The Ultimate CS Guide For Startups
Today's edition is sponsored by Freshdesk, the #1 customer success platform. Empower your team to deliver exceptional customer experiences. Check them out now!
The role of the Customer Success Manager is still overlooked and underrated.
In particular for startup founders.
Here’s how they can transform your business and save you hundreds of thousands of dollars:
The Multi-Faceted Role of CSMs
Customer Success Managers wear many hats.
According to a 2023 study by Gainsight, effective CSMs:
Manage accounts
Prevent customer churn
Assist with renewals
Drive upsells
Gather customer reviews (boosting SEO and generating leads)
Seek referrals
💡As
, founder of , says it best: “Customer Success is where 90% of the revenue is!"Lara Barnes, former SVP of Customer Success at Sitecore, highlighted the importance of the CSM role in our CS My Way Interview: "Customer Success is all about the customer. As a leader, you represent the Customer in the organization."
Want to dive deeper into the role of CSMs? Check out my comprehensive guide on what makes a great Customer Success Manager.
The Financial Impact: A Real-World Example
Let's look at a hypothetical case study to see the potential impact of a CSM:
Churn Reduction
Recent data from Totango shows that companies with dedicated CS teams experience a 24% higher net retention rate.
In our example, imagine a CSM reduced monthly churn by just 5%, saving $5,000 per month in lost revenue.
Over a year, that's $60,000 saved.
Upsells
According to another 2023 report by Gainsight, companies with mature CS practices see a 27% increase in expansion revenue.
So in our scenario, let's say the CSM generated $12,000 in monthly upsells.
Annually, that's an extra $144,000 in revenue.
Referrals
The same Gainsight report indicates that customers who have a positive experience are 38% more likely to recommend the product.
If our hypothetical CSM brought in $24,000 of new business each month through referrals, that's …$288,000 over a year.
Kevin Herrholtz, VP of Customer Success at AddShoppers, said it well about the human element in customer success: "It's always people first, tech second."
See my full interview with Kevin for more exclusive insights.
Curious about how to drive customer expansion? Explore my strategies to boost customer value and growth.
The Bottom Line
When we add it all up, a single CSM contributed $492,000 to the company's annual revenue.
That's nearly half a million dollars!
Why This Matters
Retention is cheaper than acquisition
Keeping existing customers costs less than finding new ones.
A study by Bain & Company found that increasing customer retention rates by 5% increases profits by 25% to 95%.
Compound growth
As your customer base grows, so does the potential impact of your CS team.
The 2023 Customer Success Industry Report by ChurnZero reveals that companies with CS teams are 67% more likely to report year-over-year revenue growth.
Customer-centric approach
CSMs help align your business with customer needs, leading to long-term success.
💡As Jeff Bezos, founder of Amazon, states: "We're not competitor-obsessed, we're customer-obsessed. We start with what the customer needs and we work backwards."
Kirsten DiChiappari, VP of Customer Success at vCom Solutions, highlighted the importance of delivering on promises in our interview: "The simplest strategy is to successfully deliver the product customers bought - as expected and when expected."
Want to learn more about key CS metrics? Check out my ultimate SaaS Metrics Quick Guide for essential metrics and how to use them.
Getting Started
If you don't have a Customer Success team yet, consider starting small.
Hire your first “founding-CSM”.
If you already have a team, think about ways you can help them drive more value.
💡Marc Benioff, co-founder and CEO of Salesforce, nailed it when he said: "Nothing is more important to us than making sure every customer is successful in our service."
The key to success is not just having CSMs, but enabling them to excel in all aspects of their role.
Explore my ultimate guide for Customer Success Managers for in-depth insights and strategies for startup founders.
💡Looking for practical tools to implement these strategies? My 150-page Customer Success Templates Collection provides ready-to-use templates for everything from customer onboarding to renewal planning.
Part 2: Customer Success For Startups | Deep Dive
Today I’m exploring CS for startups in particular.
So I've prepared an exclusive guide that is laser-targeted for founders.
Don’t miss out! Upgrade to Premium now to access the full guide and take your Customer Success strategy to the next level!
"The strategies I've learned from this newsletter have helped me boost customer retention by 20%. It's a must-read for anyone in Customer Success." -Mike D., SaaS Founder
"I love how the premium content goes deep into real-world examples. It's like having a mentor in my inbox every week!" -Lisa M., Head of Customer Experience
💡Exclusive Bonus: The Founder's CS Cheat Sheet
As a special bonus, upgrade now and download a one-page cheat sheet summarizing the most key CS tactics for busy founders.
Keep it handy for quick reference as you build and grow your startup.
In today’s members-only section, you'll discover:
The Startup CS Playbook
Early-Stage CS Strategies
Learn how to implement Customer Success principles even before you can afford a full-time CSM.
Founder-Led Customer Success
Discover techniques to drive customer success by yourself and build relationships that last.
Scaling Your CS Function
Understand when and how to grow your CS team as your startup expands.
CS Metrics for Startups
Identify the key performance indicators that matter most in the early stages of your business.
Tool Stack on a Budget
Get recommendations for affordable tools that can amplify your CS efforts without breaking the bank.
Investor-Ready CS Plans
Learn how to present your Customer Success strategy to impress potential investors.
"Love the practical tips! As a founder, I'm always looking for ways to improve our customer relationships. Hakan’s newsletter delivers on the promise. One strategy we implemented increased our customer retention by 15%!” -Mala L., SaaS Co-founder
"Thanks to The CS Cafe, I secured a promotion to Senior CSM!! It's an awesome resource for anyone serious about growing their career in Customer Success." - Ray K., Senior Customer Success Manager
Part 2: Premium Content
1. Early-Stage CS Strategies
As a startup founder, you might think Customer Success is a luxury you can't afford yet.
But the truth is, you can't afford to leave money on the table.
Here's how to bake Customer Success into your startup from day one, even without a dedicated team.
But first, download your free cheat sheet that summarizes the entire strategy below: