State of Customer Success 2018

I attended Pulse Europe (the 4th) on the 8-9th November, an event run by Gainsight, a Customer Success (CS) technology vendor. They run the larger, main event in the US and I had the pleasure of attending last year where I captured the State of Customer Success 2017. So this is a timely update with a local, regional flavour.

Below are some general observations, main takeaways and then I captured notes from the sessions I attended (including my spin on things).

Chatting to the GM of the European office of Gainsight, Dan Steinman, I concluded that not only were Gainsight in the CS technology business but also in education. He agreed.

By that we didn’t mean the services part of Gainsight where they do offer education in support of their technology (see Gainsight University). I mean the education of an industry, a nascent one that needs it. It’s in their interest of course, to grow the category and also the industry within which it operates, mostly Enterprise Software [as a Service]. 

We also discussed how other industries could benefit from learning about the CS business, like car manufactures which I have written about before: The connected car vision is missing a few connections

I digress, the point is Gainsight take a leading role in informal education and for helping grow and share learning between individuals, companies, for the category and beyond. In this respect they are very successful and the event achieved that aim too.

Main take aways:

1. Tighter integration between product and CS, the move to self service and broader alignment

This was a theme driven not just by Gainsight on the back of their acquisition of Aptrinsic (more here). I’ve been seeing this more and more and driving it in my work and it is definitely a growing trend.

It encompasses two elements:
(1) greater collaboration between product and CS teams on high touch interactions with and insights from customers and,
(2) the built in onboarding, help and product adoption features in products that drive end user self service.

This trend is possibly the most evident but there is also the need, oft talked about, of greater alignment within customer service oriented teams and with sales and marketing teams.

2. Lack of innovation

I found at this event and on the whole that there are no real innovations being driven or presented other than in company products themselves (point above). I am writing an eBook / trend report about this and in the work I do mentoring startups and it is a main pillar I stress.

I think in an industry or category often struggling to find its way (see next point) we will have to do more to innovate and increase the impact of customer success activities. There is so much scope since the customer is at the forefront of everything and technology is changing so much and so fast. But innovation needs to come to business models, processes and people too.

3. Hype Cycle

The chart below was presented by Nick Mehta, CEO of Gainsight in one of his keynotes. Billed as a maturity chart, you could also easily see this as a hype cycle. I’ve been through the early curve twice in companies and seen it happen in others. I’ve also seen it happen with many technologies which the cycle most often refers to. I got an impression that as an industry we are in a trough of disillusionment.

Perhaps I’ve been in CS too long and lack the starry eyed optimism of a newbie but I’m saying this from the perspective of what I hear. I hear too much justification, disagreement on the function and its impact, arguments on who owns the customer, fights with other disciplines like customer experience, etc.

It just feels like the conversations are typically of the kind you find in the trough of disillusionment. It’s also a period characterised by lack of innovation as mentioned. That’s not  a bad thing. If I’m right, I’m looking forward to the slope of enlightenment for the industry as a whole because on this, I’m a true believer 🦄 🚀

Day 1 – 8 November ’18

Keynote – CS trends

This is a list that Nick Mehta, CEO of Gainsight ran through:

1. CS drives sales. Prospects talk to customers and advocacy is key. So if you ensure customers are successful, they will act as willing reference points and that will help close deals. I totally agree with this and think it’s an undervalued KPI (from the vendor point of view).
2. Company-wide priority. Top down involvement, endorsement and integration into operations is critical for CS success. Having been  a part of two reorganisations because this was not done right from the start, I absolutely concur. Where CS fits is still being debated though and the dust has yet to settle on that. More on this later.
3. Career success. CS is one of the twenty most promising jobs of 2018. Growth in Chief Customer Officer’s was talked about and the fact they are primed to be the next CEO’s with some early examples quoted.
4. Prescriptive. There’s a greater drive to commonality, standardisation and bench-marking. The periodic table by Gainsight below is an attempt to define this. With this lacking in many of the organisations I’ve worked in and with, it’s going to be a challenge to define for an industry but I agree it’s critically needed.
5. CS movement. The growing attendance at Pulse conferences and book sales was pointed to as evidence of a growing CS movement. A little self serving perhaps but I can definitely feel an uptick in tempo over the years. The jobs market is also an obvious indicator and aside from CS being a most promising job, the number of openings I’m seeing is rising almost exponentially.

