Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Despite being the group with the closest understanding of the use cases and qualities that make for successful and unsuccessful customers, Customer Success rarely has a strong influence in defining the company’s Ideal Customer Profile.
So yesterday we held a roundtable with 5 powerhouse leaders to discuss how Customer Success can influence the ICP in the right way. Thank you to all our panelists for the engaging conversation around a topic that needs more showtime:
What follows is an excerpt of the conversation where each panelist shared one thing CS leaders can do this quarter to influence the ICP. (You can also re-watch the full discussion here.)
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CHRIS: Let’s go around and share one takeaway or one action that you'd recommend CS leaders working on this quarter to have a bigger influence on the Ideal Customer Profile (ICP). Rachel, why don't you start us off?
RACHEL: For some of us who are planning for Q4, strategizing for 2022, and thinking about budgeting cycles in the next couple of months, now’s a great time to revisit the ICP. How is your company doing on the ICP? Think about the data and go back through your growth analysis. Where have you won? Where have you been successful? Where have you not been successful? Does the ICP definition reflect reality?
But be part of the solutioning too. Don’t just say, “We need to revisit this.” Actually come prepared to make changes and have the data to back those changes up. It's the Customer Success leader's responsibility to be the internal voice of the customer and share the customer experience your company is providing with data.
Come to your strategic planning sessions for the subsequent year saying, “Hey, this is where we're seeing success. CMO, can I better understand our ABM strategy? Are we targeting the right people? Or, “Hey, Here's where we're really struggling and finding friction. We need to revisit our marketing or sales process here.”
But this can only start with the CS leader having a strong voice about what's working and what's not, and really being the person who kicks off the conversation.
I don't think we do that enough in the sales cycle. We go right into OKR planning and we start with the targets and then back our way into it. This isn’t bad, but I think that there is an opportunity to pause and reflect before we jump into next year and say, “Well, how has this past year been?”
That sits with the CS leader in many respects. It's a great opportunity for them to show their leadership and bring the right data points forward to the rest of the leadership team.
CHRIS: Amazing. Thank you. What do you think, Jimmy?
JIMMY: You know my experience doing sales was a lot harder than I thought. Frankly, it was really frustrating when I would bump into the Customer Success team often saying ‘no’ to deals that I thought were good.
So I would say if you're coming from a sales perspective, have empathy for your Customer Success team. And if you’re coming from the CS side, have empathy for your Sales team.
There's probably nothing better that you could do than develop a really healthy relationship there, where lots of information is passed back and forth and everyone understands the other parties incentives. The relationship might be dynamic, or a fluid thing. Healthy tension in this relationship can be a good thing, but having open lines of communication between Sales and CS is super important.
KATE: Pulling from what Jimmy and Rachel have said, proactive data and communication is what CS leaders need to focus on. They should be leading the conversation and showing like, “Look at these customers that are successful. If we sign up more of these types of customers, this is what our business looks like 12 months, 24 months, five years, 10 years.”
And then on the inverse, CS leaders need to share data around what happens if the business doesn’t do that and what that would look like. We're all shooting to build that healthy business, so as we’re heading into 2022 planning (which is crazy), how can we do more to get our target ICP customers across Marketing, Sales, and CS. It requires building a plan together.
VICTORIA: At every company I've worked, Customer Success teams carry a ton of clout. There's just so much power in aggregating and analyzing those customer insights that you're seeing every single day. But it’s even more powerful when CS leaders add a layer of commentary about how those insights affect the ICP.
Whether that means, reinforcing it, expanding it, or maybe going a little deeper. It's so important to come to those conversations with that data and that point of view and then aligning with your cross-functional stakeholders on what that means.
ALEX: Couldn't agree more on having the data around the ICP—what's worked, what hasn't, who is in that ICP today? The second thing I'll agree with is that the Customer Success org is gaining more and more clout and influence on major strategic decisions, particularly as we go from subscription into consumption.
Most companies now are trying to get more than 50%, sometimes as high as 70 or 80% of their business for the year (or revenue for the year) from their installed base. So we've seen that shift happen and as it happens, I think the most important thing for CS leaders is to have the confidence to influence and change compensation plans.
Your CS organization and your Sales organization should both be compensated on renewals and expansion deals—not necessarily at the same rate. There are different sorts of ratios your company may use, I get that. But both functions should be incentivized and compensated on both so that there is discouragement from selling deals and customers that we know are not in the ICP.
And at the same time, incentivizing both teams should drive a lot of alignment through reward for going after the right profile and working together to get those companies, not just renewing but expanding.
CHRIS: Great. Thank you. You know, we've heard today from five very forward-thinking, exceptional leaders in the Customer Success space and I think the message is coming through loud and clear that CS has to be playing a prominent, if not the most prominent role, in helping to drive, define, align, and communicate the ICP to the company.
HIRING
Avoiding Management Debt
Here’s Rav Dhaliwal on the pitfalls to avoid when considering candidates for CS positions. He offers five “variables to help better identify the contextual skills and experience a candidate would need to make their customers successful.”
CAREER
The Fast & Furious Career Path of Kellie Capote
In this piece, Gainsight’s CCO offers a trove of tactical advice for accelerating your career in CS. She shares habits to build, tactics for getting leadership to place a bet on you, how your focus will change at different management levels (including the transition from VP of CS to CCO) and more.
TRENDS
Customer Success Post COVID
What does the future hold for Customer Success? We’ve been seeing a lot of startup activity to solve the remote interaction paradigm of the future and this piece by Dave Jackson provides some hypotheses as good as any.
DISCUSSION
The Role of CS Ops in Tech-Touch – The What, How, and Metrics That Matter
Next Tuesday, we're hosting a discussion alongside Insided to get some clarity on how CS Ops should work within tech-touch. The panel of experts will cover how to get started, the most important tasks and responsibilities for the CS Ops team, the metrics to measure, the tools to use, and more.
Alex Hesterberg cut his teeth in Customer Success 20+ years ago in Consulting, then Services. Since then, he’s gone on to be VP and CCO at companies like Riverbed, Sailthru, Pure Storage, Turbonomic, and now Delphix—many of which he led through acquisition or IPO.
It doesn’t take a long conversation with him to know he’s a true operator. But one part of Alex’s playbook in particular caught our attention: Presales reports into him, and that’s been the case for the past few companies where he’s led Customer Success. Beyond being “a best practice” in a land and expand model, owning Presales helps his team ensure that bad fit customers aren’t getting through to CS.
Below you’ll find our interview (edited for clarity) where he explains when Presales should report into CS, how to measure their success, compensation, and how they influence the types of customers being sold to.
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Chris: You’ve owned Presales at four different companies—Sailthru, Pure Storage, Turbonomic, and now at Delphix. I have to imagine the head of Sales or Revenue at some of those companies have wanted control over the Presales team’s focus. How have you overcome that?
Alex: So backing up, only once in my career have I been lucky enough to have a “three-legged stool” model, or 1-1-1 model where there’s 1 Account Manager to 1 Sales Engineer (SE) to 1 CSM. It’s an expensive model, so you don’t see it often. But when there’s a dedicated Sales Engineer to each AM and CSM, that person’s capacity is absolute.
Most companies operate in pooled models where Sales Engineers are shared resources. That’s where the tension emerges: you get Sales saying “I need that SE” for some dedicated capacity.
The way we combated that tension was to start by creating a framework:
Bringing that framework to Sales cut out all the guesswork around an SE’s capacity, and incentivized them to be more intentional about when SEs are brought in to a deal, what they’re doing, and for how long.
And by the way, we’ve seen that there’s so much capacity particularly in the technical field that gets lost to exploration as opposed to going towards where the money is really being made. For example we have a really high win rate from accounts that complete POVs—like 80 or 90%. So if you see that, all of a sudden that’s really the activity we want SEs spending the most time on. We should look to shrink the other three activities (discovery, presentation time, demos) by giving those activities back to the Account Managers and CSMs, so that extra SE time can be spent on POVs. Because that’s where the money is made.
In short, I’d say we’ve avoided friction by framing out how teams get access to those technical resources without wasting their time.
Chris: When you’ve joined new companies, how have you handled this conversation with the CRO to take ownership of the Presales team?
Alex: The first real question I ask is, what is the mix of our go-to-market strategy? What’s the mix of revenue that is coming in the door, and what are your expectations on that mix of revenue for the fiscal year?
If the answer is 80% or 90% is coming from net new logos and only 10% is coming from our install base, then okay—anybody can own the Sales Engineering team. But if it’s more like we’re expecting 60%, 70%, or 80% to come from the install base and expansion motions, then Sales Engineering needs to live with the customer team.
In the latter case, when the company is focused on a land and expand motion, having SEs aligned to Sales but within the Customer org allows us to ramp SEs to the long-term use cases that customers have. They’re already aware of the second and third products a customer may buy when they’re in their first sales cycle.
So it’s less about “who people report to” and more about the motion.
Chris: How do you know if the Sales Engineering team is successful? And how are you handling compensation?
