Best Practices in Customer Success in 2018: Maximizing Revenue, NPS and Happiness (Video + Transcript)

This session with leaders in the customer success space discusses best practices for your customer success teams in 2018. They talk about when to hire your VP of Customer Success, qualities to look for in your team and how to ask for feedback at the best times in the customer journey. After all, Jason Lemkin says 90% of your revenue goes into customer success.

Also, if you didn’t attend SaaStr Europa, we’re having it again in 2019. Be sure to grab tickets before October 1st because prices will be going up come November 1st. This is your very last chance to grab tickets starting at $199!

Transcript

Katherine Barrios | CMO @ Xeneta

Emilia D’Anzica | Principal @ Customer Growth Advisors

Sue Duris | Director of Marketing & Customer Experience @ M4 Communications

Sue Duris: Hello everybody! How’s everybody doing? If you’re in the right place, this is Very Best Practices in Customer Success in 2018, how to maximize revenue, NPS and happiness. My name is Sue Duris. I’m founder and director of customer experience and marketing for M4 communications. We’re a customer experience consulting organization out of Palo Alto, California. We work specifically with coaching SaaS companies on how to be customer-centric.

Sue Duris: Let me take time now and introduce our panelists. On my immediate right is Katherine Barrios who is Chief Marketing Officer at Xeneta, where she leads the marketing and customer success teams. She has close to 20 years of experience in B2B software product space with core expertise in demand generation, enterprise sales, product marketing, product management and media analyst relations. Katherine is a true believer that the entire organization must align along the customer journey with marketing and customer success teams working in lockstep at the core. Barrios is a native of New Jersey in the US and has been living and working in Oslo, Norway since 2001.

Sue Duris: Next we have Emilia D’Anzica, who is a strategic management advisor and principal of customer growth advisors. After nearly 20 years in the tech industry and helping companies like job fight, bright edge and walk me scale, she has a deep understanding of best practices in building a highly successful customer-focused success, operations and marketing teams. She now specializes in working with executives globally to build customer programs from onboarding to customer advocacy.

Sue Duris: I want to throw a number out to you, $1.6 trillion. That is the latest number and 2018 of money that organizations are losing because their customers are switching to their competitors because of poor customer experience. Customer experience, I’m sure you’ve read a lot has become the key brand differentiator for businesses, so it makes it very important to really focus on customer relationship building. We know through research and things of that nature that most growth is happening in the post purchase phase of the customer journey. It was Jason Lemkin, who actually said customer success is where 90% of revenue is.

Sue Duris: There are other important stages. There’s an onboarding stage that it’s very, very key. Matter of fact, if you have an effective onboarding program you can reduce at least 25% of your churn rate and you’re constantly nurturing so that when time comes for renewals and expansions, you’re going to have those customers and drive, in my opinion, the most important customer metric and that’s customer lifetime value.

Sue Duris: Let’s start out with first question I’m going to post to Emilia D’Anzica. Customer success is more than just a customer relationship based consultative process. Now, it needs to include how do we help our customers reach their desired outcomes. How do we locate the gaps? What are the opportunities and strategies we can put in place to help them?

Emilia D’Anzica: I would say for, especially startups starting early and investing in your customer success programs, often companies end up hiring their first VP of Customer Success too late and then suddenly that person is not acting in a strategic way, they’re not putting processes in place, but rather they’re just putting out fires. They have to clean everything up first before they can actually become proactive. I think that’s the first thing, I would say, is hire someone sooner rather than later that actually has seen the playbook successfully in customer success.

Emilia D’Anzica: You also want to hire someone who understands your technology, not just the customer success journey, especially in SaaS, it’s critical what is unique about your platform, what’s the unique differentiator that will lead customers not only or prospects to buy your platform but also to keep renewing. Why would they go to a competitor if they’re able to really understand the platform and what the benefits are?

Katherine Barrios: I agree one hundred percent. I think we can say from our side that we were a bit late in hiring our first customer success person, so we don’t want to see something where we didn’t do it too great and we would be an example of that. We did go into some firefighting mode initially. Now we’re in a good path. In addition, I would like to add that the alignment between the commercial teams meaning sales, marketing and customer success is critical to happen early or than later in particularly your acquisition strategy and how does that play through into your retention strategy and how do you have a full circle of acquisition and retention and then going back to new business. Having those teams aligned on the same strategy is very important and having that, again, happen earlier than later is what’s really going to make a difference with all teams being accountable for revenue in shape or form.

Sue Duris: That’s a really good segue way into our second question. We can’t do customer success in the silo. We can’t do anything really in a silo to be effective. Making sure that there is alignment between customer success, marketing, sales, product operations is not only is it a full-time job to do so, but it’s very, very critical. What strategies can we employ that we can accelerate that alignment and sustain it? Maybe a part two to that and I know it’s kind of a million dollar question in customer success circles is, who handles the renewals and the upsells? Is it is a customer success? Is it account management? Is it someone else?

Katherine Barrios: Yeah. In our organization, our customer success team handles the renewals so they run the lifecycle of the customer and they handle the renewals. The upsell is sent back to the account team. Whether that’s the right way to do it, we need to see. We are advisors so customer success are in an advisory role and if all things go in play meaning the alignment between sales and marketing and we all align as to why did our customer by, are we delivering on that promise, are we delivering the value that they want. In essence, if all those take yes and we have programs in place to do that, the renewal process should be a smooth one where it would be normal for the … in our business for the CSM to take and carry the customer through the renewal process instead of handing it back to the sales. There’s a balance between being an advisor, a trusted advisor, and being able also to bring in that revenue and identify upsells.

Emilia D’Anzica: I’ll take a more tactical approach to your first question. I believe that it starts with communication across all executives, the leaders. If you just start asking your leaders to provide a couple of slides for the board, they’re not talking to one another, they’re not aligning on their vision and their values. What I’ve seen as very effective is using something like the V2 mom, the Mark Benioff Salesforce way of alignment where every team is responsible once a quarter and once a year to provide their vision for their team, what values do they adhere to, how will they measure their success, what obstacles do they usually, do they currently have and what methods are they going to use. If every team can answer those questions, and it’s in a shared place where all the employees have access to it, I believe that the communication can make everything run smoother.

Emilia D’Anzica: That leads into the second question of the renewals. I think it depends on your company what do you provide as a service and also who do you have on those teams. I’ve worked … one of the companies I recently worked with during the span of my tenure there, they changed who owned the renewal four times because it’s not, there’s no set answer to it, it’s how do you work with the customers. What I believe is if you start the customer journey once it’s closed, the customer understands that they have a trusted advisor leading them, their customer success manager, and there’s someone doing the financials and they’re introduced early. It’s not a choppy customer experience. They know that if they want to ups, they want to purchase more of the platform or the renewals coming up, they know that this person will come back to be part of the journey and they’re always there, for example, to vent. “I don’t feel I’m getting value out of the product” or “the customer success manager isn’t a good fit for my needs.”

Emilia D’Anzica: I think it’s always good to give the customer a lot of support and that means it’s okay to have a customer success manager that gives them the trusted advisor relationship and have someone else be doing the financials.

Sue Duris: What another great segue way into our third question. Building the customer success team whether it’s your first customer success manager that you’ve ever had, or you’re adding to the team, getting the right traits and skill sets so that organization, that customer success organization can be effective with customers is so critical. Emilia D’Anzica, what are those key traits and skill sets that the customer success manager or customer success team as a whole should have?

Emilia D’Anzica: I’ll ask this to the audience. Think of one word when you think of a customer success manager, what’s their one trait? When I do this with customer success teams and we write down our words and then we go on a circle, one of the recent sessions I did not one person wrote down leader. Customer success managers are leaders. Once the opportunity is closed, that customer is depending on the customer experience, the customer success manager to lead them through best practices in that journey. That’s the number one trait, I believe, a customer success manager should have is being a confident leader. I know the product, I know the journey you’re about to embark on, and I’m going to become your trusted advisor, and along with that comes good communication. Being really clear and direct with what the customer can experience through this journey. I would say those are the two most important ones.

Katherine Barrios: In addition, I would say an empathetic person, being able to look outside of your own two feet and not be in your own bubble, whether it’s only talking about your product and all the buttons and all of that and how great it is, woohoo, you really need to try this. I think it’s really looking at what does a customer really need, answering their questions, what value are we bring to their business, to their bottom line. Then, in addition being able to look forward to anticipate what their questions can be, what their needs can be like and will be like, and proactive in that and not waiting for the customer to come and ask the questions, but really be involved as much as possible into the business of that portfolio of all the companies as much as possible and know what kind of information they can be needing and how to drive that relationship further.

Katherine Barrios: In addition, I think the customer success manager must also be able to be a good colleague in terms of being empathetic and looking at beyond their own two feet within an organization. How can sales and customer success work together marketing work together customer success, product work together customer success, understand the needs of all the different departments and again be empathetic towards the needs and the goals of every single department, because essentially, we want everybody to work together. I think that’s the hardest part is that most teams really live in their own bubble and, again, not being empathetic for each other’s needs creates chaos and misalignment. That ultimately stalls many processes when you get to the renewal part, when you get into upselling and all the other thing that you can do. That’s what I think about that.

Sue Duris: A panel discussion would not be complete without one question on metrics. I need ask by a show of hands, how many of you use some form of NPS, net promoter score, in your metrics? That’s pretty good. NPS has been a key way for SAS companies to basically monitor where their customer satisfaction is, judge what the key satisfaction is. That said, I’ll pose this to both of you. What are the pros and cons of using NPS to determine satisfaction and not only to determine satisfaction but using the insights to improve processes? Are there other metrics that we should maybe consider?

Katherine Barrios: We use NPS. We don’t particularly look at just the number on the NPS but we’ll look at really the scale of how things are moving up and down. From promoter passive to detractor and we’re running on quarterly. If they’re running … if they’re moving from passive to detractor, we obviously have a challenge. How many of those are moving up and down? Who are those? What we do then is we actually reach out to, particularly the passives because those are the most dangerous ones that aren’t saying anything and and risk them moving to detractors, but we are measuring how they move on that scale. The number itself, there’s a lot of margin of errors there depending on when things are sent, who actually answered them, what kind of email address. Was it a user? Not a user? There’s many things that can go wrong in an actual number and also what do you benchmark towards but in terms of it moving up and down with the promoter passive and detractors that’s where we really draw value. That allows us to see, to try to predict, obviously, what’s going to happen and who we should be focusing more on.

Katherine Barrios: We couple that also with who are our high-value accounts. If we have high-value accounts then not passives, our team is going to focus a lot on those and depending on when their subscription is over. In addition of what we see as other metrics is not only the NPS but also engagement overall with our platform and engagement overall with our content that we push out. Everything we measure, engagement with our content, are they attending our webinar, they have very customer specific things working with their customer advocacy manager, and how much the use our platform, how much are they signing in, or not signing in. All of this makes up a score for us in terms of letting us know if it’s something that we can anticipate to easily renew or if there’s more work that we need to be doing.

Emilia D’Anzica: Yeah. I would say NPS is dependent on one, what do you do with information? Two, is your entire company part of the NPS scoring? What that means is, once you send those NPS to relevant people, so like you said not to everyone but the decision-maker, the day-to-day champion, those two users are probably the most important ones you want to send an NPS to.

Emilia D’Anzica: What do you do with that information? One of the things I found as very effective is making each head of each department not only you review the data with them but also they’re responsible for calling 10 of the people who answered. They’re not the 10 happy ones that will give to marketing, let’s write a case study, but all the passive and the detractors. Let’s get the head of product on the phone with them and really understand the frustration they have. It will help push your products forward.

Emilia D’Anzica: I do believe using … if you’re using Salesforce and you can push your data in there so your CSMs can see that data on a regular basis in terms of usage is really important. The other survey I really like to send is right after they go live the customer success manager marks the customer live with your platform. What does that really mean? If you send that survey a week or two weeks after they’re marked live, you can really get a good deep understanding of did they feel they were live? I’ve been through an onboarding where suddenly I was, went from being with my onboarding manager to suddenly being with my customer success manager, and I thought, “Wow! I didn’t even know I went live. I don’t feel live.”

Emilia D’Anzica: I think it’s really good to send these surveys from someone like the vice president or another third-party, for example, so that that customer will give you honest feedback on that experience because I think we can all agree during onboarding is one of the most critical times when a customer is, can churn. They will be calling saying, “I want out of the contract”. I work with clients all the time saying, hearing these kind of challenges, the customer has buyers remorse so it’s a great time to send surveys then as well.

Sue Duris: To the audience, do you guys use other tools like … are you doing customer satisfaction? Show of hands on you’re looking at customer satisfaction or customer effort score. One thing about NPS that we don’t want to do is turn it into a transaction type of metric. If you have a service issue, you don’t want to put that put that out every time … you don’t want to ask the NPS question every time you have an issue. You want to do something more like customer effort type of a score because customers who see that every interaction that they have are going to get sick of it. It’s time and a place and I think you’re talking about quarterly, quarterly or biannual, those are the appropriate times. Our fifth and final question is, since we are now in the mid-part of 2018, what trends for the rest of 2018 and in the future do you see in the wonderful world of customer success?

Emilia D’Anzica: Do you want to start? Do you want me to?

Katherine Barrios: Okay.

Emilia D’Anzica: Okay. I see that with so many different generations right now. Using platforms for different needs is one incorporating emotional intelligence in how you build the customer success team, especially, one of the clients I work with a lot of the owners of that purchase the platform are 60+, very successful, they own their own companies, and then the people who actually end up using the platform are in their early 20s, let’s say. Those people who are fresh out of university, they totally get tech, they want self-service. They want it in the platform, they want to figure it out on their own, but perhaps the people that are used to more handholding or they don’t want to even use the technology, how do you service both of them? Really, thinking about emotional intelligence across generations, I think that’s really important and often missed.

Emilia D’Anzica: That also means if you’re a global company, you have to think about the different cultures and how to communicate with different cultures. I’ve been working with Israeli companies for a long time now and I remember getting an email in all caps and I felt like I was being yelled at. I told the person, I said, “Why are you writing to me in all caps? I feel like almost threatened.” Really understanding that different cultures have different communication styles I think is really important. Then, just really from the user perspective, making your product to self-service as possible. Customer success, I don’t think is going away just because you have in platform support that’s contextual and real-time. I think it’s just becoming the norm. You have to have a way for your product to be consumed without having so much handholding.

Katherine Barrios: Yeah, from my perspective, I think more from an organizational side. The mentor I am, a true believer of having teams aligned so again going back to the sales marketing, customer success and I believe that and particularly marketing customer success will be even more aligned as we move forward. Our teams currently work together and the reason for it is that customer success needs to be a strategic player in the organization. That’s important. If you’re able to see how all the different acts of the customer success manager plays a role into revenue contribution as the sales and marketing, that is golden.

Katherine Barrios: But in able to do, in order to do that we need to first align everyone from the very beginning. In our case, we’re bringing even our CSM into deals before they’re closed. We sell to enterprises and we’re customer success is going everywhere in the organization, so it’s not just with in that customer success bubble, but bringing them into the sales cycle already early working together with marketing in terms of getting all the feedback and making sure that that feedback in understanding what makes a successful customer, what content caused that to happen.

Katherine Barrios: All the learnings is bringing that back to the top of the funnel and creating content that is really making people love what we do and ultimately become a customer and working with product. I think that is the way that CSM also needs to go, be a strategic player within an organization and not only be within the retention side, it needs to really go through entire organization. I see that happening more and more. For us, it’s working really well.

Katherine Barrios: It has taken a while to get the teams to, again, look beyond their own two feet, like customer success look beyond only onboarding and that part, and for marketing only to be doing marketing, but now we really see and especially in sales, let me get started in the sales side. I could talk forever about sales alignment, but that’s critical to make sure that everybody sees the purpose of every team that they are aligned strategically.

Sue Duris: Great! We’ve come to the end of our session. I hope you learned some things. The three of us are going to be around. Approach us on customer success, customer experience. I can’t see a scenario where assessed organization can be effective and grow without having a customer success team. It’s very, very vital. We’ll leave you with that, and thank you very much for your time.

 

Published on October 25, 2018

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