CS in EU

• Pockets of activity mentioned like London, Berlin, etc. For me they echo the startup centres in EU where often the bigger, better SaaS companies reside and thus CS naturally follows.
• EU is learning and following fast and a couple of stand out companies were quoted as evidence of that – see next point (in brackets is what they are excelling in):
• Slido (Voice of Customer); Intelliflo (ROI); ReviewPro (tech touch + human, e.g. 3 mails following sign up – if no open, human contacts); Signavio (customer health); Attraqt (exec alignment/sponsorship – internal); Response Tap (success planning); Workfront (risk management); Gainsight (stakeholder alignment – external).

CS and Product

This was presented by Travis Kaufman, VP Product Growth, Aptrinsic on the back of Gainsight’s acquisition of Aptrinsic. Ultimately its a reflection of the strategic direction Gainsight believes they need to take to grow the market and no doubt themselves. There are some compelling arguements.

• Sales and Marketing have done it (quotes about Salesforce’s acquisition and integration of several marketing platforms into their offering), now CS and product need to. Hardly compelling evidence but some other drivers were mentioned which do make sense.
• Driven by
  — Data. Drive new opportunities based on usage data.
  — Scale onboarding by extending the journey into the app.
  — Influence product roadmap based on data not opinions
• Product is way to scale CS engagement for high volume, low touch accounts. I’ve written about this multiple times here and here.
• Feature / user feedback built into the product and covering onboarding as well as ongoing use will expand.
• Sales and marketing consolidation will be followed in the CS / product world is the firm prediction – I’m rooting for this outcome.

Accenture analysis

A talk on why CS is the new growth mantra which is based on the main C-Suite challenge around delivering profitable growth. 500 executives were surveyed for the insights amongst 10 brands: Microsoft Azure/O365, Tableau, Symantec, Adobe, Salesforce, SAP, Cisco, Workday, Dell-EMC, Marketo.

• A customer’s level of trust in a brand is the single most important 
  factor in a renewal decision (55% said so). Trust is the #1 influencer and counts no matter how long a customer has been buying a product or service. 
• First impressions count – deployment (installation, activation and setup) is the most important CS activity. It is 2 times more significant in determining whether a customer will renew. A bit of confusion on their part here. As pointed out in various other presentations over the two days, I would separate out CS management from deployment activities and for me its much more about how you launch to end users: Launch like a boss – bringing consumer startup practice to your enterprise technology platform.
• Longer term customers value access to self service tools and the ease of renewal – 73% think its important and it can have a 20% influence on renewal decisions. I love this since it validates a lot of my thinking: Role of Self Service in Customer Success.

Must win moments for a CS team

By the author of The Three Value Conversations: How to Create, Elevate, and Capture Customer Value at Every Stage of the Long-Lead Sale. This presentation was about a messaging approach for customer renewals, price increases and upsells. It was part based on a quote referenced by Nick Mehta (see screenshot) that renewals are really resells. It also emphasised the need to tell a better story. Great example of Malcom Gladwell’s Tipping Point book success – he wasn’t the originator of the theory, Morton Grodzins was. But Gladwell popularised the theory through better story telling. Other points:

• Selling (acquisition) stories need to be different to staying (retention) stories because the latter reinforces preference stability as opposed to disrupting change / status quo bias.
• At point of renewal, there is no sense selling on new features/functions which many sales people do, but rather on reinforcement.
• Some really good scientific and evidence based reasoning (neuro science, behavioural economics, social psychology and decision science) on why good storytelling works. Totally get this having done several sessions on storytelling before – key CS skill I would say.
• Focused around the customer retention path post sales (why stay), but also answering questions around why the customer should pay more and evolve (expand). 

Success Planning

ResponseTap and Micro Focus went through some of their common approaches.

• No common view of desired customer outcomes between sales, deployment, onboarding, etc.
• Single source of truth needed – one document
• 3 time lines created for a plan (short, medium, long)
• Everyone agrees on common outcomes before plan is approved – sales, CS, support, etc,
• Benefits/Learning:
  — Having a common customer journey between departments
  — Tracking NPS at different stages is useful and should cover various journey phases: sales, onboarding, then service/support and CSM
  — CS should review internally feeding progress back to the organisation
  — Improved cross team collaboration and decision making
  — Better renewal rates after implementing

Self Service

This applies mostly to the support function and was presented by someone from Insided.

