So I think 2023 may mark The End of Customer Success as We Knew It.
What happened? At least 3 core changes:
#1. The Massive Push to Efficiency
As almost every public SaaS company got cash-flow positive and radically more efficient, and most startups had to stretch their dollars much further — customer success took a lot of the brunt. SaaS companies are now simply willing to run a lot more leanly in CS, in many cases hoping to rely on automation, knowledge bases and community to pick up the slack. The days of $1m per CSM may be long gone. For example, you can see it here in the latest data here from Pilot. CS has taken the biggest brunt in layoffs, unfortunately:
#2. The Massive Push of CS into a Sales Function
This is an even bigger change. CS in many ways become “weaponized” by sales and SaaS companies to chasing tough renewals and supporting aggressive upgrades in tougher times. So be it, but that left even fewer resources and attention on just plain … customer success. Aggressive price increases across the board consumed much CS energy as well.
#3. The Lack of Positive CS Outcomes in 2023
This compounded the change. The bottom line is almost everyone saw NRR fall in 2023 — the traditional metric of success for CS. Strip our price increases, it looks even worse. And what about CSAT? While I don’t have the data, it’s tough to imagine CSAT went up on average in 2023, given the above changes. So CS ended the year in a frustrating place. NRR and CSAT down in many cases. It’s tough to argue for more budget there.
What will this lead to? IMHO a slow reboot of the function. It’s already started. And maybe it was just time.
Everyone will try to do what they can with AI and automation, which can only do so much in the enterprise especially. CS likely will remain attached to sales in many cases, limiting its role to revenue-focused activities. The budget has moved in many cases from an independant department and function to the CRO’s budget. Perhaps the biggest change is we’ll all sort of probably live with less … true “customer success”. We’ve learned to live with the lower NRR and CSAT you get as a result. The age of efficiency has led many to accept certain suboptimal outcomes so long as the cash flow remains positive.
To be clear, personally, I’m not that excited about these changes. Talking to a bot instead of a human that actually can solve my problem? A terrible experience. CS just doing upsells? That doesn’t help me. I miss The Good Old Days of Customer Success. I hope perhaps we get back there. But it doesn’t seem like it. The function isn’t just changed — we all are. We aren’t the knowledge workers we were from 2011-2019, either. On to the Next Era of Customer Success. I’m a bit worried, but I’m facing east.
A great deep dive with Nick Mehta, CEO of Gainsight on this topic here:
A related post here:
