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It’s budgeting and planning season, so I recently chatted with Beth Yehaskel, Revenue Optimization and Customer Success Architect at Winning by Design (also former Head of Customer Success at Dropbox) for the ‘nuffsaid podcast about this topic. Beth is one of those deep-thinkers who has opinions on a range of topics (which we love). And her take on budgeting conversations is no different.
In our interview, Beth shared the difference between a CS org that’s run as a profit center and one that’s run as a cost center. She also covered how CS leaders need to tie increases in retention to Lifetime Value (LTV) and the important difference between providing “customer impact” and “customer value.”
Here’s an excerpt from our conversation, edited for clarity. You can also listen to the interview on the ‘nuffsaid podcast.
CHRIS: You’ve said before “Customer Success needs to be designed as a profit center not a cost center.” Where did that philosophy come from and what does it mean?
BETH: Customer Success originally started out as a response to recurring revenue customers not sticking around. Companies realized somebody needed to work with customers to keep them happy enough to keep renewing. Consequently, a lot of companies continue to view CS and all the associated functions—CSMs, Support, etc.—as being a cost of software, or just something customers get when they buy. In these companies, the function isn’t not viewed as a source of revenue.
The exception to this might be the implementation team, especially for companies that charge for implementation services. But apart from that team, anything associated with the post-sales customer journey is often viewed as a cost center.
But here’s the thing, and more companies are realizing this: if you're really taking care of your customer base and doing the things that will bring churn down, renewals up, and most importantly expansion numbers way up, you can get to profitability far faster and cheaper than if you only focus on making improvements to getting new customers in the door.
CHRIS: What are the signs that a CS team is operating as a cost center, not a profit center?
BETH:
CHRIS: So if CS is doing a good job engaging customers, and growing & expanding customers, a company can get to profitability more quickly. How do you have that conversation with the CFO?
BETH: If you start looking at the Customer Acquisition Cost (CAC) for new revenue, it's going to cost a whole lot more to get new customers in the door than it is to grow existing customers.
Let's say that it takes 14 months for your average customer to pay off the spend that used to actually acquire them. If a customer then churns out at 12 months, you've essentially lost money with this account. Be that because it wasn't a good fit or they weren't seeing impact, whatever the reason. However, every month beyond the 14 months that you can keep that customer is going to go towards increased profitability towards your revenue.
Beyond that, if you can really spend time expanding from the base, which is a lot cheaper than getting new business in the door, and you have the advantage of hopefully articulating the value that you provide and the impact you provide to customers, then you can really see compound growth. The longer you can get that LTV going, the lifetime value of your accounts, and the more spend over time, the faster you will get to profitability.
CHRIS: What’s your advice for CS leaders who are in budgeting mode and they're about to make this pitch to their CFO? What argument to use with the CFO that CS is the right place to invest the next dollar to improve company results?
BETH: Focus on the numbers. If you're talking to a CFO, you want to be very data focused.
Let's say that you have a churn rate that's 15%. If you can make changes to the customer journey and adjust the number of accounts a CSM has and how they manage those accounts so that you can reduce that churn rate by 5% or 3% even—calling out those numbers shows a huge impact for what is relatively low cost for extra CSM headcount.
Efficiency is big as well. When I say invest in CS, I'm not just talking about adding CSMs or adding Support people. This also goes towards making sure you have the processes in place so that you have mapped out customer journeys that are appropriate for each segment, whether you have high-touch segments, low-touch segments.
What do customers need to renew to get that impact to buy more? Make sure you have that journey mapped out and all the things that need to happen for those results that you're looking for. And then just do the math on how much time it takes for those different tasks to get accomplished and how many bodies you have and how many hours you have in the week.
If you start mapping that out against the revenue associated with a reasonable reduction in churn and an increase in expansion, then you can usually start getting into some really interesting conversations with the CFO.
One final note on this: Companies focus so much on their Sales teams because they're the ones bringing new revenue in the door and of course revenue is what makes your business successful. When CS leaders can show that their teams are having an impact on revenue and they are contributing to new revenue at a lower cost than just straight Sales teams, then that’s what’s going to help a CFO shift in their thinking. That’s when the CFO will understand that Customer Success is a profit center, not a cost center.
CHRIS: Twice you've used the word “impact” as the main reason why customers churn. What do you mean by business impact and how does that differ from making sure that customers are receiving value?
BETH: It’s critical that companies understand what value and impact they can provide to customers. They should be talking about this in the Marketing and Sales cycles, but certainly all along the customer journey, too. Here’s how I define the difference between value and impact.
Value is focused on usage and adoption. It's making a difference, but it's isolated.
Impact is focused on significant business and strategic impacts to your customer account. Impact means value realized. Customers buy because they want a tool with strategic impact. They purchased for an increase in revenue or efficiency.
When I'm talking to my clients about value and impact I like to use an Instant Pot analogy. The Instant Pot is an appliance that got really popular a few years ago—it’s a pressure cooker, but it has a ton of other functions. Depending on the model, you might have 10 different buttons with a variety of different cooking methods.
When you buy it, bring it home, and pressure cook your first meal in it, you have achieved your first value. You've done something that you couldn't do or couldn't do as well before you had the Instant Pot. As you start using more and more of those buttons to make yogurt or bread or hard boiled eggs, you're moving towards full value.
The impact, however, is when you start reclaiming counter space in your kitchen, because the Instant Pot has allowed you to get rid of some appliances you no longer need. The impact means spending more time with your kids in the evening because you don't need to spend as much time cooking. That's how to think about impact versus value.
The reason people will stay with your product and keep buying more from you is if they are seeing recurring impact, not sporadic value moments. You need to make a positive difference in a customers' business, not simply their function. And if you're not doing that in a way that you can articulate and more importantly, that they can articulate, it's going to be really hard to convince them to keep spending money with you, much less spend more money with you.
CAREER
Why Chief Customer Officers are Next in Line for the CEO Job
Here’s a quick read highlighting two CCOs-turned-CEOs on what they think the Chief Customer Officer can bring to the CEO role. “You’ve got to start with a belief that the reason for being in business is that customers have choice and your role in business is to meet and exceed their needs. If you don’t do that they’ll go somewhere else.”
STRATEGY
A New Way to Think About Product-Market Fit
The best Customer Success leaders play a core role in using customer data to identify whether products have product-market fit. This article adds more color to what product-market fit is: “it’s not binary; it’s a spectrum” and provides questions to consider for identifying whether you’re in the product-market fit Desert, Mountain, or Mountain Peak (and what to do about it).
COMMUNICATION
DThe Best Leaders are Feedback Magnets. Here’s How to Become One
“Being a feedback magnet is a game changer in your career trajectory for two reasons: 1. Feedback is the only way to see your blind spots… 2. Your colleagues already have feedback for you. They’re just not saying it aloud.” Ascend’s CEO Shivani Berry serves up a few word changes you can use to actually get feedback from others. Some examples: swap the word “feedback” with “advice”, and narrow the question. (“Do you have feedback for me?” isn’t targeted enough. Instead try, “How can this deliverable be 10% better?”)
PRODUCT
A Product Manager’s Remorse
Here’s the Gainsight team with another music video that’ll bring a smile to your face.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Krista Anderson-Copperman is decidedly one of the most important pioneers in the Customer Success space. 20 years ago she joined Salesforce to play a core role in growing the Customer Success function (that was back when Salesforce coined the term “Customer Success” and built the largest CS function of that time).
She then went on to help Okta grow from $20M to $580M in ARR and through their IPO as their Chief Customer Officer. And now, she’s an advisor and board member to several prominent companies including Gainsight, Drift, Attentive, BetterCloud, and Benchling.
In case it wasn’t obvious, Krista has “been there”. She’s seen success and failure and has advised other CCOs experiencing the same.
In this interview, Krista explains how Customer Success has evolved and predicts where the role of the Chief Customer Officer is heading.
CHRIS: The powerful Customer Success function of the past was around on-prem and Professional Services. What did a good Account Manager look like during that time, and what does a good Account Manager look like now?
KRISTA: Back then the big difference was that when you sold someone software they had to install it on a box, physically in their building, and you had very little insight inside the customer experience outside of what they told you. But honestly, it didn't matter — they had already paid for it. You could sell it, set it up with professional services, and then walk away with very little account management. And unless a customer needed an upgrade, something was broken or you wanted to sell them a new piece of software, the customer experience didn’t matter because you already collected the money.
That’s overly simplistic, but from a SaaS perspective when we first started selling software as a service on the cloud at Salesforce, we knew it was different… But we didn't quite grasp how different it would be until we started losing renewals.
It was then that we realized we couldn’t just sell people on new products. We also had to sell people on the cloud itself: how to do business in the cloud, what the benefits were in terms of maintenance, security, productivity, cost as well as how to continuously take advantage of the constant flow of new features we were releasing. The CSM was born out of the need to regularly educate customers on these topics and, as you know, has evolved significantly from this simple definition. The best CSM’s today are product and people experts with varying levels of technical depth depending on the products they are supporting. They understand the different roles within accounts — champions, decision-makers, and end-users — and actively work to maintain and grow their company’s footprint in their accounts by understanding current and future challenges their customers are facing.
CHRIS: That was a great take on the past. I’d like to share Nuffsaid’s vision for the future and see if you agree or disagree with it.
One trend we’ve noticed is that investors of all types are now looking at retention rate as a key factor in the valuation and health of a company — which means that companies are now demanding a more powerful Chief Customer Officer. This shift in focus will also mean more companies will organize themselves around the success of the customer, and CCOs will not just be responsible for running a better CS department, but also for arming the company with the customer data it needs to drive better decisions.
What’s your reaction to that?
KRISTA: I 100% agree. The best CCO's are the ones who act as the glue across the organization by providing insights to drive growth and retention... But depending on a company’s stage, that can mean really different things. It can mean helping identify what the right product-market fit is for an earlier stage company. For later-stage companies, it's more about partnering with Product, Engineering, Sales, and Marketing to deeply understand and act upon customer needs to retain and grow their account base
They do that by training their teams on a couple of key deliverables. The first is developing relationships with both buyers and champions at their customers, so they can deeply understand the problems customers are facing and then partner with those customer execs to solve the problems. Sometimes with their own technology and sometimes with other tech. But the point is, the expectation is to seek to understand, partner, explore deeply, and solve the customer's issues. And to do that, you have to have those relationships inside your company across Product, Engineering, etcetera. You're the glue.
The bonus is, when you start to act that way where c-level execs at your customer start to think of you as a problem solver and ally, this almost always equates to greater wallet share and higher retention.
The second key piece around insights and being the glue is data. Every CCO should be measuring customer sentiment and every CCO should have a customer health or adoption metric. But the best CCO’s deeply analyze and act upon retention/churn, growth, and competitive data to increase win rates and grow their accounts. They're telling Product and Marketing where they are getting stuck competitively at the time of renewal and are providing suggestions on how to tweak the product or messaging to avoid such situations in the future. They're sharing insights with Product and Engineering around functionality that yields higher renewal rates and functionality that creates churn. What they aren’t doing is giving Product never-ending lists of feature requests — instead they're working cross-functionally to provide a prioritized list that will reduce churn and open up new ARR.
CHRIS: So, in an earlier stage company, the CCO’s job is primarily product-market fit. As the company scales, it shifts to more nuanced, product use cases and most importantly, future problems that need to be solved. And no matter what size the company is, the CCO needs to have a really good understanding of the competitive landscape and the needs of the product to fight against competitors, create moats, etc.
KRISTA: Yes - understanding, analyzing, and providing suggestions on how to avoid competitive pitfalls during renewal is critical for a CCO. But they also play a more subtle and unique role in having early access to competitive intel. There is a playbook for going head-to-head with a competitor for a new logo. You enable all GTM teams on that playbook, but in renewals, unique scenarios can unfold and CCO’s need to capitalize on them.
One scenario that everyone should be taking advantage of is when you are going into a renewal where your tech and relationships are rock solid and a competitor is trying to get in the door. Your champion will tell you if a competitor is there, so ask! And then ask for details. And keep track of those details. You will start to see trends emerge. Likely in how your competitor is positioning themselves in existing accounts vs. new logos but also around where they are headed. Competitors are forced to give more information when they are trying to win an existing logo from you, than when you are both competing for that logo as a new customer. Use that to your advantage.
All of that said, I’ll also note that, now that I’m working with companies as a board member and advisor, I spend about half of my working days talking to CEOs, CCOs, and COOs of high-growth, enterprise, B2B startups, usually anywhere from 40M-250M in revenue. And one noticeable challenge in enterprise software that has become clear to me is the need for more talent in the CCO role.
The CEOs I speak with are dying to meet people who can own the full scope that a CCO must own — from partners all the way through to upsells and renewals. There are very few people who have owned that large of a remit, can do it well at scale, and with the topics we have discussed today in mind, so there is abundant opportunity for people to build their careers in this area.
CHRIS: You talked about how CEOs want a more powerful CCO—someone who can just own that whole post-sale function, but there's a gap, right? Most VPs of CS or CCOs have grown up through a CSM track and they're often known as the nice person in the room. They haven't been trained in business in the same way that the CFO or the CPO or the CRO has. How do we close that gap?
KRISTA: One of the most impressive up-and-coming CCOs I advise today comes from a finance background, so my first piece of advice for anyone is to understand the financials of your company. How does your company generate revenue? Where does your company see future growth in products and customer segments? What financial metrics are important to your company from an overall performance perspective, not just the balance sheet? There is a shortlist of SaaS metrics that high-growth companies typically focus on. Know them, know which ones are important to your company performance and what you are doing to impact each one of them.
I start there because the biggest disconnect I see is exactly what you said. The people in these functions often don’t understand the fundamentals of how the company is run.
After that, the advice that I always give people early in their career and, in particular, in any of these post-sales functions is to go broad, don't go up. If you're in Professional Services, go take a lateral step to do something in the CSM world or in Voice of the Customer or in Sales. Whatever function you're in today, take a lateral step so you can better understand the full customer experience, not just one piece of it.
The Chief Customer Officers of today usually own anywhere between 4-6 functions: Professional Services, Support, CSMs, Education, Renewals, and Voice of the Customer (VOC). But when hiring for a CCO at a high-growth enterprise-focused company, three of those categories are more important to have expertise in.
The biggest CCO hiring mistakes happen when a CCO comes in without deep knowledge of these three areas. Professional Services and CSM leaders often have deep philosophical differences on how to make customers successful and someone who has run CSM’s but not renewals doesn’t always understand the commercials of the business. Imbalance or a heavier focus in any of those three areas relative to the others can create real customer experience issues.
Nuffsaid’s content, Gainsight’s content, and others are doing a good job of helping people understand what to look for, but companies need to be really conscious about developing people broadly across these practices versus continuing to develop deep expertise in a single area.
CHRIS: Let's take a peek at your vision for the next five years for Customer Success or CS leadership. Where is it going and what gaps do we need to close to get there?
KRISTA: We addressed a bit of this earlier so beyond continuing to invest in the function itself as well as the future leaders of the function, I think companies need to do a better job of educating the workforce on the ‘whole health’ of the company and the critical role CS plays in this. Strategic planning frameworks like OKR’s and V2MOM’s serve an important function in that they provide everyone in the company insight into the priorities and the metrics leaders are using to hold each other accountable to those priorities. This is so important for Customer Success as we are still very much so in the education phase of helping individual contributors and leaders across organizations understand the vital role good CS teams play in company health and success. And going back to our discussion about the best CCO’s being the glue, getting the whole company to understand that CS is not just about CSM’s or Pro serve doing their job — its about about coming together cross functionally to maintain and grow the customer base is critical.
But again, the problem is leadership. CEOs are recognizing the need for these really strong CCOs who can zoom out, who can analyze product and competitive dynamics, and who can understand the customer at the C-level and what's going on in their business. But there's nobody there to do it, so all the functions get put under a CRO.
The problem with this model is the majority of CROs have spent zero time in any of the CS functions as a leader or individual contributor. They know very little about what these functions should look like or how they should operate so they fall back on their sales experience and you end up with these well intentioned but wacky and wildly expensive models where companies are double and triple comping multiple teams on renewals and upsells. Not to mention, creating a mess of the customer experience.
So keep it simple. Keep your sales team focused on new logos and upsell/cross sells. Keep your CS teams focused on adoption and retention and do everything you can to develop those leaders into a CCO. That doesn’t always work, so recognize when the time is right to hire a CCO with a meaningful scope and make them a peer to your CRO. In addition to ensuring the right level of leadership and focus, this structure sends a very powerful message to your customers, sales and product teams. New business is not king — existing customers and new logos are of equal or greater importance to our company. That is the future of CS because that is the reality.
KRISTA: CCOs of the future will be experts in the practice areas I mentioned earlier, but they will also have very strong cross-functional, operational and execution-oriented minds. They will have a deep understanding of the economics of the business and the power of data in their role to drive customer retention and growth. They will have access to tech and data we only dream about today — this will definitely make their jobs easier but will also go a long way in developing future leaders in this space. Finally, they will have the people skills to connect with customers and peers to be the glue across an organization in the way we have discussed.
So think about your best CSM leader, then combine that person with your best sales leader, add equal parts operations leadership, data leadership, and product strategy and there you have it!
PLANNING
Executive Playbook: Planning and Budgeting in Customer Success
Boaz Maor, CCO at talech, shares some of the key challenges CS execs are thinking about in 2022 and outlines suggestions to approach those problems. He covers topics like where to work (WFO or WFH), CS Ops, and more.
STRATEGY
The Principles of a Remarkable Customer Experience
Xero’s CCO, Rachael Powell, leads the entire customer experience — including CS, Support, Education, Marketing, Sales, and more. She’s effectively managed such a massive scope of responsibility by instilling a core principle: the “inside-out” approach to improving the customer experience. Here, she breaks down how that philosophy works.
COMMUNICATION
Don't Be Spooky
Adam Keys cuts straight to the point: “Never message someone on your team, ‘let’s talk when you get a minute’. That’s void of information and scary as heck!” This is a quick read with a good reminder for any manager. Avoid spookiness by giving your team context.
PLAYBOOKS
Is My Product a Must Have or Nice to Have?
We teamed up with Kristi Faltorusso (the Queen of Playbooks, in our opinion) to create a blueprint for figuring out how customers perceive your product and what playbooks to fire off if your product is deemed a “nice to have”.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
We know onboarding is critical: if your customer never fully implements the product, if the end-user isn’t fully trained on how to use it, you limit their ability to get value. That’s why in high-touch segments, we ask CSMs to spend so much time upfront with their customers.
But what of low-touch segments? Oftentimes this group doesn’t get the onboarding attention they deserve.
That’s why this week we interviewed 3 experts to learn how they think about the onboarding process for low-touch customer segments. Here’s what they had to say.
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MARIE LUNNEY, DIRECTOR OF DIGITAL CS AT CHILI PIPER:
“Our current process at Chili Piper looks like this: Once someone signs with us, they’re added to the Chili Hub. It’s a customer portal where they log in and are welcomed with a letter, a roadmap of what they’re going to accomplish, and a to-do list. We have videos and articles linked to each step, along with guides on terminology we use at Chili Piper.
“The Chili Hub is a great resource to understand how to navigate our tech. Our SMB, digitally-led customers have to complete the checklist in Chili Hub before they can schedule a kickoff call with an onboarding specialist. After they’ve scheduled that meeting (using Chili Piper), our SMB customers have their kickoff call and the onboarding specialist will work with them the entirety of their onboarding journey. After this first step in the customer lifecycle, when customers have questions, they can schedule a call which will round-robin between our Customer Support Engineers, or they can send in a support ticket.
