That’s how David Ginsburg, Chief Customer Officer at WorkBoard (and former Success leader at companies like Box, Mixpanel, and UserTesting), articulates the flaw of too many companies. They build a product, hire Sales people, and then eventually realize they have all these customers that need help implementing the product and renewing. Then they hire a Customer Success person to manage all post-sale activities and to “own retention.”
“CSMs should be helping customers achieve their desired outcomes,” Ginsburg explains. “But when they’re managing onboarding, training, engagement, renewals, upsells, and product releases—you can end up with a Success team that’s lost sight of that goal. Companies need to get clear on what Customer Success owns as early as possible.”
In this interview, Ginsburg draws from his experiences in companies both early-stage and well-established to share four elements of a successful team structure in Customer Success. He offers ways Success can become embedded in the sales cycle and in commercial conversations—and while you may not be able to copy over every piece of his advice, it’s sure to get you thinking about your current structure.
All customers aspire to work with the “trusted partner” CSM. This CSM deeply understands the industry, the product, and the different verticals of customers. They’re able to actively listen and map what they hear as critical to driving outcomes for the customer; And the customer trusts them enough to incorporate the practices and use cases the CSM recommends.
The problem is, Customer Success owns less budget than other departments in many companies so there’s a limit to how senior of CSMs we can attract. Ginsburg acknowledges that this depends on the company’s maturity, and there are ways of working around this restraint, but ultimately a Success team’s ability to hire for experience versus potential often comes down to a reality of budgets. “We often need to be able to hire junior CSMs with potential, and then grow them into senior CSMs that aren’t just building strong relationships but are also providing expertise and guidance,” he explains. “We want customers to value the opinion of their CSMs.”
Ginsburg offers this advice for bridging the gap:
Hire for potential. Consider hiring people with some consulting experience, or other related fields that practice skills that translate to helping customers achieve their goals. For example, consultants are required to develop the ability to understand what customers are trying to solve.
“In interviews, one of the questions I always ask CSM candidates is what their superpower is,” Ginsburg says. “I want to know what they do that they think is both impactful and natural. And there’s no right answer—but when they index exclusively on the relationship side, it’s not a great sign. A relationship alone isn’t going to help you get through a rough patch, it’s not going to move a customer from red to green. So when a CSM walks in with the mentality that that’s what they can get done, I tend to be skeptical.”
Get clear on the role. “For CSMs to be fully successful in their roles, you need to get super clear on what their role is. How should they spend their time? What are the highest value activities they should focus on? Then, see if you can give the other activities to associate CSMs. Most organizations don’t have ‘associate CSMs’ but I think they should: it trains the associates while freeing up time for the subject matter experts to the more impactful work.”
Train CSMs to develop their expertise. Ginsburg recommends teaching CSMs how to speak at a strategic level not just about the company’s product, but the problems in the overall space. That requires an understanding of the processes and best practices that other companies are implementing. CSMs should work to see patterns in how companies of different sizes and in different industries use the product.
“The term 'trusted advisor' is a buzzword that is thrown around too loosely and too often,” Ginsburg says. “But the intent is solid. If the opinion is earned and valuable, whether or not customers choose to act on their CSM's guidance, they still want to hear it."
Move away from the “project manager CSM” mindset. “As organizations, we need to shift our mindsets from thinking of CSMs as “facilitators” where they’re the ones coordinating all the moving parts and putting the right people in place, but they’re not the ones doing the actual thinking. It’s like ‘when the CSM doesn’t know the answer, they can point the customer in the right direction.’ Eventually, the customer just wants to work directly with the person who’s giving them the answers,” Ginsburg explains. “CSMs need a degree of subject-matter expertise in order to deliver on the “trusted partner” promise (Ginsburg prefers “trusted partner” to “trusted advisor”). Certainly you should bring in SMEs as the depth requires but you must know enough to probe, ask the right questions and begin the problem-solving process. Net, net the “facilitator” analogy does not sufficiently describe the role of the CSM.”
In some of the most effective Customer Success teams, CSMs begin building relationships with prospective customers during the sales cycle. While they’re ultimately focused on actually delivering on the customer’s needs, CSMs are brought in during the sales cycle to help the customer feel more comfortable with agreeing to a commitment, and to frequently answer questions.
“We’ve found that customers appreciate speaking with the person they’re going to be working with after the deal is signed,” Ginsburg explains. “It also helps bridge the gap between Sales and Customer Success, since the customer doesn’t have to repeat anything and the CSM is already read-in on what the customer expects.”
“Keeping CSMs 100% focused on the relationship and 0% on sales sounds great in theory. I understand the purity of CSMs not being involved in commercial conversations,” Ginsburg says. “But If you’re doing well by the customer, you’re building trust. Injecting someone the customer may have never met before into the equation can be jarring, and it can be a real challenge from a sales perspective too.”
Which means, whatever your process for renewals, upsells, cross-sells, and expansions, Customer Success should at the very minimum be part of those conversations, strategizing and collaborating with their partner in Sales.
“If you hire a CSM that understands the commercial terms and their impact, that's a strong perspective to have as your company evolves everything from its pricing strategy to its discount strategy to even features and functionality,” Ginsburg says. “And how do you have the voice of the customer in your company without Customer Success understanding some of the key commercial terms involved on why they're a customer?”
Ginsburg has led teams where CSMs owned renewals and where there was a separate renewals team (which freed the CSMs to focus more on helping customers achieve their desired outcomes). In either case, he emphasizes that renewals are a non-event when done well.
“If we’re doing it right, there shouldn’t be a sense of flurry and panic surrounding the renewal,’” Ginsburg says. “Renewals should just happen—and a lot of our expansion should be happening organically as well.”
If a company is getting what they want out of a product and they’re using the product to achieve their goals, then expansion will come naturally as the company grows. Conversely, when working with more mature enterprise organizations, it’s common to begin by selling into one team or business unit within a company. When they’re ready to roll the product out to a broader group, that’s when Sales should engage and take the lead.
“CSMs can be great at identifying growth opportunities,” he says. “But selling the product into other business units is not part of their core expectations. When that's an opportunity, we bring in Sales because of the required level of planning and ability to navigate organizational dynamics. The CSM should be focused on customer outcomes, and those types of activities can divert energy away from that core focus.”
For companies looking to establish a successful Customer Success team, here’s a summary of Ginsburg’s advice:
Jurva kicked off her career in customer-facing roles over 20 years ago, having built her career in Fortune 500 companies. Jurva says these companies would introduce new products to their customers, and she’d lead the effort to roll the products out and get customers to adopt them. Now as CCO, she leads the Customer Excellence team which encompasses the Customer Success, Professional Services, Knowledge Services, and Support teams.
“I’ve been in account management roles, in Sales, and in Customer Success,” she says. “In each role I’ve been focused on bringing brands closer to their customers through technology intent on driving personalization, relevancy, and predictability. I’ve always been drawn towards building customer relationships, so as I progressed in my career I began to focus more on building out teams and organizations around the customer journey.”
In this interview, Jurva shares the changes she’s made that help Lucidworks provide a world-class experience across a wide range of customers. She breaks down how she evolved the Customer Excellence team structure and defined their customer experiences, and how she pushed her organization to be a more strategic player at Lucidworks.