Alex: Our job is to make sure that SEs are focused on the most meaningful work that's tied to revenue and tied to their own commission checks. So for SEs, it’s a question of are they doing the right activities, are they successfully delivering on those activities, and are those activities taking a reasonable amount of time?
SEs log what they’re doing every week—not necessarily time sheets, but their activities across the four buckets of work: discovery, presentations, demos, and POVs. We look at what they’re focused on, their win rates on POVs (which usually comes down to “were they successfully completed or not”), and the duration of time spent on activities.
As for compensation, SEs are paid on new logos, renewals, and expansions from existing customers. So they essentially get paid across the board. CSMs on the other hand are paid for renewals and expansions from existing accounts. We look at how many expansion opportunities they create in a quarter. (I prefer CSMs have a selling mentality and are incentivized to look for expansion opportunities.)
Chris: So what role does the SE team play in either defining the ICP or ensuring customers are a good fit in the sales process?
Alex: I’ll say first off that Sales reps are paid on renewals and Sales leadership have components of their variable tied to renewal rate. So they already have some incentive to acquire buyers who will become successful customers.
But you’re right, an SE still plays a critical role in ensuring customers are a good fit. In their relationship with a customer, they can see whether a customer has the right use case, technology, and existing processes to be successful with a product. If it’s a bad fit, the customer probably won’t make it through the POV (which requires all these steps to be met based on our Ideal Customer Profile. It’s really hard to meet those requirements if it's not a good fit.)
We also take ICPs one step further: We use them to guide our expansion playbooks. Sales Ops and CS Ops come together to look at the install base over the past three or so years to identify patterns. How many customers are in this vertical versus that vertical? What was in their first deal, their second deal, and so on?
Then we feed that information into ICP documents that CSMs can use like a map. Your customer is in this vertical with this product? Great. Here’s what they’re most likely to buy next, and here’s what needs to be in place for them to do so (e.g. different buyer or champion roles, use cases, etc.). The CSM can work towards creating those conditions. So we use ICPs to continuously drive value with customers.
CULTURE
How To Align Incentives With Your Customers’ Success
Solve For The Customer is Hubspot’s #1 core value—it ensures they align their internal incentives with their customers’ success. Yamini Rangan (CEO of Hubspot) does a stellar job in this piece sharing examples of how they align their incentives to that goal and how doing so impacts the company’s growth.
LEADERSHIP
4 Ways CCOs Get “Stuck”
Despite any success in scaling up a well-oiled Customer Success engine, CCOs are often seen as "not strategic". Here, Rachel Orston (CCO at SmartRecruiters) offers some put-to-use-right-away tactics for getting unstuck.
SCALING
Archetypes of Lazy Thinking
Alexandr Wang, CEO of Scale, lists 5 ways “lazy thinking” shows up in companies, all of which might sound too familiar. For example, archetype #3—“someone else is thinking about it” and therefore, you don’t have to deal with it.
ROUNDTABLE
Influencing the Ideal Customer Profile as a Customer Success Leader
On September 14th, we’re bringing together some of the brightest minds on this topic to discuss:
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
It’s an honor to have had the word ‘Customer’ in my job title for more than 20 years, whether I was a Customer Support Engineer, Customer Success Manager, or VP of Customer Success. I’ve had the opportunity to scale out Professional Services, Support, and Success Management along with Operations.
I've been thinking a lot about what an end-to-end CCO should look like. What are their responsibilities, especially in regards to streamlining the deal closing process?
In my mind the 2.0 CCO should own Professional Services, Customer Success Management, Customer Support, and Customer Operations. But the key ingredient in a 2.0 CCO’s success is Sales Engineering. By owning SE and having a seat at deal desk, the customer department would control time to value, quality of use cases, and ultimately net retention rate.
Most CCOs own the post-sales process but it's less common for them to own Sales Engineering (SE). There are two major reasons why I believe the most effective customer departments of the future will own SE:
Sales Engineers understand deals. They’re able to communicate what they know with urgency across an organization, and they speak the same language of the people responsible for bringing that deal to production and value.
I was employee number 12 at a previous company, Imply. One of the benefits of joining a company that early is that you grow a tribal knowledge of the product, the Ideal Customer Profile, what makes a good deal, what a good use case is, and what behaviors long term customers have.
Because of that, I was able to voice my opinions with deal desk and be a gatekeeper for the selling or not selling Professional Services by sharing what I’d learned over my time at the company.
But even CS leaders who join companies at a later stage can influence deal desk and Presales to close the right types of customers with the right customer data. That information usually comes in the form of an ICP, created by CS Ops, that outlines the behaviors, tech stack, and use cases of customers who are a good fit.
I’ve witnessed two models of a Sales Engineering team’s involvement. Model A: a Sales team member or Sales Engineer goes to a customer, defines value, closes the deal, and then peels off and runs away as quickly as possible. Then it’s on the CSM, the Solution Architect, and Support to gather the pieces and sew them up, and try to figure out how to get the customer happy.
Model B is much more effective. Model B is where a Sales Engineer is an end-to-end technical teammate for the customer—they close the deal and implement the customer. And the same Sales Engineer is there with the customer’s 2nd and 3rd and 4th sales (if they’re needed).
This takes away the risk of context switching, while empowering the customer by leading them to the technical wins and business value they wanted in the first place. That's the perfect world because you’re not losing any time, any context, or any of the trust that was built during the sales process.
In order for the Sales Engineering team to not be seen as an adversary or a deal blocker to Sales, the two teams need to have a good relationship. The dynamic between an SE and an AE should be similar to the relationship between a CSM and their Sales counterpart, where both parties trust each other and leverage each other’s skills in the deals they work.
An SE should be trusted in the same way. SEs understand what it takes to prove a technical outcome to get business value and they put trust in their Sales peers to work the commercials and the expectations in that arrangement.
To empower the SE team to ensure that the best possible deals are crossing the finish line, they need to be able to show, historically, what deals have been the most effective and their impact on the team’s close rate. On the flip side, they also need to be able to let leadership know if it's a bad use case or bad terms.
At Imply, the head of CS and SE had a strong voice with deal desk and power over pricing. They had the ability to flag deals getting too much of a discount and they had veto power over deals where the use case was not a good fit for the company.
I don’t think individual SEs should have deal desk authority, but there needs to be a team member who rolls up to the head of Presales that can relay SE knowledge up the chain. SEs tend to know what's going to make for a good deal and they understand what short-term grenades look like—those short-sighted deals everyone wants to avoid because they negatively affect our ability to fulfill long-term company goals.
The ultimate pain of hyper growth startups is that when it’s crunch time and there’s pressure to hit numbers, people make compromises that later negatively affect the company. Bad use cases or bad deals are sold and then the company is later hit with the much larger problem of having to report churn or gross revenue retention going down below a number that affects their ability to raise money.
That is why it is so important for the SE team to have influence in the Sales process while reporting to CS. They won’t allow deals to slip through because of a short-sighted approach.
LEADERSHIP
Success Spotlight: Emily Garza
Emily Garza, AVP of CS at Fastly, with thoughtful responses to a range of questions across career ladders, owning commercial responsibility, and team structure.
INSIGHTS
7 Tips for Writing The Perfect Follow-Up Email (According to Science)
If you’ve ever started an email with “Hope all is well” or “Just following up” you’re doing it wrong. Here’s Gong Labs with some researched-backed email tactics your team can implement today (and others you should avoid every day).
COMMUNICATION
3 Ways to Confront Bias, Prejudice, and Bullying Masquerading as Feedback
In this post, Kim Scott offers suggestions on handling bias, prejudice, and bullying—and how to “push back in a way that minimizes the harm done to you, and perhaps prevents it from happening again or even improves your relationship with the person.”
CULTURE
When “Love Your Customers” Becomes More Than Lip Service
Krista Anderson-Copperman, former CCO at Okta and a pioneer for the function of Customer Success, was the brains behind the Okta’s “Love our Customers” culture that helped them scale from $5M to $4.7B in revenue. Skip to minute 14 of this podcast to hear about her mission to provide customers with “ultimate transparency” even when it is uncomfortable.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Despite working in an industry where job postings for VPs ask for 10+ years of experience, Gainsight’s Kellie Capote moved from a Strategic CSM to Director to VP to CCO... in only 4.5 years. So just as you’re probably thinking “How did she achieve that?”— we wanted to know, too.
My cofounder Nick and I recently spoke with Kellie to reflect on her rapid rise to the top. Below you’ll find a summary of some of that discussion, where she recalls three distinct tactics that helped her scale herself at fast-growing Gainsight.
Want to listen to the conversation with Kellie instead? Head to the ‘nuffsaid podcast and catch the full interview here.
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CHRIS: You started as a CSM at Gainsight in 2017 and now only four and a half years later, you're the CCO at the most well-known Customer Success software company on the planet. How did that happen?
KELLIE: You're not the first person to wonder how the heck this all happened. I'll start by saying it's certainly been a fun, fast, and furious journey with tons of professional growth and learnings along the way.
