Why SaaS Companies Are Firing Their CSMs Despite the Importance of Customer Retention

The SaaS business model is built on a foundation of customer retention. This is because retaining existing customers is crucial to the success of a SaaS company, as the cost of acquiring a new customer is 5 to 25 times higher than retaining an existing one.

However, despite the importance of customer retention, many SaaS companies are making the questionable decision to fire their customer success managers (CSMs).

Customer success is the key to customer retention, as it ensures that the customer is getting value from the product or service they have purchased.

CSMs play a crucial role in ensuring customer success, as they ensure that customers get the most out of the product, address any issues they may have, and help them overcome any obstacles to success.

Unfortunately, the odds of getting bailed out by venture capital (VC) are at an all-time low in today’s world.

This means that companies need to focus more on profitability and efficiency rather than simply acquiring new customers. However, the decision to fire CSMs seems counterintuitive, as CSMs are often the key to customer retention and profitability.

So, why are SaaS companies deciding to fire their CSMs?

The answer is unclear, but it could be due to a lack of understanding of the importance of customer success and customer retention. It could also be due to a lack of resources, as CSMs are often not considered a priority when budget cuts are being made.

In conclusion, firing CSMs is a questionable decision that SaaS companies must reconsider. Customer retention is built on customer success, and customer success is built on the work of CSMs. Firing CSMs is detrimental to customer success and retention and could also hurt the overall success and profitability of the company.

To retain customers and ensure the success of a SaaS business, it’s essential to provide exceptional customer service and support. This includes proactively addressing any issues or concerns, providing training and resources to help customers get the most out of the product, and regularly checking in to ensure that customers are satisfied.

The role of CSMs is critical in this process, as they are responsible for building relationships with customers and ensuring that they are successful with the product.

Do’s of Customer Success:

  1. Understand your customer’s goals and objectives.
  2. Provide comprehensive onboarding and training.
  3. Proactively address customer concerns and issues.
  4. Regularly check in and communicate with customers.
  5. Continuously gather feedback and use it to improve the customer experience.
  6. Provide resources and support to help customers achieve success.
  7. Build strong relationships with customers and show a genuine interest in their success.

Don’ts of Customer Success:

  1. Don’t ignore customer concerns or complaints.
  2. Don’t overpromise and underdeliver.
  3. Don’t neglect regular check-ins and communication with customers.
  4. Don’t neglect to gather and act on customer feedback.
  5. Don’t treat customers like just a number or a source of revenue.
  6. Don’t neglect to provide resources and support to help customers achieve success.
  7. Don’t neglect to build strong relationships with customers.

By following the “do’s” and avoiding the “don’ts” of customer success, companies can ensure that their customers are satisfied and successful, leading to increased customer retention and overall business success.

Without the expertise and dedication of CSMs, it becomes difficult to retain customers and achieve long-term success in a SaaS business.

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