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Should customer success have veto power over bad-fit customers?
In 2001, author and consultant Patricia Seybold could see that technology was having a profound impact on business economics. The customer, she wrote in her book “The Customer Revolution,” was in charge. Businesses had to become more customer-centric.
While the subscription model was nascent and SaaS, as a term, hadn’t quite been popularized yet, Patricia had a few ideas that were innovative at the time.
First, she advocated for a single executive leader to be charged with overseeing the post-sale teams and ensuring customers get value from a product. That notion evolved into what we know today as the chief customer officer.
Second, she recognized that as a company grows and matures, it will invariably obtain some customers who will always be dissatisfied. The focus then should be on keeping the profitable customers and letting those that are not profitable part ways.
Her ideas are 20 years old at this point, but they still conjure an important question: Should customer success teams have veto authority over bad-fit customers?
We put that question to the 1,250+ respondents of our annual Customer Success Leadership Survey.
Nearly nine in every 10 (87%) respondents said “yes,” customer success should have that power. Further, more than one-third (36%) say they do have veto authority over bad-fit customers.
We also looked at this question from a couple of different angles including by annual contract value (ACV). Interestingly, there does appear to be a correlation between ACV and veto authority: the larger the ACV, the more likely customer success has veto authority.
For example, just 24% of customer success leaders responsible for accounts with ACVs of $5,000 or less have veto authority over bad-fit customers. By contrast, 40% of customer success leaders responsible for accounts with ACVs of $250,000 or more have this authority.
Download the full report—2023 Customer Success Leadership Study—for a more in-depth look at the influence of customer success teams across the organization. The report, which is a joint effort by ChurnZero, ESG, SaaStr, and HubSpot, is full of metrics, benchmarks and insights that will help customer success leaders and team members better understand the evolving landscape.