Summary:

In the video, Dave Jackson discusses the concept of CS P&L, which stands for Customer Success Profit and Loss. He emphasizes that CS P&L is a tool that showcases the value derived from planning and thinking about the investments one is going to make in the Customer Success organization to become a positive margin contributor. The CS P&L is built upon two main components: the revenue line and the cost line.

The revenue line includes elements such as CS revenues, renewals, expansions, upsells, and possibly professional services, which many CS organizations incorporate as part of their structure. The cost line, on the other hand, encompasses aspects such as people, equipment, premises, and other related costs.

Dave Jackson advocates for using the CS P&L as a scenario planning tool where various variables such as new business growth and current retention and net retention rates are considered to plan forward. By presenting the CS P&L to the CEO and the executive team, it serves as a powerful document that aids in making informed decisions regarding the growth and development of the company.

He further delves into the potential of reinvesting part of the CS budget into improving the product, thereby integrating customer success into the product itself. This, he believes, could potentially offer better leverage from an investment perspective.

Our Thoughts:

Dave Jackson brings forth a compelling argument on the utilization of CS P&L as a strategic tool in business planning and development. The meticulous breakdown of revenues and costs into detailed components offers a clear pathway for organizations to visualize and strategize their growth trajectory.

Jackson’s emphasis on scenario planning is indeed a prudent approach. It encourages organizations to delve deep into the current market trends, analyze retention rates, and forecast new business growth, thereby fostering a culture of proactive planning rather than reactive decision-making. This not only helps in averting potential crises but also in seizing opportunities that can lead to business expansion.

Moreover, the idea of reinvesting a part of the CS budget into product improvement is a forward-thinking strategy. It resonates well with the contemporary business ethos of customer-centricity. By building customer success into the product itself, organizations can potentially reduce costs and enhance customer satisfaction, which is a win-win situation.

However, one could argue that focusing too much on CS P&L might lead to an overemphasis on numbers, potentially sidelining the qualitative aspects that are equally vital in building a customer-centric business. It is essential to maintain a balance between quantitative analysis and qualitative insights to foster a holistic growth strategy.

In conclusion, Dave Jackson’s insights into the CS P&L present a robust framework for organizations aiming to enhance their profitability through meticulous planning and strategic investments. While it is a potent tool, it should be complemented with a deep understanding of market dynamics and customer preferences to build a business that is not only profitable but also sustainable and customer-centric. It encourages leaders to think beyond mere numbers and to envision a strategy that is grounded in enhancing customer value, thereby steering the organization towards a path of sustained growth and success.