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➤ WELCOME BACK

You’ve opened today’s issue because you already know the truth: Customer Success in its current form isn’t protecting your revenue. It’s draining it.

Here’s what you’ll take away today:

• The system and workflow that turn churn firefighting into predictable rituals

• Common traps that make CS look busy but destroy net revenue retention

• A practical framework for transforming CS from a cost center to a growth engine

Let’s get into it.

➤ IN CASE YOU MISSED IT

How To Engineer Healthy Customer Dependency: “The difference between customers who churn at month three and those who renew at year three isn't price sensitivity or feature completeness. It's integration depth. If you have integration depth, your power users are weaving your product into their daily workflow so tightly that removing it will require rebuilding entire processes.…” Read it!

➤ TODAYS FOCUS

👉 Why Customer Success Became a Cost Center

Customer success was designed as the safety net. But in most organizations, it’s still treated like insurance, something you only think about when things go wrong.

That mindset is bleeding recurring revenue.

How did we get here?

• Early SaaS scaled sales before it scaled retention. Deals first. Churn second

• CS inherited reactive work: “Save this account,” “Handle this ticket,” “Do this renewal”

• Leaders defined CS by headcount, not by revenue impact

Result: CS became firefighting. A black hole for margin. And the retention number floated above the team, owned by no one.

The companies that win in the next decade won’t see CS as cost containment. They’ll see it as revenue protection. A core operating system, a framework.

👉 A Framework For Fixing The Broken Contract Of Customer Success

Step One: Change the Charter

Stop treating CS as a support-adjacent function. Define the job in financial terms. 

• Net Revenue Retention (NRR) 

• Gross Revenue Retention (GRR) 

• Expansion ARR

Make it explicit; customer success protects revenue. That means:

• Every pod/group/department owns a revenue KPI

• Every renewal is forecasted aggressively

• Every churn event gets a root-cause postmortem

When the team sees themselves as “revenue operators,” the work changes.

Why it works

Clarity of purpose changes behavior. When CS is measured by NRR, GRR, and expansion ARR, the team optimizes for financial outcomes rather than activity volume.

Forecast discipline improves because the target is explicit. Roadmaps shift toward retention drivers because the metric forces prioritization.

Pitfalls

Choosing vanity metrics that do not predict renewals or assigning a number without the data, enablement, or authority to influence it.

A lack of ownership clarity. The lines blur between sales and support, so no one is accountable.

Overfitting to lagging KPIs and ignoring leading indicators like activation depth and seat utilization.

Step Two: Redraw the Org Chart

Most CS teams sit awkwardly between sales and support. That’s a political liability.

Instead, create a Revenue Protection Unit that reports into Growth or directly to the CEO.

Structure it like this:

• Lifecycle Ops: Owns data, health scoring, and automations. No black boxes

• Retention Managers: Hybrid of AM/CS. Carry a number. Forecast expansion and churn risk

• Product Feedback Loop: Dedicated analyst translating churn drivers into roadmap inputs

This turns CS from “nice-to-have” into “board-level accountable.”

Why it works

Lines of authority will help reduce political friction. A Revenue Protection Unit reframes CS from service to strategy.

Dedicated roles will concentrate expertise in data, account strategy, and product feedback. This helps escalations move faster because decision rights are clear.

Pitfalls

Creating a new box/role/group without changing incentives or workflows. Half-measure won’t work here.

Orphaning support and creating customer whiplash across teams. It’s easy to rebrand Customer Support as Customer Success; don’t be fooled, these are different roles.

Try to avoid hiring traditional account managers when what you need are operators fluent in data and systems.

Step Three: Connect Finance Early

Too many CFOs see CS as headcount spend. They only feel the pain, not the protection.

Flip that by embedding finance into retention reviews. Show the delta between forecasted churn vs. actuals. Then tie it back to margin.

When finance sees that CS reduces variance, the budget expands.

Why it works

Finance validates impact and funds what works. The definitions for cohorts, revenue recognition, and renewal stages prevent surprises and add clarity.

Variance analysis turns churn from anecdotes into budget inputs. This means credibility with the board increases when numbers reconcile.

Pitfalls

Ignoring cohort timing, which distorts GRR and NRR trends. This is why you want more than just account managers who don’t understand data and systems.

Treating finance as a gate, not a partner, which slows decisions.

Step Four: Build Feedback Into the Roadmap

Every churn postmortem should have a line item in the product backlog. These should include missed integrations, poor onboarding, or pricing mismatch.

Tag each postmortem with ARR lost, then prioritize fixes and process changes by revenue impact, not just customer complaints.

This is how retention becomes a product feature, not a CS afterthought.

Why it works

ARR-tagged feedback quantifies the cost of not shipping a fix, which helps with prioritization by revenue impact, aligning product with the retention goal.

Patterns across lost customers inform positioning and onboarding, helping your roadmap become a retention instrument, not a feature list.

Pitfalls

Creating roadmap whiplash by chasing every churn reason. Take time to gather enough data for quality decision-making.

Ignoring the cost of delay and engineering complexity in the scoring model. Weak instrumentation and missing cost-KPIs make impact measurement ambiguous.

Step Five: Treat Customer Success Like a Factory

Factories don’t just produce outputs. They measure yield, defect rates, and throughput.

Do the same with CS:

• Inputs: number of accounts, feature adoption, etc

• Processes: QBRs, dunning, renewals

• Outputs: GRR, NRR, logo churn

Why it works

Factories manage flow, yield, and defects. Doing the same with CS inputs, processes, and outputs exposes bottlenecks.

Continuous improvement becomes normal because the system is visible.

Pitfalls

Goodhart’s Law, where a metric stops reflecting value once it becomes the target. Don’t let entropy grind your factory to a halt; revisit processes often and iterate.

Skipping a baseline makes improvements impossible to prove. Start measuring now.

Step Six: Measure Retention as Aggressively as Growth

Boards obsess over pipeline. They should obsess equally over retention.

Present churn data with the same rigor as bookings:

• Leading indicators (adoption, logins)

• Lagging indicators (renewals, revenue churn)

• Forecast accuracy vs. reality

Retention deserves its operating review; every quarter, without fail.

Why it works

What gets reviewed gets resourced. And cohort views can reveal the shape of churn rather than a single rate.

Leading indicators guide intervention before the renewal date. Leading indicators drive transparency and attention. And board-level attention creates real accountability for fixes.

Pitfalls

Avoid comparing unmatched periods and declaring victory. Remember to review your data by cohort for the given periods. It’s a moving target.

Survivor bias occurs when only current customers are surveyed. Pay close attention to all customers (new, old, and churned). Get comfortable communicating with the ones who have already left you.

👉 The New Charter

Customer success is not broken because of bad people. It’s broken because of weak systems.

Revenue protection reframes Customer Success as:

• A growth engine, not a cost center

• A predictable system, not a heroic scramble

• A financial KPI, not a feel-good function

The companies that restructure CS now will defend margins when the market tightens.

The ones that don’t will bleed. Quietly. Predictably.

➤ TILL NEXT WEEK

Retention isn’t a department. It’s a system.

Customer success only “works” when it’s rebuilt as revenue protection. Owned by everyone and measured with the same rigor as growth, and run like a factory.

The choice is simple: engineer churn out of your model, or let it engineer you out of the market.

Cheers,

~ Rick