“When you say ‘CS’ that’s a naughty word. So I don’t believe in customer success. Because what does customer success do in most companies? They are basically either renewal people or they’re guiding the customer around to how to use the product.
But if you ask the tough of customer success, can they sell the product? No. Are they technical enough to be a sales engineer? No. What are they doing?
So me, I’d rather take that money that you are spending on customer success and invest it in either professional services people that are paid for — that you can use as free resources — but they are technical or sales engineers or sales reps. So you’re getting something. As opposed to this weird thing that you can’t really quantify.
We have a business value engineering group, which they actually are more of an enablement group for the sales team to help build business value plans for the customer. ‘Hey you were doing X before, you are doing Y with Snowflake; here’s the benefit.’ But it’s an enablement. You’re teaching the sales team how to fish. It’s not like they are going to do this for every single sales rep across the company. The sales rep should end up doing that for themselves.
Get rid of ’em. Build a professional services organization. Hire more SEs who can do it. Customer Success– look people think that’s blasphemy — I don’t believe in it. I inherited customer success. I got rid of it. It was an expense that I didn’t see the value in.
Just give the sales rep a renewal quota. It’s a basic thing. ‘Hey guess what, you have a renewal quota and you have a growth quota. That’s easy. Here go sell. And if you’re too busy to do the renewal, I’ll just take away half your accounts.’“
– Chris Degnen, CRO at Snowflake on The Twenty Minute VC podcast
OK, folks I am just going right in on this one because it is WILD. TOTALLY WILD!
STRAWMAN#1: CS IS JUST GUIDING PEOPLE AROUND THE PRODUCT
Just guiding people around the product? What?! Should people not understand how the product works? Didn’t sales people bring these customers in so they could use the product?
Look, I am ALL for product-led growth and support-driven growth, and in an ideal world I truly believe most products would essentially sell themselves, be super easy to get up and running, and effortless to maintain. However, THAT ISN’T THE WORLD WE LIVE IN. All products are positioned as a solution to a problem, but the space between marketing and the AHA moment! of that value realization can be quite wide — especially when you are taking about a complex problem and an immature product. CS is a MASSIVE part of filling that space. Guiding people around the product means they will USE the product and GET VALUE from the product and WANT TO KEEP PAYING YOU for the product.
I will never say that this is all good CS people do, but GUIDING PEOPLE AROUND THE PRODUCT IS CRITICAL WORK.
STRAWMAN #2: CS CAN’T SELL
Bro, this is weaksauce. First of all, anybody who knows anything about SaaS growth knows that over time the lion’s share of revenue is driven by retention and renewals and not new customers. In fact, according to a study by Harvard Business Review, increasing customer retention rates by only 5% increases profits by 25% to 95%.
As mentioned before, customers stay and pay and grow because they are having a good experience with the brand and product. Sales is rarely (if ever!) part of the experience that makes customers stay and pay. Good on you, Mr. Sales Man, for the initial securing of the bag, but the ongoing maintenance and growing of said bag.– by which I mean the ongoing maintenance and growth of revenue — is something you contribute precious little to.
STRAWMAN #3: PROFESSIONAL SERVICES WILL CONTINUE TO BE A RESOURCE TO A GROWING CUSTOMER.
OK, there are a few ways to think about this. If you are selling the implementation as part of the product such that the PS person is essentially embedded full or part-time into the customer organization, then I will grant that an additional CS person might not be very useful. However, if you are selling Professional Services as an add-on (with all the GAAP accounting revenue recognition complexity that entails), then the idea that valuable PS time is going to customers that aren’t explicitly paying for it will likely get you into hot water with your CFO. Just sayin’.
Look, every company is different. From what I understand, Snowflake has a usage-based pricing model that maybe means they are making money so very “hand over fist” such that maybe they can get away with this. But not every company is Snowflake. Most companies I have ever worked for don’t want PS people sitting idle and delaying revenue recognition OR PS people attending to customers who’ve already spent through their allotted hours. PS is there to hit certain milestones as outlined in the contract, not to do the things a good CS person should be doing, such as:
- track usage and overall customer health;
- proactively reach out with useful guidance and resources;
- report back/ align on the value the customer is receiving from using the product; and
- be an ongoing advocate for the customer, driving bug fixes, product improvements, and new product development.
STRAWMAN #4: SELLERS WILL EVENTUALLY BE SELF-SUFFICIENT ENOUGH TO NO LONGER NEED TO RELY ON SALES ENG, PS, AND CUSTOMER SUCCESS
I would love to work with self-sufficient sales people. I have never met any. Show them to me.
STRAWMAN #5: CS HAS NO QUANTIFIABLE METRICS
NRR, GRR, NPS, CSAT, Renewal Rate, Churn Rate. I can’t believe I even have to write this. I’d argue that CS has TOO MANY quantifiable success metrics.
STRAWMAN #6: SELLERS WILL SINGLE-HANDEDLY DRIVE UPSELLS AND RENEWALS.
Most upsells and renewals require deep insight into customer health, success metrics, and actual progress towards desired outcomes. Salespeople tend to — hmm, how should I put this? 🤔 –skate across the surface of things and then turn to CS, Product, and implementation people for the information they need to initiate and drive upsells and renewals. Again, show me all these learned scholar sales people you claim are out there. I am open to being wrong.
I could go on and on with what made me crazy about this interview, but I won’t. It actually wasn’t all bad. But when it was bad, it was very very bad and wrong. The thing that made me craziest was really more towards the beginning of the interview when he talked about the TWO WHOLE YEARS he was paid to go out and talk to potential customers and bring those valuable insights back to Product to help improve the product. This work is called Customer Development and is a big part of what a good CS team continues to keep alive after the product finds market fit. Product and brand experience development is not one (or two!) and done. It is a cycle that requires time and attention. This dude knows that and I think is just being provocative.
Bold new ideas are part of what Silicon Valley is built on and we all enjoy the occasional hot take as part of this brisk exchange of such ideas. However, this comment felt completely thoughtless and irresponsible. I am all for the evolution and possible rebranding of CS (and tbh I think that is just what the Snowflake “Business Value Engineering” team that he references is), but the idea that the work that CS teams do is useless to the organization and should be done away with is at best laughable and at worst, hurtful, foolhardy, and dangerous.
Camille E. Acey 
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