When Jurva first joined Lucidworks as VP of Customer Excellence, her role was focused on Customer Success and Professional Services in the West Region. Her group was responsible for onboarding customers and ensuring they had the right professional services resources needed for implementing the platform. Also under the same “Customer Excellence” umbrella were two teams that didn’t fall within Jurva’s oversight: Knowledge Services (which handles training, documentation, and knowledge management) and Support.
“It wasn’t long after I joined the Customer Excellence organization that I began to notice our West and East teams were not managing our customers in the same way. The experiences were disjointed,” Jurva says. “Even though we had 300 plus enterprise customers and were growing significantly in ARR, it didn’t make sense for us to be split up regionally in that way. We were too small. And we weren’t achieving the optimal customer experience across the board because the different territories were doing very different things.”
Jurva moved into the Chief Customer Officer role and transformed the way Lucidworks’ Success team was working. She broke down the regional silos and merged the disparate groups into one Success team, one Professional Services team, and they now deploy those resources geographically as needed.
“Now, we look at our operations from the standpoint of the customer journey,” Jurva says. “We aim to organize our teams to create accountability across the customer journey.”
The unified Customer Excellence function—including the four teams of Success, Professional Services, Knowledge Services, and Support—rolls up to Jurva as the CCO. She works hand-in-hand with the CRO to ensure that incoming renewals align with the Sales strategy, to map territories with existing accounts, and develop strategies for upsells.
Jurva says Customer Success still contains regional teams—but they are not siloed. Jurva still wants CSMs to be close to their customers, so she’s hired reps in areas where Lucidworks has large pockets of customers. (Sales reps are similarly distributed.)
This proximity eliminates a lot of travel expenses. But more than that, it keeps the company top-of-mind with its customers.
“In every organization that I’ve worked with, we’ve had a combination of both in-person and remote reps,” Jurva says. “It’s really about knowing your customer. Some customers don’t care if we’re on site; they just want us to be in touch frequently. And others really value us being present. Seeing our faces. It shows them that we’re invested in their success.”
The three customer experience tiers
In addition to breaking down silos and unifying the Customer Excellence teams, Jurva defined the customer tiers that determine the type of experience different customers get. In short, customers are grouped according to 1. revenue, 2. growth opportunity, and 3. engagement.
Here’s Jurva’s breakdown of the three tiers:
Strategic accounts
These are the customers that are either driving the most revenue for the company and/or have high growth potential. They’re also the customers who are interested in having the most contact with a strategic Customer Success rep.
Customer Success directors are assigned to these accounts, and each rep manages between 8-12 accounts. These reps are more senior, have a deep understanding of the product and customer use cases, and can speak about the product to different audiences in different industries. They’re also able to effectively prioritize their time and keep a pulse on how customers are experiencing the product.
Mid-tier, medium-growth accounts
This group includes customers who have medium growth potential but do not require a Success rep to provide a high-touch experience. Instead, it requires the rep to dig in to discover where there might be expansion opportunities.
The CSMs and Senior CSMs assigned to these reps are generally focused on running communication programs with customers and being there for assistance. If a customer has a problem or, say, has a new person join their team, the CSMs are there for training. They’re also looking for potential growth opportunities where there may be smaller upsells.
Low-engagement customers
“Then there’s the final tier which includes our least engaged customers,” Jurva explains. “These customers are smaller, lesser-known brands, low revenue generators, and have been with us a long time and are ok with staying on an older version of the product.”
Jurva’s team assigns Customer Success associates to these accounts. “These reps tend to have one or two years of prior experience. We bring them on, train them on how to run programs with the accounts in this tier that boost engagement with the product. They’ll come to our annual conference, look for incremental upsells, and they own renewals,” Jurva says.
Customer Success at Lucidworks drives renewals and upsells. The team collaborates with Sales—and collaboration is particularly high with the strategic accounts described above—but ultimately the ownership comes down to CS.
Success handles straight renewals (including annual increases) of the mid- and low-tiers. The reps simply let Sales know that there’s no upsell opportunity here, and then they close those opportunities.
“When we’re driving renewals for our strategic accounts, we’re very much aligned with Sales reps to provide context into what we’ve been doing with this account and what we think some upsell opportunities are,” Jurva explains. “Any time we see an upsell or expansion opportunity, we bring in Sales. Then the salesperson will drive that transaction.”
Salespeople at Lucidworks are not compensated for renewals. They get a portion for upsells and the first-year comp when they close a deal. But renewals go strictly to the Success team. And both Sales and Success get compensated for upsells because it’s technically new ARR.
The real magic, however, is how smoothly Jurva has brought Success earlier into the Sales process.
Bringing Success earlier into the sales cycle
Many Sales orgs can be resistant to bringing in Customer Success before the deal is closed. It’s only natural; Sales wants to be in control of every aspect of the deal, so bringing in an additional person to talk to the customer can add a level of uncertainty.
“Since I joined Lucidworks, we’ve evolved our process from having a distinct handoff between Sales and CS to one where the AE brings in the CSM when they’re around 70% to closing the deal,” Jurva says.
This provides a much better experience for the customer for two reasons:
But evolving this process requires a cultural shift and it doesn’t happen overnight. Here’s some of Jurva’s advice for others looking to make this transition:
“Customers are looking at every dollar they spend, and what they’re going to get out of that dollar,” Jurva says. “It’s important to have touchpoints like QBRs, especially in times like these when many customers are cutting or freezing budgets. QBRs are one channel for understanding the customer’s goals, coaching the customer to use your product to reach those goals, and then reiterating the value of the product.”
QBRs sound great in theory, but they can often evolve into a meeting that’s much more company-focused (“Here’s the value of our product”) than customer-focused (“Here are your goals, here’s how we’re helping you get there”). Jurva recognizes that when they head in this direction, it’s not uncommon to see key champions or sponsors avoid attending QBRs. Here’s her advice on making sure these meetings stay valuable for the customer.
1. Prioritize strategic clients and bring metrics to the table
“For strategic accounts, the touchpoints are more around getting customers the education and the services they need from us,” Jurva says. “These meetings are less important for mid-tier and low-engagement customers.”
Lucidworks pairs each strategic-level account with an executive sponsor at the C-level. That executive sponsor attends each QBR, and the customer gets personal engagement with their sponsor as their own internal advocate. The executives participate in examining what’s working well (and what’s not), and how the customer can move forward with your company’s product and service. That extra presence can help close renewals and drive expansion opportunities.
“These meetings help ensure that if you’ve spent a couple million dollars with us, we are focused on getting you the ROI on that spend,” Jurva says. “That holds weight when you get together with decision-makers and stakeholders.”
2. Tailor the conversation around the customer’s goals and objectives
“It’s a natural tendency for CSMs to want to go into one of these meetings and just vomit about everything new their company is doing and why it should matter to the customer,” she says. “Instead of doing that, we need CSMs to both listen to business’s goals and objectives and prove that they’re listening by focusing the conversation around those goals. That helps the relationship. It also helps make sure that executive sponsors want to come to the meeting.”
3. Share what’s working for other customers with and outside of your product
To the level that confidentiality and consideration allow, Jurva encourages strategic CSMs to share with customers what their peers in the same or adjacent industry are doing and how they are leveraging the platform.
“I can’t tell you how many customers actually love having those data points and learning from other customers,” she says. “Of course they should share how other customers are succeeding with the product, but customers also love hearing about general practices other customers are using as well that don’t have much to do with your product. What helps one customer succeed can help more customers succeed.”
