Why customer success becomes your competitive advantage during economic downturns
You know that feeling when you're watching a plane land and someone starts clapping? I find it oddly misplaced. They're celebrating the pilot for doing their job, but nobody thinks about the mechanic who made sure that plane could fly in the first place.
That's exactly what happens with customer success (CS) during economic downturns. We forget about the people preventing disasters until something goes wrong. Then suddenly, everyone's looking at the maintenance logs.
I’ve spent years leading customer-facing teams through economic cycles, working closely with organizations across industries as they try to innovate, grow, and adapt under pressure. Whether it’s healthcare organizations improving outcomes or financial services firms launching new products, the common thread is the same: customers are the builders, and our role is to enable their success.
But something fundamental has changed. The mission used to be about helping customers achieve more. Today, it’s about helping them achieve more with less. And that shift changes everything about how customer success must operate _._
## The economic reality we're all facing
Let me paint you a picture of where we are right now. Economic slowdowns aren't new; we've weathered them throughout modern history. But this one feels different, doesn't it?
You've got decreased economic activity across the board. Production's down, whether that's manufacturing or farming. Consumer spending? People are getting cautious. Even if they haven't been directly impacted yet, they're thinking twice about every purchase.
The unemployment picture gets complicated, too. In the US, our numbers look okay on paper, but coming out of the pandemic, those statistics feel a bit... _disconnected_ from reality. And globally? Some countries are really feeling the squeeze. Take Argentina – 20 years ago, one of Latin America's richest nations. Today, they're struggling to stay afloat.
I’m based in Houston, and I see it firsthand in the energy sector. Drillers are pulling back, stopping exploration. They're looking at their budgets and saying, "Maybe we don't need to spend money finding new oil reserves right now." That ripple effect touches everything.
## What businesses do when times get tough
When economic pressure hits, companies react in predictable ways. They spend less. They invest less. They hire fewer. And unfortunately, they lay off more.
Travel budgets? First thing to go. Those customer visits where you'd sit down face-to-face, build real relationships and understand their challenges over coffee – gone. Innovation slows to a crawl. All those features on your product backlog that customers asked for during your last success meeting? They might never see the light of day.
This creates a vicious cycle. Without new features, customers might not renew. Without renewals, revenue drops. Without revenue, more cuts happen.
Microsoft saw this play out over its 45-year history. Microsoft used to be all about those big enterprise agreements – 30,000 employees, one massive contract. But what happens when that company downsizes to 20,000? Your renewal shrinks by a third. That's partly why Microsoft pivoted toward subscription and consumption models; you can't renew what people won't use anymore.
## The 3 horsemen of customer success challenges
When companies start cutting customer success teams, three things happen almost immediately:
1. **Potential churn skyrockets.** Without someone actively monitoring customer health, small issues become big problems. By the time someone notices, it's often too late.
2. **Revenue constraints tighten.** You can't grow accounts when nobody's having strategic conversations with customers about their evolving needs. That expansion revenue you were counting on? It evaporates.
3. **Market size shrinks.** Your customers might literally go out of business. If you're selling to barbershops and barbershops are closing, you've got a segment problem that has nothing to do with your product quality.
These pressures create a paradox. At the exact moment when customer retention becomes critical for survival, companies cut the very teams responsible for keeping customers happy and engaged.
## The hidden cost nobody calculates
Here's what drives me crazy about these decisions. We forget to calculate the cost of _not_ doing something. There's no line item in the budget for "revenue lost because we fired our CSMs." No dashboard metric for "opportunities missed because nobody was paying attention."
Peter Drucker said it decades ago: "The purpose of business is to create and keep a customer." Not just create – _keep_. That second part? That's what customer success does.
Look at what happened with Salesforce. In 2022, Salesforce laid off a _huge_ chunk of its Customer Success Managers (CSMs) and handed those responsibilities to account executives. If you follow their financials, you'll see they're struggling now.
Why? Because they're a subscription business. You can't just cut people to make your quarterly numbers look good and expect no consequences. The CFO might celebrate the cost savings on the next investor call, but what about next quarter when renewals tank?
## Being a champion when nobody wants to listen
So how do you make the case for customer success when everyone's in cost-cutting mode? You have to become a champion for the function, and that means changing how you talk about it.
First, embed customer success into your organization's DNA. I know a car dealership in Houston that takes their best mechanics – people with ten years under the hood – and turns them into customer success executives. Think about that. Who knows the product better than someone who's fixed it a thousand times?
These mechanics-turned-CSMs can talk about cars with genuine expertise. They remove that feeling of being sold to because they actually understand what they're talking about. When a mechanic tells you about potential issues with your car, you listen differently than when a salesperson does. That's the power of authentic expertise in customer success.
## Measuring what actually matters
You need data to make your case, but not all data is useful. There's a lot of garbage metrics out there – vanity numbers that look good but don't drive decisions.
