Edward Chiu is the CEO and Co-Founder of Catalyst, the market’s fastest growing Customer Success Platform (CSP) built by CS Leaders for CS teams. Through his leadership, Catalyst is helping enterprise companies drive revenue growth by giving them a clear line of sight into customer health and upsell opportunities. Previously, Edward built and led the Customer Success team at DigitalOcean, helping the company grow to $150M+ in revenue and one of the largest publicly traded cloud providers.
Catalyst has consistently been named a leader in multiple categories from LinkedIn’s Top 50 Startups, Crain’s Best Place to Work, Built-In Best Place to Work, and most recently Inc.’s Best In Business 2022.
M.R. Rangaswami: Why is Customer Success (CS) so important in this economy and how has it become the new revenue growth engine?
Edward Chiu: We’re experiencing one of the largest stock market drawdowns in the past couple of decades. Some of the best companies in the world you wouldn’t expect have done layoffs like Amazon and Salesforce. Back in the 07-09 recession, there was a study done by a consulting group that highlighted companies that focused on customer experience significantly outperformed the S&P 500, and those who didn’t saw their returns drop in free fall.
Customer Success is important in this economy because it helps to ensure your existing customers, who are keeping your business afloat – are satisfied with the products and services they have purchased. This ultimately leads to the much-needed retention during a down market and most importantly, organic revenue growth. There’s nothing cheaper than generating repeat business and word-of-mouth growth through your existing champions. CS has become an increasingly important part of many companies’ growth strategies, as they also leverage it as a differentiating “product” from their competitors.
Having spoken to hundreds of Chief Customer/Revenue/Executive Officers in the past couple of months, the number 1 focus they are all shifting to is creating “growth through their existing customers”. Leaders are frantically trying to organize all of their customer data from disparate sources and find immediate opportunities where Customer Success and Sales can start to tackle jointly.
M.R.: Sounds like customer success is becoming the new growth, how do executives go about creating a program that truly scales this process?
Edward: Existing customers have ALWAYS been one of the most important growth drivers, but because of this market downturn, it’s now becoming the primary.
Most executives think this shift is incredibly daunting but it’s actually quite simple. To start, CS leaders have to be expeditiously focused on data-driven customer success.
They need to first identify specific metrics and data points that are most relevant to their customers’ success. This may include data on feature adoption, level of engagement with company reps or content, successful outcome moments, etc. Next, they need to work with other stakeholders in the company to identify where this data is captured, generally, it’s in some kind of data warehouse like Snowflake or Redshift.
Most leaders tend to depend on data science teams or engineers to analyze this data using data visualization tools, but that creates a lot of dependency on other departments. That’s where Customer Success Platforms (CSPs) like Catalyst.io come in. CSPs are unique solutions that aggregate all of your data from Salesforce, data warehouse, ticketing software like Zendesk, and converge it into a single pane of glass. From there, you can quickly segment your customers by adoption and automatically send customized interactions to drive upsells that don’t rely on manual labor from your reps.
M.R.: What’s a trend you’re predicting in the next 6 months given the focus from new business acquisition to driving revenue growth from existing customers?
Edward: I was chatting with a Chief Financial Officer recently of a $100M+ software company and the most illuminating thing about our conversation was how important he viewed customer success as a revenue driver for their path to going public. Retention was an afterthought for him because churn isn’t a problem for their company, but effective collaboration between the go-to-market teams to generate targeted upsells is an area that requires deeper investments. Immediately following our call he introduced me to their Chief Customer Officer and VP of Product to learn more about data aggregation and improving their collaborative process to drive upsells.
In all my time in CS, it has been incredibly rare to see finance leaders be so invested in this topic, let alone be the first touch point in creating motions for change. The trend we are witnessing and will continue to see is customer success becoming the center for organizations. Product development will start with what your existing customers are looking for, marketing initiatives will revolve around the customers’ voice, and sales will partner closer than ever with CS to account for majority of the business revenue.
It’s an exciting time for businesses to focus on Customer Success, most importantly it will be the primary focus that leads businesses out of this economic downturn.
M.R. Rangaswami is the Co-Founder of Sandhill.com