For Success leaders striving to build teams, processes, and culture around the customer journey, here’s Jurva’s distilled advice:
If you search for “close better deals” on Google, 99% of the content is about how to close more deals, bigger deals, faster deals. There’s little to no content about how to close “higher quality” customers—meaning customers who are more likely to renew.
It’s a shame; better deals will renew at a much higher rate, promote and refer your product to others, and grow more predictably over time. As companies grow, renewals begin to fuel the company even more than new customers and bookings. And focusing on renewals is especially important to focus on in times like these. At best, “bad deals” consume your CSM’s time and energy. At worst, they become detractors.
So, how do companies close “better” deals? And when a “bad” deal closes, who is at fault?
In this post, I’ll break down the behaviors and processes that can lead to closing a bad deal and then offer solutions for each problem. But first, we have to answer the following question:
There’s a difference between a “misunderstanding during the Sales process” and a “bad deal”.
A misunderstanding is when the customer’s expectations don’t match what the customer actually received, but it’s easily rectified by the Success team.
A bad deal is one that the Success team knows will not renew without either a.) a massive amount of work from the Customer Success team, or b.) decreasing the price or adding services, which both ruin the margins. Here are some examples of bad deals:
Most companies have robust funnels set up to capture leads at the top of the funnel, then nurturing those leads to talk with Sales, trial the product, and eventually close. Through that process, they identify and remove unqualified people.
For Marketing, those stages typically include:
Define ICP / Buyer Persona → Lead capture → Lead enrichment → Lead nurture → Lead score → MQL
For Sales development reps, those stages typically include:
Lead database → Cold outreach → Qualification call → AE gives demo
So all of the decisions about which leads are worth pursuing happen before the Salesperson is involved. Even with the incredible amount of qualification that many of us put into our lead generation process, we can hardly fault an account executive for closing the deal that was handed to them.
Here’s how to diagnose and fix some of the true causes of bad deals.
Problem 1: Lead quality
What it is: Marketing is sending low-quality leads to Sales.
Causes:
Problem 2: Sales influence
What it is: Sales is over-extending to get deals across the line.
Causes:
Problem 3: Compliance
What it is: Compliance is sacrificing standards to get deals across the line.
Causes:
From the list of “causes” above, we can see it’s generally not the sales team’s fault when a bad deal is closed. It’s up to the Success leader to challenge their peers in Marketing and Sales to find areas for improvement so that bad deals can be avoided. Some potential solutions to the problem include:
1. Marketing is accountable for generating better leads
Require the marketing team to do a few things:
2. CS gets to qualify inbound leads CSQL
Aaron Thompson proposed the idea of a Customer Success qualified lead—allow the CS team to specify criteria needed to close a deal. These criteria could be included in the initial qualification call, as well as in the deal desk process. In the most progressive version of this idea, Success would have a representative that participates in SDR qualification calls to ensure good opportunities are being passed off to account executives.
3. Have a tighter deal desk process for approving deals
Inevitably, the business will need to be flexible with deal terms sometimes to close important deals. But a strong deal desk process catches the changes, documents them, and makes them available for future analysis of the customer base and margin reviews. Ideally, someone outside of Sales (operations/finance) catches outliers and exceptions since their job isn’t directly tied to quota. Exceptions should be clearly documented in SalesForce at the opportunity level for easy future analysis.
4. Give CS a chance to “reject” a new deal
When the CS team does the first kickoff call, give the CS person a chance to reject a deal. In other words, their compensation will no longer include that customer’s performance. In order to have the deal officially rejected, the CSM must clearly show which qualification criteria were not met, and the VP of Success has to approve.
5. Make everyone’s salary based (in some way) on renewal rates
Since so many departments are responsible for the quality of the deals that are closed, make everyone’s compensation directly tied to renewal rates. This could be in the form of a quarterly or annual bonus, or aligned to your organization's current pay structure.
Doing it this way prevents Sales from feeling like they are being singled out, and gets everyone aligned around the KPI that matters most for SaaS companies.
It’s your responsibility as a leadership team (but especially as the VP of Success) to put the proper structure in place to enable the team to close the right deals.
Is your team handling "overselling" in a way that's not addressed in this post? Let me know.
Take an example of a fictional fitness watch company, FitWatchCo, which plans to sell more watches; the consumer wants to lose weight. FitWatchCo focuses their messaging on features—heart rate monitoring, step counting, and altitude tracking—expecting the customer to figure out the best use cases to solve their problem. Then, FitWatchCo measures the number of times their fitness watch is used per day, without any consideration for whether or not the customer lost weight. FitWatchCo is delighted to see frequent usage and assumes the customer is happy. Next month, when the customer hasn’t lost weight, the customer sells their fitness watch.
If we’re going to keep our department named “Customer Success”, it’s important to iterate and improve on our understanding of the value received by our customers. The framework below provides a quick summary of the journey you’re likely to follow.
Many software companies are product-obsessed. You can see it right away on their websites—they’re marketing attractive features and benefits. There’s no language around how customers can use the product to reach their specific goals.
It’s easy to think about Level 1 using the fitness watch example. The company is essentially saying, “here’s the product!” And the onus is on the customer to figure out how to use it to achieve their goals.
Now, some might argue that B2C companies have to talk about their product features because there are unlimited use cases for consumers. But great B2C product presenters, like Steve Jobs, always paint the picture of how your life will be changed and improved. The focus isn’t on selling the product, it’s on selling life with the product.
In B2B, Level 1 looks like this: the Success team solely focuses their time with customers on explaining features and use cases. There isn’t a tie to the customer’s goals. “Here’s the product, go use it.” If the customer doesn’t use the product, that’s on them.
The way Success teams can move to Level 2 is to track usage metrics to evaluate whether customers are receiving value.
Here, the Success team still focuses on pitching features and use cases to customers, but is also leveraging usage metrics to evaluate whether customers are getting value out of the product.
Since low adoption is one of the top reasons for churn, companies begin tracking usage data as a feedback loop for understanding how customers are doing. This behavior is a step in the right direction and can help companies identify customers who aren’t using the product, aren’t using enough features, or don’t have enough total active users.
What Level 2 is missing is connecting usage to an outcome that matters to customers. The way Success teams move to Level 3 is by identifying the customer’s goals and then demonstrating how using the product frequently will help the customer achieve their specific goals. It’s moving from saying “Here’s how our customers should use the product,” to “Here’s how you should use the product and why using the product in this way will help you reach your goals.”
The next level of maturity is for Success teams to align usage of the product to the customer’s goals. Instead of focusing on features and use cases, Success teams anticipate 3-4 high-level objectives that customers will have when buying their product and create playbooks for helping customers achieve those goals with their product. ← The most mature companies today are at this level.
So if a customer has a goal of increasing revenue by 3%, the CSM would follow a playbook that shows the customer how to use the product to achieve that goal.
Here’s what’s missing in Level 3, and how Success teams here can move to Level 4:
Tracking product usage is a good step towards understanding how customers are experiencing the product, but it’s a company-centric metric. The amount of usage is not highly correlated to the value received by the customer. So to move to Level 4, companies have to invest in other approaches to better understand the value received.
There are no products that own the entire ecosystem of people, tools, and services required to hit a company’s objective. If your customer wants to increase revenue by 3%, your product is only one part of that story. The key to moving to level 4 is understanding where the product fits in that ecosystem and then being able to coach customers to leverage all the moving parts required to hit the customer’s goal.