Previous to Gainsight, I was working in a people management role, leading teams at ADP. But behind the scenes I was geeking out on all things Customer Success. I knew Customer Success was a fit for me—and it made sense from a business perspective, with the massive shift in SaaS to the recurring subscription model.
But I also felt so energized thinking about Customer Success; my strengths are in working with customers and consistently challenging them to achieve their next level of desired outcomes. And at that point in time, I had two young daughters and thought it would be good for me to reground myself in an individual contributor role for a bit. I thought I was going to take a breath of fresh air as an IC, but quickly found myself gravitating right back to people management.
I’ll admit that timing was certainly on my side. Gainsight’s CSM team hit a rapid clip of growth and we were a super small, mean, and mighty team when I joined. I had the opportunity to help build out a few of our strategic enterprise teams. Then, I led all of enterprise CS. After that we just continued to grow and improve: we streamlined the org structure, brought CS Operations into the remit, and eventually I stepped into a VP role to lead the global CSM organization.
Then, about six months ago, I had the opportunity to become Gainsight’s CCO where my role would extend over the broader post-sales organization. I had (and have) some very big shoes to fill from our former CCO, Ashvin Vaidyanathan, who is near and dear to my heart.
And now, sometimes I pinch myself when I wake up because I am truly living my dream. But by the same token, I know that this is a large responsibility, not only to Gainsight, but to the broader space of Customer Success. That's what keeps me energized day in and day out.
NICK: I'll speak for everyone in the world and ask, are there any specific learnings that we can all take away from that meteoric rise?
KELLIE: I'll share three things that come to mind the most. Ironically, I host a CCO fireside chat at Gainsight with new Gainsters (as we call them) and they often ask this same question. Here’s what I say:
1. Number one, don't underestimate the power of cross-functional relationships from day one in your career. Back in my early days at Gainsight, I can recall one customer situation that required me to work with essentially a counterpart from each department in the org. We all had to group up and rally together to resolve the issue.
That one situation had a lasting effect because the relationships I instilled with other department heads ended up paying off in dividends over the course of my career. My peers in that moment ended up becoming advocates for me internally, especially at the executive level, as we all rose together.
When you think of a future VP of CS or CCO, it absolutely must be someone who can rally around the notion of cross-functional collaboration.
2. The second one is just a bias for action. I like to call it the “bulldog mentality.” You can slice it two ways: from an internal perspective and from an external perspective. Internally, I have an eye for process optimization, which was probably one of the key differentiators between me and my peers.
It’s not about saying, “Hey, this little thing over here, it's not working.” When you have a bulldog mentality, you actually go and do something about it. When you take ownership and initiative to constantly drive organizational progress, it not only benefits you by pushing you to be a more effective leader, but more importantly, it helps the broader team and company.
Some examples: I crafted Gainsight’s first true onboarding process doc for CSMs, I re-imagined our EBR templates, and restructured some of the KPIs for our team. I think one of the biggest things stepping into the VP of CS role is we had some high level metrics, but getting that operating rhythm in place was crucial. If you constantly drive towards operational excellence from an internal perspective, you will get attention from others in the org.
From a CS customer-facing perspective, I think the best CSMs have that same quality of a bias for action. The CSMs that continue up the leadership path are those who constantly challenge and push their customers up the maturity curve. They’re not okay with mediocrity. They truly embrace being the biggest advocate for their customers and infuse customer centricity across the organization.
3. And last but not least, one aspect that has helped me in my career path is what I like to call the adaptability quotient. We often talk about IQ and EQ, but especially in the world of CS, I think we can all agree that a lot of the time it's like a rollercoaster ride. Every day is different. You don't know what's going to come out of left field, maybe even 30 minutes from now. There's the good, the bad, the ugly, and every emotion in between.
So being able to retain an even-keel mindset and say, ‘Okay, what's the next thing that I control? What can I do about this?’ rather than riding the emotional highs and lows, bodes very well from a CSM perspective, but also it increasingly becomes that much more important if you want to thrive in a CS leadership role.
NICK: It sounds like a really important part of being a CCO is your ability to execute. How do you figure out the biggest problems to solve? Do you go straight to Gainsight’s CEO, Nick Mehta—and if not, how do you navigate internally to figure out the most impactful problems to solve?
KELLIE: There are a few parts of this question to unpack. First, we've done a good job at Gainsight of making sure there’s connective tissue from the highest level of the company down to entry-level roles.
As a company we've created a one-page strategic plan, which succinctly synthesizes our mission, goals, and critical initiatives to drive the business forward. This is the backbone of purpose. But especially in the world of CS, I'm constantly looking at the headwinds and the tailwinds. I dig deep into our churn and expansion analysis to see what's working, what isn’t working, and in many cases this informs me on the most valuable problems to work on.
In my role as CCO, my success depends upon how I go about solving cross-functional issues. I’m seeking out how Gainsight can be world-class when it comes to CS<> Product, Marketing, and Sales collaboration.
As the CCO, you are the responsible party for being the learning engine of the business. It's your job to make sure everyone at your company has a well-rounded view of what's truly happening to the customer. In CS, we are so close to our customers that we must be capable of injecting customer-centricity within the executive team, the board, and across the entire company.
INDUSTRY
On Being the Leader HubSpot Deserves
Yamini Rangan recently moved from CCO to CEO of HubSpot which, apart from being a recognition of her skills and experience, is a major win for the Customer Success community. This letter is telling of her intentions now as CEO: “At many organizations, listening to customers is a seasonal trend or one-off initiative. At HubSpot, I want customers to be an integral part of our operating system as a company.”
FRAMEWORK
Build Your Customer Driven Growth Engine
Here’s Jeanne Bliss (Founder & CEO of Customer Bliss) with 5 bite-sized videos detailing a framework for customer driven growth. Jeanne’s a forward-thinking CS leader and reflecting on her framework here is well worth your time.
COMMUNICATION
Across the Globe: Customer Success in 10 Countries
Here’s an interesting roundup curated by Kim Oslob (Sr. Director of Customer Engagement at MeasuringU) on how Customer Success is approached in different companies. The piece is worth reviewing both from an enablement perspective (CSMs working with customers in different countries may need different kinds of support), and sharing with any team members changing their territory.
CULTURE
7 Ways to Protect Your Company Culture Through Change and Growth
Here’s a helpful list for department heads and founders with tactics to bolster the culture that made employees want to join your team in the first place. I especially like tip #6: Don’t underestimate “silly” traditions.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
As you climb the career ladder in Customer Success, it can feel natural to operate in the same way you did at lower levels. But according to Rachel Orston, without a significant shift in mindset and habits, new leaders 1) won’t be able to get out of the tactical day-to-day work, and 2) will never become the strategic customer champions companies need from their head of CS.
Rachel would know. She’s been a CEO and has held executive roles in Marketing, Operations, and Customer Success at companies like IBM, UserIQ, BetterCloud, and now SmartRecruiters. Her varied experience has helped her to deeply understand the makeup of a successful leader and strategic CCO.
This issue is an excerpt from an interview I had with Rachel where she explained how CCOs can pull themselves out from being too tactical.
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Probably the most common pattern I see with Customer Success leaders who can’t scale themselves is a tendency to manage for today. They're stuck in a whirlwind of dealing with people and the day-to-day tactical issues CSMs throw at them.
Don’t get me wrong, leaders who are stuck in this trap aren’t bad people leaders. In fact, their teams usually love them because they're the go-to person who can solve all the problems that pop up. They’re the hero. The problem is that at the end of the day, CS leaders in this habit become exhausted, and they don’t get any strategic or proactive work done. They've spent all day reacting to the problems du jour. And this happens at all levels; VPs managing global teams at $100 million+ in revenue companies have come to me completely drained.
There’s a 3-step system I’ve used to help get out of the weeds. In short, it’s a “people, process, and systems” analysis.
One note before we dive in: even after doing this analysis, CS leaders must reframe how they think about their priorities on an ongoing basis. No more “I’m going to get 30 things done on my task list.” Focus on the highly important, longer-term initiatives. The A+ problems.
Sometimes leaders get so close to their work that they can’t see beyond it. A year passes and the CS leader will realize they haven't kept up with the current hiring profile, how the market has evolved, if the product has gotten more technical, whether CSMs are well aligned to drive value, and where they have skill gaps.
That’s why the head of CS needs to consistently assess if the right CSMs are being hired to drive the right outcomes to deliver the right value. In a company growing in size and complexity, at regular points you’ll find the CSM profile you need moving forward will not match the profile of the past.
Before you proceed with hiring a new profile of CSMs, ask these questions: Do you need more enablement and skills training? Do you need more relationship building with your Product team so CSMs can level up technically? Or do you actually need to start looking outside your existing team?
I'm a firm believer in team development and building folks from within your team. But there are times, for example, when you start to close multi-million dollar accounts and the profile of someone who can manage those relationships is very different from the CSMs that are managing 40-50k deals.
