Customer Success (CS) teams are pivotal in driving value and revenue. But their influence doesn’t stop there—they also have a significant impact on other critical aspects of customer engagement, including:
Product Pricing
The Cost of Owning and Operating the Product
Product Pricing
CSMs don’t operate in isolation. They collaborate closely with sales, product, and marketing teams to understand customer sentiment toward pricing, expectations, and perceived value. As they work to deliver positive experiences and drive stakeholders toward desired business outcomes, they also gather valuable insights into market trends and competitive dynamics.
CS leaders should leverage their teams’ unique perspectives to shape pricing strategies effectively. By understanding the rationale behind pricing decisions from their CRO or CFO, CS teams can help bridge the gap between customer expectations and the actual value delivered.
Key Scenarios Where CS Teams Influence Pricing
“Land-and-Expand” Strategies: When products are initially offered at lower prices to attract customers, CS feedback helps evaluate whether this approach aligns with the product's value and growth potential.
Tiered Pricing Models: CS teams facilitate customers’ transition to higher pricing tiers by demonstrating the incremental value of premium features like advanced analytics or dedicated support.
Premium Pricing Perceptions: If a product is priced at a premium, CS teams can highlight these gaps to refine pricing strategies while customers struggle to see the value due to technical or operational challenges.
Pricing is a complex and sensitive topic that involves multiple stakeholders, including finance, sales, marketing, and leadership. CS teams provide a vital “reality check,” ensuring pricing strategies align with customer needs and market realities.
The Cost of Owning and Operating the Product
The price customers pay to the vendor is only part of their overall cost. The total cost of ownership includes several other elements, such as:
💰 The Subscription Cost
💰 The “Cost of Buying”
💰 The Cost of Risk
Let’s break these down further:
The “Cost of Buying”
This includes:
Market research and RFP processes
Proof-of-concept (POC) trials
Legal, compliance, and procurement efforts
Deployment, data migration, and integration costs
-> The CSM Perspective:
While much of this effort is a “sunk cost,” CSMs can recognize and address customer concerns during onboarding. Acting as trusted advisors, they help ease the transition and pave the way for successful engagements.
Deployment and Data Migration
SaaS deployments often require significant effort to align with enterprise IT and security policies. Data migration can further complicate matters, introducing operational risks and costs.
->The CSM Perspective:
By providing clear playbooks and facilitating expert support, CSMs can minimize unnecessary effort and ensure smoother transitions. Effective planning and proactive communication also help mitigate risks associated with failed migrations.
Integration Costs
New solutions rarely operate in isolation. They must integrate with existing systems, which requires detailed planning and collaboration between vendor and client teams.
->The CSM Perspective:
CSMs can guide customers through integration processes early in the engagement, reducing time, effort, and potential delays later. They can also involve the experts from their teams to provide professional guidance at the right time.
Training and Internal Acceptance
Successful deployment isn’t enough to enable successful product adoption. Training and enabling end-users ensures they are comfortable and productive with the new product.
->The CSM Perspective:
While CSMs may not directly handle training, they play a key role in promoting knowledge repositories and self-paced learning tools. Identifying internal champions to drive adoption can further enhance success.
The Cost of Risk
Every technology implementation carries inherent risks, from operational disruptions to budget overruns. While risks may not always be quantifiable, they do carry implicit and explicit costs, such as:
Project management overhead
Technology modifications
Operational risks like downtime or poor customer service
->The CSM Perspective:
CSMs can mitigate these risks by:
Maintaining lessons-learned registers
Assessing stakeholder risk tolerance
Establishing communication channels for proactive risk management
Sharing best practices from previous engagements
Reducing Costs with Customer Success
As the role of CSMs evolves, it’s clear that their contribution can extend beyond promoting value and enabling revenue. The other key aspect is their influence on cost reduction with inputs to pricing strategy and driving their customers to improve operational efficiency.
By addressing Value, Revenue, and Cost Reduction, CSMs make their contributions measurable and meaningful, both internally and externally.
Comments