An Investor Perspective on Customer Success – CS100 Summit Recap: Stacey Bishop
Stacey Bishop is currently a partner at Scale Venture Partners, a leading early-stage capital firm based out of San Francisco. Stacey came to the CS100 Summit stage armed with a palpable energy and bursting with insight into centering company focus on all things customer success. Stacey is a firm believer that customer success is a responsibility of every business function, and that successful customers require attention from the entire team. She believes customer success is the difference between a financially viable (and successful) company and one that is not. During her time on the CS100 stage, Stacey discussed her incredible insight into customer success from an investor’s perspective.
Watch the video of Stacey’s presentation below:
Stacey sat down with Dave Blake, Founder & CEO of ClientSuccess, for a 1:1 conversation on her story of success in the venture capital world and how she views customer success from this unique perspective.
3 Reasons Why Hubspot, Ominture, and ExactTarget Had SaaS Success
Stacey has been at Scale Venture Partners for over 17 years, and when asked what she looks for in a successful investment, she was quick to highlight three SaaS companies all from outside Silicon Valley: Hubspot, Omniture, and ExactTarget. What made them so successful in Stacey’s eyes?
- Loyal employee bases. All three companies created winning internal cultures and invested heavily in employee advocates.
- Stable executive teams. Things like multiple co-founders, promoting from within, and laser-focus on the end goal help make these executive teams thrive.
- Maniacal focus on the customer. All of these companies knew from beginning that successful customers would push them the furthest, and they invested resources in such.
“We want to understand the pain point the company is solving, and want to make sure it is high on the priority list of the prospective customer.”
What Types of SaaS Metrics Do VC Firms Look For?
When asked what types of metrics VC firms look for when weighing new business, Stacey mentioned that most firms look for lifts in revenue, recurring revenue, and long-term renewal trends. While it may be hard to find a consistent benchmark across companies or industries, Stacey said to just make sure you are tracking metrics against your own data, to show executives and board members how your team is performing over time.
Dave then asked Stacey what she thought about the huge wave of marketing technology solutions and companies coming to market. With firm conviction, Stacey told the audience that investors are looking for the IPO, not for the acquisition. In order to stand apart in this sea of competition is to hone in on a huge consumer pain point and create the best solution possible.
While it’s taking time for customer success companies to come out of this SaaS wave, Stacey emphasized how important these solutions are to successful cultures. So many customer success metrics can help make-or-break VC investment decisions, such as:
- A must-have product to help retain customers, If your customers aren’t sticky, where is the future?
- High customer churn. If VC firms see high churn, they run from deals, no matter what the sales plan looks like.
- Net retention. Stacey mentioned that the gold standard in SaaS is over 100% net retention, but companies should be striving for the 80% mark.
What Are the Board Metrics for Customer Success?
“When presenting to the board, you must have a customer success dashboard with consistent metrics.”
What are these relevant numbers? Obviously net retention, but Stacey says capitalists and board members also want to see gross churn, impacted revenue, and even lists of at-risk customers. Board members want to know the reasons behind these churn numbers and know why these customers are at risk so they can jump in and help. It’s also a good idea to highlight your onboarding process to show exactly how the customer success team is promoting product stickiness and loyalty.
As Stacey and Blake wrapped up their riveting discussion, Stacey reiterated the fact that metrics are key, and that customer success leaders should be on the hunt for solutions and platforms that help create a whole picture of the business, in order to flag churn or other risks and take action to stop them.
You can view Stacey’s entire presentation here.
Join us this September at the CS100 Summit 2017 at Sundance, Utah. This is an exclusive summit for leaders of customer success teams. Rub shoulders with the best leaders in the industry. There are only 100 executive seats available and we sold out last year. Learn more and register here.
Check out our resources below for more customer success best practices and insights for how your organization can approach customer success with the customer at the center.
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