ISSUE #12: There's At Least 5-10 Points in Margin Hiding in CS

CS and Ops functions are chronically underplanned, and that has huge consequences on a company's P&L.

So what do I mean by underplanned?

Even if they start out functioning well, over time these functions can easily become barriers to growth and improved profitability because they were neither designed nor maintained with scale in mind.

Sometimes this happens from the start. CS is added as a reactive measure—a catch-all for everything that happens after the sale. Other times, it happens gradually. New responsibilities accumulate, inherited from Sales or Product. CS becomes the default owner for work no one else owns. Unlike Sales or Product, CS is rarely scoped with the same rigor.

With no clear boundaries, no fixed operating model, no systematic cost discipline, CS becomes a place of highly variable work with an unconstrained scope. Even in a service business that's bad! Whether the impact shows up in the P&L or not, at the end of the day someone is paying for it. And that is usually not the client.

The Cost of Underplanned CS

Let's quickly run through the costs of a poorly planned CS function.

Commercial costs:

• Inconsistent delivery: some clients get far more effort than others.
• Pricing is decoupled from effort, which not only leads to variable margins, but is a terrible way to build a business.
• Sales promises are hard to evaluate against an undefined delivery model.

Organizational cost:

• Value delivery depends on individual heroics rather than consistent execution.
• Experience varies from one client to the next and is a function of internal inconsistency, rather than client behavior.
• People become overloaded with unclear and far-reaching roles that might span onboarding, support, and account management.
• Coordination suffers across functions.
• Teams burn out trying to plug gaps.
• Hiring becomes difficult when every role demands hiring a human Swiss Army knife with impossible-to-find breadth and depth (which never works anyway).

Product cost:

• CS absorbs product gaps, which can mask deeper problems with product-market fit.
• Temporary workarounds become normalized.
• Product roadmap is pulled in too many directions.
• Support creep gets mistaken for legitimate product expansion.

Client impact:

• When there are no delivery constraints, clients often get more than they paid for.
• Flexibility can create confusion about what the offer actually is.

You can’t manage what hasn’t been scoped. You can’t optimize what hasn’t been planned. If CS is meant to scale—or even if it is simply meant to enable growth at constant margins, it has to be thoughtfully planned.

Planning means knowing what CS is responsible for, and what it isn’t. It means scoping functional work, creating clear interaction points with Sales, Product, and Support, defining service levels so client expectations match delivery, using data to understand costs and value, and much more.

Let me reiterate my conviction that in every company, at least 5-10 points of margin can be unlocked by building functional discipline in CS/Ops. And that doesn't include the impact from growth that is unlocked because companies can do more, more efficiently.