A company that sells marketing automation might have a customer say, “We have a goal of 200 demo requests per month.” And a mature marketing automation company would respond, “Great, we’re one part of that. We’re going to help you with this, and you’re also going to need these other tools and services to hit that goal.”
When companies understand how the ecosystem plays together, they can pinpoint risk and systematically act on it. If your company does it’s part, but your customer doesn’t successfully adopt another tool, you can see where the risk is coming from and help the customer know where to allocate their energy.
Success teams in Level 4 have also moved beyond relying on product usage as the main indicator that the customer is receiving value, and have begun to track earlier indicators of customer health like:
Here’s what’s missing in Level 4. Level 4 assumes the question of whether the customer “received value” is binary: either the customer received value, or they didn’t. But in reality that’s rarely the case. Customers can realize some value from a product, but not get everything they were expecting. Companies at Level 5 are able to detect and record when customers have received partial value.
Level 5 is where the Customer Success team not only understands the customer’s goal, the ecosystem of products required to meet that goal, and is tracking early indicators of customer health, but they’re also able to record and detect whether the customer received partial value.
At this level, the company has recorded each goal that the customer wants to accomplish. The company visualizes the products, services, and processes needed to accomplish each goal. Each player in the ecosystem is assigned metrics to indicate if they’re meeting, exceeding, or below expectations.
Since a failure anywhere in the ecosystem could lead to the company failing to hit its goals, it’s critical that the company is able to identify weaknesses early. Periodically (monthly or quarterly), the entire ecosystem is reviewed and evaluated by the company and the customer.
Returning to the example at the beginning of this article, let’s examine how FitWatchCo would perform in a Level 5 environment.
First, FitWatchCo would acknowledge that the customer’s goal is to lose weight. FitWatchCo would identify that in order to lose weight, the customer will need an ecosystem of products, processes, and services to accomplish the goal:
Each player will receive success metrics:
FitWatchCo or the trainer meet with the customer on a monthly or quarterly basis to review progress towards goals and identify weaknesses early. Each player in the ecosystem only ‘wins’ if the customer actually loses weight. Otherwise, the customer gives up and everyone experiences a “churn” event.
When we reach this level of maturity, we’ve finally earned “Customer Success” as the title of our department.
Here’s an overview of each phase of maturity and move to the next level.
“Early on in my career, I wanted to focus on helping customers achieve value from products—and I’ve been learning as I go ever since. You’ll see a similar path with most senior level Success leaders today: they simply enjoyed being customer-facing so they made careers out of that interest, and had to shape their roles, teams, and organizations from scratch.”
Pendo’s Chief Customer Officer, Jennifer Dearman, spent the first half of her professional career in consulting—until she took notice of the wave of thought leadership around customer journeys and “Customer Success” about a decade ago. Back then, the idea of having a dedicated team focused on customer health and happiness wasn’t top of mind for most executives, even in SaaS companies. Dearman was intentional about only joining companies who were forward-thinking on that front.
That intention led Dearman to become the Director of Customer Experience & Engagement at Red Hat and then VP of Global Customer Success at Kronos. As she sees it, Red Hat was the first time she was able to take the theory of Customer Success and implement it, and Kronos was where she transferred everything she’d learned to build out the CS organization from the ground up.
After Kronos, Dearman joined Pendo, an experience she credits with evolving her thinking from solely focusing on the customer experience to also focusing on the product experience.
“Your customers might love their CSMs, but if they have a poor product experience they're still going to churn,” she explains. “Customers stay because the product delivers value. For me, that was the missing piece to the whole Customer Success picture.”
In this interview, Dearman takes a deep-dive into how she’s evolved the company’s Success organization for scale. She shares advice on setting team structure, segmenting customers, and creating a right-touch customer experience model, and she offers her opinion on the future of Customer Success.
The Success organization at Pendo includes the global technical success team, technical account managers, the renewal and expansion team (also known as the Subscription Success team), and customer success managers.
As the CCO, she reports to the CRO. Along with the Success organization, the revenue organization umbrellas the sales organization, revenue operations, and professional services.
How the structure has evolved: Subscription Success now owns renewals and expansions instead of CSMs
One unusual aspect of this structure: Dearman reports to the CRO, but the Success team still owns a significant portion of the company’s expansion efforts. In most org structures where the CCO reports to the CRO, the sales team is responsible for the commercial aspects of the customer relationship.
But even before Dearman joined, Pendo’s team of CSMs were already handling all renewals and contributing to expansions. In fact, she notes that CSMs were juggling too many responsibilities.
“They had too many accounts, weren’t geographically aligned to customers, and there was no discernible difference in the experiences being provided to customers of different sizes” Dearman recalls. The CSMs were responsible for product adoption, customer health—everything you’d expect a CSM to be responsible for—plus the added responsibility of securing renewals and contributing to expansion. She says the CSMs had an upsell target, and Sales owned the expansion number for the most part.
Dearman recognized right away that she’d need to peel the renewal and expansion piece away from the CSMs so they could do what they do best - help customers achieve their business outcomes. To do that, she created a new team in her Success organization called Subscription Success.
The Subscription Success team handles expansion and renewals for the commercial (mid-market) and corporate (SMB) customer segments. (More on enterprise—the highest tier—below.)
“The CSMs are still responsible for keeping customers happy, driving value, and influencing the renewal and expansion,” Dearman explains. “The land AE turns customers over to the Subscription Success rep, who is part of my team because that relationship between the renewal and expansion motion and the CSMs needs to be very close.”
AEs maintain the commercial relationship with strategic accounts
The primary distinction here is with the top-tier strategic customers—Pendo’s enterprise accounts. In this segment, the AE that sells the deal maintains that financial relationship through the life of the customer.
For these enterprise accounts, there’s an AE instead of Subscription Success rep and these customers still have a CSM.
“The CSMs do all of the health and advocacy and classic CS activities in partnership with the AE,” Dearman says. “The AE owns the whole commercial relationship at the highest level, which makes sense. They should be deep in those accounts.”
For all the differences in models of Customer Success, Dearman sees one consistent chapter in the Success leader’s playbook: Most CS leaders start by segmenting their customers.
“One of the first pieces of thought leadership in our space was that you can’t treat all customers the same. You’ve got to segment on something,” Dearman says.
“Some companies focus on the high-touch experience first because, frankly, it’s easier,” she explains. “It's easy to give these customers more love. They are likely getting a lot of attention already and there are typically a lot fewer customers in this category. On the other hand, it's a lot harder to touch customers at scale. I'm a proponent of creating a model that affects all customers at the same time instead of only starting with one segment. Every customer deserves an investment in their success and a more comprehensive engagement model provides value to all of your customers regardless of their size or contribution to your business. The experience should be similar, not the same.”
“It's easy to give these customers more love. They are likely getting a lot of attention already and there are typically a lot fewer customers in this category. On the other hand, it's a lot harder to touch customers at scale.”
Segment customers along their experience, not spend
When the concept of segmenting customers was first introduced, companies were segmenting customers purely on ARR. The highest spend customers get the high-touch experience, the lowest spend customers get some version of a tech touch, and the ones in between get some muddled version of the two. Dearman recognizes that the thinking around segmentation has evolved.
“When I joined Pendo, I wanted to be more deliberate about how we segmented our customers and to align customer profiles directly with the type of experience a customer needs,” Dearman says. “So we've created experience levels that don't match one-to-one with our sales segments. That was intentional.”
