You drive sustainable progress. However your CFO holds the keys. And it’s all too possible that your two groups function in silos, talking completely different numeric languages and prioritizing distinct goals.
When your CFO doesn’t see the direct hyperlink between buyer success and the monetary metrics they observe, it’s more durable to influence them to spend money on CS—which may finally result in preventable churn.
So how are you going to construct a greater working relationship along with your CFO?
In our newest webinar, ChurnZero CEO You Mon Tsang and Maxio CEO Randy Wootton tackled the CCO-CFO disconnect head-on, digging into the shared and unshared metrics of every workforce to establish the widespread floor the place CS leaders can bridge the hole. Watch it right here, and discover the three high takeaways beneath.
What are the highest takeaways for working extra successfully along with your CFO as a buyer chief?
1: Know the widespread floor that finance and buyer success share.
“ARR, GRR, and NRR are the widespread language each groups can use to measure success,” says You Mon.
These metrics present a shared framework that bridges the groups’ priorities, enabling clearer communication and mutual accountability between buyer groups and CFOs.
Annual Recurring Income (ARR) displays predictable recurring income. For CFOs, it’s a crucial indicator of economic stability; for CCOs, it underscores buyer dedication.
Gross Income Retention (GRR) measure the recurring income retained from current prospects, excluding upsells however accounting for churn. A powerful GRR alerts a steady buyer base—important for each monetary forecasting and buyer well being assessments.
Web Income Retention (NRR) contains upsells, expansions, and churn. NRR above 100% demonstrates that your buyer base will not be solely renewing but in addition rising.
Necessary: Make certain your measurements are constant. ARR, GRR, and NRR are non-GAAP metrics, which implies that their interpretations can fluctuate. To make sure CFO and CCO alignment, standardize how your group calculates these metrics.
2: Perceive your CFO’s deal with effectivity and profitability.
“The CFO’s major accountability,” says Randy, “is to inform the CEO what the money is, and guarantee profitability.”
This implies they’re laser-focused on the next metrics, which instantly impression monetary efficiency.
Gross Revenue Margin measures the price effectivity of delivering your services or products, factoring in prices like internet hosting and a few buyer assist. As a CCO, understanding how your CS applications impression gross margins can assist you make a stronger case for finances.
CAC Payback Interval helps CFOs measure how lengthy it takes to recoup buyer acquisition prices by recurring income. The median payback interval for SaaS corporations is 14 months, however this varies by firm dimension and contract worth.
Brand Retention tracks the proportion of consumers retained over a particular interval, no matter upsells or contractions. “Brand retention supplies readability on whether or not your buyer base is steady, particularly in markets the place dollar-based metrics would possibly masks churn inside smaller accounts,” notes You Mon.
Your CFO’s deal with effectivity and profitability implies that they’ll be open to collaborating on effectivity alternatives that don’t essentially contain headcount cuts—akin to leveraging AI and automation to extend buyer worth supply at scale.
3: Take these initiatives to collaborate higher along with your CFO.
“Securing your buyer base with robust gross retention is the muse for progress,” says Randy.
These initiatives, which mirror that purpose instantly, will show you how to construct a stronger working relationship along with your CFO.
Present the monetary impression of retention. CFOs perceive how retention drives profitability, so spotlight the ROI of investing in CS by tying improved GRR and NRR to long-term monetary good points.
Use business benchmarking information accessible in ChurnZero’s Buyer Success Management Examine, Maxio’s benchmarking software, and SaaS Capital’s B2B SaaS Benchmarking Survey to contextualize your metrics.
As an illustration, SaaS corporations with mid-market contracts usually purpose for GRR above 90% and NRR exceeding 100%.
Collaborate on success plans which combine each monetary and customer-centric targets to maintain each groups working towards shared outcomes.
‘Sit down with the individual throughout the desk,” says Randy, “and outline what success appears like for this relationship.” Success plans ought to embody measurable milestones, akin to characteristic adoption timelines or implementation targets. Revisit them quarterly to make sure progress and alignment.
