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A View from the Boardroom: Reducing Churn and Focusing on Customer Success

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Last week, Battery Ventures General Partner Roger Lee joined Ajay Agrawal of Bain Capital and Harrison Miller of Summit Partners for a keynote panel at the Pulse 14 Conference, hosted by Gainsight. Moderated by Rich Karlgaard of Forbes, the panel, “How to Make Customer Success a Board Priority” discussed the tectonic shift of software companies from a “sell it and forget it” mindset to the customer success-centric approach of today.

Primarily driven by the SaaS movement, sales and marketing organizations are hyper-focused on what panelists called “renewable relationship” and ensuring that customers find value out of their investment.  With SaaS products, customer churn is a much bigger problem for companies, and software providers and others need to work hard to ensure customers stay happy and renew. Panel members discussed how this can only be achieved through a real understanding of the company’s business outcomes, which is a result of a direct, ongoing relationship with the customer.

During the discussion, Lee pointed out that “customer success isn’t defense, its offense.” He noted that boards are now much more focused on forward visibility, and ensuring that portfolio companies are successful by prioritizing the end customer and their values and measurements for success. (Lee has discussed this topic on his blog previously.)

Lee went on to discuss how companies can build a sustainable business — starting with the fundamental concept of helping the customer become successful. He recommended that companies over-invest in customer success, making it a core tenet and focusing function within the business from the start. By investing in customer success early, and ensuring that customers love a company’s products, companies will reap the benefits down the road.

All participants agreed that, in light of this new “renewable relationship,” software companies have to be more proactive in their customers’ success to become successful themselves.

The Pulse conference was held in San Francisco May 13-14 and drew about 900 attendees. Speakers included author Malcolm Gladwell and CEOs including Phil Fernandez, from Marketo; Phil Libin from Evernote; Dave Goldberg from SurveyMonkey; Peter Gassner from Veeva Systems; and Tien Tzuo from Zuora.

 

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