Customer expectations are at an all-time high, making it more and more difficult for companies to please them. Companies who understand their customers well are the ones who rise to the top over their competitors. New Relic, provider of real-time insights for software-driven businesses has this formula figured out. Hear from Roger Scott, New Relic’s EVP and Chief Customer Officer as he shares his 7 tips and tricks for keeping your customers happy— and how to do so at a large scale.
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Roger Scott | EVP @ New Relic
FULL TRANSCRIPT BELOW
Good afternoon. How’s everybody doing?
Good? That’s not a bad start. As the introduction said, I’m the Chief Customer Officer at New Relic. Been with the company for a little bit over four years. And I wanted to share a little bit of my experience and the company’s experiences of building the company to a scale that we are today. And looking back, some of the lessons that we’ve learned and things that I think would potentially be of benefit to this audience.
How many people in the audience have either used New Relic or are aware of New Relic? Okay. So a fairly good number. We have a vision at New Relic that we want to create more perfect internet. And through that, we’re going to instrument, measure and improve the internet through the deployment of our technology. And that allows our customers to build better software, much more perfect software, to have better relationships, and to also build better businesses.
We are the world’s most complete and comprehensive instrumentation platform on the marketplace today, that is cloud-based, that is SaaS-based.
When we started out, we built the company purely as a SaaS company. We didn’t ever have an on-prem solution. We didn’t ever have any technology that sits on-premise outside some of our collector agent technology.
And so we’ve built … We started out in fairly small fashion, initially, when we started the company 11, 12 years ago, and focused very heavily on the application performance management marketplace. And our CEO and founder, Lew Cirne, was actually the founder of the category of APM. He had a company called Wily back in 2000 that he started, that ultimately sold on to Computer Associates, and really was seen as the father of the APM market segment, and learned a number of things in that experience that we then applied in terms of building New Relic, which is his second go around on the whole monitoring space.
That has extended beyond APM quite significantly over the years. We have a full suite of six products that we now are able to instrument right from the front-end customer experience, whether you’re using a mobile application or you’re accessing the internet through a browser, to doing synthetic monitoring through to the application itself, and then ultimately back out into the infrastructure that it runs on.
And so essentially, you are able to look from end to end in terms of the full customer experience and deliver insights and analytics on top of that that hopefully allow you to build better software, create better relationships, and to have better businesses.
So we’re into our second decade. The company started back in 2007, 2008. As I was introduced, we have 17,000 customers. We’re a global operation right now, but we started out with fairly humble beginnings and focused very much exclusively on APM. It was monitoring Ruby on Rails back in the day. We thought it would have a business opportunity of around about $100 million in revenue. We could see the market opportunity there, but nothing as big as we’ve been able to realize, now, as a company.
We work with mostly modern teams. So if you are building software and you’re running software today, you should be running New Relic, or a New Relic equivalent. We’d like you to run New Relic. It’s an integral part of your business going forward, and having a platform like New Relic is going to be essential to the success of your business over time.
We started out in the commercial SMB mid-market space. It was interesting, listening to Tiago from Talkdesk, and some of his experience with moving from a commercial business to an enterprise business rings pretty true for me and for New Relic’s experience. And when I joined back just over four years ago, we were about a $140 million business that was very squarely in the commercial business. So much more of an inside sales mentality, hub-based selling, predominantly in North America, not really into strong relationship-based selling and the trust that he talked about. But one thing that we did really successfully in the early days was establish an incredible brand. And that brand led to viral adoption, whether it was in the commercial segment or the enterprise segment. We hadn’t actually formally committed ourselves to having more of an enterprise sales organization. But actually, many enterprises already had the use of New Relic, because there was this viral adoption, a recognized brand. Developers were really loyal to the product, and they were able to take the product with them whenever they went. And so you saw these little pockets of the usage of New Relic, even in some of the largest enterprises around the world.
So fast forward to where we are today, we’re a $550 million-plus ARR company. Over the last four years, going from a $140 to $550, we’re still growing at 35%. We’ve re-accelerated growth. If you look today, over 50% of the Fortune 100 would now use our product, and use it quite extensively. And so significantly bigger, larger, and more successful company than we were four years ago.
So one of the things I like to do at venues like this is to talk a little bit about one of my passions. And one of my hobbies is photography. And I absolutely love photography. And I think it’s actually quite a good analogy for the business world, and it’s a great analogy what some of the things that you need to think about as a SaaS business.
And so these are three gentlemen that I took a couple years ago, taking photographs in Havana, Cuba. They were all within about a mile radius. Incredibly striking individuals. And one of the things that it taught me is that great photography depends on exceptional subject matter. If you truly want to inspire people to understand what it is about the subject that you are trying to photograph, or the message you’re trying to get across, you’ve really got to have strong subject matter. And in that subject matter, you’ve got to be opinionated and you’ve got to be provocative, and you got to get under the covers of the individual or the company. Use either. Talk about the photography or talk about a business. You’ve truly got to get under the covers and understand what touches the soul of individuals. What’s important to them? Tap into something that’s emotional and then be able to show that in a photograph, is essential.
So subject matter is critical, and our customers depend on us in having strong subject matter. When we walk into meetings, we’ve got to have really strong opinions about things. And actually, it was Ansel Adams … I think most people are familiar with Ansel Adams. He was a famous photographer of the last century, who was very famous for photographing a lot of landscape photography in the western states of the US. And he said, “Great photographs are made, not taken.” And I think there are parallels there for business, as well; that if you want to have exceptional impact with a customer, you have to think about the thing that you want to do with them, the value that you want to deliver. And you have to think about how you’re going to make that. It’s not just something you take. It’s not just something you turn up and switch on and deliver. It’s something you have to be intentional about.
And subject matter also includes the thought process around focus. And Ansel Adams also said this: He said, “There’s nothing worse than a sharp image of a fuzzy concept.” Now think about that: There’s nothing worse than a sharp image of a fuzzy concept. And how many times do we go into a business situation and think we’ve got absolute clarity about what we want to talk about, but the customer doesn’t really understand what the value is? So we’ve got a strong opinion, we’ve got clarity around what we want to say, and the customer’s looking there, scratching their head and thinking, “Well, that’s a fuzzy concept. I don’t truly understand that.”
And so I think the whole essence of subject matter, what your focus is, and how you convey that over to your customers is critical.
The second thing in photography that I think is essential is mindfulness. I once did this amazing photography course in Santa Fe, in New Mexico, in the USA with a gentleman called George DeWolfe. And George DeWolfe is a fine art photographer. He’s relatively well-known in the industry. And he did this whole course on mindfulness. And what he taught us was to almost become meditative around photography, that you should immerse yourself in the situation. And you get to the point where all the distracts go away and you become part of the environment that you’re trying to photograph, and you take way better pictures because you’re really sitting back and watching what goes on. You’re not rushing in, taking a picture, not thinking about it. So you actually connect with the environment that you’re operating in.
And I think that is so true of the business world today, particularly in the SaaS world, is that we have to be exceptionally mindful. As with photography, you can’t rush into a situation, thrust a lens into somebody’s face and expect them to relax, to be fine with the situation and respond to that. And so, too, in business, I think we’ve got to be exceptionally mindful and to start to think about what is really critical to a customer, and see how we deliver that.
And that requires us to be immersive, as I talked about. It requires us to slow down and think and to be intentional about what we’re trying to achieve. And so for a number of these pictures that you can see here, I actually sat in those environments for an hour or two, and never took a photograph. Got to know the people, got to the point where they felt comfortable, and then you’d get to a point where you’d talk about maybe taking a picture. And sometimes you wouldn’t; it wasn’t the right time. And this allows you to build really strong relationships, as we do in busy, as well.
So the third area of photography that I want to touch on, third and fourth, is around intimacy and trust. And if you know the author Stephen Covey really well, he wrote the famous book around the Seven Habits of Highly Successful People, and has written a lot recently around the importance of trust. And he talks about the fact that trust is the most critical element of personal and professional relationships these days; that trust is at the cornerstone of every relationship.
And so building this intimacy with your subject matter and being mindful of what’s going on is critical in building successful photograph portfolios, and I would argue in building successful companies, and I think it applies even more so to SaaS companies.
And I think it’s especially true of SaaS companies, when you start to think about the fact that everything is a service. And there’s this great graphic that was created by TSIA, the Technology Services Industry Association in the US. Great organization, if you do have a services component to your business, and you’re looking for best practice and trying to understand how to set it up effectively, they’re really useful and helpful. But they talked about the evolution of the expand motion within businesses. And if you go from the early 1990s through the .com era, through the social enterprise, and right up to where we are today in the softwares and service world, how, over time, it’s become the responsibility of marketing, and I would argue, also, the product, when you think about product-led growth; what is the product actually doing to drive growth? It’s marketing and product that have become increasingly important in terms of how we communicate to customers what’s new in the product. What’s the new capability, what should you be thinking about in terms of added value.
And I think in the SaaS world, you’ve got to start to think about the fact that this is a continuous service delivery model. It’s a flywheel. It’s a make the promise, deliver the promise through delivering on not just the service, technically, that you’ve delivered to the customer, but how you support them and how you help them realize value, how you help them understand what the new added value is in the platform over time, as well.
And I think this is an important concept, as we go through some of the experiences that we at New Relic have had. And I think it’s critical if you’re trying to scale a business, to start having this service mentality mindset, that it’s not about the technology alone, and it’s not about technology with a bunch of salespeople, but it’s actually what is the service delivery strategy that you have that you’re going to use to continue to interact with your customers.
So I want to spend a little bit of time today and talk about seven key areas that have been the basis of my experience over the last four years, and certainly some of the experiences of my colleagues, who have been at New Relic for a little bit longer than the four years that I have been. So these are a few lessons and learnings. I’m not saying they’re parables or anything like that, that you should … It’s not the law. It’s not something that I think is firm. It’s an idea. It’s a thought. It’s a concept. It’s some realizations that we, as an organization, have had. And I’d love to share that with you, and then also get feedback from you as to what your thoughts are.
Tiago mentioned this, in terms of hiring people at the right time in the evolution of your company. And there’re quite a few schools of thought around this. Do you hire Mr. Right or MR. Right Now? You hear a lot of people talking about that. I have the opinion that one of the things that has served us really well in my organization, and the broader New Relic, and I run the customer solutions group, which is everything in the pre-sales and post-sales arena that doesn’t carry a quota. Well, it includes the renewals people, so they carry a quota. So it’s all the technical resources, it’s all the professional services resources, pre-sales, education, customer success, management renewals, et cetera. So we’re the ones responsible for that flywheel of the relationship.
And one of the things we did really well early on, in my belief, when we started to shift towards the enterprise, which was four to five years ago, we wanted to have both, but there was a distinct shift, more to the enterprise; was who do we need to build the company we want to be and support what we have today? And I think we got a great balance, to the point where the 75 people who have a management responsibility in my team today, 50% of them got their first management in the company. And so that’s supporting the growth of the company and evolution of the careers of the people that were involved in the company from the early days, which I think’s really essential.
But at the same time, we went and hired a bunch of people who we knew had done this before, who could … And this was part of the discussion earlier. Who could mentor a number of the people who were in their first management gigs and perhaps had never done this before? And whilst that’s energizing and motivating, it also can introduce risk in the business.
So to me, think about what you want to be three, four years old, and who’s going to be able to deliver on today, but also set you up for success three, four years out. I think the people that you hire, it’s a combination of the organization that you create, it’s the leadership that you hire and the service delivery mentality that you think about.
So for me, the cornerstone traits that you’re looking for are people that are customer-centric. They’re customer-obsessed. They think about what it is that the customer wants to be able to do. They have less of an internal focus. That’s the secondary thing. I think you want people that are inquisitive and are curious about the technology that you have and the service that you have, and want it to be better. They constantly want to valid that with the customer and get feedback from them.
And so all those traits, to me, supported us really well in our growth trajectory, is that we put some cornerstone leadership in early that served us well two, three, four years down the line. And I think you’ve got to continually think about that. We’re a $550 million company with a strategy to go to a billion and beyond. We’re thinking already about what does that mean in terms of the leadership, the organizational structure that we need to have.
Second lesson for us was to, very early on, particularly with your key customers, your marque customers, your brand name customers, is develop a joint vision of success. And in my view, you may not necessarily invest in it as early, but you will be thinking about what customer success means and how you’re going to implement the whole motion of customer success. And for us, developing shared customer success plans with our customer early on, something that we didn’t ask them to help us define success; we asked them to help us validate success, what it looked. Because quite frequently, we were going in and saying, “This is the art of the possible. This is where you could get to. This is the outcome that you could have.” How does that relate to your business? What are the KPIs that are critical to you to achieve that?
But having that joint vision of success with your customers is essential, especially when you get to scale, because if you don’t have it, you’re going to be chasing your tail. You’re going to be putting out fires. You’re going to be intervening when there’s a problem rather than monitoring how you’re doing in terms of the path towards the success that you’ve jointly defined.
