboration is vital (vital!) to the success of every CS organization. And we aren’t improving at it. In fact, for the second year running, inter-departmental cooperation is down. No! Why?!
If you’re looking for a CS New Year’s resolution that will have a big impact on almost everything you do, pick this one. Without the help of our peers across the business, we simply can’t do our jobs. CS cannot exist in a silo. Need to fix a bug? That’s Product. Need to escalate an issue one of your most important customers is having? That’s Support. Need a bigger budget? That’s Finance. Oh, and remember how we all said NRR was the most important metric? According to Gainsight, “World-class NRR is 125%, and as you might expect, it’s impossible to achieve that level without a comprehensive strategy across departments.”
Here are a few of our previous blog posts on this critical topic to help guide you:
- Why CS & Sales Should be Friends, not Enemies
- 10 Ways Customer Success Can Break Through Silos
- Why Success & Support Need Each Other (But Aren’t the Same)
- Be My Valentine: A CS Leader’s Guide to Wooing our Friends in Finance
- 3 Steps to Getting Sales on Board with Your Customer Success Plan
Crossing the threshold into 2023 is an exciting opportunity to reevaluate our priorities and set expectations for the coming months. Let’s prepare our Customer Success teams for whatever craziness that gets thrown our way. Happy New Year!