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As customer success professionals, we often ask ourselves “Is this what I should be spending my time on?” With so many competing priorities and KPIs, every single decision must be strategic and focused to keep your team and your customers on the right track. Patrick Campbell, CEO and Founder of ProfitWell, a SaaS analytics platform, takes this uncertainty a step further.
Combating Customer Churn vs Growing Customers
In a recent article, Patrick questions the overall definition of customer success, echoing a common sentiment in the industry: is customer success about combating churn or is it focused on upsells and renewals? Inspired by a question from Emery Wells, CEO at Frame.io, Patrick tackled the topic in an episode of The ProfitWell Report. In the hunt for the answer, Patrick looked at nearly 5,000 SaaS companies to see what actually has a bigger impact on a business: churn or revenue.
With the data from these organizations at hand, Patrick was able to pull out some pretty eye-opening statistics, which the customer success team used as a jumping off point for even more insight and discussion. Just look at what Patrick was able to deduce from his research:
Which Strategy Impacts Your Business More?
Based on those numbers, it’s easy to see how churn and revenue together are huge drivers of the customer success industry. But which one actually impacts a business more?
According to Patrick’s analysis, customer success teams in general impact expansion revenue more than they impact gross churn. Whether through upsells, renewals, or expansions, helping customers grow and expand their relationship with your organization can make a stronger impact on your organization as a whole.
Additionally, as Patrick briefly highlights at the end of his video, churn in general is more reliant on a customer being a good fit from both a product and business perspective. To truly drop churn numbers, organizations must have a targeted customer profile that expands from marketing to sales to customer success. This way, teams aren’t wasting time on accounts that are likely to fall through regardless of effort.
Understanding How Churn and Revenue Work Hand-in-Hand
For best results across the board, customer success teams should look at how to drive expansion revenue by preventing gross churn. This means ensuring customers are satisfied with their service and the products so they can spend more with your organization.
Here are some ways customer success teams can successfully bridge the gap between focusing on churn and upsells:
With these strategies in place, your customer success team can have peace-of-mind that you’re focusing your time and effort in the right places.
eBooks:
Ultimate Guide to SaaS Customer Success Metrics
Customer Success as a Culture: Customer Success Leaders Edition
Blog Posts:
Customer Success in the C-Suite—Aligning the Board and Exec Team
The Four Fold Mission of Customer Success
Learn more about how ClientSuccess can help your company develop a strong Customer Success methodology and strategy with easy-to-use customer success software by requesting a 30-minute demo.
