Customer Success | 5 MIN READ

How Customer Success Drives Company Market Valuation

How customer success drives company market valuation? Read on this article to delve into 5 such battle-tested ways.

Simran Mohanty
Oct 27, 2021

How Customer Success Drives Company Market Valuation

How Customer Success Drives Company Market Valuation

As they say, what goes around, comes around, holds true in the customer success niche too. Let’s face it – customer success as a subject is transformative. In simple words, it drives in more exponential value for both vendor as well as the customer. In fact, it’s that value growth for the customer that truly drives the value growth for the vendor. When implemented right, customer success does have the power to drive more company market valuation. At the end of the day, what really matters is the value that you deliver to your customers and the value that you receive as profits. As long as you are in a business stature, profit or revenue is always a primary target. But how does customer success drive company market valuation? If that is what you have been wondering lately, we have compiled a list of ways in which customer success can drive in more market value of your company. Without any further ado, let us delve into the topic.

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

In a customer success niche, revenue is all about MRR (Monthly recurring revenue) or ARR (Annual recurring revenue). Let’s say that your customers stay retained with your company and do not churn out at once, this means that you have a better chance of driving in more conversions. Or, let us assume that your customers are ready to pay more for your services, either by getting add-ons or opting for premium plans, it is you who is going to get more revenue. The more you had such categories of making revenue, the more is the chance of driving company market valuation in to your brand, and frankly that is all that should matter to you.

With Customer Acquisition Cost

CAC or customer acquisition cost is a key SaaS metric that indicates the total cost that is needed to acquire one customer. People generally think that the lower the cost, the better is it to magnet more customers. But that is not entirely true. CAC costs will also be lessened by an up in customers advocating on your behalf. From online reviews to case studies, and from viral expansion to reference calls, customer-driven growth is an accelerator of CAC Ratio efficiency and shouldn’t be left to chance down. 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 the value of your company, believe it or not, it is true. If you are seeing a lot of customers getting churned off, there is a good chance that you might as well be churning off your employees too. It may look like that you do not care about your customers, or maybe you are selling to the customers whom you shouldn’t be selling in the first place. Whatever the reason may be, working in an environment that is not healthy leads to more churn rates. Therefore, the second you add in more talent or employees that can create a difference into your system, will eventually make a stark impact on your company market value. Start implementing this factor and trust the change.

With Enhanced Account Expansion

An enhanced account expansion has multiple benefits. Aside from the fact that it helps your customers evolve and get more value from their relationship with you – is too important to leave to chance; operationalize logical account expansion and create a truly predictable revenue model. Which is better – growing revenue from your existing customer base and turning off your new customer acquisition or forgetting about your existing circle and focusing on acquiring more customers? The pick is yours and so is the answer.

With Customer Lifetime Value

Customer Lifetime Value or CLTV is an essential element of the customer success niche 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, which increases their CLTV even if they never increase the amount they pay, but is also the key to moving customers to become brand advocates for you one day.

Parting Thoughts

Customer Success as a niche is all about delivering the best to your customers and making sure that they are satisfied and happy with your products. People often confuse customer support with customer success but they are two separate things. Customer support is definitely a part of customer success. In this article, we learned that how with enhanced Revenue, customer acquisition cost, more employees or talent, enhanced account expansion, and with more customer lifetime value, we can add more company market valuation into your systems. It is all about implementing each of these bits in the right way and ensuring that you give only the best to your customers.

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Originally Published October 27th, 2021, Updated October 27th, 2021

Simran Mohanty

Simran hails from the content marketing backdrop with extensive knowledge in blogs, articles, and technical whitepapers in the non-fictional domain. She uses her 'gift of the gab' to explore new possibilities on her way and to make an exquisite impact on her readers. In her spare time, she likes to read journals on artificial intelligence or play with her cute kittens.

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