Article by: Donna Weber, author of Onboarding Matters: How Successful Companies Transform New Customers Into Loyal Champions
Any time the economy slows down, you scrutinize where you spend your precious funds. Maybe that means pausing a couple of streaming channels for a while, shutting off lights around the house to reduce the electricity bill, and eating out less. It should come as no surprise that your customers and your company are participating in similar cost-cutting exercises as well. They are examining what they can put on hold and determining what is a good investment versus what is an unnecessary cost.
Costs Versus Investments
Let’s talk about the difference between costs versus investments. Synonyms for the word cost include ‘loss’ and ‘expense,’ while synonyms for investment include ‘funding,’ ‘financial backing,’ and ‘support’. Generally, you see ‘cost’ negatively, as in a loss of money, whereas investment is seen positively as a resource. I worked at a company where the chief financial officer (CFO), had an amusing yet accurate analogy about costs versus investments: He compared supplying bottled water at the office as a cost and providing coffee to the workforce as an investment. That’s because bottled water is a luxury when water is freely available to drink from the tap or through a simple water filter. Coffee, on the other hand, is known to fuel productivity. Extensive research has shown that caffeine consumption is associated with increased alertness, concentration, and performance. Accordingly, morning coffee is so ingrained in our work culture that many companies face severe employee pushback when they try to reduce their coffee budgets.
How Are You Proving Your Value to Customers?
While new sales might be quiet these days, this is not the time for existing customers to wonder why they pay you month after month or year after year, especially when you provide business-to-business (B2B) subscription products. Don’t give them a reason to see you as a cost. You need to be regarded as an investment.
At any time, but especially now, it’s critical you demonstrate to existing customers that your product is indispensable and that you fuel their productivity. Rather than leaving them guessing, work together to figure out exactly how much more productive they are as well as how much money they save and/or make because of your product. They need to be certain that the investment in your product is worth exponentially more than what they pay you.
I recommend you reach out to existing customers to learn their priorities, outcomes, and goals for the year ahead, especially because priorities are rapidly shifting. Now is an excellent time to create or update success plans. Download my Success Plan template and hold those strategic conversations immediately. Then keep communication lines open to ensure you are part of the solution now and in the future.
How Are You Proving Your Value to Your Company?
Any time the economy slows down, financial teams and leaders examine where they can cut costs. That means your leaders are analyzing investments and costs across your company. Unfortunately, Customer Success is an easy target.
Despite the ongoing impact Customer Success leaders know they deliver to companies, they are usually calculated as a cost, as COGS, which means Cost of Goods Sold. I learned from Patrick Campbell, CEO of Profitwell, that while Customer Success leaders are confident in the value they provide to customers and companies, the rest of the C-suite does not always share that view.
At the September 2022 CS100 conference for Customer Success in Sundance, Utah, Patrick revealed that when asked which leadership they would cut first, three out of five CEOs and founders said Customer Success. Patrick’s data shows that nothing supports these opinions. Engaged Customer Success teams correlate with higher net promotor scores (NPS), increased expansion revenue, and higher company growth rates. As the saying goes, perceptions are a reality, and the assumption that Customer Success is a cost puts those teams at risk.
Just like with your customers, you cannot afford for your leaders to wonder why they pay you and your team month after month and year after year. Rather than worrying about your team being cut or wondering how you will manage with reduced resources and frozen budgets, get busy pulling together calculations that correlate your team’s efforts with your company’s growth, NPS, and customer expansion. I recommend you watch the webinar I did with TaskRay, which covers simple ways to calculate and articulate the value you deliver internally and how to articulate that to your company. This will ensure that you stick around and deliver more value to your company as well as to your customers.
How will you ensure you and your team stick around long enough to prove your value to customers and your company? You need to be viewed as a cherished investment without hesitation. It’s time to leverage the data and speak the language your buyers, your leaders, and your boards most relate to. It’s time to show your influence on the business’s bottom line. I can help.
DONNA WEBER is the world’s leading expert in customer onboarding. For more than two decades, she has helped high-growth startups and established enterprises create customers for life. Her award-winning book is Onboarding Matters: How Successful Companies Transform New Customers Into Loyal Champions. Learn more at donnaweber.com.