Customer Success 2020
“We used to say everyone is in sales. Now we say, everyone is in customer success.” Those were the words of Jeff Barnett when he presented his view of how and why a business should be prioritizing customer success in 2020.
As the former COO of Demandware and CEO of Salesforce Commerce Cloud, Jeff knows a thing or two about fostering a company-wide customer obsession. And, lucky for us, as a Core community member, he’s dedicated to sharing his craft. That’s why, on March 18th, as everyone’s worlds were going virtual as a result of COVID-19, Jeff jumped on a live stream with the Underscore Core and shared his thinking and actionable advice related to the customer success paradigm shift that is taking place.
Jeff was joined by fellow Core Member Renee Bochman, VP of Customer Engagement at Salsify. Renne has a long history of working with startups as they scale. She previously championed customer success at companies like Endeca, Vertica, and Acquia. Over the years, she’s grown a tremendous passion for ensuring organizations are thinking about the customer experience from the perspective of the customer, as it’s easy to get caught up in the company’s point of view.
The live stream event was facilitated by Underscore’s Customer Success Fellows, Jay Wilson, and Bryce DelGrande. Jay is the Director of Customer Success at Buildium and Bryce is the Manager of Customer Success at Shoobx, Inc. This tremendous event, a recording of which is above and transcript of which is below, was made possible by them. Enjoy!
Good evening, everyone. Thanks for joining us for our Underscore Customer Success Core Virtual Event. We appreciate everyone’s flexibility in joining us remotely. Ideally, we’d be connecting in person, obviously a lot going on, but still planning to talk about, and you might be looking forward to connecting with folks after being cooped up at home the last few days. First and foremost, we hope everyone’s staying safe and sane out there, working remote with family and pets running around.
Grab a beverage, it’s 5:00 and join us for what should be a fun and informative night. Before we get started, my name is Jay Wilson. I head up the Customer Success Manager Team at Buildium, which is a property management software company located in downtown Boston. Along with Bryce DelGrande, who will be leading a Q&A later on tonight, I’ve recently partnered with Underscore VC as a customer success fellow. What that means and the goal of what we’re looking to do is to create a venue where customer success professionals can make connections and have conversations that get to the heart of the challenges that we’re all working through every day, including some of the ones we’re going through now.
These types of events the ones like tonight, where we bring together the broader customer success community are one way to do that. Again, hopefully in person in the not too distant future. We also want to look for ways to connect folks that are in similar roles, so that might be over breakfast or drinks. So VPs, the VPs, or managers and directors with each other to talk about their daily grind. Additionally, we know that real change and real ideas can spark when conversations continue flowing in these events and relationships start.
So we’ll also be growing a Slack group and experimenting with ideas to foster one-on-one meetups, to allow CS professionals to dive deeper into how other companies are doing things and meet up in office or over coffee. Bryce and I are extremely excited to be partnering with Underscore VC on this initiative. For those of you that are just getting to know Underscore, Underscore is a Boston based VC firm that surrounds the entrepreneurs they back with a community of experienced professionals.
This community is what’s called Underscore’s Core. The Core is a network of hundreds of Boston’s brightest and proven business builders. So for us, what better organization to partner with than one that believes so deeply that success is built through a community and collaboration? With that, I’d like to pass it to Michael Skok, a co-founder and partner to Underscore, who will get our night underway.
Thanks, Jay. It’s really fun to think that actually this customer success core group got going now about four years ago with none other than your CEO, Chris Litster.
Thank you for taking up the reins now, bringing this to the next generation and championing the customer success score with us here.
My job this evening is a very easy one actually. It’s to introduce Jeff, who has been working for the last several weeks actually with us to try to develop what he feels is an important shift in the customer success perspective. So let me give you two minutes background on Jeff, and then he’ll give you the background on why he’s thinking about this and where this came from. First of all, Jeff is a very accomplished exec. He’s been keen in e-docs. Then when I recruited to Demandware, he was one of the first people to start building our sales organization at a time when we basically had zero revenue.
So very few people have done what he did, which is then to build it into a multi hundred million dollar revenue business that we then took public, and it was a pleasure to watch him on the board both develop the organization as well as obviously lead the team to becoming a very successful public business in its own right.
What he did beyond that, which was very important, was he harmonized the business around a business model of customer’s success. It’s easy to talk about that, but what he achieved was frankly creating partnerships with brands like L’Oreal, LVMH, Adidas, Patagonia, New Balance, many others that would be considered to be some of the best retailers, the best brands in the world. How he did that was to make sure that every day he got up, he thought about how can he make their business more successful. The business model that we had actually aligned that way so that we only took revenue when they were getting increases in their GMB.
That attracted the attention in the end of sales force because they looked at it and said, “Hey, we’re a SAS business, this is one of the biggest areas of growth in commerce.” Ultimately, they came to acquire the company where Jeff then took the CEO role and ran the business through not just a few hundred million customers … Sorry, a few hundred million in revenue, but ultimately $20 billion of gross merchandise value, creating a $1 billion revenue business with inside sales force with literally a couple of hundred million unique consumers on the platform. So it’s a fantastic journey to listen to. I’m happy, Jeff, that you’ve chosen to share with us the learn things from that and also how we can shift our perspective for the next generation of customer success. Jeff, over to you.