“The idea in segmentation is to align the profile of your customer with the experience that they should be getting. It’s not always based on ARR.”
Her segmentation strategy still contains an ARR threshold. But it now heavily accounts for customer preferences and growth potential, too.
As an example: some customers don’t want or need a regular 1:1 with a CSM. They’re happy with self-service, so Dearman’s team will enroll these customers in the self-service experience called Pendo Neighborhood. (More on this concept in the next section.) It’s a fully digital experience, with one notable difference that Dearman developed at Kronos and brought to Pendo: this experience has named CSMs specifically dedicated to supporting customers in the Neighborhood.
“When you’re thinking about creating a scale program, you need that kind of differentiator,” Dearman says. “We automate as much as we can. But we also want those customers to have an avenue to office hours or a one-on-one with a CSM if they need it. It’s still a one-to-many, but it adds a level of personalization.”
In addition to aligning the customer’s profile to the experience they should be getting, Dearman also accounts for growth potential when segmenting customers. She says some enterprise accounts are in the Neighborhood—they’re just not going to expand. And that’s fine. Dearman still wants those customers to have the best adoption experience they can and leverage Pendo as effectively as possible.
And on the flip side, high-growth companies that might normally fall into the middle tier can get moved up into the high-touch experience. Dearman wants to bake in that high-touch connection early in their relationship.
How many accounts a CSM can manage
Even with a different style of segmentation, Dearman’s team still has the long-tail accounts. She’s had to figure out ways of assessing how many of those an individual CSM can efficiently take on.
She points to the industry benchmark of $2 million per CSM as an acceptable starting point for big companies, but not a great metric for small to midsize businesses. At Pendo, account sizes are smaller, and $2M per CSM would be an unmanageably high quantity of customers per CSM.
“I had to pivot my thinking and move towards a number-of-accounts approach as opposed to an ARR threshold,” she says. To calculate that number, she factors in the experience that those CSMs are delivering.
If a CSM has 100 accounts and is expected to do quarterly business reviews for each one of them, that’s too many customers. Space out those important reviews or reduce accounts and it starts to become more manageable.
“You have to match the entitlements you’re promising to give to a customer with the number of accounts you give to a CSM,” she explains. “They go together.”
Dearman says it can be a trial-and-error approach. She poses starting with 15 accounts per enterprise CSM, 40 for the mid-tier, and 100-200 for the long tail. The team at Pendo is still testing those quantities to see if they make sense.
Dearman’s Pendo Neighborhood concept delivers high-value experiences for a segment of customers that was largely untouched.
“Small customers are unique, and they can get a lot of synergy from each other in terms of how they can leverage your product,” Dearman says. “Putting those customers together and creating a forum for them is important. Pendo Neighborhood is about creating that community, and we have a lot of self-nurturing happening at that level.”
Creating a scale program that retains high renewal rates isn’t just a nice-to-have either. It’s table stakes for a customer success program. Small customers tend to be the first to churn.
“Small customers are unique, and they can get a lot of synergy from each other in terms of how they can leverage your product. Putting those customers together and creating a forum for them is important.”
The purpose of Neighborhood is to keep this segment of customers fully engaged and informed. A lower-touch experience does not have to mean low-value, and a community model brings even more value to these customers en masse. The idea is to create a one-stop-shop where customers can have discussions, find resources, stay connected to the product and each other, and open a line of communication with Support or a CSM when they need to.
Start now and iterate
The success of a community-minded scale model depends heavily on the maturity of self-service features and content, automated onboarding, communication campaigns, and the community itself.
But a Success team shouldn’t feel like they need to optimize all of those things before starting a scale program.
“It’s iterative,” Dearman says. “I’m a proponent of getting started with something, learning and then iterating. If you wait until you have all the building blocks in place, you’ll never launch anything.”
“I’m a proponent of getting started with something, learning and then iterating. If you wait until you have all the building blocks in place, you’ll never launch anything.”
Pendo Neighborhood started out as a Slack channel with a dedicated team of CSMs and an email alias. Now more than 600 customers live in the Neighborhood, which is hosted on Zendesk—and Dearman is still iterating.
“We’re in the process of building integrations so we can launch the broader community, and we’re building programs that we can launch in the product,” she explains. “You could wait forever, or you can get started with something. Try things.”
Dearman sees a couple of big predictions for CS in the next several years.
Clearer role, more funding
Right now, Customer Success as a field is admittedly “a bit of a hodgepodge,” Dearman says. Some CS leaders are responsible for the classically-defined customer success motion (health, adoption, advocacy) while others have some/all post-sale functions, and some also have renewals and expansions. And the on-going debate about where Customer Success should roll up remains a hot topic.
“Customer Success must be strategic for a company, have executive support, and dedicated funding. If any of these are missing, delivering on the promise of customer success is nearly impossible. With that in mind, I predict Customer Success will more consistently report directly to the CEO and include all post-sale functions.”
She also predicts Customer Success will be recognized as the growth engine for companies which will lead to better funding for the function.
“Retention is critical for any company. Customer Success is key to retention and that’s foundational. But more companies are starting to realize the revenue growth potential of investing in Customer Success,” Dearman says. “As that trend continues, there will be more budget allocated to Customer Success. And in my opinion that doesn’t mean incremental. It means less funding to new Sales team members and more funding diverted to CS around retention and expansion because that's where the money's at.”
“Retention is critical, and that’s foundational. But more companies are starting to realize the revenue growth potential of investing in Customer Success. As that trend continues, there will be more budget allocated to Customer Success.”
That’s not to deny the importance of net new logos, particularly for startups who have to focus on the acquisition of customers. But at some point in a company’s maturity, the pendulum swings toward expansion as the engine of growth. “The growth of a company then comes from the expansion motion, and that expansion motion should sit within the Success organization,” she says.
Success will be more remote-friendly
Dearman has worked with widely distributed Success teams. She’s also worked in co-located ones, where barring a global pandemic, she can count on one hand the people who didn’t come into the office every day. With this experience, she sees the advantages of Customer Success being increasingly operated by remote teams and remote CSMs.
“Distributed teams allow you to hire where the talent is,” Dearman says. “And you can align resources more closely to your customers. It's Incredibly efficient and even improves the customer experience since CSMs can meet with their customers without traveling far.” With in-office cultures, she felt the teams missed out on a lot of opportunities.
“I understand the concern in-office companies have that becoming more distributed risks losing the company culture,” Dearman says. “In my experience, that’s never been true. Distributed teams have amazingly strong company cultures too.”
If Dearman had to distill all this advice into a simple checklist for Success leaders striving for a scalable organization, here’s what she’d say:
There are no guidebooks or frameworks for assessing churn risk during a global pandemic.
So naturally, many Success leaders are looking to NPS—their typical mechanism for understanding how customers are doing—and debating whether that’s a feedback tool to use in 2020.
Most of us know the NPS question:
Considering your complete experience with our company, how likely would you be to recommend us to a friend or colleague?
The majority of leaders we’ve interviewed recently believe that NPS is a single factor in an overall portrait of customer health, but not the most important factor. They believe that a customer’s willingness to “recommend a product to a friend” does not accurately capture the various risks present in today's world of uncertainty. For example, some industries have been massively impacted, the key champions often don’t control the budget, or the product may be too expensive relative to the value received.
