Get your product and customer success teams on the same page to improve net retention

It’s easy to say things like “We’re customer obsessed,” but statements like that are hard to actually execute. In many companies, the product and customer success teams are separate entities, and when they don’t work together, there will arise a dynamic that can cause all sorts of problems for the customer, which can lead to dissatisfaction and churn.

Most companies can’t afford these issues in an economic downturn. Protecting and growing your existing customer base is the most cost-efficient and expedient path to success for both you and your customers. At a time when customers are slowing down, if not halting, their adoption of new initiatives, helping them achieve more from their existing investments is a winning formula for growth.

Combining the product and customer success functions into a customer experience-focused (dare I say, obsessed) team is the best path forward for SaaS companies looking to nurture happy customers, build better products and generate more revenue from existing customers.

Here’s just one example of how a siloed team approach can go wrong. In some companies, the customer may face a dozen hand-offs between signing the contract and getting to their implementation. At one of my previous companies, there were 14 hand-offs between different functional groups, including sales, onboarding, customer support, professional services and account managers.

Today, customers can cancel at any time, so you must earn your seat at the table with your customer every single day, and there’s no room for any missteps.

That many hand-offs creates a big margin for error in the customer experience — not to mention a lack of ownership when something goes wrong. Most importantly, you miss out on valuable insights into how your products and customer experiences can improve, leaving your customers wondering just how much you are invested in their success when they are thinking critically about their most important vendors.

This example and many other anecdotes from the field show that separate customer success and product teams create misaligned incentives between groups. Here are a few other reasons why and how you should unite forces into a single customer experience team.

The why: Customers really just want to talk about your product

Customers buy your product because they believe in your vision, your point of view on solving problems they have, the capabilities of your technology and the promises you make for the future. Now you have to deliver on these expectations.

For modern SaaS companies, “landing” the customer is just the first step, but it wasn’t always that way. In the past, perpetual license companies captured the lion’s share of their total revenue up front when the contract was signed. Maintenance revenue was nice to have, but it was peanuts compared to the initial contract value. As a result, there wasn’t much risk over the lifetime of the customer. As a result, product teams found themselves largely disconnected from customers and often relied on external research or second-hand information on what customers needed instead of actual customer feedback.

Today, customers can cancel at any time. You must earn your seat at the table with your customer every single day and there’s no room for any missteps. As a leader with responsibility for both the product and customer success teams, I want to know what percent of my churn comes from customers at their first renewal. Why did they not realize the value they anticipated? Was the product too difficult to use? Were they sold the wrong thing? Have their leadership or business priorities changed? Did the problem occur during implementation?

Did they understand the journey to realize value from my products, and were we able to lead them down the path — through onboarding, implementation and usage — so they could successfully achieve those objectives? If there’s a problem, I want to know fast, which is why it’s critical to build a cohesive experience between your front-line customer success teams and your product teams.

I’ve created a cohesive customer experience function at a few different companies, so I’ve learned my fair share of lessons along the way. Here are some tips for navigating the transition from a siloed approach successfully.

Give someone authority to manage customer experience

One of the biggest hurdles to combining product and customer success might be the structure of your team. It’s important to give authority to a leader who can think holistically about your customer experience and how prospects and customers engage across their lifecycle. How do you optimize their experiences to deliver on the shared vision you agreed upon when the customer signed the contract?

Regardless of what you call the role, product management, user experience and customer success should report to the same person. This leader should create a structure that shares incentives and common goals aligned to your customers’ measures of success.

Here’s one practical example. Many companies make the mistake of treating expansion sales generated by their customer success organization as just another lead source for their core sales team. The problem is that new logo sales and customer success-driven expansion operate on very different, and sometimes conflicting, incentives (quarterly quotas versus net retention, lifetime value and product adoption) and, unsurprisingly, behave accordingly.

Instead, managing these teams separately allows them to focus on what they do best rather than constantly switching contexts and finding themselves outside their comfort zones. Empower your customer success team to own long-term relationships with customers and engage in consultative sales based on their insights into each customer’s strategic objectives and business priorities. After all, people make purchases based on relationships, and your customer success team is the one on the front lines.

Create a consistent touchpoint with customers

It’s important to maintain regular, engaged discussions with your customers. You can use your products as a dynamic, ever-changing palette with which to do so. Topics can include roadmap updates, requirements-gathering sessions on new product initiatives and product-usability sessions.

Most importantly, demonstrate to your customers that their voice matters and that the entire product and customer success organization is actively seeking their input. This is how you make the move from vendor to trusted partner.

In some cases, it may make sense for your product managers and engineers to go on-site for customer meetings. That’s a practice companies like Twilio follow, which has its engineers meeting customers at least once per quarter. One tip to keep your team honest is to benchmark the number of customer conversations that involve the product organization on a quarterly basis.

Review internal, active development initiatives weekly

Your team may get a lot of requests from customers, so it’s important to stay organized. Our team tracks customer commitments and requests in the same Jira board, so our engineering team knows what they are working on, the next steps, target deployment dates and which customers are waiting on each feature.

We then meet every week to review active development initiatives. We uncover all sorts of important information: For example, the product manager and engineering lead may discuss an initiative and learn that they’ve missed a deadline or are nearing a deadline. With customer success at the table beside them, the issue shifts from being someone else’s problem to a shared problem that we need to solve for the customer.

Ultimately, software is complex; features will be delayed and bugs happen. When customer success, product management, UX and R&D are all at the table together and focused on customer experience, it becomes easier to find ways to break these issues down into smaller chunks.

Most importantly, bring your customers into the solutioning process. They’ll buy into the fact that you’re all in it together.

Create a culture of open dialogue

How do you know if a customer request is worthy of a product enhancement or change? One way is to maintain open dialogue between all of the customer success managers and product stakeholders.

Our team does this by maintaining a Jira board of client requests. Anyone on the team can submit feature requests on behalf of customers, and these requests are tagged with the customer or prospect who requested them. Based on my experience, the first question an engineering team will ask is, “Who is going to use this?” They don’t want to spend time building capabilities that go unused.

By tracking feature requests by customer, both your product managers and engineering leads know where the request is coming from. And, they know who they can go to within the customer success team to learn more, validate assumptions and ensure they build something of value that addresses a customer’s jobs to be done.

Act on product data

Most SaaS startups use some sort of product instrumentation tech to gather data on customer usage. (We use Datadog to instrument APIs, Pendo to instrument applications and FullStory to track individual usage.) However, once you have that data, you need to act on it.

Product, operations, customer success and technical support can use this data to proactively talk to the customer. When there are issues or underutilized features, data-driven conversations can help you understand what’s really happening and how to make the product better. More importantly, you demonstrate to your customers that you are committed to their success by helping them address problems before they become a crisis.

Having customer success as an integral part of the product organization helps make these conversations a part of the daily fabric of the teams most responsible for customer experience.

Build a holistic CX team

To sum up, the “old way” — where you kept product teams hidden away in a back room somewhere while the customer success team dealt with delivering customers the bad news — no longer works in the world of recurring revenue SaaS products. The new model of business innovation focuses on building a holistic approach to customer experience and is rewarded with efficient expansion revenue and improvements to net retention.

This CX team is responsible for successful onboarding to “go live,” as well as every inflection point throughout the entire customer lifecycle — think product enablement, implementation, product adoption, launch preparation and expansion. An empowered customer success manager helps the customer navigate each of these phases to get to successful launch and beyond.

Embracing this model will help SaaS companies earn their seat at the customer’s table every day. In the process, you’ll find that you’re also increasing revenue and customer satisfaction for the long haul.