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How SaaS companies can remain essential infrastructure in uncertain times

by Ana Lopez
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Manjula Talreja is the Chief Customer Officer of PagerDuty, where she leads the global customer success group.

Heading into 2023, the economic environment has become more volatile and challenging. Companies in any industry will likely spend the year maintaining their customer base and, where possible, expanding their business with those customers. At a time when it can be significantly more efficient to retain and expand customers than to acquire new ones, it’s more important than ever to listen to your customers.

In an uncertain economic time, feeling the pulse of the customer – and acting on it – can be the difference between growing, surviving or losing customers to an inferior but cheaper competitor. If you only speak to your customers at the time of purchase or renewal, you have not become a trusted advisor, but have remained a supplier. I’ve noticed that companies need more than ever strategic partners. They want partners who understand their needs and the challenges they face and proactively come up with solutions that drive cost efficiency while increasing revenue. Without really understanding what customers need, how can you apply your product and your expertise to help their business survive a recession?

Having a mature customer success group (CSG) can make all the difference and ensure that your organization remains a vital asset to your customers.

An effective CSG power

Immature customer success teams remain focused on processing renewals, primarily resolving specific customer technical issues as requested. For them, success is low turnover. Acting as an expansion or growth engine is not part of the equation. But today this approach is not enough.

Many customers expect more, and the stakes are much higher. In the software-as-a-service (SaaS) world, everything contributes to growth or failure. For customers, time is their most valuable resource. A single negative review due to a bad customer experience can influence a consumer’s decision on the other side of the world. And all too often, SaaS companies invest millions in research and development, with an emphasis on the softwarewhile the maintenance.

Customers expect to understand their ultimate business goals, their biggest challenges and the competitive environments in which they operate. And from their SaaS partners, they expect tailored recommendations that reflect that insight. Organizations can no longer solve the problems of one team alone, they must align with the objectives and priorities of multiple personas at the corporate level.

As such, CSGs must evolve to meet these expectations to become effective, mature customer success groups.

It starts with mindset. CSGs need to understand that they are not just there to help customers use a product, renew a license or make a sale. Success passes stand up for the customer. The team must become that trusted advisor that the customer can rely on to solve their problems, beyond just troubleshooting the technology or configuring their instance. In fact, CSGs can demonstrate that understanding by providing customers with the right solutions before they even have to ask.

Next, it’s about resetting the CSG team’s core processes and goals. To become the voice of the customer and go beyond innovation and drive growth, I’ve found that CSG teams need to leverage data science.

Why? SaaS companies have a unique advantage with data science. These companies can analyze how customers use the platforms, identify opportunities for greater efficiency, and benchmark the customer against other companies in terms of value capture.

Data-driven customer success

But what does this have to do with staying essential infrastructure in times of recession? In a recession, one of the first things organizations can do is cut costs. Your technology solution may become a budget casualty, or the number of licenses required may be reduced—or you can be the partner your customers turn to to cope with slowing hiring, smaller teams or other budgetary pressures. In my experience, a mature CSG can make all the difference and keep your business the foundational platform.

The legacy approach to customer success means that CSG team members don’t get an alert when a customer drops licenses because they’ve laid off staff. If you don’t find out about your client’s business impact until an extension call, it’s much too late.

Now take an adult CSG. Because they position themselves as the voice of the customer, they are trusted advisors and can use data to focus the conversation on unused features or automation to ease the strain on teams. Using data science also means that CSGs can anticipate customer needs, show the business what’s happening, and predict changes in adoption and willingness to buy.

The key to maturity is operationalizing your data through data science. This allows CSG’s to show clients real-time, data-driven forecasts of how their technology solution can unlock potential value. These findings can be shared with product development teams to create a deeper product connection and guide the product roadmap to what customers want from their product. SaaS organizations can also create a custom early warning system that benchmarks and predicts customer churn risk, enabling CSGs to make real-time strategic decisions.

But the move to adopting data science didn’t flip overnight. It requires executive buy-in and freeing up time with precious data science resources to make CSG teams more effective. You need to develop algorithms based on key usage and relationship inputs to gain insight and develop your own early warning systems to help you navigate the economic downturn.

Empower your organization

In times of economic uncertainty, customer success teams are an essential resource to keep their organization from becoming a budget victim. An effective CSG that can predict changing customer needs, position themselves as trusted advisors, and create deeper product connections can create much more value by helping customers accelerate transformation goals, despite uncertain times.

The key is doubling down on your desire to understand your customers and understand that your role is to hear and defend their voices. Focusing on renewals is no longer enough – it’s critical to move from reactive to proactive and help customers in the face of uncertainty.

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