Why are Customer Success organisations being so badly impacted by layoffs?

Voices from the Customer Success Space (Part 1)

by Anya Breen

Since its origins in 1996 Customer Success (CS) has been on a steady trajectory, holding various titles, from fringe ideas to established functions across the tech industry. Over the past 10 years in particular, B2B SaaS has bolstered CS to a seat at the table when it comes to revenue growth, which has been accompanied by increased commercial ownership for CS functions. 

Despite this, the past year has seen a sea change in the availability of capital and pressure for profitability, and many CS organisations have found themselves in the firing line as leaders struggle to justify investment and budgets. Some companies have even dissolved their entire CS departments.

Over the past month, I spoke to 10 CS leaders across the industry, from Canada, the US, the UK, and Germany to ask: why are CS organisations so badly impacted by layoffs?

One of the most frequent points raised was that there is still a clear lack of consensus across the industry as to what ‘Customer Success’ really means. Most organisations will have different answers. Where is the sales/ CS divide? How does CS differ from support and service functions? 

“CS has typically been the ‘dumping ground’ for everyone. CS is sent support issues, invoice issues, and product and implementation issues to solve.” Anonymous - Customer Success Director

This lack of consensus has undermined the status, voice and ultimately the credibility of the function, leading to a weakened perception of CS by executive leadership and a view that it is a ‘nice-to-have’. 

“Unfortunately, and bluntly speaking, some leaders and executives still see customer success as a back-office role.” Billal Malik - Customer Success Director, UK & I, Onfido

Multiple leaders I spoke to, including Leonardo Neves at Shutterstock, referenced the sudden push by investors for short-term cost cutting across the tech industry. This has badly hurt CS because, by its very nature, CS is a mid to long term play that’s impact can only be measured in longer, 1-3 year cycles. 

“Unlike Sales whose revenue contribution is immediate - CS's impact is demonstrated at the point of renewal. Businesses that have chosen to reduce or remove their CS teams will see a short term reduction in operating expense, but the longer term revenue impact of those layoffs will be far greater than any short term savings.” Matt Lane - Director of Customer Success

The fact that, in many organisations, CS is a relatively new function means that this is aggravated by the time a CS function needs to get up and running fully. Ciaren Diante, Head of CS at Capsule, referenced the ‘trial and error’ period needed to lay the right foundations and see results, which is only further complicated by the fast-evolving nature of many products and services in modern SaaS businesses.

Unlike other functions, measures to make the CS organisation more efficient also do not have an immediate impact, impeding short-term cost-cutting initiatives within the function:

“Calculating ROI on organisational resources to make CS more efficient can be incredibly difficult, and implementation takes time. If your organisation is budgeting in a very tight way from year to year, you are not going to achieve immediate visibility of the effects of these resources.” André Krüger - Head of Customer Success EMEA - DACH & EE, CyberArk

Most of all, however, the leaders I spoke to referenced there is a lack of adequate communication and representation of the value of CS to executive leadership across the industry, regardless of whether a CS function is more or less commercial. This missing representation means that decisions are often made without all the facts in hand. However, this can be a two way street, and it was also raised that there is often a failure on the part of leadership to seek to understand the value that CS brings and the gap it fills. 

The first part of addressing this must be a clear consensus on the value that customer success brings to an organisation, and its impact on profitability. 

Part two of this three part series will explore this. Returning to the industry leaders who shared their views in this article, I ask the question: how do CS organisations contribute to profitability? 


Thank you to Billal Malik (Customer Success Director, UK & I at Onfido), Joe Christian Balcazar (VP Operations at Portage CyberTech), André Krüger (Head of Customer Success EMEA - DACH & EE at CyberArk), Simon Smith (Head of Customer Success at ENSEK), Rosanna Zrnic (Former Director of Customer Success at Security Compass), Leonardo Neves (Senior AM Team Lead EMEA at Shutterstock), Matt Lane (Director of Customer Success at Cyncly), Katie Savino (Customer Success at Planhat), Diana May (Director of Customer Success at Bonterra) and Ciaren Diante (Head of Customer Success at Capsule) for your invaluable contributions to this article.