Well, thank you so much, Michael. Appreciate the very, very kind words. I really do appreciate that. Hello to everybody. Thank you for joining. I am so sorry we can’t be in person. I was really looking forward to it personally. But hopefully, we’ll have the chance to do that before too long. You have to eliminate some of that social distance between us, and once we’re through all of this. But in the meantime, hope you’re all a safe at home, safe and sound with your families. Thank you again for joining us this afternoon. I hope this is helpful to you, and what’s your appetite vis a vis the topic of customer success. But now before I get started, I just want to take a moment to discuss the origin of this presentation, delve a little bit on what Michael was saying.
As he mentioned, this work around my experience as COO of Demandware on that journey, and ultimately a CEO of the commerce business at Salesforce. That was a long journey, it was about a 14-year journey for me, and got an interesting perspective in the sense of starting with a pre-revenue business and starting to wrestle with what customer success meant in this modern day up through of course a very large public company. All along the way, we were learning and solving on this topic. By no means have we figured it all out. So there’s a lot of learning there in front of us. But it was an amazing, wonderful experience, also incredibly humbling, incredibly humbling at times.
In particular, we learned a lot about customer success, and we made a ton of mistakes at every step of the journey. Ironically in the early days, I think back on this. I was confiding with a colleague the other day, we were chatting by. We were super confident, we really thought we had progressed. We got customer success. In fact, we chose a business model aligned with the customer’s online revenue. A percent, and this here money is a percent of revenue. Early on, pretty early, in the first couple of years, we established a customer success function. Now, we didn’t actually call it that then, but that’s somehow what it was doing. Yet as you grew, problems emerge. They emerge with the customer, and a sense of struggling to get to the objective that drove the project in the first place.
Also within organizations, you start to get friction between different parts of the organization in terms of aligning around a customer. So in a nutshell, that was the school of hard knocks that started me and us down this path of thinking about what’s the right new operational model for customer success. To start, let’s just talk about what’s going on in the world today. I don’t think it’s controversial. But I think we all agree that the combination of the internet as a platform coupled with mobility technology with apps is driven a real profound disruption in virtually every aspect of our life, how we shop, how we travel, how we entertain ourselves, how we communicate.
This has deeply transformed the economy. It happened really in the blink of an eye so quickly. In retail for example, since its founding in 1994, we’ve seen Amazon capture 40% of all US online sales that holiday season. They’re now going to market cap three times the biggest retailer in the world which is Walmart, just incredible.
With transportation, Uber was founded just 10 years ago in some of its peers is hard believed. Yet in a recent survey, it was found that 75% of all travel receipts for corporate America are for app rides versus about 22% for rental cars that had been 50% just five years prior and only 5% for taxis. So the world has been turned upside down in transportation to a very short time. That’s cut across the economy. If we look at this B2B world that so many of us live in, the transformation has largely been characterized by a major shift from on prem to cloud computing. You can consider just to put that in perspective, AWS since it was launched in 2006 has created $500 billion, $500 billion dollars in market value. While at the same time, there were the previous gold standard, which was IBM, over that same period of time has created only three billion, three and a half billion in market value, so incredible shift in value creation as a result.
So I think we all get. We are just at the point, why does it matter? What’s the point here? Well, I think we can identify two key implications of this on our business. The first is that our customer relationships have become much more continuous and connected versus discontinuous transactional relationships we had previously. So in other words, we are now daily delivering service and touching our customers. Secondly, as a result, we get the emergence of these new business models, namely subscription and utilization models, where we earn as we go. Because of these fundamental shifts, the old operational models are no longer sufficient. I can tell you at Demandware as we were going through this research high and low from academia and the business press, and our peer in business community. We found a real lack of models to fall back on. We always think about how are we going to organize our business to really maximize customer success given all these large sweeping changes.
So we began a long journey of developing our own. That’s a lot of what you’ll see in this one video I have here today. Previously, let’s step back and talk about what the world looked like beforehand to draw contrast. Previously, the model for successful software business looks something like this. I’m simplifying of course. But this is basically how we saw. It was a huge focus on a traditional marketing funnel, at the top of the funnel, building brand awareness, and closing customers at the bottom of the funnel. Hopefully, getting those repeat sales happening, that feedback loop that became more efficient. All this connected to a post-sale process that was about getting the customer deployed, usually through a third party.
So we get leverage and offload that responsibility. Then providing the customer a place to go for support if they had problems. So in other words, it highly proactive sales model connected to a much more disconnected reactive support model, call us if you need us. I think that’s really pretty close. So this model, I don’t mean to be negative about it. It worked well for us in the day. It fueled massive growth in kind of the first generation of enterprise technology, and systems integration services, call centers, help desk technology and so forth. However, it is wholly inadequate for this modern customer experience we’re talking about, getting these changes I’ve outlined. So why? Well the reason is this, the approach this historical proof ignores the customer, ignores the customer journey, because this is what the customer journey looks like.
It starts with a problem. Why did they buy your software in the first place? What were they trying to accomplish? There is a long journey to be walked before the objective is realized, whatever the fruits of their ROI is, that they sold the project to turn in from the first place. So the work really starts with a sale, and it’s not successful until the objectives are fully realized. We know the steps, right, implementation, training and enablement of users, testing, various rollout processes, we go across business units and geographies. All the while, applying analytics to measure results, tuning, optimizing, as we go to make that journey back. The more effective and efficient we can make that journey, the happier and more benefits that will accrue to the customer. Ultimately, to us in the form of subscription fees and lack of churn.