“We’re also piloting a video option in Chili Hub for customers who want to go faster before the kickoff call. In the future, I see us continuing to use videos and possibly a Learning Management System (LMS) to guide customers through onboarding. We’ll be able to use indicators through product data to track behavior and logins so onboarding specialists can proactively reach out if someone needs additional support. That way, we’ll put the self-service first, but if customers show signs that they’re struggling, we’ll be able to proactively reach out and help.”
ELYSSA MILLER, DIRECTOR OF CUSTOMER SUCCESS - DIGITAL AT CREDLY:
“Our tech-touch program currently includes an introductory email from our CSM team outlining the steps a customer needs to take to be successful on the Credly platform. We offer all clients access to our detailed self-paced onboarding course via our LMS that trains clients on the functionality as well as best practices. Clients are also given access to templates and resources via Google drive. The course provides guidance on how to use and leverage those resources. Last but not least, our tech-touch clients have access to our robust support portal, which provides direct 'how-to' guidance and ticketed support.”
SHAREIL NARIMAN, HEAD OF CUSTOMER EXPERIENCE AT ARROWS:
“My company, Arrows, is fairly new and we're catered to being a high-touch onboarding tool, but coincidentally, the tool itself acts like tech-touch when needed. I actually use our tool to onboard our customers. A lot of them fit in the high-touch/1:1 onboarding segment but within Arrows itself, we link out to our help center, resources, videos, tutorials, and all of the more scalable versions of what you would consider customer onboarding.
“We coach people to start their tech-touch programs with their high-touch segments. But in the past, I've also used tools like Intercom and Pendo for in-app messaging and different LMS platforms to house webinars and on-demand content. I’ve worked on tracking customer behavior in-app to understand what customers are clicking or not clicking, so that I could train on those things.”
ELYSSA MILLER, DIRECTOR OF CUSTOMER SUCCESS - DIGITAL AT CREDLY:
“Initially, we had assumed that all clients would still want some form of human interaction, even if it were just a 1-hour meeting. We learned that there are many clients who want and prefer to be entirely self-sufficient. Once we opened up access to the platform and content directly, we saw a whole group of customers thrive. The lesson learned there was to meet customers where they are rather than assuming they want or need human interaction from us.”
SHAREIL NARIMAN, HEAD OF CUSTOMER EXPERIENCE AT ARROWS:
“One thing we’ve learned is that onboarding never ends. That's not to say you shouldn't time box it or have X amount of calls or X amount of check-in points. You should set a goal to have 100% of your customers onboarded, but also realize that not all will learn the same way. The better approach is to offer 100% of your customers the option to get onboarded, but understand the journey will look different. It might look like a mix of 1:1, hands-on, white-glove onboarding with some of those low-touch onboarding techniques like webinars or on-demand content. To truly scale your onboarding, you have to take a strategic approach. 1:1 onboarding can help you understand those initial value moments that you're trying to drive customers towards, which can ultimately inform what value to deliver to your low-touch segment onboarding.”
“When you approach onboarding with a finite timeline, you're trying to jam every single step and feature and talking point into those first 30 days or first number of calls. This inevitably goes over everyone’s head. Instead, understand that onboarding never ends. Focus on the main value drivers for your customers and then over time add in content that drives onboarding forward.” —Shareil Nariman
MARIE LUNNEY, DIRECTOR OF DIGITAL CS AT CHILI PIPER:
“Two lessons learned. I knew this coming in, but you have to keep in mind that you really are dependent on data, data sources, and data accuracy. You’re reliant on data because you can’t build out sustainable operations or programs without it. You can’t rely on humans because that goes against the premise of tech-touch programs. So the sooner that you can get Product on board and to see the value in these low-touch initiatives, the sooner you can get the data infrastructure in place to make sure all your systems are connected and stable. Once this happens, doors will open for your digital CS program.
“Lesson #2 came from piloting an onboarding webinar. We told 3 new customers that we wanted to try this with the ideal benefit of being onboarded more quickly. What we found is that they did not like that experience. Their feedback was that the experience needed to be more nuanced. Customers wanted a more dynamic conversation than the format of a webinar would allow. So my advice is that it’s good to pilot things and not go all-in on ideas before you’ve figured out if they will work or not. Also, be open to feedback from your customers.”
“It’s such a balance with 1:many. Of course, companies are doing it to make a profit. But you won’t make a profit if you don’t retain your customers, so you have to provide a great customer experience. And what you think is a great customer experience may not be the truth. You have to tease out where that line is.” —Marie Lunney
SHAREIL NARIMAN, HEAD OF CUSTOMER EXPERIENCE AT ARROWS:
“I think you can take your tech-touch program to any segment because the content should all be focused on helping customers realize value with the product. The changes you may need to make will depend on how specific customers (or users) use the product and what they’d want to learn, and how quickly they want to learn it. I've worked with plenty of huge enterprise customers who don't want to talk to me in their first month: they actually want some on-demand resources and content to go read on their own and then come back and check in with questions, thoughts, or feedback. Offer all the different avenues to your customers and give them the option to learn in their own way, while you learn what is or isn’t working so you can optimize each of those avenues as you go.”
MARIE LUNNEY, DIRECTOR OF DIGITAL CS AT CHILI PIPER:
“We’re currently setting up our data lake. My goal is to give the same value-driven information to our SMB customers as we provide for our mid-market and enterprise customers in QBRs. We hope to use our data lake to build a system to be able to plug and play customer information to perfectly customize a pdf or presentation. This would be sent from the digital CSM but it would give SMB customers their ROI, their top bookers, their super users, and the catered information that’s hugely important for business. Those are the digital touchpoints I want to incorporate into their customer journey so that they know we care about them and understand their company needs.
“Beyond this being useful for SMB customers, I can see how our Account Managers and CSMs who work with enterprise and mid-market customers would find huge value in this tool because it would save them time. If we can make them more efficient, we can hire less, and do more with fewer people. Honestly, there are few things that we would provide to our SMB customers that we wouldn’t also try to adapt for our larger customers—it would just be an optional or added resource for them.”
ELYSSA MILLER, DIRECTOR OF CUSTOMER SUCCESS - DIGITAL AT CREDLY:
“We initially created a course solely for the purposes of tech-touch clients. However, we expanded our courses to our higher-touch clients so our CSM team could spend less time training on the platform and spend more time having strategic conversations with clients on how to get the most out of their program.”
SHAREIL NARIMAN, HEAD OF CUSTOMER EXPERIENCE AT ARROWS:
“There’s so much content you can create to help 1:many segments get onboarded like help center articles, how-to guides, best practices, blogs, webinars, videos, etc. But I like to think about content in two themes—‘how to’ content and ‘why to’ content. ‘How to’ content is the instructional step-by-step stuff: how to log in, how to set up your account, how to authenticate, and how to set integrations. But the ‘why to’ often gets overlooked which is unfortunate because that content can be really resourceful and scalable in teaching people over time, why they should continue to log in, why they should use this report versus that report, or why they should upgrade to a certain feature in your tool. Each one of those moments in itself becomes an onboarding opportunity.”
“Experiment, experiment, experiment! Just because a process works great for a high-touch client does not mean it will apply directly to a tech-touch client, but the only way to learn is to try new things. Make sure you have ways to measure success or failure, iterate, and continue to learn.” —Elyssa Miller
MARIE LUNNEY, DIRECTOR OF DIGITAL CS AT CHILI PIPER:
“I’ve always been a proponent of SMB—maybe it’s because I’ve worked for smaller companies, but those are usually the people that when they buy tech, it’s a big decision for them because they don’t have these massive budgets. Especially for the tech that we provide, by helping their inbound conversion rates and sales and increasing their bottom line, we really want to celebrate that growth with them. I think that’s important to keep in mind when you’re driving 1:many onboarding.”
LEADERSHIP
Being Nice and Effective
Can one be classified as a nice leader and still be effective? Subbu Allamaraju argues that yes, this is very much possible, and claims that “being nice should not come at the expense of being effective. Likewise, being effective should not require not being nice.”
CUSTOMER EXPERIENCE
How Should CX Be in a Digital-First World?
Here’s a quick read with some refreshers on how we should think about the customer experience today, now that most customer interactions are online.
CAREER
Don’t Worry. You’re Not Wasting Your Mentor’s Time.
Ever feel like a burden to your mentor? In this piece, Lara Hogan suggests that you shouldn't: “Your perspective, advice, and gut checks are valuable. Your feedback can open up someone’s eyes to new possibilities. Even just giving someone a space to vent can be a game-changer.” Plus with her Manager 'Voltron' scorecard, Lara offers a nice reminder to try to find different mentors to help with different parts of your life.
STRATEGY
Why You Need to Think About Renewals Before A Customer Even Signs Up
Investor Eugene Lee interviews two experts on the topic of renewals: Sarah Stern, Head of Customer Revenue Operations at Miro, and Sarah Wood, Head of Renewals at Hopin. I enjoyed the clear tactics these two Sarah’s shared on big questions like "When should I start working on renewals and how do I work with the team to collaborate?"
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Seth Wylie kicked off his journey in CS Ops over 5 years ago at InsightSquared. During his time there he became a Gainsight “super fan” administrator, so when the opportunity to work at Gainsight in CS Ops opened, he jumped on it. At Gainsight, Seth has worn many hats: he’s been an individual contributor in CS Ops, the manager of their growing CS Ops team, and recently took up the opportunity of supporting and connecting the CS Ops Admin Community too.
We recently sat down with Seth, a self-proclaimed “full-flavor CS Ops geek”, to learn about his career path, how others can break into a CS Ops role, and the skills necessary to grow a career from there.
If you’d rather listen than read, head over to the Nuffsaid podcast to listen to Seth’s full interview.
