3 Customer-Led Growth Strategies to Stop Churn With Kevin Chiu, COO & Co-Founder, Catalyst

In today’s business world, retention rates are at an all-time low. And while organizations have restructured and stayed lean, customer teams need to maintain the same customer base, delight users, and prevent churn.

It’s a lofty task for even the most experienced teams. As a result, businesses are redefining their strategies to align with user needs, and customer education and success have taken center stage. 

Customer-Led Growth (CLG) has become a crucial avenue for business success. Kevin Chiu, Co-Founder & COO of Catalyst, joins the LEARN podcast to dive deep into how CSMs must evolve and how organizations must shift their mindset and approach and prioritize effective customer education for long-term prosperity.

Use digital channels to teach customers to use mission-critical features

Imagine investing in a product or service with enormous potential to transform your business but failing to grasp how to harness its mission-critical features or the key touchpoints that make or break a customer’s journey with a product.

Failing to educate customers on these essential features can lead to churn. Relying solely on Customer Success Managers (CSMs) to educate every decision-maker or prospect is impractical. Instead, organizations must use digital channels to reach customers at scale. 

“If people don’t understand how to use the mission-critical moments of impact, we call it in the product, they’re going to lead to churn,” Kevin says. “Because you can’t just have a CSM educate every decision maker, every potential power champion or adopter in the company. You have to think about all the different digital ways, webinars, customer trainings, group trainings, in-app notifications, email, SMS tools, LMS solutions, etc.”

Some strategies that have been successful for Catalyst include a self-onboarding initiative for customers and integrating data from the CRM to data warehouse tables. “We’re in a world where we can’t talk to everybody,” Kevin says. “We have to teach them hard concepts through digital channels.” 

Organize priorities around customers

The business market has been abuzz with customer-centricity and the concept of Customer-Led Growth. However, the road to executing a true CLG  strategy is more intricate than it might seem. The transformational shift from a sales-led approach to a customer-led model requires a mindset change and a concerted effort to align priorities across the organization.

“You’re sitting on a pot of gold with your customers, so in a customer-led world, it’s about prioritizing infrastructure on your customers and being able to retain them and grow them,” Kevin says. “It’s simple concepts that are oftentimes overlooked. There are so many things that go into customer infrastructure, customer debt, customer processes, and workflows that the intention and outcome is to drive expansion in renewal revenue. And most people don’t really think about it until things start really breaking. And so for me, in this current environment, it’s less about having the perfect benchmark but just organizing the company’s priorities around the customer.”

At the heart of this shift is the realization that market dynamics are ever-changing, and what once worked may no longer hold true. 

“I have this saying, the market is the herders, and the companies are the sheep,” Kevin shares. “You just follow what everyone else is doing, and overnight the market dynamics switch, and it’s really hard to close new business. Fast track to the market we’re in today. Nobody is buying new business software. New business teams are missing their quota. And when nobody’s buying marketing, inbounds are also down because why would you go and spend all this time requesting demos if the CFO said you can’t buy anything for the entire year? So you think about what is a faster, cheaper, more cost-effective way to grow revenue with less red tape.”

In a rapidly evolving environment, the ability to prioritize infrastructure around customers becomes paramount for sustainable growth.

CSMs must protect customers and learn new skills

As the landscape shifts towards a customer-led paradigm, the role of Customer Success Managers (CSMs) evolves from mere service providers to challengers and educators. CSMs must adopt a commercial mindset, with strong discovery skills and the ability to articulate and sell product value. They become instrumental in driving expansion and renewal revenue, ensuring that customers not only continue using the product but also derive substantial value from it.

“When markets shift, the job description and demand and requirement for the company to survive also shifts,” Kevin says. “So there are a lot of CSMs who are uncomfortable asking hard, tough discovery questions. And if you don’t want that, that’s no problem. But what I’m trying to tell them is you might not match the new market CSM description because that’s what this market needs to protect gross retention at all costs. You have to protect your customers, and that requires learning new skills.”

Kevin shares three key focus areas for this new generation of CSMs:

• Ask the right questions. Great discovery skills are a trained skill in the art of sales. As a CSM, you don’t need to act commercially, but you need to think commercially.
• Adopt a challenger mindset. You have to challenge the customer to think about ‘why you want this feature. How does this feature tie to the top three OKRs? Does this sound like a nice-to-have or a need-to-have?
• Sell the product. You must be able to sell the product and articulate it in a value-driven way. 

Kevin shares how CSMs must work with other teams to truly understand the product’s value for customers, especially during renewals. “Every CSM right now is struggling with explaining why the customer should renew,” he says. “That’s a reselling process, and you probably have your least trained person to resell it. But there will be an evolution of both sides of the coin from sales to CSS that will meet in the middle, which is a go-to-market team.” 

Championing a challenger mindset, asking tough questions, and communicating product value becomes essential. As the bridge between customers and the organization, CSMs must guide customers toward understanding their needs and how the product aligns with their top priorities.

Customer success is central to success–now and in the future

As businesses navigate Customer-Led Growth, prioritizing customer education is central to success. Organizations must adapt, transform, and align their strategies to cater to a customer-led world. While the journey may be demanding, the rewards are substantial–sustained growth, improved customer retention, and an unbreakable bond between businesses and their customers.

In a market that rewards those who prioritize customers, it’s evident that a robust customer education strategy is not just a choice; it’s a necessity for CLG.

Check out the full episode to hear more from Kevin. And remember to subscribe to the LEARN Podcast on Apple, Spotify, or Google for more expert advice from industry leaders on customer success, customer education, employee development, revenue, enablement, and more.