How Customer Success Drives Company Market Valuation - SmartKarrot

How Customer Success Drives Company Market Valuation

How is Customer Success driving around your company market valuation? Buckle up, and find out below.

How Customer Success Drives Company Market Valuation
How Customer Success Drives Company Market Valuation

The saying, “What goes around, comes around,” is true even in the customer success industry. Because, yes, CS, when done right, dramatically impacts your customer’s bottom line and yours as well. Not convinced? This post will cover five ways businesses, and their customers see value from the CS industry.

Table of Contents

  1. With Enhanced Revenue
  2. With Customer Acquisition Cost
  3. With More Employees or Talent
  4. With Enhanced Account Expansion
  5. With Customer Lifetime Value

With Enhanced Revenue

Revenue is all about MRR (Monthly Recurring Revenue) or ARR (Annual Recurring Revenue) in customer success. Let’s say that your CS department is doing an exceptional job helping your customers reach their desired outcomes. A satisfied customer doesn’t churn. And when your customers aren’t churning, this, of course, means more revenue for you. 

Or, let’s assume that your customers are ready to upgrade their current subscription with add-ons or opt for a more premium plan. Once again, this also has a positive impact on your revenue.  

And a happy customer is a retained customer, and a retained customer drives revenue growth.

With Customer Acquisition Cost

CAC or customer acquisition cost is a SaaS metric that indicates the total cost needed to acquire one new customer. Another way CS drives company valuation is by customers advocating on your behalf. From online reviews to case studies and viral expansion to reference calls, customer-driven growth accelerates CAC Ratio efficiency and shouldn’t be left to chance. Therefore, the more you leverage this factor, the better it is for your market valuation.

With More Employees or Talent

How you nurture your ability to acquire talent impacts your company’s value. If you’re seeing a lot of customers churning, there’s a good chance your employees are churning too. Maybe you’re trying to sell to customers that you shouldn’t or selling a dream that simply doesn’t exist. Whatever the reason, working in an environment like that isn’t healthy and, by design, leads to more customers and employees churning. 

But when you’re focused on customer success, most of the time, you’re in tune with and focused on employee success. And this is an attractive factor to investors, who are always looking for the value of a company.

With Enhanced Account Expansion

An enhanced account expansion has multiple benefits. One benefit customers see from a helpful CS department is getting more value from their relationship with you. And from your end, this means increased revenue through just your current customer base.

Why does that matter? Because when you’re experiencing healthy revenue growth from account expansion, you don’t need to focus on customer acquisition to continue growing.

With Customer Lifetime Value

Customer Lifetime Value or CLTV is an essential element of the customer success industry that helps to drive more market value for your company. Increasing CLTV, through extended lifetimes, either via simple customer retention or via expanded revenue, such as upsells, cross-sells, etc., is a very healthy sign for your customers as well as for your company. And Customer Success is the way to keep customers longer, increasing their CLTV—even if they never pay more. It’s also the key to customers eventually becoming your brand advocates.

Parting Thoughts

Customer Success is all about delivering the best to your customers and ensuring they’re satisfied and happy with your product. And when your customers are satisfied and finding value, you can as well through the different ways discussed in this article.  Because, overall, it’s all about implementing these correctly and ensuring you’re giving your customers your best.

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