So we want to bring that benefit forward. That’s good for the customer good for us. You can really think of In fact, you think about under the steps of the customer journey here to the goal or the objective, think about that as your march to LTV. You want to keep the customer obviously from not opting out along that journey. But in fact, you want to get them there quicker and you want to bring that forward. So there’s been a lot of talk recently topically about flattening curves, well, here’s the place we want to fatten this curve, we want to bring it forward.
So in a nutshell, the very nature of our relationships with our customers has changed and necessarily, the ways in which we as businesses need to engage them. We’ve moved from selling a product to providing an experience or a business outcome. We move from perpetual licenses and money upfront to pay as you go models, from a focus on upselling and pushing, that next upgrade, that next product to generating success for the customer. Therefore or thereby creating a pool. They want more or need more so they can get more benefits sooner, and eliminating all the barriers for them doing that.
Finally, we’ve gone from supporting the customer to living with the customer. Net, net, customers now have more choice and more access to information than ever before. So many vendors are out there offering to solve the problem. We have more price transparency than ever. Switching costs are going down every day. So it’s a brave new world, new rules, new game and those rules are customer rules. Convinced? I certainly am myself. So it’s their game. It’s about their success. We need to understand how they define winning and how we can best align to ensure that success. That’s why I’m about hearing the rest of this presentation. But as a good entree for that, it begs the question, what is customer success? Because it is such the buzzword so topical these days.
I have people tell me, “Yeah, we’ve got customer success nailed. Customer success is our number one value of corporate lives. See, look, it’s on the chart there.” We have a customer success team. So we feel like we’ve got it nailed. Well, I can tell you, great start, but there is a lot more to it. I think you all know that. So let me offer this definition, it really comes down to two key words. One is objective, the customer fully realizing their objectives and as fully and as quickly as possible. Secondly, that the experience in doing so is pleasant. It’s no good to have the customer meet the objective. It’s been a complete death march through the project and implementation to get there. Everybody’s agitated, right? So it’s really a combination of those things, solving the problem, getting to the benefit in doing that in a really elegant way.
So where do we go from here? How do we attack, how do we attack this opportunity? The bottom line it comes down to this, easier to say than to do, but aligning the entire company around the customer’s path to success and their objectives. Not like we often do around our internal business metrics, we can no longer offer or just create a customer success team and view that as a recipe for success. It really needs to permeate every department, every aspect of our business. So the approach we took really could be summarized around the following kind of key steps. There’s obviously a lot more detail to dig into these areas, but due to related time, but the first is around design. This means stepping back ensuring the path for the customer to the objective. So how does the customer define success? What things need to happen for them to achieve it? Not just looking at our product, but in the fullness of that whole supply chain once? What does it mean?
Secondly, operationalizing, So critically reorienting how we align our company and priorities to maximize customer success first versus again, our business metrics, which we so often do. We do that through a customer centric operational model, I’ll share a framework here in a moment. Thirdly, getting representation for the customer. Doing this needs to be a real customer success function aligned with the customer and their objectives, I’ll get into that. Then all of that connected to the right monetization model, meaning your business model and having that align to the best proxy for success for the customer, eliminating the friction.
So let’s briefly talk about each of these in a little bit more detail. In charting the path to the customer’s objectives, there’s really three key questions to be addressed in my view. The first is what are the customer’s objectives? What are they looking to do when they purchase your product? Is it about revenue growth, cost savings, margin improvement, cash management, etc.? What was it? Then secondly and importantly, what are the metrics they will use to measure this at the end of the day? We don’t want 10 or 20, or 30 metric, we really want to get to those couple of metrics, maybe three, two that allow us to really get the right signal attenuation to what’s important to the customer.
Then thirdly, we need to identify what work needs to be done in order for the objectives to be realized. Because this is where stuff gets real. There’s a lot to be done. So moving to a customer centric operational model is where this becomes concrete and actual of a company. It’s really the heavy lifting. I could tell you, we spent a lot of effort internally Demandware with the leaders of Salesforce to make this happen, and keep reinforcing it and getting the company to walk the walk.
So to draw a contrast to a customer centric organization, let’s consider for a moment the traditional operational model, very similar to what we had certainly with Demandware, Salesforce many of you are organized this way, I’d suspect so. It looks like this. We’re organized around corporate goals and things like bookings, ARR growth, margin, cash and so forth. Then these goals matriculate down to our internal supply chain to our departments, to the specific departmental responsibilities and metrics that they need to employ. So things like billability and margin for the services team, maybe leads and bookings for sales and marketing and so on, R&D, being focused on bug fixing, try to get that next feature out ASAP in order to stay ahead of the market and augment the market. Don’t get me wrong, all of these things are important.
This one will have worked really well for us for a long, long time. However, one big thing is missing here, that is the customer. Where is the customer in all of this? I mean, they’re touched on here and there but they do not, if you agree, centered on the customer. So ultimately, we set back, now, we’re excited to center our entire operational model on the customer. this took a lot of work and there was a lot of discussion.
Sort of at the end of that, we decided that the entire customer journey could be represented across these four phases, select. So the process the customer needs to go through to actually make the decision to purchase, the things they need to think about there. Activate, which is actually to get them on the platform, onboarding implementation, to the scale process, which is really about rolling out that value proposition across the entire business and realizing the the plan value. Then we have an innovation phase which is now looking great. We’re now on track, we’ve rolled out completely. We’re realizing the benefit, but where do we go from here?
