by mike smerklo
For any recurring revenue business, there are seven key reasons why the Customer Success function should report directly to the CEO and NOT the Head of Sales.
Customer success has (finally) started to become an established function within SaaS companies. As a startup begins to scale and move from ideation/product creation phase into revenue generation, it quickly becomes clear that resources are needed to help manage customer relationships AFTER the initial sale.
I have been an advocate of Customer Success and the importance of both the function and mindset within SaaS/Recurring Revenue companies since dinosaurs roamed the Silicon Valley…
As recurring revenue business models have become the standard for technology companies, it has become clear that Customer Success is critical for sustaining growth, profitability and customer reference-ability. In short, if you don’t get Customer Success right, nothing else matters.
As a result of this increased importance, it has been refreshing to see most emerging-growth companies building out functions that focus on all aspects of Customer Success – from onboarding and adoption to support and eventual renewal of the subscription agreement. This function can also take on responsibility for upselling and/or cross selling of additional seats or subscriptions.
In short, this is a critical function for any SaaS/Recurring Revenue business.
But here is the question I get asked more often than not about this function – should this function report directly to the CEO? My quick answer – why wouldn’t it???
The normal response from CEOs that I work with goes in one of two directions:
My response is pretty simple and direct (before making sure, of course, that I remind EVERYONE that I was once a CEO so whatever I say must be 100% accurate)….What is the ONE THING that will make or break the success of your business? Hard to answer with anything here EXCEPT Customer Success!
Here are THE seven KEY reasons why Customer Success should report to the CEO:
The advent of the Customer Success function is refreshing to see for technology companies, and the industry has come along way from the early days of “sell now, beg for forgiveness later” mindset.
By making the Customer Success function a direct report to the CEO, the long-term health and wellbeing of a business is significantly enhanced.
And it also takes one more excuse away from those Sales Executives when they miss the F#cking quarter – that fact alone might make it all worthwhile.
I hope you enjoyed this post and appreciate your comments. For more reading on this topic, here are some other great posts:
Bruce Cleveland’s Rolling Thunder Blog – The missing SaaS Metrics
Roger Lee from Battery Ventures – Why Customer Success Needs to be Board Priority
Totango‘s List of Metrics and Goals for Customer Success