Some leaders are still advocating for NPS given the lack of well-established and tested alternatives. Others believe NPS is too vendor-focused and unempathetic for this moment in history—it risks sounding oblivious to their current situation which can dissolve the customer’s trust with the company. Both groups of leaders are still searching for earlier risk indicators.
An alternative (we’d argue “better”) way to assess churn risk amid COVID-19 is to begin by looking at the industries most impacted. Map out your customers across “high risk,” “medium risk,” and “low risk” according to the level at which their industry has been impacted by COVID-19. Provide playbooks to CSMs for customers in each segment. Then, take into account how customers have previously responded to pricing, and tailor your outreach accordingly.
Here’s how.
Instead of reaching out to customers blindly and asking how they’re doing, we should begin by understanding the sectors our customers are in and how the current crisis has affected those sectors. A customer in the Tourism industry should be approached differently than one in Pharmaceuticals or Online Retail.
Ask CSMs to map their customers into “high exposure,” “moderate exposure,” and “low exposure” industries as indicated above. Once this exercise is complete, Success teams can
Leaders can also create playbooks for CSMs to use at each level of exposure so their team’s outreach meets customers with the appropriate response.
CS leaders should create a playbook for each level of exposure that CSMs can use to reach out to offer support and gauge customer health. I recommend using a collaborative approach for customer outreach—you can offer a few ways you’re able to help, but ultimately the customer should tell you what they need.
Here’s how you might build templates for reaching out to customers in each level of exposure:
For high risk customers, ask an open-ended question:
“We understand that these are challenging times. You have an upcoming renewal in 60 days. We value our long term partnership and we think of it as a 10-year relationship. As your long-term partners, we're looking for ways to support you in the coming year. Can we have a conversation about what you would need to help you through this difficult time?”
Allow high risk customers to tell you how to support them.
Give moderate risk customers the chance to pick from a menu of options. You might include three options to choose from:
Consider what variables have influenced their decisions in the past and make sure those are addressed (more on this below).
For low risk customers, open a channel for them to make an ask if they need to. Rather than offering any menu options upfront, you could say:
“Your renewal is planned for the next 60 days. If your business is encountering economic challenges, let us know this week. Our renewal invoice is scheduled to send in 30 days.”
Presenting it this way assumes that the renewal will go through without any problems while empowering the customer to reach out if they need it.
After mapping out customers according to their level of exposure, look at how pricing has influenced their decisions in the past. CSMs will want to tailor their outreach according to the customer’s perceptions of the product and their price sensitivity.
Right now, price rules everything. Even companies in low exposure industries will want to cut some extraneous costs. This is a time when everyone is more sensitive to overall expenses.
There are two parts of “pricing” that you want to know the answers to with each customer:
1. How have discounts affected them in the past?
Use discounts with caution! Many businesses have price point thresholds for each of their customer segments that indicate the customer does not see value in the product. For example, let’s imagine you offer your product at $15,000 per year—your data will likely show that customers who pay $10,000 or below are more likely to churn. The reason is that the customer doesn’t think your product adds enough value to justify the price, or perhaps they’re using the product to solve a short-term problem.
During COVID-19, companies will be tempted to use discounts to keep customers. Discounting may be appropriate if it follows the following guidelines:
2. Does your product solve a severe and ongoing problem for the customer?
If you know your customer doesn’t deeply value your product or doesn’t think the price justifies the problem it’s solving, help customers connect the problem to a more severe or bigger one. Find a way to reframe it in their mind, by connecting the problem to the company, to their departmental goals, or the company's annual goals.
The customer’s perceived value of your product isn’t fixed. There will be times when your customer feels the pain that your solution solves more intensely, and times when the pain isn’t as strong.
A simple example: Someone in Denver probably feels a strong need for a snowblower in the winter, but they could easily live without one in the summer.
Similarly, a product that aggregates data into executive-level reports will have customers who understand the product’s value more clearly at the end of every quarter, or when they’re advocating for additional resources.
Customer success leaders must document what problem the customer is trying to solve with the product as part of the onboarding process. In other words, why did the customer make a purchase? Each problem-to-be-solved should also include a severity rating on a scale of “This isn’t an important problem” to “I’m on fire—please put out the fire.”
Responses to these questions indicate how likely that customer is to expand or renew in the upcoming quarters.
Pair this information with the customer’s exposure level and Success leaders will get a much more accurate read on churn risk, and can reach out to customers in an appropriate way.
Connecting with customers in the right way during this time is no easy task, but sending out traditional NPS surveys can be interpreted by your customers as insensitive to their new reality. It can no longer be used as the golden standard of customer health. Instead, be proactive; look at industry risk to forecast churn and offer tailored, empathetic outreach to support customers in the right ways.
COVID-19 or not COVID-19, I bet you have heard that question many times, as it is one of the most common topics posed in #CustomerSuccess forums, conferences, blogs, and management meetings.
There is also a striking commonality in the responses to the question. In essence, the argued position is usually either a ‘Yes’ or a ‘No’: clear, decisive, and primarily supported by one’s conviction, with minimal objective information supporting the position.
Not only is determining the ownership of ongoing customer revenue critically important, but it is also involved. Each company likely has their preferred solution. Therefore, executives and decision-makers could benefit from utilizing an analysis framework rather than personal anecdotes and preferences to make these decisions.
Generally, there are three options to manage the commercials of existing customers:
Each option has pros and cons; thus leaders in the organization (heads of CS and Sales, as well as the CEO and CFO) will need to align their actions (job descriptions, compensation structures, hiring profiles, skill training, operating procedures and touchpoints between the teams, etc.) with the chosen strategy. I have seen a multitude of companies operating in each of the above options, signaling that they are all workable options from an operational perspective. But, how should the executives make the decision that best serves the company?
In my experience, there are ONLY two (2) primary vectors that should influence this decision:
Typically, longer sales cycles require a more substantial investment in time, energy/effort, and cost for the Sales Executive to build the relationships needed to win the initial deal. The most straightforward measure of this is the average duration of the sales cycle. But, it can also be measured by the cost of it (CAC), which for many high-performing companies, is highly correlated to the sales cycle duration.
The larger the initial time and cost, the less it makes sense to transfer those relationships to a different person (CSM), and the more it makes sense to maintain the ownership of the relationships with the Sales Executive. It is worth noting that the length of the sales cycle closely correlates with the size of the organization the company is selling to (target market) and to the expected revenue (ASP) from them. More significant deals can justify longer sales cycles, and smaller deals can only be viable if their sales cycles are short.
This point is easiest to understand when you think of extreme situations. Think of companies that sell to Telecom, Auto, or Aerospace companies. In each of these markets, there are only a few hundred, sometimes dozens of potential customers worldwide. The people in charge of selling to them own the relationships with a small set of those companies, sometimes only one or two, regardless of whether they are already a customer or still a prospect.
On the other extreme are companies selling directly to consumers (B2C) or small customers (SMB). In many of those situations, there are no dedicated salespeople at all, as the size of the deals can not justify them.
Assuming there is upside potential from the customer (or the “account”), it is essential to identify what drives that upsell. The drivers of revenue growth from customers can be:
The more the upsells come from “more of the same” (increased pricing, higher consumption, organic growth, expansion of features, etc.), the more it makes sense for the person who manages the ongoing working relationship with the customer (the CSM) to drive those upsells. The more the upsells come from NEW sales – new products, new divisions – the more sales work is needed, and the more it makes sense for the salesperson, not the CSM to own this task.
