In our ‘View From The Top’ Series we’re bringing together top C-Suite leaders and investors in the software industry to share their stories and elaborate on why investing in customer success has become a must-have for any business today. We’ll hear how these leaders have invested in customer success to help their entire organization increase revenue, reduce churn and drive business outcomes.
In this episode, we sat down with, Chris Doggett, Chief Sales Officer at Fuze, to discuss how he builds compensation plans for his customer success team, unique ways to gather customer feedback, how he measures and reports on customer success metrics to his company and board, and advice for other fast growing SaaS companies scaling their sales and CS teams.
You’re in charge of revenue for Fuze, how does customer success fuel revenue growth for you?
Doggett: The net answer is is that customer success is fundamentally about the customer experience, specifically on helping customers to derive the most value possible out of your service.
As a result, customer success itself, I think of in terms of revenue as providing foundational support. That is to say I don’t think it directly drives revenue growth, at least not in the way we sort of traditionally think about sales functions. I do think when you combine a good customer success program with high service quality, and customer needs, and you have a good product fit, and those things come together, the result should be that you have a strong, long term valued partnership between the provider and the customer.
“When you combine a good customer success program with high service quality, and customer needs, and you have a good product fit, the result should be that you have a strong, long term valued partnership between the provider and the customer.”
That makes for a strong revenue base that you can build new customer acquisition, and therefore drive revenue growth, but I think customer success is really an indirect or a supporting function for revenue growth, not a primary driver or a source of new revenue.
In your organization, customer success is part of the sales organization? Is that right?
Doggett: Yes, I’m responsible at Fuze for sales and delivery, and the simple way to describe that is the full customer lifecycle, from initial awareness all the way through to advocacy and customer success, and we have another function which is partnered with customer success, which is account management, are the two functions within sales that handle our existing customers.
How do you build compensation plans around items like renewals, upsells, and churn for the CS team, and make sure that they align with the organizational objectives?
Doggett: We have two functional roles that work with our existing customers. Customer success managers is one and account managers is the other, and they really work in concert with each other.
The customer success manager is responsible from day one, from when the customer signs a contract, through the whole lifecycle, to manage the partnership that we have with our customers. The account manager is responsible for all of the contractual negotiations, including renewals, cross-sells, and upsells
We do compensate the account managers based on that, specifically based on net revenue retention, so they have a list of assigned customers that they’re responsible for, and we of course look at the expected renewal values, and then also what our expected cross-sell and upsell rates are into their base. Combined, that ends up being a net revenue number that we compensate them on.
For the customer success team specifically, we don’t drive variable comp the way that you do on the account management side, but rather we look at customer satisfaction, adoption, usage of the platform, and feedback from the customers to assess their performance. That’s more of an annual bonus model than it is something we’re commissioning on.
When you gather customer feedback is that something that you do with NPS surveys or CSAT?
Doggett: It is. We also get direct feedback from customers in the product itself, so if you use our platform to make a call, or conduct a meeting, or things of that nature, at the end of that session you’re prompted with a little five star rating. We get a pretty high click rate on those, and folks can rate it one to five stars, and depending on the rating they may get a followup question or a checkbox that they can click to provide more information.
We’re actually doing it in real time, all the time, thousands and thousands of times a day, across our customer base, and then of course we do some of the more traditional measures with surveys, and CSAT scoring, and things of that nature.
In addition, we have a lot of good visibility in terms of metrics from our platform, so we can see for any given customer what the adoption rate is within their employee base, and what their usage patterns are, and that also gives us a really good indication of how the platform is working for them. If it’s working well they will use it a lot and increasingly as they adopt the product, and so those are really good indicators for us, as well.
Has it made a big difference to capture feedback after they’ve just used your product a minute or so ago?
Doggett: It makes a huge amount of difference for us, both on the positive side of things when we know things are going really well and they’re getting a lot of value out of it, but this is technology, and sometimes people have an issue with a new headset that they plugged into their laptop, or whatever it may be.
It’s equally important when they didn’t have a good experience for us to know that, to collect some additional information, and to be able to respond to them. Back to this topic of customer success and the customer experience, customers are often very surprised when you reach out to them and you say, “Hey, look, I’m seeing that in the data it looks like at this particular location we might have a network issue.” Whatever it may be, you help them troubleshoot that, and that goes a really long way to building a strong partnership.
Is being that attentive and responsive a significant competitive advantage for you?
Doggett: It is. It’s reflected when folks review Fuze and the platform, we get high marks for having a very robust customer success program, and we get good feedback from customers and of course that’s all reflected in a lot of the reviews that we get, which is great to see.
Given all the technology that is available to us and all the companies that are gathering this voice of customer, just think back at how often you’re hit up with someone asking for your feedback. That happens quite a bit, but how rarely does someone actually reach out to you based on that feedback to do something about it?
Doggett: You can really blow people away when you detect something that’s going on in their network. For example, something that’s problematic, before they know they have an issue, and that’s when you can really exceed expectations, which is obviously what we all aim to do, but it’s easier said than done.
You clearly embrace the importance of customer success. How do you ensure the rest of the C- suite recognizes the importance of customer success, and if that is or how that is a part of everyone’s job in the organization?
Doggett: It is fundamentally part of everyone’s job in the organization, whether you’re in a customer-facing function or not, but there’s always a challenge in making sure that it’s clear to people how what they do day-to-day relates to the overall health of your customer base and your customer relationships, and therefore your business.
In the C-suite, for us, it’s not really a challenge. In the executive group, we all recognize the importance of net revenue retention, and it’s universally understood that that’s one of the most important metrics to our business as a service-based business, and what we do to help ensure that is part of how everybody thinks about things is that we have regular monthly operations reviews that we do with all of the leaders in the business.
