Dive Brief:
- The worst of budget and staff reductions seem to be over for customer success teams, according to a survey of more than 1,000 customer success leaders. The report was released last week by ChurnZero, 6sense, Customer Success Meetup, Gong, SaaStr, and Success Venture Partners.
- Last year, 13% of organizations said they were reducing headcounts on customer success teams. This year, 8% of organizations said they were reducing headcount, on par with 2022 levels. Over a quarter of customer success teams say their budgets will decline in 2024, but it’s still an improvement from 31% of customer success teams in 2023.
- The data indicates customer success teams may be stabilizing. “The stop of deceleration has to happen before re-acceleration happens,” said You Mon Tsang, CEO of ChurnZero. “Not many companies are growing, but also far fewer companies are shrinking. Far fewer companies are cutting budgets. More folks are stabilizing at their current state than the year before.”
Dive Insight:
Two years ago, economic headwinds hit SaaS companies hard. Customer success teams, often the newest business group, took an oversized hit.
But customer success teams have proven themselves to be essential, especially in growing the bottom line, Tsang said.
“When new sales become really hard to get, people sort of turn and look at the customer teams to get more growth out of their customer base,” he said.
This desire for customer success teams to drive more revenue has led chief customer officers to increasingly report to a chief revenue officer, who often oversees sales and marketing as well.
In 2024, one-third of chief customer officers report to the chief revenue officer, up from one-quarter the year prior. In 2024, 2 in 5 report to the CEO, down from about half in 2023.
Tsang understands why smaller companies have more CCOs reporting to the chief revenue officer, but he says that ideally, most CCOs would report to the CEO.
“At the largest companies, the CCO owns 90% of the revenue,” Tsang said. “As a company evolves, gets into the $50 million, $1 billion mark, that person should really be reporting directly to the CEO.”
