This week's Newsletter:
IT'S 2024: THE ERA OF RESULTS-LED GROWTH HAS ARRIVED!
Let me explain...
The concept of "Business Strategy" is not very old. It emerged after World War II and predictably drew most of its inspiration from military strategy.
PHASE 1: BEST PRODUCT 📦
The first strategic framework to become dominant was Porter's Five Forces, which was based entirely on RIVALRY. It even characterized the company's relationship with its customers as a "rivalry" based on buying vs selling "power"! (How insane is that?)
It's a story of business as WAR ⚔️ in which the best (and cheapest) product vanquishes all the others.
Although it's still taught in business schools, this model eventually faded because it was terrible at predicting winners.
It was also blind to a lot of dynamics. One particular idea that was missing: Customer Experience.
PHASE 2: CUSTOMER EXPERIENCE 🙂
Business strategy hadn't accounted for the possibility that customers might care more about the experience than the product's features or price.
But instead of adding Customer Experience to the framework, it quickly replaced "Best Product" as the dominant theory of business. It's a simple and emotionally appealing grand theory:
🙂 Happy customers stay, and 🙁 unhappy customers leave.
There's just one problem with it → It isn't true!
Companies have collectively spent untold billions improving customer experiences and measuring customer satisfaction.
But the payoff has never arrived. While satisfaction scores have been improving for many years, customer retention and loyalty have steadily declined.
It turns out... 👉 Customer happiness doesn't pay! 👈
📈 Data consistently reveals that there's literally zero correlation between how satisfied customers report being and how long they stay!
WHERE DOES THIS LEAVE US?
We are now entering a major evolution in our understanding of business strategy based on an astonishing new body of research that consistently shows that the best predictor of customer retention is MEASURABLE RESULTS.
📊 Customers with measurable results stay SIX TIMES LONGER on average than customers without measured results!
PHASE 3: RESULTS-LED GROWTH 📈
2023 was the year we could no longer maintain the myth of customer satisfaction. The upheaval has driven many leaders to ask a hard question:
❓ "What did we get for all our investments in customer experience?" 💸
And the timing is urgent. Our ChurnRX Benchmarks reveal that most SaaS companies do not have sufficient customer retention to achieve durable growth.
WELCOME TO THE ERA OF RESULTS-LED GROWTH!
👉 The winning growth strategy aligns everything in the business to identify, drive, and measure customer results. 👈
The future of Results-Led Growth is now, and I'm here for it!
It is going to transform everything companies do.
Will your company be able to make the shift?
Work with Me in 2024: Schedule Your Free Consultation Now
Customer Success Leaders, CCOs
CEOs, CFOs, Boards
...and many others
I'd love to meet you and learn about what you are working on in 2024.
Looking back at my: "MY TOP 5 THEMES FOR CUSTOMER RETENTION IN 2023" →
[NOTE: I published this article one year ago, and I always like to look back and see how my perspectives look in hindsight. What do you think?]
I've spoken with 50+ CS leaders since the beginning of the year, and some major themes have emerged...
📈 MEASURING THE CUSTOMER'S RESULTS
Companies are waking up to the reality that retention relies on materializing value for their customers. Companies can only truly claim to be customer-centric by systematically tracking their customers' results. But measuring customer results can be challenging, and doing it at scale requires building a whole new set of capabilities.
👉 2023 is the year the best companies will tackle this opportunity head-on.
🔒 SELLING FOR RETENTION
The founding logic of Customer Success was to help customers succeed AFTER the sale. But the evidence is overwhelming that some of the biggest drivers of customer success happen before the customer ever arrives in onboarding.
👉 In 2023, the smartest CS leaders are studying why customers succeed to help marketing and sales find the customers who can win.
🥊 SCALING WITH SKILLS
In 2023, CS is being asked to do even more with even less. One of the biggest opportunities to massively increase effectiveness is through upskilling. Just like in sales, there is a huge disparity in the performance of individual CS reps.
👉 This year, the shift is from getting more people on the team to getting more skills for the people on the team.
📊 DATA → NOT SURVEYS
Surveys have dominated how companies understand their customers. But data increasingly reveals that what customers SAY and what they DO often don't match!
👉 In 2023, innovative CS leaders are investing in better ways to track and analyze customer data to understand and drive customer results at scale.
🔮 PREDICTING CHURN → NOT PREVENTING CHURN
The cardinal sin of customer success isn't churn; it's unexpected churn. That's why the winning approach depends on the ability to predict which customers are at risk long before they realize it themselves.
👉 In 2023, the red account playbook is all about watching for key customer behaviors and intervening while there's still time to get them back on track.
📣 What are you focused on this year to move the needle?
QUOTE OF THE WEEK:
RESULTS-LED GROWTH: The winning growth strategy aligns everything in the business to identify, drive, and measure customer results.