ChurnZero, the platform and partner for customer success, together with SaaStr, ESG and HubSpot, has released the 2023 Customer Success Leadership Study: its fourth and largest annual study of the customer success (CS) teams driving recurring revenue and customer-led growth at SaaS and subscription businesses.
2023’s study reveals that although the tough economy has impacted customer success teams, who remain understaffed according to benchmarks, with headcount and budget growth at a standstill, they are becoming more operationally sophisticated and better equipped with purpose-built technology and new tools like AI. Additionally, CS teams’ metrics have shifted, reflecting how they contribute to their organization, with greater emphasis on improving churn rate, renewals, and expansion revenue under the overarching, top metric of NRR (net recurring revenue).
Based on a detailed survey of CS leaders worldwide, conducted between May 23 and July 15, 2023, the study focuses on four key areas: the influence of CS within the wider organization, the organizational alignment of CS teams, CS operations, and CS leaders’ goals and aspirations. An expanded set of questions for 2023 addressed current and future usage of AI, compensation for renewals and expansion, and the frequency of in-person customer interactions. Survey respondents were most likely to be directors or senior directors of customer success, reporting to CEOs of companies with between $5m and $49m in revenue and between 51 and 200 employees.
“Customer success is a pivotal function within every SaaS organization,” says You Mon Tsang, CEO and co-founder, ChurnZero. “The recent headwinds have prompted SaaS leaders and investors to hit the brakes on ‘growth at all costs’, and to refocus on profitable, sustainable, customer-led growth. While not immune to our industry’s wider budget and headcount freezes, CS teams have earned their influence as revenue and growth drivers.”
On Wednesday, October 18, leaders from ChurnZero, ESG, SaaStr and HubSpot will analyze key findings from 2023’s Customer Success Leadership Study in a live webinar. These findings include:
- CS matters at the highest levels of the SaaS industry. 51% of CS teams now report directly to the CEO.
- CS teams have embraced AI. 78% of companies say they have adopted or will adopt artificial intelligence (AI) in the next 12 months.
- There is an uptick in the adoption of customer success technology. For the first time in four years, more than half of CS teams are using purpose-built customer success software.
- CS team sizes and budget growth stagnated in 2023. 55% of teams reduced or maintained headcount, while 62% of CS leaders decreased or maintained their non-headcount budget.
- Economic uncertainty is slowing progress. 65% of CS leaders are delaying purchase and business decisions for three to six months.
- Ownership of the renewal process is shifting slightly. The percentage of CS teams that own the renewal process is trending downward, with dedicated renewal teams picking up the difference.
- Face-to-face meetings with customers are still happening. 77% of all companies meet with some segment of their customer base face-to-face at least once a year.
- Key CS metrics and charters have shifted, with teams putting more focus on churn rate, renewals, and expansion revenue.
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