Last week, I spoke at the Customer SuccessCon West conference about calculating ROI for customer success programs. (Thanks to all who attended: what a crowd!)
While we eventually constructed a model together (I will get to that in future posts), the first component of the discussion was why ROI analyses do not work so well for customer success.
- ROI analyses require comparing before and after states, or approach A versus approach B, while customer success is usually an either/or condition. So you can calculate the ROI of, say, moving to group onboarding, but it’s awfully difficult to show the return of the customer success program as a whole.
- ROI analyses focus on quantitative financial benefits, leaving out qualitative benefits. How do we (honestly) capture the value of a wonderful success story? Not everything of value can be monetized.
- ROI analyses struggle to capture long-term benefits, and customer success is often about the very long term. It’s possible to create ROI analyses for any length of time, but it’s rarely done.
- ROI analyses may not be appropriate at all for “hygiene” functions. Have you ever seen an ROI analysis done for the product team as a whole? No, because we all know and accept we need to develop products.
Before you jump into an ROI exercise for customer success, think about the limitation of the approach. Add a comment to share your experience with ROI.
Can’t wait to hear about the rest of the presentation? I will gladly send you a copy. Just ask!