The Three Crises of Customer Success

The Three Crises of Customer Success

To say the current economic situation threw Customer Success into a crisis might be an understatement.

Burnout was already high but now churn is rising and so are layoffs. The SaaS model that defined much of the 2010s and early 2020s was predicated upon having access to near-unlimited capital, with customers buying licenses and renewing with little-to-no issue in what seemed like perpetuity.

But a slowing economy and the Fed’s decision to hike interest rates at the quickest clip in four decades drove a stake through the heart of that model, with SaaS moving from hypergrowth to contraction in record time.

Yet, to blame this all on the Fed or the economy would be a mistake. The SaaS model that existed before was unsustainable and bound to break under any amount of stress - the current reckoning was long overdue.

And, while there are plenty of reasons why that model was broken, the state of Customer Success bears quite a bit of the blame.

That’s because Customer Success was already struggling through three distinct crises, ones that were causing it to deliver a poor customer experience, even before the economic headwinds of 2022.

Understanding the root causes of those crises and solving them will be key to creating a stronger and more sustainable SaaS model in the future.

The Three Crises of Customer Success


Why You Should Care: The slowing economy and increased interest rates are challenging the once-thriving SaaS model.

CS faces three distinct challenges:

  • Scope: Overextended roles lead to ineffectiveness and customer turnover.
  • Burnout: High stress and unrealistic expectations are causing widespread burnout among CS professionals.
  • Accountability: Previous leniency on metrics is no longer viable; precise value demonstration is required.

What we can do about it:

  • Refine Scope: Streamline Customer Success roles to focus on core value delivery.
  • Set Realistic Expectations: Adjust job expectations and provide sufficient support to prevent burnout.
  • Clarify Metrics: Identify which metrics matter to customers upfront and focus all your energy on driving those to demonstrate the value your solution (and CS) provides early and often.

Key Takeaway:

To create a sustainable SaaS model, it's crucial to resolve these crises by redefining Customer Success strategies.

"The SaaS model that defined much of the 2010s and early 2020s was predicated upon having access to near-unlimited capital...but a slowing economy and the Fed’s decision to hike interest rates at the quickest clip in four decades drove a stake through the heart of that model."

1. The Crisis of Scope

Anyone who has worked in Customer Success for even a short period of time knows that the job of every Customer Success Manager is slightly different, with the role at the same company and even in the same segment often varying widely.

While it’s easy to chalk that up to companies not really knowing what Customer Success does and the relative immaturity of CS as a function it’s driving the biggest problem in Customer Success today - the crisis of scope.

Too many companies don’t think through what Customer Success actually needs to do in order to deliver value to their customers. Instead, they design catch-all customer roles that do a little bit of everything and virtually anything that will make a customer happy.

Instead of being laser-focused on helping customers identify and drive toward their success metrics by integrating the solution into a customer’s day-to-day workflows, CSMs get caught up in small tasks that barely move the needle.

This scope bloat might not seem like a huge deal at first but, over time, it starts to eat away at the capacity of CSMs and begins to hurt the business. Since no one is focused solely on demonstrating and delivering value for customers, it doesn’t always get delivered.

That leads customers to begin to question whether they’re actually getting value out of a product. They start to grumble and, soon enough, they begin to churn, setting off the dreaded Customer Success Doom Loop.

2. The Burnout Crisis

Burnout has been a hot topic in Customer Success since the beginning of the Great Resignation and peaked during the Quiet Quitting hysteria in the second half of 2022, but it’s been whispered about by CS professionals since long before the onset of the COVID-19 pandemic in 2020. That’s because the sort of bloat we see in Customer Success roles is pretty much a recipe for failure and burnout.

Rachel Provan, who has done some excellent work on this topic, sees role bloat leading to unrealistic expectations on CS, which leads directly to burnout.

UNREALISTIC EXPECTATIONS are what leads to feeling ineffective and unappreciated. If it’s impossible to get everything done, and done well, it leads to hopelessness.

But the burnout crisis is being driven by so much more than that. Renewals and upsells have gained significantly in importance to companies’ financial health as sales have dried up over the last two years and who is bearing the brunt of that pressure? Customer Success. Meanwhile, CSMs are watching warily as layoffs wrack the industry, adding stress and pressure to perform in their current roles, lest they be next.

Add to that the fact that Customer Success rarely gets proper onboarding and enablement for their ever-changing roles, and it’s understandable why so many CSMs would feel lost, adrift, overwhelmed, and hopeless; burnout naturally follows.

3. The Crisis of Accountability

The final crisis Customer Success is currently facing is what I call the crisis or accountability. For years, CS was able to get customers to renew with less-than-perfect metrics.

Numbers were sometimes a little fuzzy and value was not always well-articulated but so long as things were directionally correct, a customer wouldn’t give CS too much trouble. Contracts - and recurring revenue - it seemed were virtually guaranteed with relatively limited effort, so long as CS maintained a good relationship with their customer - that all came to a screeching halt in 2022.

Now, churn is up and many renewals are a fight - something the Customer Success of yesteryear was simply not prepared for. That’s left CS in crisis because the power to deliver easy renewals has long been how it justifies its high cost.

Customer Success is being forced to relearn how to frame conversations around and deliver tangible value, while simultaneously examining all their interactions with customers to identify whether everything they’re doing is necessary and driving value.

Where Does Customer Success Go From Here?

With Customer Success seemingly getting it from all sides, it can be hard to see a way out of its three crises. Thankfully, the solution is relatively straightforward, though it’s far from painless.

First, the scope of Customer Success roles needs to be narrowed.

No more catch-all customer roles. CSMs should be entirely focused on work that is essential to delivering the most value to their customers. Any tasks that don’t deliver value for customers or, at least, drive them towards value realization is either non-essential or should be handled by another role.

Second, Customer Success needs to come to terms with the fact that most CS roles face unrealistic expectations and get insufficient support.

As leaders work to rescope Customer Success roles to align them around customer value, they also need to look at whether what they’re asking any one person to do is even possible. In many cases, the responsibilities of CS will need to be divided amongst new, more specialized roles and those roles will need their own dedicated training and enablement.

Finally, Customer Success will need to get tight around metrics, specifically which metrics matter to their customers and how their work can directly impact them.

The future of CS will be all about customer value - how it’s being delivered, how much of it is being delivered, and how quickly. Customer Onboarding and Value Expert, Donna Weber, emphasizes, “Value must be meaningful and appreciated by your customers."

Just because they log in and use your product does not mean they see an impact across their business. Now is a great time to reach out to new and existing customers to find out what is meaningful to them.

Ask why they keep using and paying for your solution. You might find different value trends for each customer segment or product.” CS must move customer metrics front and center to justify its value not just to customers, but to company leadership as well.

To escape the three crises it's facing, Customer Success has to evolve. It won’t be easy, but it’s long overdue.

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