Customer Success is a Major Industry Focus — Is It Yours?
It’s a known fact the value of customer success to the SaaS industry is absolute. Whether it’s one or a few individuals, a larger team, or even an outright department, customer success must be part of every SaaS company — and the earlier the better. Customer retention is the most reliable opportunity for revenue growth — even more so than customer acquisition. The latter can cost you up to five times more than retention and has a vastly lower chance of success: 5–20 percent versus 60–70 percent for retention.
It’s clear why: customer success typically takes the reins post-close. While sales and marketing will leverage existing subscribers in their own efforts, customer success is charged with taking those relationships further. This includes making sure subscribers have the support they need to realize the long-term value in the platform as well as typically managing the renewal process. Because of this, they’re significant drivers of net recurring revenue (NRR) — one of the most underrated yet important metrics and a direct contributor to a company’s ability to scale.
It’s important not to limit customer success to post-close work, however. More and more companies are realizing the value of bringing customer success into the equation earlier, such as in pre-sales efforts. The reason for this is because customer success has deep, extensive knowledge of multiple areas that have a significant impact.
How Customer Success Adds Value Beyond Post-Close
They Know Your Subscribers
Customer success is deeply ingrained with your existing subscriber base. They speak with subscribers to troubleshoot situations and problems, provide training and support, and generally check to see how the platform is supporting subscribers’ goals. They leverage built-in or third-party platform analytics to gain deep insights into what’s working for your subscribers, what’s not working, what could be done more efficiently, and more.
Whether you leverage customer success teams in pre-sales functions or share their insights for use by your sales and marketing teams, what your customer success team knows enables greater success in acquisition efforts to convert prospects into customers. Successful companies will leverage the value of customer success to SaaS for far more than simply post-close relationship maintenance, such as informing sales processes and developing specific marketing campaigns targeting common challenges and those discovered in the platform.
They Know Your Platform
Along with developers, engineers, and product managers, your customer success team should have expert-level knowledge of the platform, its capabilities, and how to use it effectively. As mentioned above, the leading use for this knowledge is to support paying subscribers in their journey from new users to expert users. However, it’s also essential that customer success teams use what they’re hearing from subscribers and what they’re finding in analytics tools to drive the platform forward.
Using this data, and by partnering with product and engineering teams, the customer success team plays a key role in optimizing the platform. This not only makes it more appealing to current subscribers — who maintain their subscription and are more likely to refer people to the solution — but also supports new customer acquisition efforts. If prospects who were exploring your platform at one point decided not to move forward, but data from existing subscribers justified a modification or tweak that now suits those earlier prospects, sales and marketing teams can reach out to bring more people into the platform.
They Know Your Company
While driving renewals, supporting customer acquisition, and supporting other teams in the development of the platform are all essential functions of customer success, one of the key reasons they add value to SaaS is because they are — or should be — aligned with business objectives. Their work supports key measures and goals like driving monthly and annually recurring revenue (MRR/ARR), net revenue retention (NRR), reducing churn, reducing platform issues, and supporting the scalability of the business.
That’s not to say that other teams don’t contribute to these goals — only that customer success has a significant opportunity to make a lasting impact because they influence one of the largest revenue sources typically available to SaaS companies: the existing subscriber base. They leverage their knowledge of those subscribers and the platform to drive more revenue from this audience via up-sells, cross-sells, upgrades, and more.
How Debt Funding Strengthens the Value of Customer Success to SaaS
Debt funding is one of the greatest growth vehicles for SaaS companies. Unlike other growth capital sources, SaaS debt financing not only provides the resources needed to extend the capability and value of customer success but also does so in a way that removes many of the shackles that other sources place on the company.
- It’s Faster — Whereas sources of growth capital like equity financing are common and have their place in the SaaS industry, they can take a significant amount of time to close. Equity deals can take anywhere from a few to several months (if not longer). The sheer amount of legal due diligence needed and financial reporting required adds time and effort that a fast-moving SaaS company shouldn’t have to navigate. With debt funding, the less intensive requirements and processes mean you get your growth capital much, much sooner, enabling you to put it to work and start realizing the benefits faster.
- It’s Less Expensive — Closely related to the above point is the fact that SaaS debt funding is less expensive than other solutions. While legal reviews are necessary, the costs for navigating this process are less because they’re not as extensive as equity and other sources. And, at River SaaS Capital, many of our structures come without fees — saving you more. This way, you save the capital you have and supplement it with growth capital you can spend on sales and marketing efforts as well as solutions to extend the capabilities of your customer success team.
- It’s Not Controlling — With equity funding, you’ll have an outside partner with a controlling stake in your company. While this has benefits, it also has drawbacks in that their perspectives and wishes must be considered. They’ll occupy a board seat and will have a say in just about every major company initiative. With debt funding, you stay in complete control. There’s no equity dilution, no lost board seats, and no opinions to consider — only partners that support your growth goals and will be there to advise as needed along the way.
Support Your Customer Success Team with Debt Funding from River SaaS Capital
Our team is ready to work with you on your goals — whether that’s accelerating your sales and marketing efforts, leveraging the value of customer success to SaaS for greater revenue retention, or a combination. Our investment team has decades of industry experience — knowledge that we’re ready to put to work for your success. Contact us to learn more about our debt funding, or apply online now.