Building an XaaS customer success strategy that drives growth

Rachel Parrinello Contributor

Rachel Parrinello is Director of the Alexander Group's San Francisco office and is a leader in sales compensation, media sales and technology practices.

John Stamos Contributor

John Stamos, Director of the Alexander Group's Chicago office, has extensive experience leading large-scale sales transformation engagements, corporate program developments and compensation redesign efforts at worldwide.

Any job search platform these days will show that there are thousands of Customer Success (CS) positions waiting to be filled. According to research from Gainsight, a customer success software platform, "Companies that invest 10% or more of their revenue in CS have the highest net recurring revenue (NRR).

This confirms the argument that it is necessary not only to have CS tasks, but to deploy more of them. Simply put, these jobs play a critical role in today's tech companies.

Like most features, CS continues to evolve and is not a "one size fits all" model. Deploying the right archetype requires careful attention to ensure CS teams focus on the right activities, deliver a seamless experience through the customer engagement model, and deliver value to end users. Successful companies realize that CS is not just a job or even an organization; it is an organizational mindset that includes action, investment, and coordination across multiple departments, including product development, management, marketing, sales, and technical and customer support.< /p>

In an XaaS model, net recurring revenue (NRR) is a key measure of success. It measures the overall impact of your existing customers on revenue generation. More simply, it measures the net expansion of churn.

NRR depends on maintaining and expanding your footprint. If a customer doesn't embrace and realize the value of your solution, they won't renew or extend their contract. That's why technology companies created customer success to drive adoption, use, and value realization about 20 years ago. Since then, many companies have implemented one or more types of customer success roles.

Companies shouldn't design their customer success roles in a vacuum.

Initially, most customer success roles were adoption or service-focused and were filled by talent in the service organization. However, the adoption sales movement naturally translates into customer retention and increased sales. Many companies today are designing more commercial customer success roles that focus on renewals and upselling, and a few are even focusing on expansion.

Companies primarily deploy at least two customer success archetypes. They typically vary by customer segment, business vs. technical focus, and business focus: adoption, renewal, upsell, and cross-sell.

While these jobs may vary from company to company, there are three main archetypes of customer success roles:

Adopt the MSC

This role focuses primarily on adoption. It also typically provides information to help the lead vendor or renewal role drive expansion or maintain renewals.