#75: Explaining CS to the CEO

If you can't explain it to a 6-year-old, you don't understand it well enough.

This concept of simplicity often comes to mind when I think about explaining Customer Success to C-level executives, especially the ones that have never worked post-sales.

I talk a lot about how to communicate value to customers. But, many CS leaders struggle to articulate the value of their function to the CEO and the leadership team.

This disconnect can lead to:

• Underinvestment in CS
• Misalignment of goals and metrics
• Missed opportunities for strategic impact

So how do you make sure you're effectively communicating the value of CS to your CEO?

I've had countless conversations with CEOs about the strategic importance of Customer Success, and I've learned a ton about what makes these discussions impactful.

This newsletter focuses on three key strategies that drive tangible business value and is designed to help you nail your CS pitch to the CEO.

Oh, and before we get started... Last year I created the '24 CS trends report, with the perspectives of over 600 Cs leaders on their top challenges and priorities. This gave our community a window into how businesses were thinking about CS and helped facilitate investment conversations. I am surveying leaders this year again!

➡️➡️ Answer this quick and anonymous survey.

Strategy 1: Growing the Business

CEOs are obsessed with growth. Show them how CS has the potential to be a growth engine, not just a cost centre. I recorded a 5-part Masterclass on how to build a revenue-generating CS team, and Episode 5 is all about driving growth.

Key points to emphasise when messaging around growth:

1. Expansion revenue: Highlight how CS drives upsells, cross-sells, and upgrades. Use specific examples and metrics.
2. Customer advocacy: Explain how satisfied customers become brand advocates, driving referrals and reducing CAC. Use real data wherever possible.
3. Product adoption: Demonstrate how increased adoption leads to stickiness and higher lifetime value. Segment your install base and show LTV broken down by usage cohorts.

Example pitch: "Last quarter, our CS team drove $2M in expansion revenue through strategic upsells. We also generated 50 new qualified leads through customer referrals, saving us an estimated $100K in acquisition costs."

Growth isn't only in Subscription Revenue. It's about increasing margins. If you haven't thought about monetising your CS team, here's a great newsletter I've written on the topic.

Strategy 2: Preventing Churn

While growth is sexy, preventing revenue leakage is equally crucial if you want a healthy business. Show the CEO how CS is the front line of defence against churn.

Key points to emphasise:

1. Early warning system: Explain how CS identifies at-risk accounts before they churn. Demonstrate how the CS team impacts the risk and how that predictability helps the business.
2. Proactive interventions: Showcase your playbooks for turning around struggling customers. This is a great source for discussion on where to invest to fix root causes and foundational issues.
3. Revenue saved: Quantify the impact of your churn prevention efforts in dollars. Knowing how much your CS team has prevented in cancellations and downgrades helps with demonstrating the basic value of CS. 

Example pitch: "Our CS team's early warning system flagged 15 at-risk enterprise accounts last month. Through targeted interventions, we saved 12 of them, preserving $1.8M in ARR. That's equivalent to landing 3 new enterprise deals."

I recorded Episode 3 of the CS Masterclass with SVP of CS at Gainsight Easton Taylor and we chatted about how to execute against these 3 points can help you make this a reality!

Strategy 3: Driving Innovation

CEOs love to see customer-centric innovation. Position CS as a crucial link between customers and product development.

Key points to emphasise:

1. Voice of the customer: Explain how CS captures and synthesizes customer feedback.
2. Product roadmap influence: Show how CS insights shaped product priorities and drove revenue through new products and add-ons that were sold to customers.
3. Beta testing: Highlight how CS identifies the right customers to test new functionality and how the team facilitates early adoption of new features.

Example pitch: "Based on aggregated customer feedback from our CS team, we prioritized the development of feature X. Early beta testing with our top accounts shows a 40% increase in engagement, potentially unlocking $5M in new revenue opportunities."

5 years ago I wrote this manifesto on how CS can be the second engine of growth for businesses by driving innovation and I still mean every word!

Bringing It All Together

When explaining CS to your CEO, remember these key principles:

1. Speak their language: Focus on metrics that matter to them (revenue, growth, ROI).
2. Use concrete examples: Back up your claims with specific stories and data points.
3. Connect to business outcomes: Always tie CS activities back to strategic goals.
4. Be concise: Boil your message down to its essence. CEOs are busy people!
5. Prepare for questions: Anticipate objections and have data-driven responses ready.

Remember, your goal isn't just to justify the existence of CS, but to position it as a strategic differentiator that drives business value across multiple dimensions.

TL;DR

Effectively explaining CS to your CEO involves:

1. Showcasing CS as a growth engine through expansion revenue and customer advocacy
2. Demonstrating CS's role in preventing churn and preserving revenue
3. Positioning CS as a driver of innovation through customer insights and beta testing

By focusing on these three strategies and backing them up with concrete examples and metrics, you'll be well on your way to winning your CEO's enthusiastic support for Customer Success.