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