Robert Statsky

Preface

In order to set yourself apart as a CS leader or a CSM, you should take on roles that require you to own a revenue target. I cannot think of any better way to solidify the importance of your role than to take a quota. You will proudly say “I am generating revenue for this organization” to anyone that looks at your role.

That alone will elevate your importance to the business.

While I realize there are plenty of roles that are not directly tied to revenue generation, there is a certain element of importance in fast growing b2b SaaS companies when it comes to generating revenue and holding value within the organization.

It’s important to note that no one team can survive without the other. So when the sales person says, I’m keeping the lights on, and your backend engineer is saying you’d have no product to sell without the work I’m doing, your first instinct should be to take a step back and realize all the teams and company roles are required to enable the others. Well maybe 99% of them…

There has been an endless amount of content dedicated to structuring teams and environments and which teams are required at what stage company you are. I will not address this because that is not my expertise or what I want to focus on for this discussion.

Customer Success has the unique ability to impact the bottom line at scale across your entire customer base.

One of the quickest ways to do this is to increase pricing on your product.

You can of course increase price in general for new accounts signing up, but the easiest place to start would be with discount recovery. Here’s how I’ve done it.

Discount Recovery

Basically put, your CSMs should evaluate every customer in their book of business that is discounted and determine how, upon renewal (whether that is annually or monthly), you can closer align that customer’s bill to your current pricing.

This should be done thoughtfully, and with a notification to the customer. But it’s sometimes surprising how much money is left on the table with customers that are paying way below the normal pricing. There should be a concerted effort by each CSM on your team at doing this. It’s best practice, and doesn’t require a full-scale program to do it.

That said, you can take a full-scale approach to rolling this out as well.

Cool, how do you do that?

To roll out a full-scale price increase:

• Make sure your data is as accurate as possible
  • All pricing for every customer you are increasing should be accurate
• Calculate at scale what you’re going to increase each customer
  • It should be a percentage increase. Consider the customer that had a 75% discount because they were signed up on the last day of the quarter 3 years ago and received the “VP special” discount. That customer is not going to want to drastically increase their price when it’s possible they haven’t done anything new with your product or service. It’s also possible you haven’t had any substantial changes to your product in the time they have been with you, so removing that 75% discount entirely could be problematic, especially if you’re in a competitive space.
• Percentage increases work well especially if your customer pricing is very messy. If you’re in the SMB space this is highly possible because you might have thousands of customers. In the mid-market or enterprise space, the approach would be different. You’d probably want customer tailored pricing based upon usage and access to your product or service.
• Develop clear messaging on why you are increasing the price
  • This could be to support new products and updates, it could be a message from the founders. Or it could be VERY generic and just let people know of the percentage increase coming.
  • If you are dealing with very close, highly valuable relationship clients, the note should be personalized and come from your CSM directly to the main decision maker and point of contact. It should be customized messaging and have a strong justification. Negotiate if there is push back.

As always, here’s what Chat GPT has to say:

Rolling out price increases to your entire customer base is a delicate process that requires careful planning, communication, and consideration of customer relationships. Here’s a strategic approach to handle this situation:

1. Conduct a Detailed Analysis:

• Evaluate the financial health of your company and assess the need for a price increase.
• Analyze the impact of increased costs, improved features, or expanded services on your pricing strategy.

2. Justify the Increase:

• Clearly communicate the reasons behind the price increase. This might include improved features, enhanced security, expanded support, or increased operational costs.
• Provide a transparent breakdown of how the additional revenue will be used to benefit the customers.

3. Segment Your Customer Base:

• Segment your customers based on usage, subscription plans, or other relevant factors.
• Tailor your communication strategy for each segment, addressing their unique needs and concerns.

4. Communicate Early and Clearly:

• Announce the price increase well in advance to give customers time to adjust and make informed decisions.
• Use clear, straightforward language to avoid confusion. Provide detailed information on the changes and their effective date.

5. Offer Value:

• Emphasize the additional value customers will receive as a result of the price increase.
• Highlight any new features, improvements, or additional services that will be introduced.

6. Grandfather Existing Customers:

• Consider grandfathering existing customers at their current pricing for a certain period.
• This approach can help retain customer loyalty while still implementing the necessary adjustments.

7. Provide Options:

• Offer different pricing plans to accommodate various budget constraints and usage levels.
• Allow customers to choose plans that align with their needs and budget.

8. Implement a Phased Approach:

• Gradually implement the price increase over multiple phases for different customer segments.
• This approach can reduce the immediate impact on customers and provide additional time for communication and adjustment.

9. Invest in Customer Communication:

• Utilize multiple communication channels such as email, in-app notifications, and social media to reach customers.
• Create FAQs and support documentation to address common questions and concerns.

10. Listen to Customer Feedback:

• Establish feedback channels for customers to express their concerns.
• Actively listen to customer feedback and be prepared to adjust your strategy based on their responses.

11. Provide Support:

• Offer personalized support for customers who may be impacted by the price increase.
• Clearly communicate how your customer support team can assist them during this transition.

12. Monitor Customer Sentiment:

• Use social listening tools and customer feedback mechanisms to monitor sentiment and adjust your strategy accordingly.
• Be prepared to address any negative feedback promptly and transparently.

Remember, effective communication and transparency are key during such changes. By being open about the reasons for the price increase and emphasizing the added value, you can mitigate potential negative reactions and maintain a positive relationship with your customer base.