How to boost your performance with CS Operations Part I
Hi, I’m Markus, and welcome to a 🔒 subscriber-only edition 🔒 of my newsletter. I help you to deliver, grow, and monetize customer value to improve your performance, accelerate your career, and build a profitable SaaS business.
Customer expectations have never been higher and their willingness has never been lower.
Headcounts have been reduced and there are simply not enough resources to complete all the open tasks.
Fire after fire is emerging and doing strategic work feels like a distant memory.
No, being in Customer Success is not easy right now.
It has never been more important to focus on doing the right things the right way.
Every CS team needs to run on peak performance.
Working without CS Operations is not an option anymore.
CS Ops impacts three core Customer Success metrics: customer lifetime value (CLV), cost to acquire customers (CAC) and cost to retain customers (CRC). An effective Customer Success Operations department will increase CLV, decrease CAC, and reduce CRC resulting in higher net revenue retention.
Customer Success Operations ensure that CS initiatives are carried out as efficiently and effectively as possible. This means optimizing the CS workflows to be scalable while using the most appropriate digital tools to fulfill its work.
A key component is to ensure CSMs are spending their time scoring instead of wasting it with customers who need a ton of help but pay little in return. Without any perspective, it will never become better.
CS Ops needs to prepare monthly revenue reports on the account level and compare them to the Customer Service Costs. I recommend using “weighted averages” to ensure that the costs are properly distributed.
Give all your accounts a score from 1-10 or 1-100 based on their service intensity and distribute your total service costs accordingly as in the example below.
However, distributing your resources should also include a second parameter - growth potential. You might have customers in your portfolio with negative or zero margins but there’s a high probability that they can become profitable.
A company recently acquired a large funding round and is hiring aggressively
Only a few members of a team are using your product to test the waters
There are additional use cases for your product
It’s important to not only look at the raw growth potential but also quantify the likelihood of unlocking it (realistically).
The BCG Matrix is a simple and effective tool to visualize the structure of your customer portfolio.
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