• Most customers don’t want to contact companies for support (72%, Forrester) so important to address well from a self service point of view.
• Free trials and freemium customers also need support
• Automation is not the answer for everything. 7 out of 10 interactions with chat bots fail.
• Including community responses in help centre search responses is good practice – Google quoted as example.
• Peer to peer answers are viewed as more trustworthy. Best is for the company to focus on company and FAQ material and the community, the long tail of other queries. Coincidentally I just came across another research based post that bears this out: Why Online Communities Are The New B2B Superpower
  — From the post: online communities are the third most common digital engagement channel for post-purchase customer feedback or support (after email and website).
• Support or help in product is best and voice queries are rising (digital assistants).

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Scaling user onboarding but keeping a personal touch

Again this was presented by Travis Kaufman, VP Product Growth, Aptrinsic. I agree with this approach from a scale, tech touch point of view. The only problem I see with it is the potential over emphasis on features. This can be a distraction from the all important emphasis on business outcomes which should never be forgotten.

• Most of the user experience happens within the product and so it’s a good reason to focus on this which I totally agree with.
• Onboard users to aha moments – key features you want to emphasise.
• Onboard to new features as they release
• Re-engage users to complete critical tasks
• Product teams need to know what feature adoption rates are and also what the qualitative feedback behind that use is. Work with CSM’s to leverage this and drive or accentuate further use. 
• Derive personas for specific use cases. Ask in qualitative surveys or deduce from the use of a feature and who you intended it for.

The quest to be LAER efficient

From the President and CEO of TSIA (Technology Services Industry Association) J.B. Wood, a great overview of the industry as a whole. Also touching on the broader opportunity with XaaS (Everything as a Service). The TSIA is an association that works with the top 400 tech companies to understand what they are doing and what impact that has.

• LAER: Land Adopt Expand Renew. Where XaaS meets profitability – see operating framework in slide below.
• 5 key markers on the path to LAIR effectiveness which is comprised of 4 stages – see this also in slides below
• Monetisation of CS falls in the effective phase. Allows for investment in better CS activities
• Point made that Cost of Sales and Marketing (COSM) is too high in cloud companies because customer acquisition costs (CAC), customer expansion costs (CEC) and customer retention costs (CRC) are based on activities being driven by traditional sales and marketing teams.
• If the CS org were to manage activities covering the latter two it would drive down COSM. Fair point and this lead to a lot of discussion around the CS org owning renewals, upsells and expansions – the standard discussion that always comes up and was covered in other talks/discussions. On this topic I feel like the verdict is still out even after years of discussion. See also Nick Mehta’s point on this from his keynote on Day 2.

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CEO’s view of CS

A panel discussion between CEO’s of Futrli, Precursive and TaskRay facilitated by the CCO of Box, Jon Herstein. All had robust CS functions so naturally the input was mostly positive.

• What can you do to make CS successful? Spend time with the team. Understand the problems customers and CS org experiences. Get quantitative/qualitative feedback on ideal CS function then build it. Get people to think like customers – spend time there.
• How to avoid silo’d CS function and ensure cross company accountability? Success hacks across functions. Have hypothesis that will achieve CS outcome then try prove. Non traditional customer facing roles spending time with customers, e.g. engineers. Love the hacking idea – I’ve written about this before: Success Hacking
• Where will you invest? Automation of tasks so CS can focus on value work. Love it – say no more.
• Any questions from VC’s around CS? A resounding YES around what is being done and how. They want insights into CS like scope of effort, ration of CS individual to customers, on what, etc.

Day 2 – 9 November ’18

Keynote, Nick Mehta, CEO Gainsight

Rumination on the raison d’etre of the CS org and where and how in the organisation it works best based on Gainsight experience. All makes total sense and as it should be for now.

