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13/01/2025

The economics of customer success: Navigating the shift to profitable growth

Written by Deborah Knight

​Recently, at The Customer Conference in London, one theme stood out: understanding and managing the cost of Customer Success is no longer optional—it’s essential. The tech landscape has shifted dramatically in recent years. The old mantra of growth at all costs has given way to a more pragmatic demand from investors: profitable growth.


Lessons from Manufacturing: Applying COGS to SaaS
Coming from the FMCG (Fast-Moving Consumer Goods) world, I was deeply familiar with the concept of Cost of Goods Sold (COGS). Every unit produced had a clear cost associated with it. When I transitioned to SaaS, I was struck by the contrast. The prevailing wisdom seemed to be: Just grow. Don’t worry about the costs.

 

But that mindset is changing—fast.


The Hidden Costs of "Throwing People at the Problem"
One of the most telling signs of unsustainable growth is what I call the people-as-a-band-aid approach:

  • Product gaps emerge.

  • Systems struggle to keep up.

  • The solution? Hire more people to manually bridge the gaps.

It might seem like a quick fix, and in some cases, it may be a necessary short-term solution. However, if left unaddressed, it becomes a financial time bomb. Relying on people to solve scalability issues is an expensive approach that ultimately highlights deeper inefficiencies in products and processes—and risks being forgotten rather than resolved.


A Holistic Approach to Sustainable Customer Success
Building a cost-effective Customer Success model isn’t the sole responsibility of CS leaders. It requires a company-wide commitment to scalability:

  • Product Teams: Design products that reduce the need for manual intervention. While it can feel like you’re stalling your product roadmap for customers when you have to build for function, ensuring scalability is fundamental to long-term growth and efficiency.
     

  • Operations Teams: Develop processes that can scale without excessive overhead. Too often, Sales Operations is the first investment, while CS Operations takes too long to follow. Bringing in CS operations expertise early helps develop scalable processes from the outset, ensuring Customer Success isn’t left playing catch-up.
     

  • Customer Success Teams: Continuously refine service delivery for efficiency, considering the needs of different audiences and focusing on key moments in the customer journey.

The New Mandate: Profitable, Efficient Growth
Investors are sending a clear message: success isn’t measured by how many customers you acquire, but by how profitably you serve them. This shift demands:

  • Thoughtful hiring

  • Intelligent automation

  • Process optimisation

  • Technology that genuinely reduces manual effort

The End of "Growth at All Costs"
The era of unchecked expansion is over. We’ve entered the age of strategic, sustainable growth—where every team plays a role in delivering exceptional customer experiences while maintaining financial health.


The good news? We now have more ways than ever to scale efficiently. With AI, digital Customer Success programmes, CSM platforms, predictive analytics, and self-service customer education, we can create scalable, high-impact solutions without resorting to costly headcount increases. The challenge is no longer if  we can scale efficiently, but how well  we execute on the opportunities available to us.
 

Enhance the experience,
see the growth

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