Taking these two vectors together should enable any company to devise a strategy that optimizes for its business. The chart here provides an example of how to put this together into an analysis for a particular company.
Data from a survey conducted in 2019 by Gainsight supports this notion, as can be seen in the charts below. First, there is a clear correlation between the type of commercial activity (illustrated in this dataset as Renewal, Upsells, and Cross-sells) and the ownership of it by the original salesperson (aka AE) or a new team member who manages the commercial ownership of the relationship. This latter one is sometimes referred to as Account Manager (AM) and sometimes Customer Success Manager (CSM).
Correlation between the type of commercial activity and ownership is seen in two ways; first, by examining the portion of companies where the salesperson is solely responsible for commercial activity. The second is where the salesperson is collaborating with others (AM and/or CSM) in that effort. The blue bars indicate that the portion of companies where the salesperson (AE) is solely responsible for the commercial relationship increases from 22% to 40% to 57% when the type changes from Renewal to Upsell to Cross-sell. Further, illustrated by the red line, the portion of companies where the AE is completely hands-off (AE Not Involved) in the commercial decision decreases from 78% in Renewals to 37% in Upsells to 26% in Cross-sells. The above stats are the average across all companies regardless of size and industry.
Assessing the correlation between the Contract Size (ASP) and the ownership can be seen on the graph here. The figure shows the portion of companies where the salesperson is involved/leading the commercial activity with customers.
Aligning the org structure as well as the roles and responsibilities of the people to the customer’s needs and wants, makes a lot of sense. Customers want to maximize value from the solutions they acquired from a vendor, which requires generating the most value at the lowest possible cost. This optimization suggests speed and ease of working relations. But, that can be achieved in different ways and is more dependent on clear internal roles & responsibilities and external communications with the customer than on org structure.
For example, most customers would not want different people to manage their renewal and upsell contracts, but rather a single person. However, a salesperson or a CSM can accomplish this depending on how the R&R is defined. Another example: Customers want a dependable person they can contact if they have a problem, one that has the knowledge, authority, and attitude to own and solve it: a “single throat to choke.” Again – fair, but does that necessarily mean AE or CSM?
The above is a suggested framework that can help organizations thoughtfully strategize this pervasive problem. But, like all frameworks, it can help define the options and clarify their implications, not make the decision for you. Organizational design decisions should take into account other factors such as the company’s culture, the brand image it wants to portray to the outside world, and the skills and interests of the critical people already in the org. Those non-quantifiable aspects are often the ones that swing the decision.
Since this is a “hot topic” among the Customer Success community, we would very much like to solicit your feedback on it.
Finally, there are several more questions we would like to answer, such as:
If you are willing/interested in supporting us going deeper into this topic, please complete the attached short survey (it should not take more than 5 min of your time).
About the authors:
Boaz Maor is the Chief Customer Officer at Talech, and Jay Nathan is the Founder and Managing Partner at Customer Imperative.
With too much noise and so many to-do’s, it’s easy for the CSM to lose track of how their customers are really doing.
It’s not for a lack of trying. Every CSM I know goes to work and does their best to ensure that accounts are healthy, and to drive growth for the business. But when CSMs are only given intelligence that comprises high-level, lagging indicators it’s nearly impossible to take specific actions to give their customer a better experience. They’re not getting the right information, but they are getting a lot of noise.
What happens when a CSM is overloaded with noise? In short, it’s more difficult for them to prioritize their time wisely. Instead of letting a key customer that has a renewal within 90 days know that the feature they requested has been shipped, they spend time responding to emails from smaller customers who don’t have a renewal coming up. Or, they get blindsided by a champion leaving an account.
There are four areas where CSMs don’t have the insight they need. In this post, I’ll walk through their current toolset, and explain how they can bridge the information gap so they can prioritize their time strategically and give customers the experience they deserve.
Today, CSMs have a few ways of understanding how their customers are doing. They have:
Each of these channels—meetings, product usage data, and NPS data—give CSMs a glimpse of customer health. But this toolset doesn't give CSMs a full picture of the customer's experience for two reasons; 1) They don't surface the underlying activities that lead to the customer's success or failure with the product and 2) it's extremely difficult to master the ability of understanding what kind of product usage leads to renewal.
There are four areas where CSMs can get better information about their customers’ experience: onboarding, product usage, bugs and features, and champions.
1. Onboarding
Onboarding is the first activity CSMs look at to understand a customer. Most Success groups come up with a step-by-step onboarding process, where CSMs move through the tasks—do kickoff call, create CS plan, deliver training, send learning materials—checking each one off as they go.
The mindset in most organizations is that once a CSM has completed those tasks, they’re “done” with onboarding. That’s an issue; finishing a task list is not synonymous with onboarding being complete.
The only thing that matters is whether the customer thinks onboarding is finished. Do they think they're prepared to use your product?
To answer that, CSMs need to ask their champions about the following:
By asking these questions, CSMs let each customer tell them whether onboarding is complete—and if not, CSMs can tailor their efforts to address a specific customer’s needs. Knowing that a customer isn’t done with onboarding gives the CSM a chance to go off-script to actually onboard the customer.
2. Product usage
There are a handful of Customer Success tools that have dedicated huge efforts to providing extensive product usage metrics. These dashboards work for the C-Suite because they need higher-level findings given different combinations of products and usage metrics. But for the CSM, it's way too much information.
Out of the wide scope of product usage analytics found in the standard Customer Success platform, CSMs really only need two categories of information to understand how the customer is using the product:
1. Milestones
Some mature companies will identify an onboarding behavior that indicates a much higher likelihood of being a long-term customer. For example, a company that offers an analytics dashboard might realize that customers are more likely to renew when they regularly use a specific set of reports.
When a CSM can quickly see whether an account missed a key milestone, they can then probe deeper into the "why" and tailor the content and engagement plans to fit that specific customer’s needs.
2. Product usage over time
Product usage is ultimately about the people and behaviors behind the numbers. Being able to see exactly who is missing the product triggers can help CSMs tailor their efforts to drive adoption with specific groups of people.
Here’s an example of a product usage report for CSMs. With just the 1.) milestones and 2.) ongoing product usage data, CSMs can get all the information they need at a glance.
3. Bugs and features
CSMs almost always promise and commit to their customers that they're going to serve as internal advocates for them within the business. The way that typically plays out is “I'm going to make sure that your bug reports get fixed and that your feature requests get included in the product roadmap.” CSMs commit to that and almost across the board, they fail to deliver.
It's not the CSMs fault. There are just so many roadblocks from a process and tooling standpoint between Customer Success and ultimately product and engineering to be able to actually deliver on that promise to the customer.
The roadblocks:
This is an especially difficult problem to untangle, which is why we’ve spent so much time thinking about the right way to solve it at Nuffsaid. The short story is this:
4. Champions
How do CSMs know about their champion’s health today? They don't. Period.
Here’s a scenario I’ve seen play out many times in the Customer Success realm. I call it the “Cool...” conversation. A manager walks up to a CSM and prods, “Hey, how do you feel about the health of your champions for xyz company?” The CSM responds, “Yeah...they're good. We're doing great.” And then because leadership doesn’t have any real way to probe deeper, they respond casually with “Cool... cool” and they give the CSM a thumbs up.
What a lame conversation. How can we give such a broad-stroked description of our champion relationships? In the end, humans are different, and their experiences of your product and team, surely, are different. Because of this, we need to treat each of our relationships as discrete connections that require different types of attention.
How to gauge champion health
At Nuffsaid, we use a framework to help understand a person’s archetype, their relationship with the product, and the team that supports the product. For each key account, we map out where each champion is on a quadrant graph. The vectors on the graph are the engagement, delight, and influence of each individual.
This framework can give CSMs direction. For example, if a high-influence individual at a key account is in the lower right quadrant of your graph, it essentially means that the person cares about the problem your product is trying to solve, but they don’t like the way you’re solving it. In a competitive landscape, this kind of individual may shop around and look at other similar tools.
CSMs are the champions of customer health. It’s a shame that they are pulled in so many directions; this leads CSMs to unintentionally put some customers on the back burner, while putting fires out elsewhere.
But when CSMs have the volume turned down, when there is an efficient workflow established, and when they are given the right information to clearly see a full picture of how their customers are experiencing the product, CSMs have the space to do what they do best; provide their customers with a world-class experience.
It’s no wonder; managers already have the responsibility of supporting large teams to achieve their objectives, while simultaneously trying to meet their own deadlines on personal projects.
Yet, when team members are consistently disregarded, their motivation and sense of belonging are compromised. In times like these, when career uncertainty abounds due to the COVID-19 pandemic, the importance of one-on-one meetings cannot be stressed enough. Perceived job insecurity can have a significant effect on a team member’s physical and mental health and, according to a New York Times piece (following the 2008 recession), it “reduces job satisfaction and decreases work performance.”
One-on-ones are the team member’s place to express these concerns, understand how the company is doing, and to feel a renewed sense of motivation and fulfillment in their work.
Most of us will be working from home for the foreseeable future. There is no better time to tune up and bring value back to your one-on-one meetings. How do you do it? We will get to that, but first, let’s take a look back.
I’ve been in B2B SaaS for over 15 years. For most of my career, one-on-ones were mainly tactical check-ins with a side of “personal connection.” What happened last week, what's going on this week, what are your blockers.
There are two profound underlying issues with this format:
Problem #1: As companies grow, managers will gain an ever-increasing amount of direct reports. Suddenly, a huge chunk of their week is spent in one-on-one meetings. Sound familiar?
Problem #2: The one-on-one meeting, when used as a tactical check-in, is much more valuable to the manager than the employee.
Along with my co-founders Nick and Hari, we sought to address these issues at Nuffsaid; how to make our one-on-one meetings more valuable for both parties and how our managers could receive pertinent information without sacrificing hours each week to essentially receive a status update. There had to be a better way.
Much like creating our company values at Nuffsaid, we’ve learned the significance of being intentional about one-on-one meetings very early on. We aim to learn from our previous experiences and build something that works for our vision. For instance, as one of our core values is to build 30-year relationships, we wanted to design a one-on-one structure that would encourage those connections to take form.
We also wanted to structure our one-on-ones to be both scalable and to be the team member’s meeting (not the manager’s). So we kicked off the process by looking at the reasons why employees typically leave companies.
They tend to leave because:
We then tailored our one-on-one meeting structure around those elements—helping to build a solid relationship and communication channel between the team member and manager, making sure everyone is included in the company conversation, and creating the space for career discussions. Nick, Hari, and I also knew addressing these issues early on would help mitigate the risk of having one of those be a reason why someone would leave Nuffsaid.
After defining the structure and expectations for what we wanted one-on-ones to look like at Nuffsaid, we renamed the meeting. Internally, we call the one-on-one a “syzygy.” The reason being, our goal is to create alignment between not just the employee and manager but also the company. A syzygy means "an alignment between three celestial bodies"; at Nuffsaid, a syzygy is the aligning of the team member, manager, and company.
Here’s the breakdown of what we expect with the syzygy.
These meetings are not:
In each meeting, we follow this structure. We go through the questions in these three sections: look around, look back, and look forward.
Note: Managers at Nuffsaid make a copy of this excel sheet for each direct report to track responses. (Feel free to make a copy of this template.)
1. Look around
The “look around” section is both 1.) a private forum to discuss personal issues or frustrations, and 2.) a place to share feedback about the leadership team and company.
A private forum
The initial part of the one-on-one provides space for the manager and team member to speak openly about what’s going on both personally and professionally. Immediately, a manager will get a real sense of the pulse of their direct report. We formatted the syzygy this way because when there are frustrations, concerns, or personal issues, we want them to bubble up early.
Managers ask:
A place to share feedback
Next, we gather leadership feedback as a way for anyone in the company to anonymously share feedback or ideas to Nuffsaid’s leadership team directly or about the company in general. This document is publicly available, so anyone can fill it out at any time. Or, if the team member prefers, their manager can fill it out during the manager’s syzygy so the team member’s anonymity is further protected.
Also included in that leadership feedback form are questions about how we’re living up to our company values. At Nuffsaid, we continuously reinforce the culture we want to see and the syzygy is a perfect delivery mechanism for that. It provides a channel for anyone in the company to uncover areas where the company isn’t living up to our core values. We try to be intentional about taking this advice seriously, adjusting where we can, and then showing gratitude for the feedback.
Finally, we ask questions to gain insightful feedback about underlying problems and how the company can solve them. The goal here is to not have a finger-pointing session, but a chance for a team member to say, “Hey, here's a problem that we need to fix.”
2. Look back
When we look back on past performance, we start with questions around how engaged the team member is with their work at Nuffsaid. We ask:
Next up, we head into performance. This is the most traditional section of the one-on-one—many companies only focus on this part, and others never include it in their one-on-ones. The idea here is to highlight what the team member has accomplished recently. The team member and manager should:
Looking at performance regularly is a necessity because it helps team members have a clear understanding of how they’re doing. Instead of having to wait for 6-12 months for a performance review, under this format we don’t have “surprises” and team members benefit from shorter feedback loops.
3. Look forward
The final section of the syzygy should be about looking forward. Managers ask team members about blockers, or things that are preventing them from reaching their short term goals, their long term goals, and their career vision. All the while, managers should be thinking about what they can do to ensure their report is successful and supported moving forward.
Long-term goals
The final parts of the syzygy are dedicated to checking in on the long term goals that were established early on by the team member (managers ask team members about their long term goals within the first month of them joining). The focus is whether anything has changed to those goals—and if so, why? Asking about this on a regular cadence helps the manager quickly know if the team member's vision of their career has changed in any way. That way the manager can always be sure they're mentoring, coaching, and sponsoring the individual in the right ways.
Career vision
The last piece discussed is on a case by case basis if a direct report thinks it is time to advance their career. At Nuffsaid, our policy is if a team member is asking for a promotion and has consistently performed at an exceptional level, managers should ask them what they'd like to do next. If, however, their performance has been average or below average, they should share clear expectations around the performance the person needs to achieve before the company could consider them for a promotion.
Taking the steps to plan the process and strategize for one-on-one meetings has proven to benefit every aspect of our workplace. When the company, manager, and team member are aligned, morale is higher and turnover dissolves. Using a structure like the above will not only help direct reports to feel supported, in tune with the company objectives, and motivated to build towards achieving long term goals, it will also give some time back to the manager who previously spent half their week in one-on-one meetings.
The syzygy is more than just a status update. It’s more than just a tactical check-in. It’s a time to build trust, to create meaningful, lasting relationships, and to focus on living out the company’s core values.
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