The One Question to Ask Before You Blow Up Your Customer Success Team

Thanks to Frank Slootman, blowing up customer success (CS) teams is quite in vogue.

“We don’t believe companies should have a separate customer success function. The first thing we did when Frank joined Snowflake was we blew up the customer success function. You are either going to do support, sales, or professional services. Customer success is not accountable for anything.”

— Mike Scarpelli, Snowflake CFO

“The alternative strategy is to declare and constantly reinforce that customer success is the business of the entire company, not merely one department. This means that when a problem arises, every department has a responsibility to fix it.”

— Slootman, Frank. Amp It Up (p. 100). Wiley.

In short, when customer success is someone’s job, it’s not everyone’s job [1]. 

I guess when “Dutch Jesus” (as a financial industry friend calls him) says it, the opposing adage does not get equal time: when something is everyone’s job, it’s no one’s job. 

I’ll leave resolving the pithy adage conflict to the reader. 

But before you say goodbye to your customer success team, it’s important to ask the right question [2]. Amazingly, many people blow up (or cut back) customer success based on the wrong questions. Some examples:

• Is our churn above or below industry averages? Benchmarks are always useful, but you can’t make this decision based on them. Churn is the result of the entire experience from sales to onboarding to professional services to support to success and, of course, product. Your churn might be above average, but it might have nothing to do with CS. And, to CS’s chagrin, conversely.
• Is our churn down over the past few years? It may not be down — and it might well be up — because most companies reported increased churn in 2023. Is increased churn res ipsa loquitur proof that your CS team is doing a bad job? No. Whether churn is high or low or down or up is only loosely coupled to CS execution. Like diving, renewing any given customer has an associated degree of difficulty. Unlike diving, not everything is under the control of the diver.
• How much does CS cost? This immediately paints a target on CS and everyone starts imagining ways they’d like to spend that money. If you’re paying normal industry salaries and the team is carrying $2-5M in ARR/CSM, you should be in the normal cost range. If you’ve got a problem, it’s more likely in mission, alignment, or execution than cost.
• Could sales use that money to sell more software? CROs have a strong incentive to raid the CS budget to buy insurance on the new sales number. After all, few CROs get fired for high churn — even when CS reports to them, which it often doesn’t. Most get fired for missing new sales targets, and they’re all keenly aware of that. 
• Aren’t CS just hand holders and grief counselors? It’s quite possible that your CS team’s activities are not aligned to the business. But this type of loaded question doesn’t lead to re-alignment, it leads to detonation. 

So, instead of questions like these, what’s the one actual question you should ask? The counterfactual. What would our churn be if customer success didn’t exist? 

Oh no, you might think, I didn’t sign up for a philosophy lesson. Don’t worry, this isn’t one. But to analyze things properly, this is where we need to start. It’s not about churn being down or up. Or churn being above or below benchmarks. It’s about asking what would things look like if CS didn’t exist, or if it existed in some new and different form?

The point of CS isn’t to do better than some other company in a different space. Or do better than you did three years ago in a different market with a different product. The point of CS is to do better than you would have done without it. Or, to do better with CS in a new form than with CS in its current form.

But that’s unknowable, right? No, it’s not. 

Instead of driving radical, company-wide change overnight, you can run an experiment. Say you’re thinking of eliminating customer success, passing account management back to the sellers, and hiring regional renewals reps to run the renewals process. Will that work for your company? Test it. Run an experiment along one of these dimensions:

• Geographic. Run the new model in Europe or Asia for two to four quarters to work out the bugs, see the reaction, and track the early results.
• Vertical. If you’re organized vertically, pick one of your major verticals and run the experiment there.
• Cross-section. Pick a set of accounts and run the experiment on those accounts only. To the extent the set is a representative slice of your customer base, this might provide the most meaningful result.

I know this probably runs counter to management’s desire to be seen as decisive, having all the answers, and leading dramatic change — but, given the stakes, the prudent path may be the best one.

Jason Lemkin predicts a slow reboot of customer success in 2024. What customer success operating system do you want to boot up? You can do what Frankie did. Or what your friend did at GoodCo. But to determine the best solution for your company, why not run an experiment first?

A little humility never hurt anyone.

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Notes

[1] I removed the meme tweet previously embedded here because of a reader’s feedback. While I still see some gallows humor in imagining the leaper screaming “customer success is everyone’s job!” as he flies through the air, I decided to remove it because (a) this was a short-lived Twitter meme that will invariably confuse readers who see it without that context in the future and (b) the actual event was more serious than I’d initially known. 

[2] Nils Lofgren (who’s covering Just a Little in the “goodbye” link) is a classic example of the artist you’ve probably heard, but not not heard of. If you have ten minutes, watch this PBS piece on his rather amazing story which explains, among other things, the origin of the beat on Neil Young’s Southern Man.