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A lot of people look at CS Ops as a hard role to get into. It doesn’t help that CS Ops job postings often require 5+ years experience. But also, it generally isn’t a very well-known choice for a career path. So I do my best to shed light for others on how to get into CS Ops and share what types of skill sets are needed in CS Ops.
One path you can take to break into CS Ops is to transition from a different role within a company you already work for. This is how I got into CS Ops. At InsightSquared, my VP of CS knew that we needed to make our CS team more scalable. There are a number of different levers you can pull to do that, but the lever he pulled was by purchasing software. We bought Gainsight and he needed someone to help with the technical and strategic challenges of implementing that software. And at the time, I was leading the support, onboarding, and technical account management team, so I had experience in leadership, systems, and data, plus lots of customer-facing experience. I was teed up well to take on that new role.
Others might transition into CS Ops by first taking an opportunity to lead a project that’s usually part of the CS Ops cornucopia. Then that small project will lead to another small project, which ultimately leads to a bigger project.
A final path I see some people take: moving from another Ops role into a CS Ops role. If you have experience in Ops whether it be Sales Ops, Dev Ops, etc. you can absolutely make a move into CS Op without first having been a tactician implementing CS-specific programs. I say that confidently because I know people who have been Salesforce administrators, but jumped over to become Gainsight administrators. People who have done analysis or different kinds of marketing have jumped directly into doing CS analysis or customer marketing, and have done really well.
With that said, there will be a responsibility that falls on you to level up your knowledge of the discipline of Customer Success. There are some great resources out there to do so including Gainsight's Pulse+ to rapidly level up your CS knowledge. You want to be able to have those conversations not just in a purely operational way, but in a way where you're thoughtful about the context of the subject matter.
One question I get is whether or not someone can jump into a CS Ops role for the first time as a new employee instead of making the move at a company they already work for. Of course, I shared my experience about getting into the role directly, and there are a lot of folks who do make the gradual transition. But the direct hop into CS Ops, whether at your company or at a different company is absolutely something people do. The thing that makes it tricky is that instead of being able to figure out what you can add to CS Ops at your organization as you go, you need to understand enough about yourself in order to tell the story about how you can add value at the start.
Let me share the four major areas where someone can enter CS Ops and add value immediately.
#1 Systems
Maybe you have systems administration experience, or if you're customer-facing on a very technical product, then you can make the case for stepping into a systems administrator role on a CS Ops team. You can also certainly build that up through certification programs. Gainsight offers certifications and Salesforce has Trailhead as another option. There are a lot of folks who are actively learning, so that they can bring a CS skill set from their current role into a more operational place.
#2 Data and analytics
Again, looking back through your experience, you might have a lot of experience with spreadsheets, or you might have dabbled in SQL. If you have a strong background in data and analytics, you could be of great help to a CS Ops team.
#3 Enablement
Most CSMs know what it’s like to be given very few tools or instructions to do their job in a clear way. Oftentimes, CSMs are basically told to ‘figure it out.’ That's the way that a lot of CS teams operate, but of course, a well-enabled CS team is going to be much more effective.
So if you step into an enablement role, you need to be able to tell the story to a potential employer about how you are good at figuring out what people need to know, helping them to get better at certain skill sets, and understanding the best way to present information to others.
#4 Retention marketing or expansion marketing
If you have experience in content writing, or working with systems like Marketo or Eloqua, you may be able to step into a CS Ops team and build programs to send automated emails to customers, build in-app notifications, or facilitate customer workshops. All those could be part of a 1:many role.
Overall, if you’re new to CS Ops, you need to be able to tell a story about how you have the skills to suit what a CS Ops team is looking for. The piece that makes this tricky is that you are potentially joining an organization where that CS leader has never had a CS Ops team before. They're likely doing their best to read content like this to learn from the best in the industry to describe what they're looking for. But you are one of two people in that interview conversation, or that exploratory networking conversation. So if you can describe what an effective CS Ops team does and show how you can contribute to that vision, then that’s compelling to a CS leader who has some clear needs, but has never seen it lived out before.
1) Being a thought partner to the CS leader. One skill set I came to appreciate having as a CS Ops professional is the ability to sit down with a CS leader, pull up a whiteboard together, and talk through strategy. CS leaders need a thought partner who can help turn their vague pain points and goals into specific plans (and push back or poke holes when appropriate). I’m good at taking subjective information from a number of places and helping to organize it into a thoughtful plan, and I’ve found that skill to be common with other CS Ops professionals I admire as well.
2) Being a systems thinker. I'm very much a systems thinker. For example, if someone who has a customer relationship challenge goes to their colleague, most people (and we need these people) are able to throw themselves at solving that particular customer situation. But I'm the kind of person that looks at that situation and thinks about how a problem is a symptom of a larger issue. I might think about how we need to improve our CSM training, the way we structure our EBRs, or whatever it is. I am fully oriented towards “how do we solve the system?” That sort of thinking is a hallmark of someone who does really well in CS Ops.
3) Being comfortable with doing things for the first time. Solving problems that haven't been solved before. Learning software that hasn't been used before. Using existing software in a way that hasn't been done before. That discomfort of doing something for the first time is part and parcel with pushing your CS practice forward, which is ultimately the responsibility of a CS Ops person. You have to be open to what you might learn along the way.
When I first stepped into CS Ops, I was a tactician. One of the first things that we did, for example, was to build out our list of playbooks in Gainsight. That was basically an interview process for me. I had to sit down with our CS manager and VP of CS and decide on what would be in our renewal playbook or our new customer playbook. Then I executed on setting those playbooks up in the system.
Whether it be a systems responsibility (like in my case), an analytics responsibility, an enablement responsibility, or customer marketing responsibility, it won't take too long for leadership, your peers, and other teams to stop asking you to execute, and start asking for your advice on how to execute. And not too long after that, people will stop asking you how to execute and start asking you what to execute on.
Pretend someone asks you, “We need to improve our new customer onboarding process—what should that look like to improve it?” Note that they're not offering you a suggested solution. They're asking you to go off and figure that out. Eventually, you’ll grow to a point where CS leaders will ask, “What are we gonna improve next quarter? Can you help me as the head of CS Ops, narrow down what the biggest areas for improvement should be on our CS team?”
At that point, you’ll understand the mechanics of your business, you’ll have the relationships with teams you need to work with, you’ll have a sense of the corporate strategy, and you’ll understand the pain points that the CS team experiences. Armed with that strategic vision, you’ll be in a great position to help your CS leader make big decisions and plan for the future.
OPERATIONS
The Rise of Customer Success as a Profit Center
An interesting paper from Julie Weill Persofsky on why focusing on delivering greater customer impact helps companies achieve exponential growth. Some findings: “CS is exponential, not additive” and “Cutting costs in CS by cutting headcount can have a massively negative impact on revenue.”
STRATEGY
How CS Ops Drives Market Valuation
Here’s a piece from Gainsight that makes the case for investing in CS Ops. Personally, I enjoyed the rules of thumb section (at the beginning) that shares a few ways of thinking about resourcing CS Ops and its ROI.
PROCESS
Make it Easy for Customers to Leave
Jason Lemkin reminds us that “customers can churn but still recommend you.” Putting in a process that makes it easy — pleasant, even — for customers to leave is a long-term strategy.
LEARNING
The Benefits of Looking Stupid
Here’s a piece to reflect on. Are you ready to get better by allowing yourself to be more vulnerable? Dan Luu points out benefits of being willing to look stupid, including “actually understanding things,” better health, and a better connection with your team.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Just one conversation with CCO, Rachael Powell, reflects her deep experience and understanding of organizational strategy, psychology, and being a change agent. Those are all things that great people officers do well, so it won’t come as a surprise then, that Rachael joined Xero as Chief People Officer five years ago before transitioning into her role as Chief Customer Officer in August 2019. The scope of Rachael’s current role is expansive. As the CCO at Xero she oversees global sales, marketing, communications, digital, customer success and education.
Xero has close to 4,000 employees, and is a small business platform with over 2.7 million subscribers globally. It’s headquartered in Wellington, New Zealand and was one of the first companies to put accounting software in the cloud. Xero has scaled its global reach through a strong relationship with accountants and bookkeepers who are an extension of the Xero family and they act as a sales channel whilst supporting the compliance and advisory needs of their small business clients.
This customer base structure has guided her strategy of extrapolating the company’s internal philosophy beyond its employees to its entire partner ecosystem, which she has dubbed Xero’s “inside-out” approach. In this newsletter issue, Rachael walks us through how her experience as Chief People Officer set her up for success as Chief Customer Officer and why adopting the inside-out philosophy contributes to a better experience for customers.
Becoming the Chief People Officer in 2016 at Xero was an important move because it proved to me the importance of winning the hearts and minds of our people before ensuring that we won the hearts and minds of our customer community. At Xero we call this operating principle our ‘inside-out’ approach.
"It does have to start on the inside. If you can’t win the hearts and minds of your own people, you’ll never be able to do it with your customers.”
Our ‘inside-out’ culture (basically making sure we get it right on the inside so we can quickly extrapolate that through to the customer base) works particularly well in a world where you have to heavily rely on channel partners.
It’s evident at Xero that the accountants and bookkeepers we work with are an extension of our organization because they basically become the bridge between the internal company and end users. That’s why at Xero, we have to focus on our internal team and then work our way out.
The ‘inside-out’ approach only works once you’ve hired the right people
When I started as Chief People Officer, I knew the only way we could succeed was if everyone at Xero operated with the same vision and aspiration to serve the small business community—to make life better for them, their advisors and the communities in which they operated across the globe.
90% of the businesses across the world are small businesses and it's likely the most underserved segment of the market. Developing the ability to help those small businesses become effective started with our people and it was my job to make sure that we brought the right people into the business.
Here are two qualities we look for when hiring at Xero:
1) Small business experience: Many Xeros (our employees) have owned small businesses themselves, grew up in a family that ran a small business, or have accounting experience. Because of their background, they believe in what we're doing for the small business economy. That’s powerful and important—they understand that small businesses will continue to grow economies across the globe.
2) Passion for our purpose: It’s crucial to recruit the right people who are passionate about our mission and have some sort of affinity to our purpose of making the lives of people in small business, their advisors and communities across the globe. We had to get that right on the inside by hiring people who could play to their strengths—that's a principle of Positive Psychology as well. It’s not just about finding people who have done these jobs before. We look for people who want to do what you need them to do—things that they are good at and energized by.
So when I started as Chief People Officer, there's a lot that went on in terms of making sure we were: 1) job crafting to put the right people in the right roles, 2) setting a really clear vision, 3) making sure people had the agency to excel in their roles, 4) aligning all of those people across a global organization, and 5) scaling that at hyper-speed.
“You have to make sure people are clear on your vision, are capable in their roles, and then you must align all of those people across the organization to be able to speed up, go fast, and deliver on promises made to the customer. That’s the ‘inside-out’ philosophy.”
If we could get things right on the inside, then working with our Customer Experience team became about actually extrapolating that magic, that culture, that passion, and that purpose through to our channel partners, who would then look after the millions of small businesses on the other side of their books.
That’s a huge component of our success—really understanding how we actually get it right on the inside so that it becomes almost like this contagious culture that our partner community wants to be a part of and that eventually, small businesses are the beneficiaries of.
When I started at Xero, I was the Chief People Officer. Over time, my role expanded to the Chief Customer Officer where I own CX and has further grown to own the end-to-end customer journey. My role was purposely created to bring together disparate groups across sales, marketing, digital, communication and customer experience within Xero to and offer an end-to-end customer experience that meets both our partners and small business needs in an agile and coordinated fashion.
My move into the CCO role would not have been possible without my time leading our people organization first. I learned the magnitude of focusing on the people experience to start, so team members would naturally amplify their passion for our solution and mission out to our customer base.
When I took on CX, our function was, rightly, planning for a world where we had 10 million+ subscribers—we were planning for the future. We were not thinking about traditional support models. Instead, we were thinking about how we could put support models in place that could scale and be efficient and effective for customers to be able to serve themselves using AI and machine learning.
We developed a platform called Xero Central, which is an intuition education and support platform, driven by machine learning and AI where customers can find their own content at a time that suits them. In fact, given the sophistication of the technology Xero Central often predicts what a customer would need to know next based on what they search for first. Customers can still raise cases with our CX advisors if they are stuck and they need to speak to a human being.
One interesting piece about Xero is that we don't have an inbound phone support line, however that doesn’t mean we don’t speak to customers. We have outbound phone support where our CX agents are empowered to serve customers who have raised a case via a communication channel that best suits the need. So when the cases come through, we make sure the right person out of our Customer Experience cohort reaches out, which ensures that our customers never have the negative experience of being passed around from person to person. Overall, 96% of our customers serve themselves because of the quality of the content and the technology that we've invested in the Xero Central platform.
As CCO I own the end-to-end customer journey—from awareness, to the buying decision, through trial and onboarding, discovering how we can deepen the relationship by helping our customers connect to additional apps and services that we offer either through our ecosystem or directly, to the final stage of the customer journey of delight.
It became important at Xero for one executive to own the entirety of the customer journey to ensure that there was a balanced focus on every part of the customer experience. What gets measured gets done. But when I first took on the remit of CCO, I noticed that though there were a plethora of measurements across our different functions, what executives consistently had visibility into only represented a limited portion of that customer journey.
I'd been at the executive table at Xero since 2016, but it suddenly dawned on me that we were looking at predominantly two metrics: 1) number of customers and 2) revenue.
What these metrics didn’t give us was any insight into what specific part of the customer journey and specific region we needed to focus on. I wanted to create a more balanced scorecard across the five stages of the customer journey and be able to monitor and measure if customers were getting a good experience at every touch point. That’s why we developed a scorecard called Journey Experience Data and Insights (or JEDI for short).
The JEDI scorecard
It’s a scorecard (JEDI = Journey Experience Data and Insights) that we’ve developed over time. In short what it allows us to do is to have a hero metric for each of the 5 stages of the customer journey:
1) Awareness (brand)
2) Consideration (trial)
3) Buy (sales)
4) Deepen relationship (retain & grow)
5) Delight (advocacy)
Along with hero metrics for each customer stage, we also have RAG (red, amber, or green) status and we can filter by region or submetrics. With this scorecard, we are able to easily detect which stage we need to divert our energy to. If Awareness is not where it needs to be, then we know that we need to dial up on our marketing activity. If we can see that Delight isn’t doing well, we know we need to lean in and support our customers with proactive customer success campaigns that help build their confidence and engages a memorable connection.
Most CCOs who read this likely oversee CS, support, professional services, operations, but they probably won't own sales or marketing. If you’d like to own a similar remit as I do, I encourage you to not think about it in terms of ‘how do I want my world to look?’ and then ask for it.
I think it's more about showing the value you bring. Since I was the Chief People Officer at Xero, I came from a perspective of thinking through the lens of the customer and wanting to make sure that we could reflect that on the inside rather than shipping our organization chart. Because when you do that (and all of us have experienced this as consumers), a disjointed customer experience occurs. The CCO is hired for their ability to ensure that the customer experience is incredibly seamless. Customers need to know that they are cared about during every stage of the customer journey.
My advice to executives who want expand their remit is twofold:
1) Work on your mindset, your ability to evolve, and build ambidextrous skills. I worked in marketing, accounting, recruiting, and more—all of which made me highly curious about people, so I went back and got a Masters in Positive Psychology. I eventually picked up the reins as Chief People Officer, which was a new mandate for me, but it only added to my repertoire of skills. Then the opportunity of leading our CX team opened up, which was perfect because I could take my people experience skills and apply them to the customer experience. Having that curiosity and growth mindset put me in good stead to be an executive that could own a multitude of functions.
2) Make sure you hire awesome people who are also disciplined experts. I certainly don't do this alone. With the right people, my role has gravitated towards being a change agent for Xero.
In this world of uncertainty and VUCA (Volatility Uncertainty Change and Ambiguity) that we're living in today, any executive's role is about being a change agent. As a change agent your role is to understand and navigate an ever-evolving environment, while creating a psychologically safe space where team members can have clarity, alignment, and the right capabilities to succeed.
Executives shouldn’t think so much about their specific discipline, but instead how they can take a company strategy to create clear, capable, and aligned teams to execute on it.
PRINCIPLES
The Ten Customer Commandments
Megan Bowen encourages us to follow 10 customer principles. Skip to Takeaway 2 in this podcast episode to hear the entire list of commandments—a few of my personal favorites were #8 “The customer will forgive mistakes, but only if you are accountable and take responsibility” and #9 “The customer decided to engage to drive an outcome. Don’t lose focus on driving the desired result.”
ONBOARDING
How to Increase the Lifetime Value of Your Customers
Here, Donna Weber offers a few tweaks you can make to your customer onboarding process that can make a big difference. She also reminds us that “Delivering ongoing onboarding ensures customers get continuous value from new features, new products, as well as from their new users.”
LEADERSHIP
How New Managers Fail Individual Contributors
This piece addresses the source of a common problem—when an exceptional Individual Contributor gets pushed into management because it’s the only promotion path available to them. Camille Fournier thinks this issue “starts with managers” and shares the pitfalls they should avoid like “neglecting to give feedback” and “hoarding information.”
CULTURE
10 Observations From Implementing CS
A quick read from COO, Nigel Sterndale, sharing his perspective on investing in Customer Success. One piece of wisdom he shares: “Never lose sight that Customer Success’ goal is to help the customer obtain the maximum value from the products or service they have purchased from you. In doing this we improved retention and development. Customer Success works. Spectacularly.”
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Recently on the ‘nuffsaid podcast we spoke with Dave Jackson, CEO of TheCustomer.Co about his new book, Customer-Led Growth: A CEO’s Guide to Building a B2B SaaS Company.
His book provides a comprehensive, principles-first overview of building a customer-first company. While the obvious audience is CEOs, anyone on the executive team will gain insight and value from this thinking to improve their org culture and design.
In this newsletter issue, we will share an excerpt from his book about the trends affecting Customer Success and how we need to evolve due to those changes. This section also gives insight into the principles Dave believes are at the core of Customer-Led Growth. You can purchase his new book here.
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When presented with a new challenge, you must take a new approach. Here are two major challenges and approaches I think are shaping B2B SaaS businesses.
The growth and acceptance of SaaS as a business model has seen an explosion in the number of companies adopting it. New companies appear daily, and old-style software companies are busily transforming their value propositions, products and organisations to become SaaS providers. One problem this has created is the cost of acquiring new customers.
Anyone selling SaaS in its first decade will be familiar with this scenario. Marketing created awareness through content, events, search and cold-calling, generating leads which, at a certain point, were passed to sales. Sales, hopefully after researching the company, began a conversation with a contact, which led to multiple other contacts. A demonstration was set up, which if successful created the opportunity to negotiate and hopefully close a deal.
Research from CEB suggests that, on average, 5.4 people are involved in a decision to purchase a SaaS software product; 6 to 11 for complex products! More content is needed for more people involved in the buying decision, further increasing costs. Dealing with this number of buyers requires more marketing and sales effort, extending the sale cycle and increasing acquisition costs.
As more suppliers enter the market, often addressing narrow niches, more companies are bidding for search keywords, pushing up the price. Content marketers are becoming more expensive as the volume of content pushed out by B2B companies expands significantly. Target buyers are swamped by the explosion of content, which is also driving down the number of shares. Now, only great content that addresses the specific needs of target customers has any chance of meaningful success and that is fleeting. Growth itself increases costs. Early customers recognise readily the pain point the company is addressing and are willing to be early adopters. Once this low hanging fruit is captured, more effort is needed to build awareness and drive conversion.
The upshot, according to SaaS data specialists Profitwell, is a 50% increase in the cost of acquisition (CAC) of B2B customers over the last five years.[1] Generating the best possible return on increasing CAC places greater importance on retaining and growing those expensively acquired customers.
This high-cost acquisition model is still very commonplace and, in some circumstances – notably applications that have to be implemented enterprise-wide, may be a valid approach. There is, however, a fundamental change underway. Software acquisition is driven increasingly by individuals and teams, not entire companies. Faced with a specific need, many users will find and adopt software of their choosing, taking advantage of free or very low-cost offerings. They don’t have the time nor inclination to convince their company to buy a new software package. They don’t know how to navigate a selection and procurement process. They just want to get on and do their job.
Conditioned by the instant availability of applications on ecosystems like Apple’s Appstore or Google’s Workspace Marketplace, users now expect instant access and a richly-featured free app or free trial. This is another example of the consumerisation of business software.
These individual buyers rarely want to get involved with a salesperson. Equally, the companies supplying software in this way can’t afford a traditional sales motion and even if they could, few traditional salespeople would be interested in the volumes and low commission potential of low average sales values. What these buyers want is a product they can access immediately, use immediately and get value from immediately. This changes the customer lifecycle fundamentally.
The traditional SaaS model of engagement can be characterised as:
See -> Try -> Buy -> Use -> Value
Atomisation of the buyer, enabled by the freemium business model, rearranges the steps:
See-> Value -> Buy -> Value -> [Buy -> Value]n
This cycle also starts with marketing driving traffic, increasingly using viral techniques, but changes thereafter. The fundamental shift is that customers expect to see value, to experience the magic if, or even before, they buy. Conversion to a paying customer begins the value cycle again, but payment often raises expectations so delivering value repeatedly is essential to secure renewals and expansion.
With the product-led model, revenue is generated by customers that buy, not by salespeople selling. Delivering value (aka CS) becomes the central driver of the initial and subsequent sales motions. The linear representation of the funnel, even the dicky-bow, are redundant. Modern B2B SaaS is a repeating cycle of value-enabled buying, where the maxim for the supplier is “deliver or die”.
These changes in the way SaaS software is built, bought, and used have massive implications for B2B SaaS companies and how you should think about and deliver value to customers. Here are 5 ways companies will need to rethink CS.
1) Person not company
The premise of this is that a company buys business software to address a challenge or an opportunity, so the outcome has to deliver a measurable benefit to the company. Success plans are developed that focus on the company’s desired outcome. The underlying assumption is that different roles are team players in a game with the same goal. The company is the determinant of value.
This premise is wrong on two counts. Atomisation of the buyer has changed the buying unit for many B2B applications. Understanding the needs, expectations and work of the individual is, therefore, the key to both the initial sale and retention/expansion. Even in sales of enterprise software, success at all stages of the customer lifecycle is dependent on understanding, shaping and achievement of goals of different individuals.
2) Minutes and hours not months and years
In the 1990s, a multi-national customer of mine decided to implement a new ERP system. The project involved hundreds of members of staff, contractors and consultants (not me) and took almost five years to implement. Such was the challenge of getting users to adopt this behemoth that at one point the team gave users project swag – mugs saying: “Resistance is futile”.
Fast forward 25 years. Download an app from the AppStore and it is available instantly and, in the vast majority of cases, you will be using it in minutes: all without the intervention of a salesperson, an implementation team or a CSM. Of course, there is a difference in scale but that is the expectation of software apps today.
The howls of sceptics saying that’s OK for games, consumer or simple apps are deafening. In most cases, they are wrong. Individuals increasingly want to get started immediately and see value quickly. Their timescales for implementing, using and seeing value are measured in hours and days, not months and years.
3) Value Elements not outcomes
Companies that have implemented CS plans have focused on the outcome the company seeks. When asked, most describe it as a high-level, measurable (preferably financial) business goal. Achieving this outcome or goal is rarely achieved by mastery of the product alone: it almost always involves some changes to working practices, skills and metrics.
As expectations of time-to-value shrink and the focus on the individual grows, this singular goal becomes problematic, even in enterprise software implementation. A singular goal is often distant from the people using the application and requires the involvement of people and processes beyond the core users. In his excellent article,[2] Rav Dhaliwal talked of “buyers vs deployers” and the importance of “understanding the ‘distance’ between the purchaser and the deployer/end user”.
Like beauty, value is in the eye of the beholder: taking a more granular approach to value is therefore needed.
4) Digital, not people, first
Fifteen years ago, setting up a CS capability was all about hiring a team of CSMs to deliver the customer success capability. Today, many companies begin with a digital first approach, where the basic value delivery process is automated. This has numerous advantages:
Let’s be very clear, digital first does not mean digital only! Nor does a digital first approach mean the end of a separate CS team and CSMs. Digital first frees up time to take on higher order, more challenging tasks to which people are uniquely suited.
5) Organisation by design, not alignment
One of the biggest failings I have seen B2B SaaS companies make is buying churn. Driven by a misplaced understanding of growth, they seek to attract customers irrespective of their ability to deliver the meaningful value that underpins reliable retention and growth. This, however, is just one example of an affliction facing many companies: the lack of alignment across departments and teams.
I have come to the conclusion that the quest for alignment is, fundamentally, the failure of the CEO and leadership team to purposefully design a customer-focused organisation. It is a problem that is ineffectively resolved by what I call retro-alignment: an attempt to bridge gaps that result from leaving individual departments to define their processes and metrics in isolation. They all try to do their best for the customer but all take a narrow approach focused on their profession.
You started a B2B SaaS company because you found a new or better way to use software, a product, to solve a problem. You may well have worked in that domain, experienced that challenge and been dissatisfied with the solutions available. You understand the issues and know what a successful solution looks like and, importantly, how its value is measured. You know that lots of other people face the same problem, so you can define and size a target market. In essence, a new SaaS business is founded on understanding and delivering CS.
This knowledge and experience is the basis you used to build out a value proposition. “What problem do you solve for who?” and “How is your product a better answer than others?” are questions every CEO must answer to attract customers and funding. You’ll find answers to these questions in every successful funding pitch deck. B2B investors want to know that your business addresses a real need in a measurable way to a sufficiently large addressable market. Customer success – the capability, not just the team – is how you address that.
Much has changed in the 15 years since I appointed my first CSM. There have been real improvements in the recognition of the importance of CS and how it is practiced. Unfortunately, many companies have yet to recognise the underlying changes, and as a result they are failing to adapt how they practice CS. They argue that their business is different (it is and always has been), that their product is too complex (their fault) and that customers are too demanding to want anything other than a high touch, people-based service (they often prefer self-service).
I think the best companies keep the founder’s belief at the heart of what they do as they grow and bring everyone and everything back to the customer. Growth understandably brings the need for specialisation and that, without great care and effort, brings fragmentation. Remember the words of Tien Tzuo: “When in doubt, build another vertical silo.” In my experience, this has the discipline of customer success writ large. I hope that after reading this book, you will be better equipped as a CEO.
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[1] https://www.profitwell.com/blog/content-marketing-customer-acquisition-cost
[2] https://medium.com/@ravsterd/theres-no-such-thing-as-post-sales-a2dd1bfb3efc
EARLY HIRES
The 3 Most Important Practices In Scaling A Winning Team
Here’s Eilon Reshef, Cofounder and CPO of Gong, with an interesting glimpse into how his company approached hiring in the early days. His third suggestion is to “develop operating principles early on” and he provides an exercise they practiced at 80 team members, which Gong still uses today (with a headcount of 700+ employees).
SAAS
Why (Nearly*) Every SaaS Company Should Have A Chief Customer Officer
“While every company is different, I can almost guarantee that your clients are getting more power over you every year. Your competition is going up. Your business is getting less sticky. Your product is evolving. If you care about Customer Success, put your titles where your mouth is and hire a Chief Customer Officer.” Well said, Nick Mehta.
SELLING
How to Close More 6-Figure Deals, According to Data
Here’s Devin Reed and Gong’s research team with another piece packed with data-backed tips (again, written for “closing deals” but applicable for expansions as well). Hear why team selling isn’t just for the Enterprise anymore, bigger deals need more multithreading, your secret weapon is team selling, and the 4 unique skills you should have on your GTM team to add value to the sales cycle.
LEADERSHIP
Top CS Strategists of 2021
Congratulations to everyone who was named a SuccessHACKER Top Customer Success Strategist in 2021 — this award is a way to recognize those who, in addition to their day jobs, put in extra effort to help us level up in Customer Success.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
In partnership with the CS community, we recently published an article on why Customer Success has the best opportunity to hire, retain, and promote more Black leaders. (You can read the full piece here.)
The short story is that Customer Success has a massive opportunity to be more diverse: for one, being successful in CS requires more broadly available core skill sets, like relationship building, communication, organization, resilience, creativity, and empathy. All of these skills can be acquired through non-traditional routes. Despite that opportunity, Customer Success—especially at the leadership level—is predominantly White.
The leaders we spoke to when writing this piece shed light on 3 main areas where companies can focus to take action on hiring, retaining, and promoting more Black leaders:
In this newsletter issue, we will share how companies can create an inclusive environment for their Black team members. Most teams think they should start with #2 (hiring), but the reality is that creating an inclusive environment will help you hire more people from underrepresented backgrounds. Consider starting with your existing employees first.
(Before we jump in, a note about vocabulary. Most people we interviewed preferred ‘Black’ to describe the community because they said it is the most inclusive term. But here’s the rule of thumb, if you’re unsure of what someone identifies as, simply ask them!)
For the past several years, DEI has been a hot topic. But the focus is too often on “how to get more people in the door” — with less attention paid to what companies can do to include people after they’re hired.
“You don’t have diversity if you don’t have inclusion.”
— Anthony Edwards, VP of Customer Success at TiLT
Our interviews identified a few of the best ways that companies can create an inclusive environment. But first, many folks noted that “inclusive” can be a nebulous word, and can only measure the inclusiveness of your workplace by asking employees what they think. There are plenty of good resources on this topic (see Culture Amp’s Inclusion Survey and HBR’s article on How to Measure Inclusiveness for example). Starting with an understanding of your employee’s perceptions will help you decide which of the initiatives below make the most sense for your team.
“Non-white people don’t assume the grass is greener at a different company. They do a lot more asking around about whether or not people feel good about themselves and feel safe at work.”
— Shadavia Jones, Manager - Customer Success Team at HubSpot
Here are some of the actions CS leaders can take to create an inclusive environment for immediate and longer-term change:
1. Make sure there are systems or resources in place so team members feel they can voice issues without fear of consequences.
For people at your company who don’t have a manager who looks like them: who do they go to to talk about their experiences with that manager? Be sure there are systems in place that allow team members to feel safe, heard, and know that something will be done when they talk about hard topics like microaggressions in the workplace. (There are tools available that help facilitate anonymous feedback and action from leadership—All Voices is an example.)
“Creating a sense of belonging at work is the outcome of three mutually reinforcing attributes. Workers should feel comfortable at work, including being treated fairly and respected by their colleagues. They should feel connected to the people they work with and the teams they are part of. And they should feel that they contribute to meaningful work outcomes.”
— Deloitte Insights, Belonging
2. Sponsor an Employee Resource Group
Employee Resource Groups (ERGs) — groups that give employees safe spaces to bring their whole selves to the table and help in personal or career development — help bring people together to share their experiences, create connections, and together they often work to tackle company-wide challenges.
Leaders can support these groups in two notable ways: helping ERGs get the senior leadership commitment they need (if they don’t already have it), and advocating for group members to be paid for their time and effort in affecting company policy and creating change. (LinkedIn recently shifted to this model; Axios wrote about their model here which others can borrow from.) Leaders can also advocate for wider participation with the group.
ERGs tend to be employee-lead, but CS leaders can help to:
3. Educate your organization
Companies need to educate their employees at all levels—leadership included—about:
Hiring third-party agencies for this type of education will help make sure you’re hitting the right points. And to take it a step further, look to hire agency owners from underrepresented backgrounds.
This education is not one-and-done of course—regular training will serve as helpful reminders to self-reflect, look out for bias, and find ways to use privilege for good.
Note: One resource we heard was especially helpful was this training: But I’m Not a Racist… Right? At the company where this was used, everyone took the quiz.
“We should be challenging White leadership to be aware when they are in spaces that lack diversity to think about how they can impact those from a proactive perspective. And if they can't change the make-up of the room, how do they put processes in place to break the cycles and practices of "doing it the ways you've always done?" How do White people in all White spaces put a reflective lens on their own thinking and decision-making for the good of the business and inclusivity? How can leaders use advisory panels or reverse-mentoring as a way to get more diverse points of view in decision-making?”
— Keishla Ceaser-Jones, Director of Partner Success & DEIB Leader
4. Create opportunities for Black employees to be visible
Sometimes companies do a lot of work to get candidates in the door — but then those people aren’t “visible” within the organization. They’re not given the opportunity to take the lead on projects or give presentations. Managers at any level can look out for this and help hand off big projects, training, or speaking opportunities (even at the team level).
“You don’t want it to be a token gesture, like ‘Go present for me at Gainsight’ so we can show others who is representing our company… But I do think there are a lot of opportunities for companies to have people of color present internally and push them to the forefront so it becomes common to see people of color leading and presenting.”
— Charles Coaxum, VP of CX at Kenna Security (recently acquired by Cisco, 7/2021)
ALIGNMENT
Actually Influencing the Product Roadmap as a Customer Success Leader
CS and Product Management generally don't work well together. How do we know? We interviewed dozens of Product Management leaders at companies of all sizes and asked them! In this handbook, we summarize how CS can improve the relationship and results with Product, including understanding how Product makes roadmap decisions, training CSMs to collect better data about problems by asking the right questions, organizing problem themes across all requests, and more.
LEADERSHIP
Don't Assume Consensus In The Absence of Objection
In this piece, Candost Dagdeviren offers a timely reminder that silence does not always mean people are agreeing with you. Leaders need to make decisions with the understanding of how different their team members are—some are loud and will readily share their opinions, while others won’t speak unless called on, or “they [may] think everyone will find them stupid if they share.” Assuming consensus because of long awkward silences during virtual meetings is a poor leadership move.
CAREER
What It Really Means to be a Manager, Director, or VP
If you’ve ever thought the lines between Manager, Director, and VP seem blurry, here’s an excellent article by Dave Kellogg to bring some clarity to the distinction. He said “The biggest single development issue I’ve seen over the years is that many VPs still think like directors” and Dave goes on to define exactly what makes one VP good and another great.
SURVEY
10 Things That Are Changing Now in Customer Success
Watch Nick Mehta’s SaaStr presentation about the evolution of CS and the laws you’ll need to abide by to “make it” in this space. His speech is packed with insights, specific examples, and things to think about as we head in 2022.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
As companies are putting the nuts and bolts in place for their tech-touch (a.k.a. digital-led) programs, there’s one role they can’t do without: CS Ops. The CS Ops role is critical in optimizing successful tech-touch campaigns, but it can be a daunting task if you’re just getting started.
We teamed up with Insided to hold a conversation on this topic with a panel of experts: Bora Lee (Manager, Customer Enablement at ChurnZero), Lane Holt (Director of Customer Success Operations at Gainsight), Sonam Dabholkar (Customer Success Operations Director at Gong), and Mary Poppen (CCO at Glint).
The following is a lightly edited excerpt from a portion of the discussion where the panel talks about the skill sets necessary to work in CS Ops and tech-touch, how digital-led models can benefit customers across segment lines, how to start out building a CS Ops team that focuses on tech-touch, and more.
You can also watch the entire webinar by following this link.
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REMCO: Lane, it sounds like you directly contribute to both the high-touch and the tech-touch side of the business at Gainsight. But other companies will usually not have shared Ops resources for both segments, instead they’ll have an Ops team, a scaled CS team, and a high-touch CS team. Was that a conscious choice that Gainsight made or something that happened naturally?
LANE: For me it was a conscious choice, but for the organization it was something that we had to come to a conclusion on as a group. As we started building out programs, we also started looking at our user journeys. It became clear that some programs would benefit customers across the board. We found that what impacts one user can improve the health of a range of different customers.
So it just made sense to take some aspects of our scaled programs and see how all customers could benefit from them. As we look at the charter for our scale team, one of the pieces of it is making it easier to be a CSM. And so some of those user journeys that we build are just making it easier for a CSM to be a CSM. Our email communications that we send are sometimes sent on behalf of our CSMs because they would’ve sent the same email anyways, or a similar enough email where it makes sense to do it at scale. The CS Ops team at Gainsight often thinks about it from the side of ‘What can we do to make it easier for a CSM to be a CSM.’ In the long run, that means potentially increasing ratios while still servicing our customers at the same level.
REMCO: The digital CSM, scaled CSM, tech-touch CSM (or whatever you want to call it) and the CS Ops manager are an interesting pair because you could argue that the two have overlapping responsibilities and require similar skill sets. For example, both team members could own setting up campaigns, looking at data, analyzing stuff, and using that info to personalize certain flows, etc.
How should the two roles work together?
MARY: Here’s how our structure works: We created something called the Glint Guided Experience as our scaled engagement model. It's meant to be a self-serve “wow” customer journey for our smaller customers who can be successful with more of a low-touch approach. But we also leverage the entire model for all segments of our customers.
Four teams support that program: 1) our CSMs, 2) our technical Success team, 3) our customer empowerment team, which is responsible for community, training, and communications, and then 4) our CS Ops team.
We have a program manager in our CS ops team who's ultimately responsible for the overall systems, automation, and reporting of the program, and then each of the roles in those 4 teams gets involved throughout the journey. So it's one program, but it's owned, in terms of deliverables, across four different sub-teams.
We apply essentially all the resources at the very beginning of the journey, regardless of a customer’s segment. This, of course, frees up our CSMs to have very strategic conversations with customers who are more complex or have multiple products, for example.
We have found it to be an incredible efficiency lift. Last year, we grew our book of business more than 20%, while not adding any additional headcount to support that business. We’ve seen an increase in our NPS and C-SAT for both the segment on strictly Glint Guided Experience and across our customer base.
LANE: Digital-led or tech-touch (I tend to call it digital-led because I believe it goes across the customer experience and segments) has been a passion of mine for years. Here’s how my team thinks about and services our digital-led model: we really focus on making sure that we're providing customers with what they need, when they need it, as well as giving customers the experience that they need for the size of organization they are.
A lot of our SMB or fast-growing customer segment will tell us, “We’re fast-growing. I can't be in meetings all the time. I just need to know what my resources are and how to access them.” At Gainsight, we’re always thinking about what the customer needs and how we can provide that in the moment they need it.
We’re not waiting for the customer to say, “Hey, I need to figure out how to do this one thing.” We are more proactive. Based on what we know about similar customers, we want to give customers the data and information they need long before they have to go looking around for it.
SONAM: I can talk a bit about how we're building things out at Gong.
At the start of this year, we built out a customer segment within our SMB segment that we're calling ‘Scale’ which is essentially evolving into a more automated, more digital-led customer journey. And basically, we build parts of the journey as we go. Every quarter we design something new, whether it's an onboarding process, an automated renewals process, or for example, we just launched the ability for customers to purchase seats in-app (which we call ‘self checkout’).
There's little bits and pieces of this customer journey that we are defining as we go. So I wouldn't say it's fully digital, but the goal of this segment is to be the test bed for a lot of these automated digital experiences. We can test them, iterate on them, and work quickly to improve them to then be able to apply and appropriately tailor these experiences, concepts, and methodologies to our upmarket segments.
To go into how we've built out this team, we have a whole CSM team who are assigned managed accounts. But we also have a manager of that team who partners very closely with an operations program manager on my team who spends most of her time designing these flows and journeys, and then measuring, iterating, and helping co-create this vision for our team.
Because of this, we have a really unique and close Ops and business partnership. I think this relationship will continue to be essential as we learn what works well for this Scale segment and then start to apply those learnings to other segments.
LANE: One thing that I want to highlight from what Sonam just said is that they iterate quickly.
That's the biggest thing I'm looking for on my team. The best CS Ops team members do things, they learn what works, they learn what doesn’t, they change those things, and they move on to improve the next program. Because if we don't do that, we're going to end up in a spot in six months or a year later where we realize we've impacted our retention rate negatively.
Being able to iterate quickly, make changes, and analyze what’s happened are key components and skill sets that managers need to look for as they're building out this team.
BORA: To build on what everybody else has said, I think it is really about a matter of magnitude.
Digital-led Customer Success can be applied across everything. What is the magnitude at which that needs to be provided if we're talking about what we call traditionally, tech-touch customers or self-service customers? What are we talking about if we go upstream to white glove service?
The processes and the definitions and the types of things that you do for a digital-led Customer Success type of program or campaign, all of that is effective. Everybody's using the base platform. Everybody's using different types of things. But the most important thing your team can do is get the right information to the right person at the right time.
And it’s on all of us to make sure that what we’re providing is value adding, so your customer never says, “Okay, I'm getting all of this information and it means nothing to me.” Everything has to benefit the customer and it must be valuable to them.
That’s the critical component of any type of digital-led campaign—what does it do for the customer at the time that customer receives it? If there's a misalignment there, I think you start to lose the customer, and that program cannot be as successful as you envisioned it to be.
COMMUNICATION
The 10 Commandments of Salary Negotiation
There’s a little game in business that everyone is playing, but most are losing—it’s called negotiation. Niya Dragova, co-founder of Candor, shares 10 expert tips on how to stick up for yourself and fight for the comp you deserve. This post is loaded with insightful suggestions like “Ask the questions an investor would ask because, *news flash*, you are now an investor — but instead of cash, you’re staking your time and earning trajectory on the company’s success.”
CULTURE
How Can Companies Enforce the Right to Disconnect? Use CS Philosophies
“In Customer Success, we center our work around ensuring we engage with the customer at the right time. We realized that applying these philosophies internally with our own team can help us [...] enforce better remote work policies.” Director of Customer Success at Juro, Claire O'Regan, draws an interesting connection between CS and establishing boundaries around our team members’ time and energy.
HIRING
The Question I Regret Not Asking Every CSM Candidate
Brian LaFaille, Global Lead of SaaS CS Programs at Google, presents the existence of two conditions that can occur in startups and CS: Peacetime and Wartime. He explains that while, “Most CSMs are able to turn on Wartime with ease [...] only the best CSMs can flip into Peacetime when the escalation is resolved.” In the article, you’ll find a question to gauge a candidate's ability to be the proactive Peacetime CSM your customers need.
SURVEY
The Impact Of Retention Rates on Company Valuation
It’s almost time for 2022 budgeting conversation. Rather than talking about CS as a lever to grow company value, discussions with CFOs often become a cost-cutting discussion where your budget gets squeezed. We can dig ourselves out of this problem by re-framing the discussion around company value, but everyone needs to chip in to provide the data to demonstrate to Finance leaders why CS is so critical to overall company value.
→ Submit your responses to the anonymous survey below. Then we’ll compile a report with the data and share it publicly so you can use it with your CFO in 2022 budgeting conversations.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
The strength of the relationship between an organization's Customer Success team and Product team can have massive repercussions on the customer experience and ultimately, the success of the customer. If this partnership is broken, you can bet that the dysfunction will be felt by the customer as well.
The problem is, Product is juggling needs from all over the business and customer requests are only one slice of that story. Product takes requests from:
Because Product teams are collecting, organizing, and planning projects that serve different business goals, it’s on CS leaders to improve this partnership if they want the right requests to be prioritized. But many CS leaders don’t know where to start.
Here’s some advice: if you make Product’s life easier, they’ll naturally start to rely on you as a trusted partner. So in this piece, we’ll dig into the “don’ts”—the 4 most common mistakes CS leaders make when working with Product, and then share a few tactics for a better partnership.
Note: The following article is an excerpt from our upcoming handbook, Actually Influencing the Product Roadmap as a Customer Success Leader.
When interviewing Product leaders for our handbook, we asked, “what’s one thing you want CS leaders to take away from this?” Nearly all of them pointed to one of these four common behaviors and asked CS leaders to stop doing them:
If you’re doing any of these, stop. Yesterday. Your goal is to turn Success into an asset for Product, and the behaviors above do the opposite. Let’s take them one by one.
1. Sharing “important” customer requests with Product as they come in
As soon as a customer reaches out with an ask, the urge is to report that immediately to Product. It feels good to help a customer right away, but it’s actually counterproductive. Product is looking for problem themes across the business. One-off customer requests almost always get lost in the ether (backlog) because Product just doesn’t have the bandwidth to think about individual customers.
2. Summarizing customer feedback in your own words
The hard truth is that Product doesn’t trust customer requests that have been filtered through a CSM. Product Managers are better trained to read between the lines to discover the customer’s true problem. As a result, filtered requests are generally written off as “not enough info”.
3. Proposing potential solutions to “make it easier” on Product
Imagine Product coming to you with tweaks to your customers’ success plans. Totally unhelpful. That’s how it feels when CS proposes potential product solutions to customer requests. Every change made to the product requires 2-3X the planning that you’d expect, and affects many areas of the platform that Success isn’t tracking. When Success comes to Product with solutions, it requires Product to do all the problem discovery themselves, which they don’t have the bandwidth to do.
4. Going directly to Engineering to solve “urgent” issues
This is an absolute non-starter.
First, the only issues that are actually urgent are bugs that prevent customers from using important features in the product. These kinds of bugs often have implications across the platform, which specific engineers don’t know about. If you keep Product out of the loop, it’s likely the engineer you have a relationship with who won’t actually solve the issue well. They may also unknowingly create bugs that are even more serious.
Second, when you ask Engineering to do something “urgent” they have to deprioritize other work. That other work may have a much bigger impact on company goals than the issue of an individual customer.
Third, you lose all credibility with the Product team when you cut them out of the process (unless you’ve agreed on the workflow ahead of time). Once you break trust, it’s hard to earn it back.
1. Have a designated Product Ambassador
“Our partnership with Product has been strongest when CS actually had a member of the team embedded in Product. This person would attend Product weekly meetings, demos, and was the person responsible for training the CS team on upcoming features or changes to existing functionality.”
— Angela Guedes, Head of Customer Success at Belvo
2. Create an internal “CS Panel” for Product to lean on
“At HubSpot we have a rotating panel of CS folks that Product can go to. Our Product team outlines the problem and the potential solution, and then CS will tell us if they have customers that might fit. It’s a good place to gut check ideas before digging deeper.”
— Jesse Tremblay, Group Product Manager at HubSpot
“We have a Product office hour every week. It allows Product to present features they’re thinking of and get feedback from CS about how they think they can use that with their customers.”
— Megan Bowen, CCO and COO at Refine Labs
3. Document and socialize for all
“In different companies I have worked at, we, as cross-functional stakeholders, have jointly owned and internally publicized a monthly updated itemized list with Impact and NRR At-Risk and Opportunity using tools like Confluence and Sharepoint.”
— Jeff Heckler, Director of Customer Success Solutions at MarketSource
4. Aggregate requests into “problem themes” for Product
"Many Product teams already do this: instead of prioritizing one-off features from all over the business, they’ll group requests into “problem themes” (think: higher-level initiatives to meet the company’s goals). Customer Success can make Product’s life easier by grouping customer requests into problem themes for them.
And by the way, a “Product Theme” is different from a “Problem Theme”. Here’s the difference:
A problem theme is better because it hones in on the outcome that needs to be achieved and gives Product the license to figure out how to achieve it. When Customer Success reports product themes, they’re basically saying 'Hey Product, just build what our customers are asking for' which goes against everything a Product person stands for. Many Product people believe 'Customers can only point out problems, they don’t know the solution.'"
— Nick Paranomos, COO at ‘nuffsaid
COMMUNICATION
How to Handle and Share Bad News
Jason Lemkin offers some great advice for anyone who needs to be the bearer of bad news. “[E]veryone that’s been around start-ups knows there are ups and downs. We expect it. And investors especially expect it. What people don’t expect is not getting a heads-up on the unexpected.” This post is a nice reminder that even when times are tough, “If you are [...] consistently transparent — you’ll get through it.”
STRATEGY
3 Questions To Ask When Building a CSM Comp Structure
Here’s Ejieme Eromosele, VP of CS & Account Management at Quiq, on how to thoughtfully design comp plans to attract and retain top talent. She provides some clarifying questions that would be useful to consider whether you’re building out your comp structure for the first time or reviewing your existing one.
MEETINGS
How Digital Business Reviews Differ from Traditional QBRs
Cast CEO, Dickey Singh, introduces the idea of a Digital Business Review as compared to the tried-and-true QBR. This post will be especially compelling to organizations with a segment of customers who require tech-touch engagement. Scroll to the bottom to check out an in-depth table comparing the two.
TRAINING
Most Business Numbers are Random Noise, Not Meaningful Signals
As Ed Powers proves in this video, many of the statistics we come across in business are bogus—we just have to be smart enough to see it. Sign up for Ed’s course on data-driven decision-making for CS leaders to level up your statistics and data-analysis game.
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