By Karla Kannan
As part of a fellowship program two years ago, I met with one of the coaches to pick his brain on further developing my organization's framework. The CS coach asked me what was happening in my company, and I mentioned that a new venture capital investor was joining our organization. He quickly pointed out that CS metrics would prove critical in this transition, advice that was timely and pushed me to get my house in order.
In today's business world, venture capital investment has become a common source of funding for companies. These investments are made to provide capital to startups and early-stage businesses with high growth potential. When a company receives venture capital funding, it is expected to grow rapidly and achieve specific business milestones. In this context, customer success leaders play a critical role in ensuring that a company meets its growth objectives. By leveraging metrics, leaders can help their organization achieve success and satisfy the expectations of venture capitalists.
The Customer Success function becomes vital for any organization that wants to achieve sustainable growth. The CS team is responsible for partnering with cross-functional roles to ensure that customers are satisfied with a company's products or services and continue using them. By ensuring customers are satisfied, organizations can help reduce churn and increase revenue, two important metrics for any investor.
By tracking key performance indicators (KPIs) such as customer retention rate, customer satisfaction score, and net promoter score, organizations can gain insights into how well the company is delivering value to customers. This information can then be used to identify improvement areas and develop strategies that include other functions to improve customer satisfaction and retention.
Another benefit of leveraging metrics is that it allows CS leaders to communicate their team's performance to other stakeholders. By using metrics to demonstrate how their function contributes to these growth targets, they can show the value that their team is delivering to the organization. This helps build confidence with investors and increases the likelihood of securing additional funding. Showcasing the value of the team to the bottom line is particularly critical in today’s economic climate, where reorganization decisions are quickly made when there is no data to assess impact.
Should metrics alone tell the story?
Data without context leads to conclusions based on the user’s interpretations. The focus should be on storytelling and whether or not the visualization of the data is at the heart of the story that we want to communicate. I always ask my team to ensure we are telling a compelling story that either shows or leads to action. Charts, dashboards, and data visualization should go hand in hand with a strong narrative.
For example, if the customer retention rate starts to decline, this could be a sign of issues with the product or service. A chart showing this change over time is good, but the addition of the identified risks, impact, and actions required to change the trend allows the CS team to present an action-driven story that they are leading.
In conclusion, the importance of Customer Success leaders leveraging metrics cannot be overstated, especially for organizations that have venture capital investments. Using metrics to track performance, communicate value, and identify potential risks, we can help our organization succeed and meet the investors’ expectations. With the right metrics in place, we can help to ensure that customers are satisfied, revenue is growing, and the organization is well-positioned to achieve its growth objectives. If, on top of that, we add a strong narrative and present an action-driven storyline that is backed by data, we then have a bulletproof strategy.
The Success League is a customer success consulting firm that a CS Leadership Certification program which includes such classes as Reporting on Results and Team Metrics & Goals. Please visit our website for a listing of our full offerings, including Leadership Coaching.
Karla Kannan - Karla serves as the Senior Vice President of Customer Experience at BirchStreet Systems, a P2P platform designed for the hospitality industry. She leads the Customer Success, User Education, and Knowledge Management teams. Her passion for service excellence has a foundation from her time at Four Seasons Hotels, where she worked in Procurement. In previous roles, she managed the PMO and served as General Manager of the Mexico office. She holds an M.A. in Training and Development specializing in Adult Education from Roosevelt University and a Sigma Green Belt from Purdue University.