The Ins and Outs of Customer Success w/ Lincoln Murphy [Episode 454]

In this podcast, we decipher the mysteries of customer success, and cover how that role should play out in the overall revenue scope.

Lincoln Murphy, Customer Success Architect and Mentor at Storm Ventures, and co-author of Customer Success: How Innovative Companies Can Reduce Churn and Grow Recurring Revenue, joins me on this episode.


Lincoln saw there was no book that fully covered Customer Success, so he wrote one. You can’t lose customers and expect to grow in any meaningful way.

Lincoln explores how we got to the point where customer success is a new operating philosophy, not just for SaaS, but for all businesses. Salesforce was the main influence.

He also compares reducing churn with real revenue growth.

Salesforce was facing an existential threat with 8% churn every month, before focusing on customer success. Lincoln gives his definition of customer success, and explains the causes of churn.

Churn also includes revenue churn, based on discounts offered for renewal. Lincoln discusses net revenue retention, how to determine it, and how it relates to overall growth.

Lincoln suggests segmenting customers, not based on their payment level, but on the experiences you need to give them to ensure their success. Losing a customer in a bad experience also costs you anyone they influence.

A customer who receives no value is not a good reference. Shoot for 100% referenceable customers. Know the traits of a bad-fit customer. Don’t set your customers, or your company, up for failure. Don’t sign bad-fit customers.

Customer success needs to be aligned with sales and marketing. Customer success can educate marketing and sales how the customer is using the product, and what language appeals to the customer.

A customer signing a one-year contract, and staying for five years, contributes five times the revenue of the original contract. Customer success is responsible for 80% of the lifetime revenue of that customer; sales is responsible for 20%.

Lincoln addresses time-to-value. If immediate value is expected, and that expectation is not met, that is a problem. Teach the client what to expect at 30, 60, and 90 days, so expectations are met. Help clients see long-term value, ASAP.

Lincoln talks about personal relationships and loyalty. Humanity is the table stakes, but the sale is about the value to the customer, and their success, not their loyalty to you as their sales representative.

Deals are no longer closed on the ability to charm. Value has to be delivered consistently from the vendor to the customer.

The Sales Enablement Podcast with Andy Paul was formerly Accelerate! with Andy Paul.