So part of that, in my mind … And this is the thought process I mentioned earlier. You may not invest in it entirely, really heavily right up front, but you got to be thinking about it. And those of you who know Reid Hoffman from PayPal days and co-founder of LinkedIn, he has this great podcast series called Masters of Scale. If you’ve not listened to it, I encourage you to go and listen to it. A number of luminaries in the SaaS world talk to him through his podcast talk about what it means to scale and all the lessons they learned. And one of the ones that Brian Chesky did with him, from Airbnb, talked a lot about this concept of slowing down to go fast. If you want to scale your company, you’ve got to think about what is the gold standard look like? What does the best practice look like? Because if you get to the point where you really need to scale it and you haven’t thought about that, you’re probably too late in the game, and you’re going to scale something that’s less than optimal, and something that you probably shouldn’t scale. It runs the risk of introducing even more risk and instability in your business.
So to me, as early as possible, pay attention, slow down and think about what is that motion that’s essential, particularly around customer success. How do customers get value? What resource do they need, when? What are their moments of value? What are their moments of truth? When do they need us most? And if you start to internalize that, and if you start to develop that into a thought pattern and ultimately into a process that you can implement in your business, you can scale pretty quickly of the back of that.
So it’s this case of pay attention to the white glove service, which doesn’t inherently scale, to then be able to, at some point in time, scale that whether it’s through digital channels or through automation or grown engineering or a combination of all those.
If you’ve slowed down to go fast, and you’ve paid attention and you understand what that gold standard looks like, you’ve then got to build it into the fabric of your business. And so this concept of developing customer journeys or defining the customer journeys, I think, is where we are right now as a company. We are right in the middle of this. And one of the things I’ve done a lot of is to explore my peer group in the industry and try and get feedback from them as much as possible to say, “Hey, what should we be thinking about?” And if you talk to most of the successful SaaS companies in our industry, the really well-known marque brands, this is one of the things they will key on the most, which is understand what that customer journey is that you want to take a customer on. Because at some point in time, you’re going to have to automate that. You’re going to have to … If I think about it in our context, we’ve got 17,000 customers. We can probably afford to invest direct customer success management and the solution architects in about 1,200 accounts. What we we doing with the other 16,000? And we can’t afford to just intervene when they have a problem. We have to get ahead of that.
So defining the customer journeys and understanding the channels that you’re going to use to execute those journeys is essential. And you know what? You can debate forever, whether it’s a journey by product or whether it’s a journey by platform, or it’s a journey by persona. Pick one and go with it. We argue that persona’s the critical one. Especially as we’re going to be developing loads more products over time, and so we just a want to focus on certain personas and how we introduce those capabilities to them.
So the customer’s on a journey, but we need to understand whether the customer’s actually having a delightful journey. Is it a great journey? And this is another thing that we’ve, over the last two years, invested significantly in; which is a discipline around understanding the customer’s health. And I would … There’s a sub lesson here for me; is that we started out this part of our journey by trying to define and aggregate customer health metric. And I think we just got into analysis paralysis. And while I also think ultimately, it’s useful to have a single metric, there’s a whole plethora of KPIs that you should be monitoring as an organization, down at the individual account level that tells you, is an account healthy? And that might be from deployment and license consumption through to the user community growth or decline. How often that user community is logging in, what are they doing, how deeply are they using the functionality? Is it superficial, or is it really deep and advanced user cases?
You need to have that data at your fingertips in addition to the data that tells you what have you been doing with the customer to see if it’s improving the health or the health is stagnant, or it’s declining. And we’ve been able to build this into a simple dashboard that any AE, any customer success manager, any renewal rep can go in and look at any account across the organization at any point in time and see in real time, what are all those metrics. And we’re starting to aggregate those up and roll them up to different dimensions in the company; be it by geography, be it by product, be it by contact type, be it by ARR band. To me, this is the heartbeat of your business. And as part of the slowing down to go fast, I think this is a critical element, as well: Understanding what it is that you want to measure and how you determine whether that journey that you’ve defined is the optimal one, or not, and how many of your customers are following it, or not.
So healthy customers, in our mind, become advocates for you. Our customer solutions group has a mantra that our passion for customer success creates lifelong advocate for New Relic. We also realize that we can’t spend enough money to get to all the customers and teams that we want to talk to. That’s going to cost a fortune, if we wanted to do that. So yes, we can use marketing. Yes, we can use PLG, the product growth element of this. But what we want are proxies for ourselves, sitting out in our customer base. And this has been enormously successful for us; is that individuals who have used the product, right down to individual ops people or developers, SREs, have taken the product wherever they go. And it’s one of the first things they’ll say in an organization. Have you deployed New Relic?