Because of course the work does not stop for the customer hitting that initial ROI, that you have continuous pressures to improve the business and grow. We need to be there at every step of the game. So everything we did as a company can be reframed within one of the phases of the customer journey. Indeed the work of every individual, every sales rep, every engineer, every services professional is connected to these phases. So first, we unpacked the work that needed to be done by the customer which we stated in each of these four phases. I’ve shown you some here or identified the metrics most important customer to each phase, in particular related to their achievement of the ultimate objectives.
Then we assign work to each part of the company, for each phase related to improving these customer metrics. These customer metrics at each phase that were targeted towards the customer, realizing that business benefited at the end. The journey as you know, [inaudible 00:22:50] can be a year or longer, multiple years, potentially until that ROI is actually realized.
We were comfortable given our business model that if we could improve these metrics to maximize the successful customer the way they saw it, that was going to positively impact our business metrics as well. Now, this isn’t to say we didn’t have business metrics on way, because we certainly did. But they were subservient to the customer experience and delivering on the value anticipated.
Of course, this kind of work quickly became a paper tiger. So the hard part is really operationalizing it. Within a company, certainly for us at Demandware, when we started this, that meant changing everything, changing priorities, and then changing the language of the company, and then changing the core processes, I mean literally everything. To accomplish this, we created an operational dashboard for the company overall, in terms of the core metrics, and how we look at these different, these four phases of customer journey. We also created an operational dashboard for each of the four phases that allowed us to coordinate and hold ourselves accountable that monthly and quarterly to progress in improving outcome for the customer each step of the way.
So I’ll briefly step through this template, objectives are clear, talking about the outcomes that we need to achieve for the customer overall and every step of the journey. Metrics are about the key measures around how the customer defines success and progress against those outcomes. Owner identifies the internal, the primary owner of the phase within the company, I think that’s important, even though every department will have a role to play, having a quarterback in every phase is important. The methods is terminology we use for the work that the company is doing day to day, quarter to quarter to get this done.
Now, ultimately, the work every person that company’s going to need is connected to one of these phases. You can connect it ultimately to one of these top-line metrics again, if you’re doing this right. Importantly, each phase is inherently cross-departmental. Two departments have shared goals aligned to the customer each step of the way. I can tell you, making this shift away from silos where every department is trying to optimize their metrics. For example, the services team trying to optimize billability and services margin. Well, that could run across purposes, do what was best for the customer that was already out there in the field live and streaming the product for that customer in the sales phase.
So we got people working together on what matters to the customer much more fluidly. These dashboards ultimately became the language of the company. It was having measured progress and it drove accountability. The fact that carry forward to Salesforce as well, 50,000 person company runs itself with a cadence very much like this. So at company meetings now, we’re no longer standing up with a traditional thing. Each department stands up and describes how they’re progressing, how sales doing, how’s marketing, how is the product doing so forth?
Instead, we stood up and we talked about how the company is doing against that phase. How are we doing to select phase? How are we doing an activation? How are we with the metrics? How are the projects that we’re investing in to move those metrics? How are those doing? We’re making the intended improvements. So let’s look here briefly at an example from Demandware. Just to frame it a little bit, this is a simplification of a dashboard that we would use. Note that initially, we had to focus on the usual metrics around company things, things like bookings and billibality, ARR growth.
But as we deployed this sassy model, we reframed the business around the customer in these four phases. If you see an example now, the select phase is focused on key customer metrics like total cost of ownership, activation was about time and constant deploy, means the customer really cared about at that point. Two was about GMV growth or the customer online sales rep. The innovation was about feature adoption and incremental GMV growth. So improvements in the metrics that drove revenue growth online for these customers.
Then we assigned departmental actions and we completed quarter by quarter to improve these metrics again, what we call methods. For example, since scale was all about getting online revenue growth up, we learned that a key impediment to that was customers employing, just employing e-commerce best practices. Forget about their use of our platform, just common best practices, not every company was executing flawlessly. We also found that the use of our tools to make site experience was sort of underutilized.
So as a result, we invested heavily and launched boot camps to propagate best practice amongst our customer base. We also invested heavily in analytics and multivariate testing, and other tools to help the customer optimize their use of our tools. We invested in walkies in the product that lead the customer to best practice and improvement of the result they were getting. So these are just a few examples. I hope the concreteness of them gives you a sense of the sort of things you can do here when you reframe about what’s most important, which is the customer.
I can tell you, in the end, they generally help us to improve the metrics. Over the years, we did fantastically well, we had a US basis near 99% customer retention, some very small church on a dollar basis, we’re between 110 to 112%. So effective upon a negative margin. So we did really well here. We think it was because we had our eye on the ball at every step of that journey. So moving on from the dashboards. A third important step is to establish a customer success function. I assume most of you have done this already. It’s very much in fashion today, which is great.
But a few things to say about that. First of all, customer success is not the department. It is work of the entire company, every department. We used to say everybody’s in sales in software. Well, now everybody is in customer success. I really mean that. Every department, every person has a role to play in that. However, it’s important to designate one department to serve as the advocate, or let’s say, the focusing lens within the company, for the customer experience to represent them within the company actively, across this four phase experience.