Focus on what matters:
* Customer lifetime value
* Expansion revenue
* Churn rate by segment
* Time to value
* Product adoption rates
You don't need fancy tools for this. I've seen companies run incredibly sophisticated customer success operations out of spreadsheets. Twenty years ago, I worked with a company that hated their SAP CRM so much that they built this massive, formula-filled spreadsheet that did everything they needed. Not pretty, but it worked.
The key is connecting these metrics to business outcomes. Show that when an account executive leaves and their accounts go unmanaged, you lose X percent more deals. When customer success coverage drops, renewal rates fall by Y percent. Make it impossible to ignore the correlation.
## The paradigm shift in customer success
Years ago, we focused on strategy first in customer success. Create the perfect customer success strategy, then hire people to execute it, then maybe invest in some tools to support them.
Now? It's completely reversed.
Tools come first – because you need data and insights from day one. Then people, who can be trained on your specific approach. Strategy comes last, built on what you learn from your tools and team.
Why this shift? Because in a down economy, you can't afford to guess. You need immediate visibility into customer health. You need to know which accounts are at risk before they tell you they're leaving. The tools give you that insight, the people act on it, and the strategy emerges from what actually works.
## Demonstrating value in concrete terms
When you're pitching customer success investmentjust to leadership, you need to speak their language. That means:
* **Cost savings:** Show how customer success prevents churn. Calculate the cost of replacing a lost customer versus retaining them. In enterprise software, it's often five to ten times more expensive to acquire a new customer than to keep an existing one.
* **Competitive advantage:** Highlight how your competitors are winning deals because they have better customer success. Nothing motivates executives like losing to the competition.
* **Long-term growth:** Customer success drives expansion revenue. Show examples of customers who started small and grew because someone was actively helping them succeed.
* **Brand advocacy:** Your happiest customers become your best salespeople. Dreamforce started as a user group – just passionate Salesforce users getting together to share tips. Now it's one of the tech industry's biggest conferences. That doesn't happen without customer success, nurturing those relationships.
## The startup trap
Startups face a particular challenge here. They'll raise Series A, B, C funding and put all their money into sales and product development. Customer success? "We'll hire for that later, once we have more customers."
Then they lose their first cohort of customers. Revenue flatlines. Investors get nervous. Suddenly, customer success becomes an emergency hire, but by then, the damage is done.
If you're at a startup, make the case early. Show how customer success _actually_ accelerates growth by reducing churn and driving expansion. Use industry benchmarks – successful SaaS companies typically see 100%+ net revenue retention when they invest properly in customer success.
## Finding the right people
Mike Lee referred to the customer success mindset in his talk at the Customer Success Summit Las Vegas 2023, and he was absolutely right – it's not for everyone. It's not a sales mindset, though you need to understand revenue. It's not a support mindset, though you solve problems. It's not a consulting mindset, though you give strategic advice.
So, where do you find these people? User groups are goldmines. Go to your product's users – the ones answering questions, sharing tips, genuinely passionate about making others successful. These people already have the mindset; you just need to give them the title and compensation.
Industry expertise matters too. If you're selling to healthcare, hire someone who's worked in healthcare. They'll speak the language, understand the challenges, and build credibility faster than someone learning the industry from scratch.
## Making customer success recession-proof
Here's the thing about economic downturns – they always end. But the damage you do by cutting customer success? That can last much longer.
Companies that maintain or even increase their customer success investment during downturns often emerge stronger. Why? Because while their competitors are losing customers left and right, they're deepening relationships, solving problems, and positioning themselves as true partners.
Your customers are facing the same economic pressures you are. They need vendors who understand that, who help them do more with less, who become part of their solution rather than just another cost center.
That's what great customer success does. It transforms you from a vendor into a strategic partner. And in tough times, companies cut vendors. They keep partners.
## The path forward
So what's the action plan? How do you protect and grow customer success when everyone else is cutting?
1. **Start with quick wins.** Find one or two customers where customer success made a measurable difference – saved a renewal, drove an expansion, prevented a competitive loss. Document these stories in detail. Make them impossible to ignore.
2. **Build coalitions.** Get sales on your side by showing how customer success makes their job easier. Partner with product by becoming their best source of customer feedback. Work with finance to show the ROI clearly.
3. **Invest in efficiency.** If you can't hire more people, make your existing team more effective. Better tools, clearer processes, focused priorities. Show that you're being smart with resources while still delivering results.
4. Most importantly, **keep the long-term view.** Economic cycles are just that – _cycles_. The companies that win are those that position themselves for the upturn, while others are still reacting to the downturn.
Customer success isn't a luxury for good times. It's a necessity for survival and growth, especially when times get tough. The question isn't whether you can afford to invest in customer success during a downturn. It's whether you can afford not to.
The mechanic keeps the plane flying. The pilot just lands it. In your business, customer success is the mechanic. Make sure your leadership understands that before the plane needs emergency maintenance at 30,000 feet.
Because by then? It's already too late.
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_This article is based on a presentation given by Ayman at the Customer Success Summit in Las Vegas 2023._