And so this philosophy in our organization is we need to develop these advocates throughout our customer base; from the individual contributors who are some of the best brand ambassadors for us, right up to the senior executives. And so that when a senior executive like Paul Cheesbrough, who was here at News UK, went to News Corp as a global organization, went to 21st Century Fox, which part of which was acquired by Disney. That connection has been hugely valuable to New Relic, because we’ve had advocates that’ve been able to vouch for our product.
So it’s one of these things that we proactively do, we target them, we think about who are advocates are going to be; who do we want to develop, and we develop tight relationships with them.
And I think your customer advocates are ultimately your trust custodians. And I come back to what I was saying about the philosophy of good photograph, in that a cornerstone of business, in my mind, is trust. And we want to establish trust above all else. And I mentioned Stephen Covey earlier, in terms of the books that he’s written recently about this. And he has this quote: He says, “The ability to establish, grow, extend and restore trust among stakeholders is the critical competency of leadership needed today. Trust is the glue of life. It is the most essential ingredient in effective communication. It’s the foundational principal that holds all relationships, but it takes time and patience.” And in my mind, this is one of the things that you want to be clear about right up front. And Tiago talked about it. People buy on trust. They trust you, particularly in the SaaS world, where everything is a service. They want to trust you. They have to trust you, and they need to trust you, and that’s in your interest, to build that trust.
And we’ve all been on a sports team or had a family relationship or worked in a business where there hasn’t been trust. Bad things tart happening. And so for me, this is absolutely essential to the success of a growing, scaling SaaS business.
And part of it is knowing what are the moments of truth and the moments of value. Particularly the moments of truth of your customers. So we have a strong presence in the media and entertainment world. And so for a lot of the media companies, a few years back, it was the night of the election in the US. That’s their moment of truth. Millions of people will hit their sights. Are we able to be there to support them personally and through our technology? We obviously are very strong on eCommerce and retail. So on Black Friday or Cyber Monday, or any particular sale period, are we there for our customers and able to support them and build their trust? Because if you’re there and you can build that trust, they’ll be there for you when, inevitably, something goes wrong with your service. And they’ll understand that you’ve got … They’ve got empathy for you, because you were there for them and they will, likewise, be there for you.
So before I close out, I do want to go back to a point I made earlier. One of the things I’ve benefited from over the least three or four years, is I’ve very intentionally spent a lot of time … I’ve sought out all my peer group in the industry, and I’ve said, “How do you think about customer success and engaging with customers?” And I’ve realized that we’re an evolving industry, and that nobody’s truly figured this out. And best practices are continually evolving. And so one of my encouragements to you, are to every turn, seek out your peer group in the industry. Spend as much time as you can with them, because you will not only build confidence around your strategies and ideas; you will learn something every time you meet up with somebody who’s trying to solve the same problem that you are. And I think that’s part of what this community and this event is about.
So in closing, you’ve probably heard I’ve got a funny accent. I’m not British, before … That seems to be the general thing in the US, people think I’m British. But I grew up in Cape Town, South Africa. Spent half of my life living there. It’s a beautiful city, for those … Anybody who’s been there will be able to attest to the fact that it’s an absolute stunning place to go. It’s got a really unique culture, amazing people. As I think most of you in the audience will you know, South Africa went through a remarkable transformation in the late ’80s, early ’90s, coming out of apartheid, the release of Nelson Mandela. And part of the process of moving to a truly democratic country and rewriting the whole constitution was this philosophy of Ubuntu. Now, most of you, I suspect, in the audience here, know Ubuntu from Ubuntu Linux, Mark Shuttleworth’s company. But Ubuntu is an Nguni Bantu term that effectively means humanity. And its literal translation is, “I am because you are.” And that I can’t be successful and happy without you. And it was the cornerstone of the truth and reconciliation commission in South Africa, which encouraged people who committed atrocities and apartheid to come forward and volunteer some of the things they had done. And you would not be charged if you came forward voluntarily, and you could provide closure. Because people believed in this Ubuntu philosophy.
And it’s one of the things I’ve tried to instill in my team, as we’ve built out a successful SaaS company is, we are because they are. We are only successful because of our customers. And if we’re not focused on those, day in and day out, and thinking of how we support them, we’re not going to achieve the goals and aspirations that we have as a company.
So with that, I’d like to thank you very much for spending the last 30 minutes with you, and hope that you enjoy the rest of the conference. Thank you very much.