• Started on the debate over CS being a role or strategy. If not solved there’s a danger we lose the initiative. It should and can be both.
• The CS charter: CS (Customer Success) = CX (Customer Experience) + CO (Customer Outcomes). CS > CSM (Customer Success Manager), in other words, Customer Success encompasses CSM’s and many other areas besides.
• Lessons from Gainsight:
  — CS and Renewals separated at Gainsight. Different skills and tasks and difficult to do both well.
  — CS and Account Management also separated. Expansion happens off the back of adoption, outcomes and different audience relationships that CS build.
  — CS and Services. Handover opportunities and knowledge for skilled teams from CS to Services to implement deep work and methodology (project management).
  — CS and Marketing. Building the right outcomes and thus advocates happens in CS, formal references and stories developed further by marketing.
  — CS and Support. Strategic, exec stakeholder and impact work is for CS. Technical skills, process and speedy results should be covered by Support.
  — CS and Product. They have so much common ground: adoption breadth and depth; customer feedback, etc. Too often they have different ways to measure and silo’d thinking. Again example of sales and marketing and need to combine CS and Product which Gainsight are doing.
  — Exec team and CS. CS provides insights to customers, execs can amplify, drive resources, decisions and problem solving, etc.

Sirius Decisions: B2B alignment and impact on business performance

Sirius Decision are a research and advisory company focused on demand generation and performance measurement. They presented findings from various bits of research.

• B2B Revenue Engine expectations have been increasing, challenging organisations to drive stronger alignment across customer success, sales, marketing and product teams.
• The historical view of alignment predominantly around the buyer is no longer sufficient to drive growth and profitability rates ahead of the market and the competition.
• Customer engagement is one of the six critical areas of alignment that B2B revenue leaders must focus on.
• Achieving and maintaining alignment within customer engagement initiatives requires a roadmap to realise the business impact it can deliver to the organisation.
• Engagement scoring (for all the various customer interactions) highly sought after by CMO’s

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Customer Success at Cisco

Alistair Wildman, Head of customer experience EMEA was interviewed on stage. This is what he shared after being there and in his position for 6 months.

• They call it customer experience which includes CS. Covers other functions: support, service, etc. So it’s the whole post sales experience.
• Hardware has been wrapped up into services subscriptions model
• 80% of post sales efforts happen through partners – they are key in strategy. Not like Microsoft apparently although not true. Good analogy of a pit stop, one tyre is changed by Cisco, the other three by partners.
• They have account based CS which is a direct engagement model and technical CS which will work with partners on customer challenges.
• Data is key. They are still in the process of building dashboards to understand usage which they think will take 2-3 years.
• Lessons from Salesforce (where Alistair worked previously): Hire for skill not for count. Senior people that know how to do the job. Develop skills through customer engagement simulations with product for training.

Data science at Gainsight

I attended this session thinking I was going to get insights into the cutting edge practices adopted by Gainsight but it was more like a basic intro to data science. Here are my brief notes before I left the session.

• We are heading into the age of predictability which is where we want to be – anticipating trends, heading off negative ones, leveraging positive ones. 
• Tasks to consider are: identify the nature of your data sources; quantify and get a score for your data outputs, understand and plot maturity stages, move up the scale.
• Prescriptive analytics understands causes for outcomes and prescribes solutions upfront. Needs AB testing of playbooks. This is the kind of deep level insight I was hoping for but we merely skimmed the surface.

How do VCs see CS

Joyce Liu (Dawn Capital), Paul Morrisey (Battery Ventures) and Stephen Millard (Notion Capital) were interviewed by Igor Beckerman (CFO Gainsight).

• Usage and adoption is a clear priority early on. Value comes later. Customer advocates seen as important and so too Customer Advisory Board’s (CAB).
• Metrics in the boardroom. Predictability and causality key. What are targets likely to be and why are they what they are.
• How much to spend on CS. Depends on whether the company has big end customer’s vs small end customer’s. Onboarding should be a big investment. Where early value is seen with correlation on outcomes, investment goes up. CS can be a cost centre in the early days but profitability is important later.
• CS leaders. Some of the best were waiters in the past – they all have a love for service. For larger companies, those that can have quality conversations across a broad range (multi functional). Systems thinkers and those that can take multiple perspectives (customer, industry, vendor)
• CCO to CEO. If former responsible for 90% of long term profit that stands to reason it will happen.
• Decision factors for investment. Talking to customers to get their views on the company. Tools and processes in place are also a key decision factor.

Bonus

Brain Cox came and spoke on astronomy and the result was 🤯 Some excellent perspective after two days of intense CS overloading.