What Netflix Has Taught Us About Customer Success and Keeping Things Simple
We’ve watched A LOT of streaming TV this past year. Mostly for work, of course. I mean, how else were we supposed to “research” the many parody videos we had to create for Pulse Everywhere?
And how else was yours truly supposed to study my personal CEO coach, the one and only “World’s Best Boss,” Michael Scott:
Here at Gainsight, we have no shame admitting that we’re total nerds about Customer Success and Product Experience. So, what could be more “binge-worthy” than THREE FULL DAYS OF IT!?!?. Or, as our kids told me during the at-home keynote previews, what could be more “cringeworthy”?
Pulse Everywhere 2021 is officially our 9th annual Pulse conference – but it’s only our 2nd time hosting the event virtually (aka, “Everywhere”). This year, we’re thrilled to make the virtual experience even more unique and engaging by welcoming 100 of our local teammates and customers to historic August Hall in downtown San Francisco for a LIVE, in-person (and COVID-safe) broadcast of our keynote sessions.
You can almost think of it as our own little episode of Saturday Night Live. Except on a Wednesday morning; in a private theater; live-streamed to +20k Customer Success and Product professionals. I said almost.
So, what better theme for a virtual conference in the age of COVID than streaming TV? After all, isn’t that where we’ve spent far too many quarantined weekends (and weekdays!) over the past year? The good news is, as quarantines are gradually lifted across the US, and more and more of us have the fortune of receiving our vaccinations, we can FINALLY get back to… well, watching more Netflix:
In all seriousness…the history of streaming TV is the perfect analogy for how Customer Success has emerged in the world of SaaS and the Cloud. Here’s why:
- Can You Think of a Better Example of Disruption? As Netflix famously showed, streaming TV was all about disrupting the existing entertainment industry (initially video rentals, then TV/movie production). In a similar vein, Customer Success (as a part of the SaaS business model) has become a key play in the disruption happening in the cloud.
- Personalization is the Name of the Game: Streaming wouldn’t work without personalization. Could you imagine paging through all of the titles on Netflix? In a similar way, SaaS companies provide incredible and growing capabilities. But without Customer Success guiding customers to what they need, clients get overwhelmed.
- Customers Hold All the Power: While Netflix was the early leader, open up your Apple TV (or similar device) to see the number of choices in streaming we all have today. Your clients in software are faced with a similar set of options. You are just one icon on their home screen.
- We’ve Seen Some Amazing Transformations: Streaming wasn’t just a story of startups. Big incumbents have stepped in. Disney brought the massive power of its catalog to bear in Disney+. In a similar vein, large software companies have realized Customer Success is a critical part of their reinvention in the cloud.
- Simplicity Dominates: Do you remember how hard it used to be to watch movies and TV? Now, you just find your Apple TV remote (usually the hardest part) and then click. The best software companies are using Customer Success, in partnership with their Product teams, to provide a radically simple customer experience. They are trying to remove friction wherever they can.
- There are Plenty of North Star Metrics: Speaking of simple, in some ways, the streaming business model is simple: acquire and retain subscribers. In the same manner, the SaaS business model is pretty straightforward: acquire and retain clients. In this vein, Net Retention Rate has become a key “North Star Metric” in SaaS. Indeed, we worked with Jake Wirfel at the Stanford Graduate School of Business to analyze the correlation between Net Retention Rate and valuation. We found that improving Net Retention explains 53% of increase in valuation multiples: .
- You Can’t Get Stuck: Streaming isn’t easy. You have to get the content right. You have to get the tech right. And you need to get the clients. In the same vein, Customer Success involves a number of moving pieces – from people to process to technology. In both scenarios, some companies dip their toe in the water and decide to go no further. The most famous recent example was Quibi, which was shut down after 6 months!
- It’s a Company-Wide Priority: Finally, there is no “streaming department” at Netflix. The entire company went all-in on the streaming customer experience. Similarly, businesses moving to SaaS and cloud models can’t afford to delegate Customer Success to be only one department’s job. While CS teams are necessary, they aren’t sufficient. Product, Sales/Marketing, and CS need to be aligned around optimizing Net Retention.
What a Difference a Year Makes
Looking back, it’s hard to fathom that it was only a year ago that we were starting to ponder exactly what our lives had become and how long it would last. And while, yes, we’ve all probably had more than our share of Netflix, Hulu, Disney+, Peacock, HBO Max, Amazon Prime Video, ESPN+, Crunchyroll, Vudu, Crackle, Fubo, or whatever your streaming preference, we’ve also bared witness to a kind of technological fast-forward the world has rarely seen.
So, if there’s a small silver lining to all of this, perhaps it lies in the fact that we’ve seen the human-first side of so many of us inherently reemerge and shine through like never before – both in our personal lives and at work. We’ve witnessed businesses in every industry and every corner of the world commit to putting the success of their customers back at their core – many because they had to, but even more because they chose to. And we’ve seen a willingness and desire to make our lives more meaningful and more simple, through and through.
And I’ll nerd out to that any day.