The Math of Training
By Russell Bourne
Let's face it, Customer Success teams are under-invested in when it comes to enablement. In my many years of being a CS leader and then being a CS trainer, I've noticed three reasons for this under-investment come up over and over:
CS leaders who want training, but struggle to make a compelling business case for enablement;
Training that gets kicked down the road because of "more urgent" priorities getting in the way;
CS leaders who feel threatened by the presence of an outside trainer, or feel pressured to deliver it in-house (see #1 above).
Unfortunately, any of these reasons can self-fulfill when a CS team invests in training as a single event and doesn't enjoy a change in behavior or results. That's true if the investment is money (an outside trainer) or time (in-house or outside). A single unproductive experience can cow a CS leader into never seeking training again, or solidify in a CFO's mind that there isn't ROI to it.
But there's a way through. In this article I'm going to talk about how CS leaders can work in concert with training decision-makers to make sure training programs continue in their effectiveness. To be clear, this article is about ongoing training for CS processes, separate from new hire training.
How You're Training Today
As I alluded to above, most CS organizations don't, in practice, provide internal ongoing CS training for established CS professionals. If you're reading this as a CSM with, say, 5 years experience, has a manager ever formally refreshed you on new best practices for account planning? How about for value validation, risk mitigation, or customer-focused selling? Chances are, your internal training for those topics are unstructured and tribal in nature. It's likely that your CS leader, and probably you or some of your peers, are excellent at doing those things; but that doesn't translate to having access to updated training collateral, actively participating in effective workshops, or carving out time for recurring practice.
If you're a CS leader and you truly believe you can create a training program that works, or if you have no other choice than to try, I highly recommend reviewing Kristen Hayer's article from last month. She offered great insight on the characteristics of effective programs, and why your engagement as a leader is crucial.
On the other hand, many CS organizations have invested in outside CS training. I'm obviously a big proponent of this (and have been since I was a CS leader myself), because outside trainers have materials and exercises that are battle-tested, and because the presence of an outside trainer is a pattern-interrupt that makes it more likely for learners to engage. Still, outside training can fail to create meaningful outcomes. Why? Because outcomes are often not measured, or if they are, they don't match the outcomes your Finance team tracks. Our Alli Tiscornia addressed how to fix that in her article last month.
So, if you're going to engage with an outside trainer, be sure to collaborate with them when they talk through goal-setting and joint success planning for your time with them. (After all, we drink our own champagne).
The common denominator here is, training is most likely to drive good outcomes for you if:
The content is aligned with your goals as a revenue organization
Tangible, real-life materials and live practice exercises are built into the training
Ongoing coaching reinforces new behaviors on a regular basis
Baseball players don't stop practicing when spring training ends. They take infield and batting practice every day during the season. Musicians don't rely on gigs to get tight. They rehearse before every show. Whatever you're professional at, you need practice. Yes, I'm talking about practice.
Let's Do the Math
If all of that sounds great but expensive, and you're one of the CS leaders who doesn't feel comfortable making a business case, let's break down some numbers. Earlier, I said you need to align your outcome goals with what Finance is tracking, and that is almost assuredly revenue if not pipeline.
For revenue outcomes to improve the best they can, what procedural things need the most help? The answer to this can vary wildly, but I've seen strong trends throughout my whole career. Most CS teams wish they could spend more time on strategy and proactive work, less time firefighting, have better discovery conversations, and better access and relationships to key customer contacts. If they could just have those things, they'd be in a better place.
Let's pretend you had CS training that enabled you to have all those things, and let’s fast forward to a year from now. What change would you see in your NRR (net revenue retention) rate? I see answers ranging from 2-10%, usually.
If you're a SaaS business with $20 million annual recurring revenue, at the low end, a 2% gain is $400,000 for the year. And if your company valuation is, for example, 6x ARR, then you just gained $2.4M in company valuation in exchange for an investment that was likely in the 5-figures.
If you're a SaaS business at $200 million ARR, we're talking about $4 million dollars of ARR gain. At the low end. If your NRR is struggling and a 10% gain is in play, that's $20M. Following the 6x multiplier example, is it really possible to gain $120M in company valuation for what is likely a 5-figure investment? Yes!
CS training costs a small fraction of these gains. We’re talking ROI in the thousands of percents. It's hard to think of any investment with better ROI than CS training that works. If you started your calculations with the outcomes Finance cares about, the business case can't be beaten.
Remember the CS leader who thinks there's no time to take people off the floor for training? If one of the goals of training is to free CSMs from reactive work so they can instead focus on outcome-driving proactive work, you’ve killed two birds with one stone. The truth is, the right proactive work will actually reduce the reactive workload.
Why Does Training Matter to CS Leaders? To CFOs?
I've talked about the symbiosis of the needs of a CS leader versus the needs of a CFO; and the CFO's needs surely extend to the needs of a CEO, board, and investor base whether private or public. So why does this matter to any of those audiences?
Of course, CS leaders would like to report a fantastic dollar ROI on the programs they run, but there's a deeper level of connection at play. CS leadership has to be one of the most stressful positions in a company. I know, I've been there. When you're a CS leader, what you really want is to "not have to worry about it". If you can plan the value your organization provides the company, and communicate it, there's a tangible weight lifted off your shoulders. You get permission to ignore the critics, and the collateral to put questioning to bed as needed. You get freedom to pursue experimentation or interesting projects. The target comes off your back.
And let's remember, another part of "not worrying about it" means you don't have to develop the training program yourself. Remember the CS leader who feels bad for calling in outside help? Instead of cobbling together an internal version, they get hundreds of hours back (take it from us, we know) which they can use to plan strategically or simply be present for evening and weekend family time. And they still get all the credit for choosing and driving a high-impact trainer.
CFOs live for accurate forecasting. They need to accurately explain any losses or gains in financial performance, especially against forecast. If you've ever listened to an earnings call, you know the CFO gives a 30,000-foot view on investments and their outcomes to the company's investors. This isn't the place to get into great detail; they need consumable, understandable, high-level soundbites. We all know how complex CS can be, but what a luxury it would be for a CFO to simply say, "We invested in post-sales enablement and grew our gross revenue retention by X, and expansion revenue by Y, contributing to overall company growth of Z." An attainable luxury.
The Success League is a Customer Success training and consulting firm. If you’re looking to bring in outside trainers for your company, we can help! We offer training programs for CSMs and CS Leaders, in either public or private classes. Corporate training available. Visit TheSuccessLeague.io for more on these and our other offerings.
Russell Bourne - Russell is a Customer Success Leader, Coach, Writer, and Consultant. In a Customer Success career spanning well over a decade, his human-first approaches to leadership and program management have consistently delivered overachievement on expansion sales and revenue goals, alongside much friendship and laughter. Russell serves on the Board of Gain Grow Retain as co-lead for Content Creation. He is passionate about equipping individual contributors and business leaders alike to lean on their Success practices to grow their careers and help their companies thrive. He holds a BA from UCLA, and in his free time plays guitar semi-professionally.
