The Rise of the CFO and its Impact on CSMs
It’s been only a little over a year ago since SaaS companies sat on piles of cash.
None cared about expenses.
None cared about ROI
None cared about profit.
The rate of growth was all that mattered.
Then, almost overnight, the tide turned and suddenly all these things became important.
Back in the day, CSMs lived in their comfort zone of doing “stuff” and being busy.
“Customer success” was measured by product adoption, usage, and 367 scoring methods.
Their performance was not measured by customer outcomes (leading indicators) and revenue impact (lagging indicators).
The rise of the CFO has shattered the old world for CSMs because they are not evaluating the ROI they get from the applications they are using.
And they are not going to continue paying for convenience, a nice-to-have product.
You are now competing with dozens of applications for budget approval.
You have another stakeholder that wants to see the value.
It’s no longer enough to create value for the people using your product.
It’s no longer enough to create value for their managers.
You have to deliver and demonstrate value to the CFO.
If you are trying to sell the CFO on product usage, adoption or one of the 237 scores you are measuring you will fail.
Here are 7 things CSMs need to do to stay relevant to their customers:
1. Take the lead
Being reactive is not a viable option and being proactive is not enough.
You have to take your customers at their hand if necessary and lead them to the promised land.
You need to be in charge of communications.
Schedule regular follow-ups to ensure steady progress, and identify roadblocks and additional customer needs.
2. Build better success programs
You can’t afford to rely on guessing and assuming.
You need to ensure that you understand your customers’ problems, why they exist, and how to solve them.
Measure the effectiveness of all the services and inputs you provide to your customer.
“Delivering value with every interaction” is no longer a hollow buzzword phrase.
Aim for 95% accuracy in helping customers solve their problems and complete their tasks at every step in the customer success journey.
3. Create stakeholder value maps
Map out the individual goals of users, their managers, and the CFO.
Define the associated value and how it is measured.
Yes, that means you actually have to talk to them.
Make sure that the goals are free of contradictions and actively communicate them if they are not.
Assign a time component as well to distinguish between short- and longer-term goals.
As you know, what does not get measured does not get managed.
4. Eliminate redundancies
Speed matters - it always did but now it does even more.
When you build your success plans you not only need to ensure that you provide customers with the proper training and education.
You need to watch out for redundancies.
Many SaaS companies produce tons of content without ever evaluating its relevance.
Everything that does not help customers move forward only adds complexity and distraction.
5. Track the customer journey
The most effective way to sell the value you’ve delivered is to tell a before-after story.
Document where customers started in terms of performance when they started out and the problems they were facing.
Gather quantitative and qualitative data to track your customers’ progress at every step of the journey.
6. Report to the CFO
It’s unlikely that the CFO at your customers’ companies will participate in a QBR.
If they’re using only 25 applications they would be in 100 meetings every year.
So you need to make sure that the right things are communicated the right way at a distance.
There are 2 ways to make it happen
Create a report that outlines the whole ROI in a way it’s easily digestible
Enable your direct customer to effectively do it on your behalf - the QBR itself provides an opportunity to create the report together
7. Sell the value
If you are a CSM who is responsible for renewals, expansions and upsells including negotiations these reports are your secret weapon.
Start all your commercial meetings with a recap of where customers started and where they are now.
Paint an image in the CFOs mind of how buying more resources and features plays out and further grows the value they get from the product.
Don’t let the conversation drift into a pricing discussion and don’t sell features and functions.
It’s not an easy time to be a customer success manager.
But I think it’s also a golden opportunity to shine.
And delivering, growing, and monetizing customer value is the key