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, Mary Poppen, Chief Customer Officer at Glint to discuss how to foster a customer-first mindset, metrics your board cares about, how to measure time-to-value, and what companies should definitely not do when investing in customer success.
There is a notion with SaaS businesses now that the selling model has changed and it’s not just a one and done. With SaaS, you have to win the business every month. There’s so many options that you or customers can choose from. In the same way, customer success has shifted from just being firefighters or providing support to showing the organization that it’s a revenue generating department that’s driving business outcomes. From your perspective, how do you help your organization shift their mindset into what customer success has become now?
Poppen: When you think about the shift from on-premise to SaaS, somebody has to be responsible for working with the customer across the journey and making sure that the value realization happens. Sales goes in, talks to the customer about what they want to achieve and they sell the value vision of what your product and your company can provide.
Once they sign the deal, who ultimately is accountable for making sure that that value realization happens? Because if it doesn’t, it’s really easy these days for the customer to pick up and move to the next organization. Someone needs to be ensuring the value, having a conversation with the customer about the progress that’s being made, what the partnership holds in terms of their business outcomes and helps them track and show progress essentially toward business results. Without a specific role for that, it’s easy for the value to get lost and for customers to essentially feel like they’re not getting what they initially signed up for.
This is really where customer success comes in. They help ensure the customer renews, decides to buy more product, and is a strong reference in the market for your business. Which is all goodness for sales, for marketing, for the board, for everyone.
For the product team as well since they’re sitting at the epicenter between sales and support in that role. They’re on the front lines feeding all the teams with that info.
Poppen: Absolutely. There was some really good research in the past that I believe still holds true. I was looking at the cost to acquire a new customer versus the cost to retain a customer; it’s actually one-seventh the cost to retain a customer. You get seven times lift in terms of your overall margin just from keeping the customers that you’ve already sold while you’re out trying to get more.
“You get seven times lift in terms of your overall margin just from keeping the customers that you’ve already sold while you’re out trying to get more.”
What do you think the rest of the C-suite should do to help foster that customer-first mindset? It’s going to start with the C-suite, obviously. A chief customer officer by definition gets this concept. What about the rest of the C-suite?
Poppen: It’s interesting because there has been a shift for a customer success type of role to be elevated to the executive table and report directly to the CEO or the president of a business line, which elevates the customer-first mentality as well. When that function is, for lack of a better term, buried under another function, say part of sales or a part of marketing, what happens is the primary focus of that function always takes precedence over anything else that they might be responsible for.
What often happens is customer health comes second to the pipeline or to the sale. Elevating it to the C-suite level has really brought the opportunity to shift the focus from solely getting new business to also viewing what it means to the organization to retain and focus on the customers we have.
“[To foster a customer-first mindset], include customer metrics in board reports and in meetings, always ensure that the customer-first mindset is present.”
I think what the rest of the C-suite can do is include customer metrics in board reports and in meetings, always ensure that the customer-first mindset is present in these meetings, talking about customer growth, overall health of the customer base and NPS and/or customer satisfaction (CSAT) type of scores and also time-to-value. I have found that the board is always interested in how we’re getting more efficient and getting better at providing time-to-value and the overall status of where our customers are, which they understand translates into retention of revenue and also into greater brand awareness in the market.
What are some examples of those metrics that you think are important to share with the board?
Poppen: What I’ve found they’re most interested in is gross revenue retention, which shows the health of the expected bookings or revenue and how much you’re keeping. So, how much of a leaky bucket do you have?
In addition, net revenue retention. Which ultimately reflects the expansion of healthy customers. NPS is another metric that has become popular at the board level. We could have a whole other conversation around this particular metric and what it means and what we should do, but they’re very interested in that.
Then the board also wants to see adoption metrics. They want to understand which solutions are being the most heavily adopted and where does that align in terms of the roadmap and strategy focus going forward.
And then finally they really want to understand how you’re going to scale, how you’re going to increase margin through scaling your practices.
Are you talking about scale in terms of number of accounts per CSM or something different?
Poppen: That’s one of the scale measures. But things like delivery differences based on segmentation of your customer base ultimately will feed a lot of scale. How you deliver to your enterprise versus say your high velocity type of customer base. Ensuring that they understand and are onboard with those plans is really important as well.
Time-to-value is a relatively advanced metric that we don’t see as often as some of the others like net and gross revenue retention. How do you measure the time-to-value or how would you suggest a company measure it?
Poppen: I’ll give my consulting response, which is, it depends. Every solution is going to have a different point or different points when there’s a value expectation from the customer. What’s probably common for everyone is from the time you onboard a customer until they go-live is a really good starting place for that.
For us at Glint, it’s from the time they sign the contract to when they first launch their survey (for example: an engagement survey). The shorter we can make that window, the faster they’re going to realize value from our solution.
Why is it important for companies to invest in customer success? And what’s at stake for the companies that aren’t investing in customer success from day one?
Poppen: What I’ve experienced is it becomes a game of catch-up. Who has accountability for customer success if you don’t have the role from the very beginning to guide the customer through the journey to get value? You could end up with the leaky bucket that we mentioned earlier.
Some of the early customers will start slipping through your fingers because there isn’t one person or a team focused on retaining that revenue. It does become a game of catch-up, hiring the right people, putting the foundation in place, and the systems and processes. If you think about it strategically from the beginning you can build the team methodically.
“[Companies not investing in customer success] end up in a game of catch-up. Some of the early customers will start slipping through your fingers because there isn’t one person or a team focused on retaining that revenue.”
These are all positive things that companies should do and why they should do them. What would be on your list of things companies should definitely not do when it comes to customer success?
Poppen: Something I’m very passionate about is don’t say, “Customers come first,” and then display behaviors that are completely misaligned to that. If you don’t invest in the customer delivery teams or you avoid having customer impact as a key part of decision making, then it’s just lip service. Walking the talk becomes really critical in moving to a customer-centric business.
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 Mary’s interview, you can listen to it here. Have questions about reducing churn? Head over to our Success Masters Community to chat with like-minded C-Suite leaders.