One way to know whether a CS leader is moving strategically is if they pause every quarter to do churn insights and analysis. Do they spend time going back through detractor NPS and lost accounts? Do they surface patterns in lost deals or in wins?
Are they stopping to identify repetitive activities that their team does that either leads to success or loss? Do they work on building a “proactive muscle” so that they don't keep falling in the same hole over and over again? Where are they creating their own problems?
Patterns are self-evident—they're not one-offs. Typically the fires that come up are not new for the team or for the leader. So if a CS leader is not able to see trends and act on them, or doesn’t set aside the time to look into patterns and how their team can become more proactive, it’s almost a given that the leader is or will be stuck in a reactive mode (as will their team). These leaders are missing out on the opportunity to be the strategic leader their team and company needs.
The mistake too many CS leaders make initially is when they start with a system (e.g. purchasing AI or fancy reporting) before they think about the people and processes to make that system effective.
Once you have the correct people in the right roles, proper processes in place, and when you understand where you are creating your own problems, then it’s time to think about the best way to automate it. Do you need a playbook? Do you need a new system? Do you need a tool?
When you’re adopting new systems to support your business, it’s crucial to think about behaviors you want your people to be showing. How are you going to drive consistency in the business? What predictable behaviors do you want to see as a result of implementing a certain system? How would a new system change how you lead day-to-day?
Let's take call recording tech as an example. I love listening to call recordings and I spend time doing it because it drives a behavior that I expect of leaders—to coach their team, to listen, and to detect patterns. By using a recording tool, leaders can not only coach the individual on the call, but also the broader team.
But part of purchasing new technology is considering why you are buying a certain tool and what culture you want to drive with the tool. If you don’t present a call recording technology in the right way, team members will likely think you’re auditing them and using it as a performance management tool. Whereas if you present it as being part of your coaching culture, where the team is constantly learning and sharing from collective experiences, people will happily adopt it.
To be influential, leaders need to set the bigger “why” behind systems to get people into a shared narrative. When we make a big platform or tool decisions, I believe in storytelling and developing clear visions of success.
CAREER
How to Work Hard
Paul Graham with an honest look at what it takes to work hard. He explains that “There are three ingredients in great work: natural ability, practice, and effort. You can do pretty well with just two, but to do the best work you need all three: you need great natural ability and to have practiced a lot and to be trying very hard.”
SURVEYS
Launching a Voice of the Customer Survey: Tactical Advice
Chad Horenfeldt, Director of CS at Kustomer, offers some solid ideas for implementing a VOC survey. I found the “execution” section especially helpful.
LEADERSHIP
How Do You Handle a Senior Employee That Is Underperforming and Not Meeting Expectations?
This question was posed on Twitter by Steve Schlafman and it sparked a discussion worth reading. Consider sharing this with peers who may be struggling to elegantly handle a similar difficult situation.
SCALING
CS Ops is the 2.0 Leader’s Secret Weapon
We teamed up with Gainsight to drop another “big” article. This one’s on how CS Ops matures and the crucial role this team plays in the success of SaaS companies.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
We’ve been doing a lot of thinking about CS Ops (thanks to everyone who has shared their perspective by way of interviews, community discussion, and feedback!), and will be publishing an article on the topic on August 10th. So for this week’s issue, we’re highlighting a summarized section from that article on how CS Ops teams mature over time.
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Most CS Ops teams follow a similar path as they mature: the team is born out of a specific CS need, they begin taking on more responsibilities, and then they take action to become proactive.
CS Ops is often born out of the need to implement tooling. The first CS hire might be able to bandaid together the software they need, but at a certain point the job requires a greater investment.
The first CS Ops role is usually focused on data and systems administration. They can’t be strategic if things are breaking; the team must be sure that the right tooling and data infrastructure is in place so CSMs can do their job.
Some CS Ops teams at this stage will have already started doing some strategic activities, like proactively reporting on customer risk or CSM performance so CS leaders know where to focus their attention.
Once the “acute need” has subsided, the team will start taking on a growing amount of responsibilities. Whenever someone asks, “Could someone help me with this?” Ops is the go-to. Updating the health score calculation, training CSMs, or configuring in-app notifications for tech-touch programs are all examples of tasks that start overloading the CS Ops team.
The tendency in this stage is to become reactive; “the everything department.” As CS Ops grows, it’s critical they stay focused on the responsibilities they can and cannot take on, and create a planning process for larger initiatives.
Editor’s note: We stole “the everything department” name from Rav Dhaliwal (Venture Partner at Crane). Thanks, Rav!
There are 4 areas of responsibility that CS Ops may take over in stage 2:
Many companies are not as well-staffed in CS Ops, so the role tends to be broad and can easily become unfocused. Given the wide array of tasks sent to the team, they need to be smart about planning and creative in how they scale themselves.
There are two major changes required to move a CS Ops team from Stage 2 to Stage 3. The team needs to move into a centralized Ops function that reports to the COO, and they must add “strategy” to their responsibilities.
Moving CS Ops to a centralized Ops team under the COO
A fully mature CS Ops team serves as a strategic thought partner to the Customer Success leader. At this point they tend to report into a centralized Ops function under the COO for two reasons:
There is one downfall here: pulling CS Ops out of the CS team into a centralized function means that Enablement can no longer live within the Ops team’s scope. Even if the team is “embedded” in CS by way of meetings, they’re no longer the experts in CS and so enablement needs to be passed off. By this time, CS usually invests in a dedicated Enablement team that lives within the Customer Success department.
Adding “strategy” to the team’s scope of responsibility
While a Stage 2 team asks, “How can we make the CS team ‘run better’?’” the Stage 3 team asks, “What can we do to move the needle on our goals?” The focus is still on improvement, but it’s more about identifying opportunities and placing bets than just iterating on how the team currently works.
Stage 3 CS Ops teams enable CS leaders with the data they need to drive decisions across the company. For example, they might:
They use data to provide strategic recommendations to the CS leader. And then depending on the project, they may also be the team executing on the recommendation. For example, we’ve heard of teams who incorporate “strategic bets” in their annual planning — these “bets” are the projects that vary most year over year.
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💡 How LinkedIn’s CS Ops team plans their priorities:
These are the things you must get right because nothing else can move forward without them. The two categories that fall into this bucket are:
This category usually includes ongoing responsibilities that have been and stay with CS Ops, things like annual headcount planning, territory building, QBRs. These are the basic expectations of the team.
Only when the foundations and BAU are tackled do you get to move on to the fun strategic projects. Here we prioritize by looking at what is the most impactful work and what is our ability to deliver on it. We also add a lens of what is most important for the business right now? Where does this fall on the company’s overall priorities? These projects could be things like rethinking service models, exploring paid services, thinking through scale and partnerships, rethinking accountability and the appropriate metrics for the business.
Given the maturity of the CS Ops team, you may be able to specialize roles on the Data & Systems side so the rest of the team splits their time between BAU (~60%) and Strategic Work (~40%).
Note: Thank you Zeina Marcotte for sharing how your team thinks about prioritization.
PROCESS
Alex Farmer on the Role of the CSM in Successful Onboarding
The “right time” to introduce CS in a sales cycle is a well-covered topic, but in this interview, Alex Farmer (the VP of CS at Cognite) offers tactical advice on the role of CS in pre-sales. He shares tips like “At the 60% sales cycle mark, CS should send the customer a one-pager outlining exactly what the customer will need to do before and for onboarding.”
INDUSTRY
5 Stages of CEO Acceptance of Customer Success
An entertaining post: Nick Mehta describes the evolution some CEOs go through — from the “peak of inflated expectations” through the “slope of enlightenment” — before they fully accept the Customer Success function.
MANAGEMENT
How Do You Recognize Your Team for Great Work?
Here’s a nice reminder for managers to give recognition for excellent work (+ creative ideas on “how” to give recognition).
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
After leading Customer Success as a VP and CCO at companies like Salesforce, TEAM Informatics, and Act-On Software, Matt Zelen made a career change. He became COO (at AppZen and now at UserTesting), but he says it was a natural transition and not a drastic change.
So for the ‘nuffsaid podcast we asked Matt about this career move—covering how it was possible, the skills necessary to be effective as a COO, and the key relationships he’s needed to build.
The following is an edited summary of his response. (Go here to listen to the full recording.)
I’ll start by saying I didn’t start out on a path to become a COO. I'm genuinely passionate about Customer Success, so achieving the CCO role at Act-On Software was the pinnacle of my career at the time.
But it wasn’t long before COO became a natural next step: for one, I really enjoy solving problems. Organizations I’ve worked in and talked with need a leader in the COO role who can find problems across the organization and solve them. So for CCOs looking to move into the COO role, the “second in command” role, I’d recommend going outside your responsibilities to look at the whole business and see if there are gaps you can fill.
At AppZen for example, the CEO was really interested in the go-to-market side of the business. So I jumped in to find areas we could be doing better as a business in other areas, like HR. And at UserTesting, I started out as CCO but we made a structural change to have renewals and CS within the revenue organization. I saw that I could have an expanded impact in other areas of the business, like infrastructure, operations, and some of the CS functions.
Moving from CCO to COO doesn’t usually happen in a “jump” but rather a change that happens with iterations. And it needs to come from the CCO finding areas they can genuinely add value; if they’re pushing to be COO and take responsibilities or help areas that don’t need it, they’ll end up in a contentious situation.
COOs usually complement the CEO. The CEO will offload things to the COO that they personally don't want to focus on, don't have the skills to focus on, or don’t have the time to focus on.
For that reason, there are skills that CCOs should onboard into their toolkit now, so that when the opportunity is available they can take on the tasks that the CEO gives them. The first part of that toolkit is the ability to take ownership. CCOs need to build the muscle to see a problem, know whether it's a priority problem, and then take ownership to solve that problem.
People may talk about operational excellence and being detail-oriented — but that stuff can be learned. Having the knack to identify priority problems and taking ownership by saying 'I'm going to fix it' is so much more difficult to come by and adds huge value to an organization.
Another skillset you’ll need to hone while working towards the COO role is the ability to learn on the fly. You have to have the bravery to just dive in, figure it out as you go, and drive towards an outcome.
To begin honing the skills necessary to be an effective COO, Customer Success leaders should be adept at identifying problems not only important to their own department, but more importantly, they need the ability to see the broader problems that affect a whole organization.
So many challenges that impact CS are not specific to CS—they're cross-functional challenges around setting expectations for other departments and knowing if the actual platform has the ability to deliver on those expectations. So if a CS leader has their head down, while swimming in their own lane, unaware of broader organizational issues, they’ll never make it to the COO level.
In my opinion, the most critical skill of any leader is the emotional intelligence to be able to collaborate across and understand the perspective of who you're working with, what their priorities are, and what they need to get done.
Let’s say you need your Engineering team to fix an issue, but they're simultaneously being held responsible for a high-stress release. As a CS leader, you’ve got to be aware of that.
Fixing cross-functional issues means getting in the trenches with other department heads, figuring out what's going on, and understanding how you can influence an outcome in the right way to get everyone on the same page.
If you come in like a bull in a china shop, it's not going to end well. CS leaders need emotional empathy to understand other perspectives in a given situation.
Some Customer Success leaders see other executives, like the Product leader or Revenue leader, as obstacles. If CS leaders want to build their presence (and ability to move to COO), that strategy won’t work.
If you see yourself as an adversary against another executive, I recommend you both go have a beer, figure it out, and realize that you are on the same team.
This goes back to the emotional intelligence side of things. I know that our CRO has a ton of stress, right? I'm aware of his perspective and his paradigm. This knowledge has allowed me to have conversations with him about how I can help him be successful. If he wins, I win. If you can get two people in a room that genuinely want to fix the problem together, you win.
Many CS leaders are known on the executive team as the thoughtful customer champions, who are collaborative, and great to work with. They often have a hard time influencing the major strategic decisions owned by a COO such as the product roadmap, pricing, and the ICP.
To go from “the nice executive” to the one actually driving and influencing major strategic decisions, CS leaders need to focus primarily on driving data-driven conversations. Take emotion out of it, speak to the facts, and I guarantee your peers will get in the habit of turning to you to make strategic decisions.
The biggest challenge I had early on in my career in Customer Success, is that CS often tends to be an afterthought. Because of this, as a leader, it's on you to build relationships and engender trust and respect across your peers so when you do say something, your peers will know it’s data-driven, and takes into account the entire mission of the organization. This takes time and experience.
STRATEGY
Nobody Knows the ROI of Their CSMs
David Apple, CRO of Zingtree, explains why it seems no company can accurately calculate the ROI of their CSMs. He also offers an alternative approach to determine optimal CSM headcount.
COMPETITION
As Long As You Are Growing 60% Or More — Your Competition Can’t Really Hurt You
Here’s Jason Lemkin, founder of SaaStr, with a nice reminder that as long as you’re growing 60%+, you shouldn’t sweat the competition too much. He articulates something CS leaders already know: “You don’t even have to be Better. You just have to be Great, and make your customers heroes and a success."
LEADERSHIP
Landing Your First Board Role
Merline Saintil shares great insights from her tenure as a Board Member of companies like GitLab, Lightspeed, and Rocket Lab. Skip to Takeaway 7 to listen to the story of how she landed her first board role. Her advice is simple—tell everyone you know that you’re looking to join a board. Word will get around.
OPINION
CSM + Renewals = ?
“There are some questions in the Customer Success world which will never get you a definitive answer, and thanks to the dynamic nature of business and the evolving world of SaaS, the answer will probably always start with ‘it depends on…’” Customer Success Lead, Russ Drury, chimes in on the evergreen debate of whether or not CSMs should own renewals. He also shares his take on the “evolution” of renewals which I found really interesting.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
You’ve probably heard of Vista Equity Partners, one of the world’s most successful private equity firms. They’re known for their factory-like approach to running businesses—it’s a science—and part of their formula includes a detailed plan for hiring the right people.
That brings us to Adam Houghton, who back in 2012 was the COO at a company acquired by a Vista Equity portfolio company. He’s brought his version of their hiring process to the teams he’s led since.
Today he’s the VP of Customer Success at Klue (a company that enables competitive research and the distribution of that information to the people that need it). And for a sense of scale, I first spoke to Adam last year when Klue had about 30 employees; they’re over 100 employees now.
In a recent interview, Adam outlined his philosophy on hiring in Customer Success. Here’s the TLDR:
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Hiring is all about future-proofing your team by investing in high potential employees. Whether those people are recent graduates or otherwise early in their careers, or people looking to make a transition into Customer Success, our goal is to find those people who have 3-4 years of runway and give them the opportunity to grow into bigger roles quickly.
The first question I usually get asked is “how do you get people to buy in to the vision for a role?”
The best place to start is to look for individuals that have both a history of progression and a record of breaking away from the status quo. Maybe they went to university and studied something completely different than what was expected of them. Or maybe they’ve led projects that they initiated, that were outside their comfort zone. That’s the mentality we’re looking for.
And on the flip slide, we need leaders to be experienced enough to mentor their teams. The most obvious benefit for them of hiring high potential but less experienced employees is cost. But also, hiring people who are eager for the chance to grow within their career gives the team a strong bench to promote from.
There are a handful of things we look at to detect whether someone naturally challenges the status quo, but the answers to these questions are most important:
At our stage, we need people who want to come in, put their fingerprints on things and get shit done.
That’s true across the company. But there is one additional question I ask in Customer Success: “Can you give an example of something you’ve done to help someone that wasn’t on your team?” That shows an interest and ability to work cross-functionally, which is so critical to CS. If you can’t work cross-functionally, you can’t support your customer the way you’re supposed to.
Hiring isn’t an exact science so when it’s not working out, I have to ask myself: 1. Did I make a bad hiring decision, or 2. Did I do a bad job of coaching? We have to figure out whether it’s the environment or the person.
If it’s the environment, that’s within our control. If it’s the person, we have to move on quickly.
The other piece is that when there’s a problem, the rest of the team will know there’s a problem too. It can hurt the whole team to keep someone that's a bad fit for the company or the specific role they’re in. (To that latter point, we’ve had people at Klue who started in SDR roles, realized it wasn’t a good fit, but were an excellent fit for the customer side. Sometimes it’s the role, not the person.)
If anything touches “bad culture fit” you’ve got to move on a decision immediately.
How you pitch the vision for a role and handle promotions depends on the size and growth rate of a company. For startups, we focus on creating a culture around “earning the right to grow.” As an individual, a department, a company, we have to earn the right to grow.
If someone wants to move into leadership and you only have a team of 5 people, who are they going to lead? There aren’t leadership opportunities there, until the business grows. So the mindset I try to put in place is to scale yourself where you are, start growing the skills of the level above you, and take action so there’s enough demand that we have to hire someone beneath you.
Apart from that, my goal is that everyone that works for me learns enough to get a better job. Sometimes the opportunities they want won’t exist at your company. Help them grow the skills, continue to build your “bench,” and support people when they’ve found something bigger.
INDUSTRY
7 Top Trends in Customer Success to Learn From, and Maybe Emulate
Jason Lemkin adds commentary to a recent LinkedIn post from Nick Mehta rounding up some trends in CS. Among the list: “Companies are starting to give NRR goals to every department.” Jason adds, “It’s also a sign of a great VP of Customer Success when they are willing to sign up for growing NRR as the #1 metric and what their variable comp is tried to… It’s also one of the top metrics you’re graded on by both private and public investors now.”
COMMUNICATION
"Driving Next Steps" Isn't Enough. This Is What Really Moves Deals Forward.
The Gong Labs team analyzed over 8,000 deals to understand what actions move them forward. One interesting takeaway: “Avoid feature-dumping at all costs… It’s so easy to fall into that ‘if they see it, they’ll love it’ mindset. But that isn’t true. Because they won’t really understand how those features address their biggest challenges.”
MANAGEMENT
Strategic CSM Comp Plans
An important conversation from last year is revisited with interesting new insights from Ed Powers on why he thinks CSM compensation plans need to be reconsidered. Skip down to Ed’s newest post where he talks about establishing metrics: “Most organizations start with too few metrics, then drown in too many, and then finally settle on just the right ones.”
TOPIC
Hire People Who Give a Shit
A to-the-point reminder from Alexandr Wang, CEO at Scale AI. Hire people who will do meaningful work; be someone who gives a shit.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Rupal Nishar recently joined the ‘nuffsaid podcast to talk about how Customer Success should work with other functions to define the Ideal Customer Profile (ICP). The following is a summarized version of her advice from the interview.
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A common thread throughout my career in Customer Success has been thinking about the Ideal Customer Profile (ICP) and the CS leader’s role in defining it. My opinion is that the ICP is a strategic initiative that should be embedded in company-level OKRs—it’s not one-and-done, and it’s not something Marketing should go off and create by themselves.
Landing customers that are a good fit for your product ultimately moves the needle for the company’s growth: it reduces churn, streamlines the customer experience, and helps a company predictably scale.
Yet most companies still have a lot of work to put in before they can say their ICP process is well established. That’s why I’ve put together 6 steps organizations can take to create cross-functional alignment on the ICP.
STEP 1: Decide who has the final decision on the ICP.
Most often we see Marketing owning the ICP, and I’ll admit it makes sense: Marketing (and specifically Product Marketing) owns the responsibility of understanding current market and competitive trends to define the company’s positioning. The ICP exercise naturally fits within that scope of responsibility.
Marketing has the final say, but other departments should be intentional about the data they bring to inform the ICP definition. CS will bring stories and data about what successful customers look like, Sales will bring data around time to close and buyer/champion traits, Marketing brings market trends.
STEP 2: Make a list of your best customers and what makes them your best customers. Then make this resource available internally.
The list should include common attributes among successful customers: traits like the size of the company, annual revenue, budget, tech stack, geography, size of customer base, maturity, industry, growth rate, historical pain points, etc. Any patterns the team points out should be documented. Pay attention to “when” patterns become noticeable in the customer journey as well.
It’s useful to also take a step back and think about what a “satisfied” or “successful” customer really is for your business, because that’ll evolve as the product(s) and customer base grow.
STEP 3: Meet once a month to review the ICP and discuss new trends.
This group should include a critical mass from customer-facing teams (e.g. Marketing, Sales, Customer Success, Support, Customer Experience, etc.) They should come together to discuss the ICP—how it's morphed quarter by quarter, year over year, and identify and discuss trends.
STEP 4: Create an ICP cheat sheet based on how individual customers receive value from the product, for Sales reps and CSMs to refer to during their customer interactions.
CSMs on my team track: net new learnings, risks, the DNA of the organization, customer persona, and how a particular customer is an ‘ideal customer.’ These details should be front and center as part of every customer interaction.
STEP 5: Create a process after every QBR where internal team members take 15 minutes to document what's been learned about the ICP.
If this practice becomes ingrained into your reps’ workflow, you’ll notice that the regular collection of ICP data points adds up to an amazing org-wide ability to sell and work with the right ICP.
STEP 6: Work with Sales to ensure the right customers are acquired.
You can spend a lot of time neatly defining an ICP that’s not used. Sales and Marketing teams have quotas and if they don’t have positive incentives around targeting the right ICP, your efforts in defining it will be lost.
For example, Sales teams who carry a renewal quota are incentivized to find customers that are a longer-term fit for the company. They’ll be more likely to walk away from customers who aren’t likely to renew.
But there are some Sales leaders who don’t ‘get’ the value of selling to the right ICP. In these situations, Customer Success leaders have to be able to talk numbers. Show your Sales peer the potential NRR if the ICP is used correctly. Show them how selling the proper ICP makes a sale easier and faster. Show them expansion strategies that have led to additional opportunities. Sales leaders are measured on numbers, so if CS leaders can help them meet their numbers, then it'll make conversations much easier.
The ICP topic often leads to the question of whether CS can reject bad fit customers. “Rejecting” or “vetoing” a customer would mean the customer isn't considered in the overall renewal rate and the Salesperson is denied their commission on that customer.
It’s a polarizing but important topic, so I recently asked about it on LinkedIn—and I’d love to hear your take. Should CS be able to “veto” bad fit customers?
MANAGEMENT
Common Blind Spots for Customer Success Teams
“Working to uncover your organization’s blind spots is crucial to being able to walk in your customers’ shoes and provide better, more valuable experiences.” This article highlights four CS leader’s perspectives on some of the common mistakes CS leaders make that lead to undesired outcomes.
CAREER
10 Tips to Evaluate The Caliber of People at a Company Before Joining
Here’s angel investor, Shreyas Doshi, with a great list of indicators to check if a company is the right fit for you. I especially like #9—“If it’s a B2B/enterprise company, speak with the company’s customers. Besides asking about the product, ask them about the caliber of people they’ve interacted with at this company and any cultural red flags.” He also suggests that if you are a leader, you can use these tips, but in reverse. “Consider them as you design your hiring process, train interviewers, and devise policies on how you will support candidates who want to learn more about your company.”
INDUSTRY
Buyers Have Changed—Sales Needs To Also
Megan Bowen, CCO & COO at Refine Labs, highlights the gap between “how we want to buy software” and “how we’re sold software” and outlines some changes companies can make to keep up with the modern B2B buyer.
LEADERSHIP
Reframing "Don't Bring Problems, Bring Solutions”
If you’ve recently asked someone to “bring solutions, not problems,” take a few minutes to read Lara Hogan’s advice. She says that framing doesn’t always work: instead of actually getting someone to bring solutions, you’re shutting them down. She offers a few open-ended questions to use instead.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Since launching SHH early last year, we’ve published 62 issues from interviews with hundreds of Customer Success leaders. And over that time we’ve heard some common themes — for example, a movement towards building a repeatable and shared framework around CS, building strategic (not reactive) teams, and the importance of influencing company-wide decision making.
So this week, we’re rounding up 6 lessons we’ve learned from interviews for this newsletter.
And before we dive in: I know there’s a ton of Customer Success content out there to sift through, so we’re always aiming to keep you focused on the topics that matter. Thank you for continuing to learn and help drive the function of Customer Success forward with us.
“One of things that I've leaned on to justify CS Ops is if as a CS leader you want me to make data-driven decisions then I need someone who can help me access that data. So if you start playing that out and say, ‘Let's use data, make better decisions, reduce churn by X percent— and what does that translate to dollarwise a year from now?’ The result is usually pretty shocking. Suddenly you look at that number compared to the salary of a CS Ops person and it becomes clear that it’s totally worth the risk to get even a fraction of that.”
—Beth Yehaskel, Revenue Optimization and Customer Success Architect at Winning by Design in Issue #54: 10+ CS Ops Questions Answered
“To scale, you need efficient processes; to develop efficient processes, you need good data; to get good data, you have to build the system that delivers it to you. It’s very hard to have one of those functions without the other — for example, it’s difficult to productively analyze data without having a part in selecting the data that’s available. CS Ops bundles those three functions: systems integration, business analytics, and process improvement.”
—Lea Boreland, Finance and Operations Lead at Column in Issue #26: Building CS Ops at Quorum, Aruba, and Pipedrive
“CS Ops can set you on a really solid track if you work well with them, but you don't want to underestimate or undervalue their impact. You don’t just toss ideas over and say, ‘Figure it out, Ops.’ You won't like what comes back to you if you do and whether you admit it or now, it will be your fault when goals aren’t met.
If you instead align on business goals and strategically plan with the CS Ops team, your path will be clearer. CS Ops has an incredible ability to power the team’s effectiveness towards a business goal.”
—Jeff Justice Williams, Enterprise Lead of CS at Box in Issue #53: Lessons From Running CS Ops at Zoom, Gainsight, Stack Overflow, & More
“When managers develop a winning culture, they build a team that’s fast, effective, and able to weather any storm—and the manifestation of a high-caliber culture starts with the onboarding process.
One of the pivotal changes we’ve made to our process is to plan the first week of work for the new hire. We have it all outlined in one document (linked here) that we share with them before their first day. It also includes an onboarding checklist, role expectations, software they may need access to, and key meetings and workflows. This plan alone helps new hires feel like they’re set up for success and able to quickly integrate with the team.”
—Clint Kelson, Sr. Manager of CS at CaptivateIQ in Issue #27: It's Time to Give Your Onboarding Process a Tune-Up
"The best way for Directors and VPs to ensure the success of all CSMs is to have clear expectations of the role from the beginning. We start with answering these 5 questions to clarify the role:
— Brett Andersen, VP - Client Success at Degreed in Issue #32: Tactics for Onboarding and Developing CS Talent
“The combination of clear data and the stories that tie to individual data points to provide context is very powerful in the boardroom. As a board member, we will go out and talk to existing customers, but it is not part of our day to day. Bringing those conversations into the room, along with the data and the case studies, is incredibly helpful to create the kind of discussion that you want to generate to both show the impact your CS function is having, and also to make it a focus area for the company as a whole.”
—Mackey Craven, Partner at OpenView in Issue #57: How CS Becomes MVP of the Executive Team
“Human beings, including CFOs, are motivated by stories. Tell the story. If a new deal comes in, but it’s actually an older customer who wasn’t a fan but the CSM got them engaged and turned it all around, tell that tale. Share the story that the Salesforce order doesn’t.
—Nick Mehta, CEO of Gainsight in Issue #57: How CS Becomes MVP of the Executive Team
“I found that the single best thing to do as a CCO was to build street cred—particularly with Sales. And building street cred meant getting engaged with deals. Every CS leader in existence should spend a significant part of their day being an executive sponsor for important accounts and actively involved in deals. We have a responsibility to help drive revenue for the company. If your job is solely to run focus groups and do journey mapping, I just don't think that you'll be able to make a real impact on the business and you won't be taken seriously as a real strategic leader. Get off your ass, stop managing CSMs, and start helping Sales close deals."
—Jeb Dasteel, CCO at Oracle (2008 - 2019) in Issue #60: Oracle’s First CCO on Why You Need to Help Close Deals
“Some of the most overlooked ways to improve the relationship between Sales and CS are:
—Emilia D’Anzica, Founder of GrowthMolecules in “How to Fix Sales & Success Friction (Hint: It’s Not Having CS Report to Sales)”
“One of the ways we’ve brought the customer-centric mindset to everyone in the company is to send out a weekly email to all employees that highlights one customer story. We share an example of how one customer is benefitting from our products and services. And we try to tie it to something that’s going on in the world; if there’s a big movie coming out and our products were used in the process of producing the movie, we’ll highlight that. It helps people instantly connect with the story and feel proud of what we’re doing.”
—Jon Herstein, CCO and SVP of CS at Box in Issue #15: How Box brings the customer to the forefront of their company
“Here’s how we bring the customer into the heart of our business. Instead of having a customer join us only once a year during SKO, we try to absolutely blow that up. We have a “customer takeover” once every six weeks where we give the Town Hall over to our customers. We assign certain CSMs to be responsible for hosting the event. As part of that, we always ask the customer, “What's it going to take to ensure that you stay with us long-term?” And I want them to be really explicit, to give us the cold hard truth of what it’s going to take.
This has proven to be very successful and it's given the company a greater sense of ownership. We’ve put the customer in a position where all of our people are listening. Our team members are engaged, they bring follow up questions, and they truly want to know more about that customer’s experience.”
—Pat Phelan, CCO at GoCardless in Episode #31: Bring Customers Into The Heart of Your Business, Literally
“Customer Success needs to be a strategic initiative of the company, and it can’t be a group that’s buried in Sales, Services, or Support. When you do have Success embedded in another team, CS begins to take on the behaviors and metrics of those organizations and can end up missing out on the point of “customer success” entirely. If it’s truly a strategic initiative—meaning one that’s reported to the board—then Customer Success will have the executive team’s support, it will have a defined and separate budget, and it will be equally aligned to other departments. If any one of those three things are missing, that’s a big red flag.”
—Jennifer Dearman, SVP of Global CS and Operations at Udacity in Issue #28: 5 Prerequisites for Scale with Jennifer Dearman
“I fundamentally believe that a product is nothing without the users and customers who are willing to pay for it. Therefore, the group that’s the closest to the customer—most often Customer Success—should hold an equal level of power at the executive level to Sales, Product, and Marketing.
I’ve seen too many organizations make the mistake of moving their Customer Success unit where it doesn’t have a voice at the executive level. Or, they turn it into something of a servant of the Sales or Product team. It’s such a mistake, particularly in SaaS: leaders in tech have a plethora of products with overlapping features to choose from, and they’re under great pressure to pick the right products and make sure they’re not overpaying or double paying. Companies need to make sure their products are being used by their customers and are being seen as valuable in order to survive. Customer Success is the “how”—and it needs to report to the CEO in order for the CEO to have a pulse on the experience customers are receiving.”
—Eleanor O’Neill, EVP of CS at Spacemaker AI in Issue #6: Why Customer Success should report to the CEO
DISCUSSION
What Are The Best Ways To Fail At Customer Success?
Here’s a post from Nick Mehta that’ll bring a smile to your face: “If a CEO wants to pretend they are focused on CS but really do nothing, where should they start?” Highly recommend reading through the comments.
CULTURE
What I Learnt After Unpacking One of My Best “Customer Experience” Moments
Here’s a fun exercise: consider the best customer experience you’ve encountered in the past few years and break down why it was so impactful. Director of CS at Chargebee, Manish M, did this and came up with a 2017 Qantas flight where his seat was broken. The company proceeded to go far above what was expected to make up for this loss. And what Manish realized is that “the lowlights sometimes provide us the greatest opportunity to turn around the customer sentiment and make it a truly memorable one.” Mistakes happen. What matters is how we react once they do.
COMMUNICATION
How Do You Check In Without Saying “I’m Checking In”?
Mitch Howe, CSM at Hivebrite, turned to the LinkedIn CS community to ask for advice about how to reach out to an unengaged customer with more value than an awkward “just checking in” email. This is a good thread to share with your team.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
Hi everyone — Nick here. I’m taking over SHH to share an interview that digs into a hidden opportunity: the partnership between Customer Success and Developer Relations.
Developer Relations can feel like a distant, ambiguous team. But the truth is, for platform or developer-focused companies specifically, the DevRel team is out there actively working with developer communities, partnering with teams to build integrations for your product, and submitting feedback to your Product team. Not partnering with them is a missed opportunity to leverage their knowledge and relationships. And at the very least, partnering with DevRel will help you understand what they’re submitting to Product that may be prioritized over your customers’ requests.
I interviewed Bear Douglas (Director, Developer Relations at Slack) and Teresa Nesteby (Developer Support Manager at Slack) for this topic. We covered:
Here’s their perspective.
Developer Relations is becoming an increasingly important priority for platform and API-driven companies. But it’s also a role that can be interpreted very differently depending on what a company does and where DevRel sits within the org structure.
"Developer Relations (DevRel) is an interdisciplinary role that sits in a border space between product, engineering, and marketing.”
-Bear Douglas, Director of Developer Relations at Slack
DevRel responsibilities in API-driven companies
In API-driven companies (think Twilio, Stripe, SendGrid), DevRel tends to act more as a go-to-market function — recruiting developers to use the platform — and is usually nested within Marketing. A lot of the team’s work is around outreach, customer education, webinars, and talks. And their KPIs tend to be based on things like top-of-funnel growth, community engagement, conversions of new developer customers, or expansion within those customers.
DevRel responsibilities in platform companies
In platform companies like Slack, Facebook, or Twitter, DevRel tends to be grouped within Product or otherwise strongly tied to Partnerships and the Business Development organizations. You can think of the DevRel team in these companies as the ones advocating for the platform with developers, and advocating for developers with the Product team. They provide the training, materials, and consulting when individuals or teams want to build an integration for the product. And they feed back real-world bugs and feature requests to the Product team.
“Ultimately Developer Relations is responsible for your platform’s developer experience.”
-Reto Meier, Developer Advocate at Google
At Slack, our DevRel team has team members with specific areas of focus: some people are focused on writing API documentation, some build tools or integrations for developers, and others run feature alphas and betas for the Product team. Each group is evaluated on hitting KPIs in their specific focus areas. For example, team members focused on API documentation are measured on delivering high-quality documentation on time. (For more on how teams are measured, here’s an article on how DevRel career ladders work at Slack.)
Editor’s note: since Bear and Teresa’s backgrounds are with platform companies (reporting into Product), that’s where we focused the rest of the interview.
Some companies, like Slack, have a Technical Customer Success Manager team (aka “Technical Architects”) and a DevRel team. In most cases, Technical CSMs are focused on contract-based work with specific customers — and their focus generally surrounds “administration“ work. DevRel teams are focused more on scale than helping customers one-on-one; they’re creating lots of enablement materials, webinars, etc., that help developers build integrations on the platform.
Here’s how a CS leader might think about a useful partnership between the Developer Relations team:
If I were to share a couple of pieces of advice with CS leaders, I’d say this:
CSMs want the product to be sticky, and what better way than to embed additional integrations and use cases, however technical they may be, in the customer’s existing workflows?
The best CSMs are willing to get deep with technical speak but at the very least, CS teams should consider DevRel as a resource to pull in when those discussions go beyond their technical knowledge. Then on an ongoing basis bring DevRel in to train CSMs on the new integrations and other areas of the product they’re working with, and how they might be used with certain types of customers.
THE ROLE OF THE CCO
Say Goodbye to the Tactical CCO — Here’s What Strategic CCOs Focus On
"If you want to influence Sales, help them close deals. Period." This thinking helped Jeb Dasteel, who pioneered the CCO role at Oracle, pave the way for other strategic CCOs to know how to approach their role. In this piece he goes deep on how top CS leaders can move from being tactical to strategic, including focus areas, key metrics, and common pitfalls.
MEETINGS
QBRs and EBRs Are Things of the Past
Russ Dury, CS Lead at Zeplin, makes the case that too many business review meetings focus on the company and not the customer. “Why do you think your customers skip EBRs with you?” This article is a good reminder that customers are busy and if your meetings with them aren’t tailored around their objectives, you might as well not waste their time.
COMMUNICATION
Nonviolent Feedback
When giving feedback, are you using words like I like it, this is good, awesome—or the reverse, bad, sucks, lazy? In this piece, Zef Hemel calls this “violent feedback.” He argues to remove subjective language from your feedback and instead state 1. the observation, and 2. the impact of the observation.
SELLING
The 4-step Secret to Upselling
Annie Gray, Director of CS at LiveHelpNow, with some useful tips for CSMs to build trust while upselling. Consider passing this quick read along to your team.
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
There are a few distinct handoffs in a typical B2B company: when a customer is handed from Marketing to Sales, and Sales to CS. When product specs are handed from Product to Engineering. Each of these handoffs are well documented and given plenty of attention.
But there’s a distinct handoff between CS and Product too, involving customer feedback on the product. And in the world of SaaS, this handoff is too often treated haphazardly: feedback is “handed off” in google sheets, in Slack, in one-off meetings.
All that’s to say, the Product <> CS partnership needs some shaping up if we’re to get Product to prioritize our customers. So to help us know how to be more intentional, we held a roundtable with Megan Bowen (CCO at Refine Labs), Jeff Justice Williams (Enterprise Lead - CS at Box), and Nick Paranomos (CPO at ‘nuffsaid) on this topic.
Here’s a summarized version of the highlights from that conversation. If you want to watch the recording instead:
Q: What practical steps have you taken in the past to have an equal amount of influence relative to your other peers on the e-staff and, more specifically, equal to the Chief Product Officer?
Jeff: I'd say that the first step is for CS to have a formal seat at the table. There are a lot of companies that don’t have that space open for CS to be able to present what the post-sale experience looks like at depth, the same way that Sales does for the pre-sales flow.
If you don't have someone at that top level, then there's a gap. So if your company has a CPO, but the highest level of CS leadership is a senior manager, it’s likely there's an innate disconnect on the executive team’s visions and how their organization plays into the customer journey.
Another situation that is very common, which is more misleading, is when the highest CS leader has a bloated title (think VP or Director) but they're really acting as a player coach. This is a disservice across the board internally and to the customer, and it makes it very hard for us to have a true voice in the journey.
If CS and Product are going to have a peer-like relationship, the company has to have a CS leader who is vision-bound and forward-looking. And both the CS and CPO leaders have their hands on the customer journey.
So for me, bottom line, the first step is to give CS a genuine seat at the table.
Megan: One way to build an equal amount of influence at that level as a CS leader is to have the mindset that you are the CEO of the business. You’re thinking “what is actually the most important problem that needs to be solved in the business as a whole?” You’re not just focused on your own department.
If you can look at the business from a 30,000 foot view, see areas we’re missing out on or the biggest pain points across the customer experience, then build a business case around improving that—that’s when you get invited to the exec meeting. That’s when you have an opportunity to drive the agenda.
Nick: I think the one thing that CS leaders can do—and I don’t think most people are tracking this right now—is you need to make your CFO, your best friend. Start learning the language of the CFO and the metrics they care about and how they think about the business. Because what I've seen with the most powerful members of the executive team is they start with a metric that matters, and then they have causal metrics that the team can affect and take action on.
So for example, the CMO has marketing qualified leads. They've got channels with funnels and they can tweak what they do with those funnels. Every meeting they come and say, “this is how we affected that KPI.”
It's the same thing with the CRO—dollars closed. And the CPO—usage. Both the CRO and CPO know what levers to pull that have downstream effects on their KPIs.
But many CCOs aren’t there yet. We’ve got NRR as our outcome, but we’re using things like NPS and CSAT which aren’t leading indicators of NRR. It’s very difficult to create a causal relationship between NPS and NRR.
Instead, what I typically recommend for companies that I've worked with in the past is this: think about your customer journey, break it down into risk stages, and think about the actions needed from all teams across that journey to move the needle on my end metric.
Q: How have you seen success in developing a comprehensive health score that takes all team metrics into consideration? And how much ownership does Product have in this process?
Megan: For a meaningful health score, there are three main things you need to take into consideration:
So it starts by thinking about those three buckets and then figuring out based on your business, your context, your product, what makes sense to measure against that. I think it needs to be quantitative, but there should be a little bit of qualitative input.
Now, what I will say is that after creating lots of “too sophisticated” health scores with all kinds of criteria, what I've actually found as most effective is a system for flagging at-risk accounts. Basically, it’s identifying signals that things are off for a customer. If they’re not logging in, sure, that’s a flag. If they’ve logged 50 support tickets in the last 30 days. If you survey them at the end of the onboarding process and they don’t feel they’re fully onboarded yet. Those are all at-risk indicators, and acting on those has been more meaningful to move the needle on churn.
Nick: Yeah. One thing I’d say is, look, product usage is my job. If any Product leader out there is telling you that usage is on you, they're dead wrong. My job is to make sure that the product is good enough that people are using it. If they're not, that's on me. That's what I'm held accountable to. So for organizations that have product usage as a core metric for CS performance, that is the first place to start—we need to agree that that's on Product.
Second, I hear a lot of the churn reasons coming from Customer Success, sharing things like “my champion left,” “we lost budget,” “it wasn’t a good fit.” Those things are not helpful to me. What I want from CS leaders is to collect better data. I don’t want to know once a quarter after a QBR if the customer is happy or not. I need an automated way to know if each champion is doing well and how they feel about that product.
So Megan, to your point, I need to know how you feel about your support interactions. I need to know how you felt about onboarding. Did my sales team over-sell you? Does the product meet your expectations? How do you feel about your service level and our response time? The thing is, if usage is going well, we may still have a problem. If it's not going well, we definitely have a problem.
I need to focus on the “we may have a problem” part and I need better data to inform what’s going on. So what I typically recommend is setting up some sort of automated survey that's specific to different areas of the account during the onboard, engage, and renew stages, where we can actually get data about the customer’s experience.
Q: Nick, who is the best partner within Product to work with every day? Is it the CPO or someone on their team?
Nick: Well, first the CS leader and the CPO have to align on what process we're going to use to include customer data in Product’s decision making.
The CPO probably doesn’t want anything to do with it after that because their team is making the prioritization decisions. So the CPO and CCO need to agree on a process where somebody from CS is representing the customer voice in sprint planning meetings for each team that’s working on those areas of the product.
And in order for anything to get prioritized, we need the voice of the customer in that meeting. So whether it's a CSM, or a CS manager, or even a director of CS that sits in these meetings, depending on your company size, that's where the ongoing partnership needs to happen.
Q: And what needs to be included from CS in order for Product to effectively make a prioritization decision?
Megan: I think a lot of teams struggle to present information within the context of the customer’s pain points, and the opportunity to be gained (or what could be lost) from a dollars perspective. That’s the only way you’re going to effectively influence change in the organization.
That’s often hard for CS leaders because as you get promoted and come up through an organization to a leadership position, that is not something that you’ve had to learn as you lead up to your new position. So they have to figure it out on the go.
Apart from that, I’d also add that it’s dangerous for Product teams to make decisions in a conference room because they think they know what’s best. I’m not saying you should do exactly what the customers say, but their perception is their reality. And if that’s not part of Product’s decision making process, they’re missing an important part of the puzzle.
Jeff: That level to level forum, between the Product team and the Customer team, is key. It means your ICs are engaged, your executives are engaged, and Product isn’t making decisions in a conference room.
One final thing I’d say is if you have an attachment to that old algebraic adage, CS (Customer Success) = CX (Customer Experience) x CO (Customer Outcomes), and if you’re putting your Marketing, Sales, Customer Success, and Product team next to that conversation, you’re on the right path. Align team members, align goals, and constant communication. There is no over-communication between the Product and the CS teams. It's just about intentionality and presence.
LEADERSHIP
My Leadership Document—2021 Edition
Here’s one to bookmark. This excellent list of Subbu Allamaraju's leadership beliefs and behaviors is filled with noteworthy advice like “To create a high performing team, you must help others grow as leaders,” “set unarguable goals,” and “use your expertise to ask better questions to promote thinking but not to dispense opinions.”
ALIGNMENT
The Intersection of Customer Success and UX
Kim Oslob, Sr. Director of Customer Engagement at MeasuringU, offers her perspective on the benefits of having CS and UX more closely aligned.
LEARNING
A Guide To Customer Exit Interviews
In this post, Anita Toth shares a blueprint for how to think about, plan, and conduct a customer exit interview. As she smartly points out, “as [customers] prepare to leave, you have a rare opportunity to find out why.”
Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.
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