That function should report directly to the CEO. It’s comps should be aligned fully to the customer success metric. So the things that matter to the customer, the customer is winning, that team’s it. If the customer’s not, then they’re not. The same thing goes for the leadership. I think the whole executive team, if not the company, has to be reframed in that way. That gets everybody thinking about what is really important, which is the culture. At Demandware, that was GMV growth along like revenue growth for the customer. That was our ultimate metric. Now obviously, this customer success organization should be tightly connected to the customer, right? I mean, this very literally, I mean in the field living with the customer.
Identifying and propagating best practice across the customer base, identifying friction points in the customer experience, and how the company or the product can be improved. In demand, for example, this is having a product expert sitting in the field, in the offices of the merchants that were running those e-commerce sites with our tools to understand how to use our tools, how they did their job. I can tell you, when we started doing that, we learned a lot. We probably understood it. I tell you, we really did, we learned a ton.
This insight came back to the company and drove R&D priorities and alignment of the resources. So finally, if we’ve done all this work, we’ve understood the path to customer achieving objectives. We’ve aligned our company around that path and this customer, success oriented operational case, we have customer success team, we can still have friction if our business model is not aligned to the customer. Now, in a classic software company, the interests of the customer and those are the company diverged post sale. As an example, consider a company like Oracle, which is a great company. They care deeply about the customers, make no mistake about it. However, they’re also at the same time under tremendous pressure each quarter to deliver growth. That means A, winning new customers and B, selling new products to the existing customers, upselling them.
Any effort on helping the existing customers to get more value out of what they already bought is an expense item. It negatively impacts margins and growth, it drags things out. So despite all the best intentions, that makes it very hard for companies to continue to do what’s right for the customer. So pick that business model right. Now, that’s true unless our business model captures value in concert with the customer. There are many potential success stories, models, as I’ve mentioned, a demand where that was a percent of revenue model. Whereby the unit is a percent of the customer’s online growth and key metric.
Just to reframe your thinking, so you can imagine, around the time I stepped down, we had about $20 billion in online sales running through the platform. The net number is actually growing significantly every year. Well, I can tell you going into an operational year, if I have X amount of budget to spend on R&D and aligned with the company, the most valuable thing I could do for a company was to make my existing customers more efficient, not selling new customers, right? So if I could make each customer just 1% more effective against the $20 billion in annual GMV manager, that was going to drive far more bottom line value to the company than any exceptional sales core.
So there’s a stark example that it can be much easier to stay aligned with the customer and focus on the right things if you’ve got the right model. You think about what’s appropriate for you, I’d given some examples here, depending on your industry and how your customers are focused, there can be a lot of different formulas to find the best proxy to what matters for the customer because that’s where value is understood and can be best captured.
So in summary, the world has changed fundamentally. You agree on that. As a result, we need to evolve our companies and our operational models in response. This means, in particular, mobilizing our companies with a central focus on providing success for the customer. We can and should measure our internal business metrics, but this should be done within the context of a plan that maximizes the customer’s outcome. If it’s the reverse, so we start with business metrics on top and within those, we’ll allocate money to some success activities, we risk missing the mark and realizing value and ultimately disappointing the customer.
So the good news is we know this works. You don’t need to think just my word for it. There are so many great companies out there that are doing this. Just take, for example, Amazon and Salesforce are two great examples of companies that have created enormous market value by being really maniacal about being centered on the customer and making them successful as well. So, listen, today I’ve shared a model for thinking about how to employ this at your company. But it’s not the only way of course, as long as you get your entire company mobilized around improving every aspect of customer’s journey to the objectives, you are on the right path. So good luck to all and thank you.
Thank you, Jeff. Fun listening to and it’s been fun watching you build this presentation, of course, for the many years actually building the business that went behind it. So a couple of questions that I think will help get us ready for the panel. That is first of all, obviously this is something that you applied from sort of zero through billion dollars in revenue. So you’ve seen it go from nothing to pale, how to begin, if you were giving somebody the first concrete step they should take, orienting themselves to their customer’s experience, where should they start?.
Yeah, well, great question, Michael. As I mentioned at the onset, the learning started very early in the bandwidth days. We were pre-revenue startup, and with the evolution of learning of all the whole way as we get larger, but I think all these things that I talk about today are very important, even the start area. But as a startup in particular, the key point I would make is this, that the most important first step is to get very tight with your customer.
Step one, the action plan I mentioned, right? Map out their customer journey, understand the metrics, understand how you’re going to facilitate that journey. That means you understand everything about their objectives, their pain points, their use cases. If you’re pre-product, this can be done in the PMR work, right? Fall back on automatic. We’re early product, we can do proof of concepts and pilots or we get to the point where we get beta customers, we have a functioning product that we can sit with.
They’re aligned with us spiritually in solving the problem. We sit with them and we learn from them. But just one key point here is that it’s critical that in doing this, we’ll be centered on the resolution of the whole problem for the customer, not just that portion of the problem we saw with our product, but we really think about how we wire the whole supply chain. So if there are third party technologies that need to take into account or services partners or enablement or training has to happen with the customer. We need to wire all those components such that the customer can get the value soon. In my view, this is where many startups, Michael, to your question, misses the trail. We get to obsess and too close to our product and our feature capabilities. We’re under pressure with our boards and our investors and sort of obsessed about basic business of metrics, like bookings, and cash mentioned, but get close to the customer.
Yep. I think that’s very well said, Jeff. Actually the important takeaway I want to make sure that startups do to really hear from Jeff is your product is very rarely more than a piece of the overall solution that meets the customer’s objectives. You’ve got to understand how you fit and be respected, respectful of all the other might be vendors or services or providers, etc. that participate and then help the customer increase the platform for all of them.
I’d love to ask more questions, but I actually want to turn to the panel sooner rather than later so they can get a chance to participate here. I’m going to start by introducing Renee. Renee Brockman currently runs customer engagement at Salsify. So I’ve been lucky enough to work with Rene twice now. We are now again at Salsify. I can tell you she’s incredibly passionate about taking the customer perspective and will be a great champion for your messages. But also, I’m sure bring some thoughts to life here. Then the second of our customer success fellows. This is Bryce, who runs Customer Success alongside J with our core community. He’s the manager of Customer Success at Shoe Box. He’s helping them as a platform bring customers as part of the ways in which they help startups. So I’ll turn it over to you guys and thank you again, Jeff, we’ll speak at the end.
Thanks, Michael. I figured a good place for us to start would be with the massive virus-shaped elephant in the room talking about COVID-19. As you’re in a leadership role in a startup organization right now, we’ve talked a lot about metrics. We’ve talked a lot about organization, how are you thinking about all that amidst all the current chaos?
I think it’s an interesting place to be. Because for customer success, we have to stay in front of your customers needs. If you develop a model and try to stay in that model regardless of how the economy or how the customer profile or that piece works, and I think this is COVID’s a perfect example of this. Now, we have to be even more relevant to answering our customers’ problems and what will really help them. So it’s an accelerated version of how do you make sure that your customer lifecycle is matching what your customer is going through right now.
So as our customers are suddenly having to work from home or suddenly having supply chain issues or suddenly having new challenges that are really impacting their businesses, how do we turn our focus into making sure our customer journey meets them where they are? Then of course, there’s also the other piece of it, of how are we really having the outcomes and the metrics to ensure the business is driving in the right direction and that the customer team with meeting the outcomes for our business that we need it to be?
Yeah, I think that’s some great perspective.
I’m going to move so I’m not like in the sunlight. The shade of day has changed.
That’s perfectly fine. To piggyback off that … How you get buy in from the executive team. Jeff, do you want to share some thoughts around what that looks like, and how do you get behind those metrics? How do you define those metrics? I think that would be great.
Yeah, and you cut out just a little bit here. Okay, so the question is around how do get buy in from the executives and the leadership move to a model like this?
Yeah. Yeah. Great, great question. I think it comes back to the voice of the customer speaks loudly. Right? So you can make all the persuasive arguments in the world you want with your leadership and your company internally, but nothing will have more impact than the customer speaking directly to everybody. So I would say look for opportunities for the company to hear directly from the customers. There’s a variety of ways to do this. This means not only the senior leadership, but other key departments, from engineering support, marketing, marketing is degree close to the customer frequently. But critically, those, they to be a step or two removed from the customer. Sometimes leadership, not all leadership is out in field every day dealing with the realities of implementations and data execution. So getting them close to that, having them sit with the customer and learn with them directly, I’ll tell you makes a big impact. I think you’ll start to find allies in actually getting that solved.
That’s great. Maybe a position that then towards Renee, as we’re thinking about getting closer to customers, and really understanding what their objectives are, how are you putting practices in place to track those objectives, to understand those objectives, to really drive this new model of thinking?
Yeah. We’ve kind of had to rethink it because you can tend to have perks that seem easy, kind of like customer SAT or you can do CRR. Some of those are lagging. Some of those are very individual, but they don’t really tell you if the customer is getting value and are they meeting the milestones that they need to do. So we’re really looking at both our onboarding and post onboarding program of how do we align with the customers on their goals and then have an check ins and scores and measurements, how we’re doing both from their perspective and our perspective, in making sure we’re doing it both at the basic level and basic level that’s on the right way. The user level as well as the executive sponsor level.
Because a lot of times you can get a lot of good feedback at one level and be really missing the mark. So we’re creating things like operational plans and goal documents to really drive towards alignment from the customer to the customer success team, and being able to share that with the account team and make sure everybody understands where we’re going and what we’re trying to accomplish. So really trying to operationalize that, it can be challenging different customers, different styles and mechanisms. That that’s the beauty of having customer success.
How have you traditionally presented those metrics or track them in a dialogue with your customers, what is what is the mutual language, what is the format of that?
We do a planning session kind of even before we start to work with delivery. So one of the things we’ve we’ve learned is that not everybody’s clear on their outcomes of what they’re going to consider success, everybody gets really jazzed up about, hey, about this new thing. We’re going to do this thing. Nobody’s really clearly defined, “How would you say that the outcome of this has been successful? And what are the metrics that would put in place?’ So we did that as part of the initial onboarding process is really make sure that everybody’s aligned against company’s goals and metrics. How are we going to track it going forward? Then share documents or share ways based on technology limitations on companies and what they can do from that perspective, and being flexible with our customers on kind of what they need, both having the short term goals because sometimes you just need to get need stuff done.
Sometimes you need that longer term goal because if you focus only on the short term goal, you never really make it to that long term goal. When it comes to renewal, and everybody’s like, “I didn’t really get the value I want.” So keeping those check in points where you need them, making sure you’re reviewing those metrics and outcomes that you were aiming for. If something comes up, because I don’t know, like a pandemic comes up, maybe you have to readjust what your goals are and what you need to accomplish for the business to be successful. So making sure you’re staying in tune with that.
Yeah, the chaos of of a pandemic, if that ever happens.
Yeah. Very medical crazy scenario.
Awesome. Looks like we have another question here from the web. Rick Kenny asks to Jeff, “Along the journey of Demandware you in the team of all the CS organization from generalist early on to a specialist model later? Can you talk about how and when you decided to make those shifts and the trade offs of making that change?”
Yeah, Yeah, great, great question. As I mentioned, there was a lot of organizational learning along this journey. You can imagine as a startup in those early days, I mean, a lot of your money that you’re raising from your investors is going to the things they really understand how to do today. Okay, we need to invest in product. We need to invest in a sales team, so forth. So getting buy-in organizationally to we’re going to invest in this thing called customer success, which is a cost center to start, sitting out there with the customer is going to scale with the number of customers we have at some level, can be a tough sell, right?
So that was figuring that out was step one for us. But as we got out there with our generalist team so that every account in our very early days was covered some level by customer success teams, doing some of the things that Renee was mentioning. We began to see opportunities. The opportunity we began to see were around really propagating best practice, areas of expertise, whether they be technology or just business practice that were not happening broadly in our customer base. We want to propagate, one customer came up with a technique that really worked, try to propagate the benefit of that across the customer so that we are all learning collectively as an organization.
So ultimately, it became easier to justify the growth in this organization and the specialties around it because we started to see as a result of some of these efforts, improvements of how our customers were performing. Their conversion rates were improving, online revenue growth is improving. We were operating in multiples to the industry, our average customer operating and growing e-commerce revenue multiples to the industry, we think in large part because of these things that we were doing. So that became the business argument internally for more investment in the scenario.
Great. Thanks for that. We have another one in from Anne. “Hi, I’m being asked to build out CS OKRs for a company that has less than 20 paying customers, what are some key things you would get started on at a new startup?” Renne, maybe you want to start with that one, and then we could pass over to, Jeff?
Yeah, it’s really actually, my boss and I have been talking about this a lot. It’s really super easy to get into the basic metrics, right. CRR, customer, one of the things we’ve been doing at Salsify is really taking a look at what are the outcomes you are looking to achieve? What are the leading indicators of what those outcomes might be? So if you’re trying to retain those customers or you’re trying to grow the customers, but that’s a big goal for a CS organization. So what do you think would actually move the needle on that customer experience based on what you know of the customer journey?
If you don’t know, it’s time to start talking to even the 20 but. From a company perspective, you probably have, you should have goals that you’re trying to accomplish. So what are bigger than you want to be comfortable with goals that you think the CS organization can actually move the needle on? Then what are leading indicators around that? Then what are the initiatives that you can do to kind of push those forward? Does that make sense?
Yeah, I think that’s a great place to start. Pulling right into another question here from Ross, which I think is relevant. One of the things that I think a lot of folks in the SAS world are seeing as they’re talking to those customers, especially early on, is the objection that we have so many staff platforms, I have to plug into all these things. What do you say to get around that? How do you navigate those waters of multiple integrations with multiple different systems?
Well, I don’t know. Jeff, do you have any thoughts on that?
Well, this is This is exactly the point that I’m trying to make around wiring, wiring the customer journey to achieving a business goal or outcome beyond just your product, right? That to solve the business problem, usually, certainly in the enterprise, there’s a legacy system environment you need to integrate with, there’s probably third party cloud technology out there. There may be services like digital marketing expertise, and other things like that, that need to come to bear to solve the problem. So this is what we’re talking about is really stepping back and thinking about how you’re going to fill all those needs in a way that makes the economics and the delivery of that comfortable for the customer.
So I think that’s the challenge for us. Right? This is where we need to stay super close to the customer to help us because we can go down a lot of rabbit holes here, build a lot of integrations. They may not bring you back, give you the leverage in the markets. So staying close to the customer with them prioritizing that you’ve got the right things done. But again, always being framed around the customer. The question was asked a moment ago about CS OKR, right? I may be a broken record on this. I’m very passionate about it. That those OKRs cannot be the traditional things of okay, what’s my services margin. What’s my billability rate, etc? Those are things out there. You got to manage those. Don’t get me wrong.
But that has nothing to do with the customer. The customer could care less about those things. What they care about is solving a problem. That means getting integrations done, getting their people trained, getting it rolled out. So that’s the opportunity for us. Right?
I think you talked about this, and I appreciate this very much. It’s so easy to get sucked into your view of the customer. So if you think about an adaption is a word that we use all the time. We want customers to adapt the platform. But what does it mean to a customer? Where’s the value in them adapting? What is adaption mean to the “It’s so tricky and slippery to kind of get in lost in the language of like, oh, onboarding, or oh, post onboarding or oh, now we’re in expansion period. But that is not a customer view. That is not a customer journey.
So back to your point of staying super close to understanding what your customer is trying to do. Because if you’re just a tool, I think at one point, Salsify had a swear jar if anybody called it a tool kind of thing, but if you want them to understand the real value-
I think you might have cut out there for a second.