“In the C-suite, ensuring the importance of customer success is not really a challenge. In an executive group, we all recognize the importance of net revenue retention, and it’s universally understood that it’s one of the most important metrics to our business.”
Front and center are our net revenue retention metrics, and the underpinnings to them; the things that drive customer satisfaction, and adoption, and renewal rates, are things that are on the board for review on a regular basis, and talked about. When we look at the trends there and we recognize when things are going well, and focus on how we can improve, but even more importantly if things aren’t trending in the right direction we drill down into the business, and figure out why and what we need to do to change the trend line.
In order for it to be important, it has to be something that you’re reviewing regularly, that’s discussed, and where you’re really digging into what the root causes are from an operational perspective.
Your customer success metrics are just as important as revenue, and growth rates, and expense line; all of those that are regularly reported, do you include customer success metrics at that same level of importance?
Doggett: Yes, we do. Right up there at the top is net revenue retention, and then customer health metrics that support that, whether it’s CSAT scores, or the end product quality scoring or its ratings that we’re getting on customer support calls. We capture their satisfaction on every single customer support call that comes in. Were they satisfied with the support they got and did they get the right answer?
We look at those things. We’re always looking at the adoption and usage metrics, and of course within the customer base the other set of metrics are what’s the renewal rate? What are the cross-sell upsell rates and trends? And then, what are the trends around activations or deactivations in credits for customers?
Those are all components of revenue retention, so those are front and center reviewed on a monthly basis.
It’s great that every executive on the leadership team has visibility into it, and they can all work from the same page. Do you roll up CS metrics to the board level, as well?
Doggett: Yes. We’re looking at the same set of metrics when we’re doing board meetings, so I think the easiest way to think about it is there’s continuity from the board level all the way down to the first line manager level on what those key metrics are, and what the drivers, the underlying factors are, that affect those metrics.
It’s something that, for us, is straightforward because we’re doing it as a matter of course throughout, so it’s something everybody’s very familiar with, and is readily available.
Is there anything else that you report up on that maybe other companies should think about including in their metrics roll up, or maybe they haven’t thought of yet?
Doggett: There’s a lot you can do on the product side of things if you’re a SaaS platform, whereas you look at usage, for example, before and adoption metrics. Adoption metrics, for example, you can look at what did the company contract for, and then what’s actually been deployed and is it being used?
If you have a thousand employees and only 800 have used the platform in the last 30 days, then you know you’ve got about an 80 percent adoption rate, and as a result your customer success team needs to be proactively doing some things to help drive adoption further within the organization. That can be simple things like making training sessions or content available to employees, or a little bit more in depth like doing an adoption program or having an ambassador or champion program within the company, etc.
When you’re thinking about a SaaS platform you need to maximize adoption and maximize usage, and there’s a lot you can dig into there, usually from a product platform perspective, if you measure it, which is fairly straightforward to do in a SaaS platform, then you can really get a lot of insights about the direction of the business and the health of individual customers.
We actually take a series of those factors and we effectively have our own formula for projecting or forecasting customer health. We validate that with human touch and customer success managers reaching out to the customer and having a regular communication with them, but it’s really important for us to look at those metrics and either see when things are going well, or when we may have an issue that we need to address with a customer.
When it comes to customer feedback and looking at the usage, actions speak louder than words, but you need both, right? If you can combine both, you get an accurate, full 360 degree view of what’s actually going on in your product.
Doggett: That’s absolutely right. You can have a lot of metrics and a lot of insights, and you’ve got to back that up with action and communications, and when you put the two together, it’s a very powerful combination.
You have been very successful in pulling these programs together. What advice would you give to other revenue leaders that are currently scaling a sales and CS team at a fast growing company as well?
Doggett: I love the growth mindset and the idea of building this mindset in a fast growing company, because what we see is a lot of young, successful companies have really hit the mark with customer success, and it’s critically important, especially in a SaaS world.
It’s fairly straightforward but sometimes people will skip a step. You start with a clear objective in mind in terms of what it is specifically you’re hoping to accomplish with your customer base, and make sure you’ve got a few targets that are straightforward to measure, so that you can use that to assess where you are relative to achieving that objective.
That’s step one, is to make sure that’s really clear. You need to make sure that everybody within the organization understands what that objective or those objectives are, and how you’re measuring them, and that they are engaged. They understand what their role is in helping to support that, and then I think you’ve got to communicate early and often what your current status is or what your progress is against achieving that objective.
If you put those things together, you can rally people in the company beyond just the customer success team to that objective. This is critical because when you’re starting out you usually start with a fairly small team, and that way it’s manageable, and you’re usually learning as you go and tuning as you go, so you need to be able to leverage the broader organization to support that objective.
In terms of the tuning, of how you build out your customer success program as you go, and how it evolves, the most important thing to do is to listen to your customers, hear directly from them. Are you meeting or hopefully exceeding their expectations as a business partner, and what would they like to see more of or see that they’re not seeing?
“The most important thing to do is listen to your customers, and hear directly from them. Are you meeting or hopefully exceeding their expectations as a business partner, and what would they like to see more of or see that they’re not seeing?”
They’re going to lead you in the right direction if you’re asking those questions and listening to them in terms of what you need to do next with your customer success organization. We can all have great plans but your actions need to be grounded in the feedback that you’re getting from your customers and to me the smartest way to build it out.
Start straightforward, start small, and then do active listening and evolve it as you go would be my advice.
Stay tuned for more interviews in our ‘View From the Top’ Series to hear why other organizations are investing in customer success. If you want to hear the full audio recording of Chris’ interview, you can listen to it here. Have questions about retention? Head over to our Success Masters Community to chat with like-minded C-Suite leaders.