Yeah. For you to understand the value of the tool or the service that you’re providing to your customers, your product marketing team, and you need to sit down and really understand that and make sure your customer experience is driving that as well. Because customers will drive you ragged wanting all the features to flip this way and flip that way, but if it doesn’t bring the value at the end of the day, it doesn’t matter.
Jeff, you talked about Voice of the Customer programs as a way to get in tune with how those customers are thinking about this, what their values are, what they need. Can you talk about what implementing a Voice of the Customer Program will look like and maybe some of the things that you’ve seen as successful programs?
Yeah, yeah, sure, certainly. It’d be great. Renee was talking about the ideal scenario of really sitting with your customers and sort of day to day talking with them, and learning from them, and so forth, and having sort of action plans, and sort of joint planning and so forth, which I think is fantastic. Qe certainly did that with as much as possible, with our enterprise customers. But of course, often depending on your business, you don’t have the luxury of doing that with all your customers. So how do you stay in tune with them all? So I’d say a couple things. First is the voice of customer needs an owner internally. It can’t be sort of everybody’s job. Often it leads in marketing, which I think sometimes it could get a little off the rail to be honest, because it gets a little bit too focused into being a marketing tool.
It’s about showcasing customer success stories. So we can impress the market and sell more rather than really learning how we get better, like you want the bad news, right? So there’s a few, there’s a lot of different ways to go at it. I’ll put a couple of things out there that we’d use with some success versus Of course service, right? You need a baseline. There’s a lot of ways to structure this. I can’t cover it right now in terms of some things we’re doing but on a regular basis, quarterly or whatever it is, maybe somehow based on that occasion the customer using the product.
Getting a consistent baseline around which you gauge how well the customer is getting the benefit, how happy they are on their journey. This can ultimately perhaps, uh-oh. Sorry about that. I thought I turned off. But getting really focused on a baseline where you’re measuring that customer experience through surveys, and then you’re checking in on it to see how you’re trending. You’ve got a baseline, quarter to quarter, a month to a month, as things roll on. Are you getting better or are you getting worse? So survey’s I think a big piece of it. At Salesforce, we had this thing called Trailhead, which was about enablement and free of charge training.
So for many of you, you may have seen it. It also within it provided an area for customers to provide general product feed map above and beyond some surveys. So feedback on product improvements. We also had an area we called idea exchange. You can go check it out yourself, actually you go to Trailhead website. That was an area to provide feedback on new product capabilities. You probably did or wanted a case for that. I can tell you that Salesforce took that stuff seriously. That became input into the planning and the product organization. When we sat down trying to figure out where our R&dDinvestment was looking at, that was one of the real key data points, because it really was … What can happen, particularly as your business scales is those top 10 customers can drown out everybody else.
That doesn’t necessarily help you win the whole market. So something like this that allows you efficiently to cover the whole market and get a good baseline of how you’re doing vitally important. There are advisory boards, there are working groups on specific topics. There’s a lot of other things at your disposal.
That’s great. So I think we have time for maybe one more quick one, pulling out of both Jeff’s comments and something that Renee brought up. I think a lot of what comes out of those programs or conversation is a ton of feedback and a ton of points that either customer success or sales is bringing to product teams and talking about internally. How do you navigate those waters to make sure that everybody is on the same page in terms of what’s important, what is actionable, when maybe the interaction between those things might be different for every team and every vantage point? Renee, perhaps you have a perspective?
Yeah, I think if an organization is doing customer success right, it shouldn’t have different points of view, because ultimately, you’re aligned on both the value that you’re bringing to the customer and the company outcomes that you’re looking at. But that’s a world that we don’t always live in. So if we don’t live in that world, it’s really just making sure you have good roles and responsibilities and clarity on who owned what pieces and how they move forward on those pieces and outcomes that are shared across the group.
So if you can get shared outcomes, and you feel like everybody understands where they fit in driving those outcomes, it can help alleviate the different points of view. Then it’s just communication and relationships, unfortunately, on some of the levels, right, but shared roles and responsibilities help a lot alleviate those challenges. But that’s even a challenge in itself as you have rolling needs and rolling responsibilities. So you don’t get to just set it and forget it kind of thing. This is your job. This is your job. We don’t roll back and look at it. It’s that constant iteration of where are things working? Where are things not working? Where are we seeing friction points? What’s the root cause of those friction points and how do we make it better in the future?
I think that’s great. So thank you both. Jeff, Renee, incredible, to be able to ask them questions of you all. Jeff, thank you for the lovely presentation. Jay should be joining me here in a second to wrap things up as I know, we’re going coming to the end of the hour. But thank you, everyone, for participating. We’re super excited to kick off the customer success core for the year, virtually as it is. Jay, I’ll pass it to you to give us some closing thoughts.
Yeah, no, I’d echo that. Thank you all for joining us while you’re barricaded at home. Even in this unique format, we had a lot of great engagement and questions. So you can see there’s a lot of dialogue and a lot of things to discuss. So this is just the tip of the iceberg in terms of what we’re hoping to do for events to foster that discussion throughout the year. So again, thank you for joining, please follow Underscore VC on Twitter. That’s the handle. We’ll connect you with the slides. I know there are a couple of folks that asked for that, as well as keeping in the loop for future events. So follow us along there. Thank you for coming. Stay safe out there and have a great night.
Stay sane as well.