A few weeks ago, I had a great chat with Adam Joseph and Shanta Bodhan about what it’s like to get started in Customers Success. You can check out the podcast episode right here.
Before my time at Linode, I worked in Finance. Shanta came from an HR background. We talked about some of the challenges we faced when starting in Customer Success and what skills from our past roles actually made us more successful. If you’re thinking about switching careers or hiring others for your own Customer Success team, you may enjoy this conversation.
This is a good post from Vitally. While I don’t agree with everything they say here (Support and Success are certainly different functions), this part struck home for me:
Customer Success should handle support during your hyper-growth phase because the more interactions your growing CS team has with customers, the more they’ll learn. Why not keep them plugged into a valuable source of customer insight, i.e. Support requests.
Your Head of Customer Success is writing the book on how Success is done at your evolving business. New products and new customers mean new use cases and playbooks. Customer Support requests provide a peek behind the curtain of the organizations using your product. Those insights will guide your Head of CS as they create the processes their team will follow for years to come.
Support requests are also an irreplaceable source of training for your CSMs. Every time a CSM answers a support query, they learn something about the barriers customers face in getting value from your product. They can then take those learnings and proactively knock down those same barriers for other customers. Example: If a customer calls in because they can’t figure out how to set up an integration, your Customer Success Manager will know to proactively educate future customers on that step before it’s a problem.
Customer Support Agents are paid for speed, not for recognizing trends and empowering customers to get the most value out of your product over the long haul. Leave your Customer Success team in charge of Support so the insights that come from those interactions don’t get lost at the end of the call.
Jamie Davidson, CEO @ Vitally
I’m a firm believer that any employee, at any company, can benefit from spending time in a Support role. The wide exposure to customers and their common problems is really important.
On our own Customer Success team, two of us transitioned from a Support background. That experience has been invaluable to our success so far. All of our new Customer Success Specialists also spend a few weeks going through Linode’s excellent Support training program before being onboarded.
Our VP of Customer Support and Success, Rick Myers, was recently on the Elevate Podcast to talk about how we do Customer Success at Linode. If you’re interested in how we built a team from scratch, check this one out.
Here’s the description:
What is customer success? I have no idea. Too many companies use the term for too many things, and most of them are doing it wrong. Our dear friend Rick at Linode is actually doing it right by defining clearly the structure of customer success for their team and refining it to better serve their customers. Sounds easy, right? Hmmmmm, is it?
If that embedded link breaks, you can find the episode right here.
Your Customer Success team doesn’t have to be only about retention and growth of the existing customer base. It can also be a powerful partner for Marketing and Sales teams to work with, helping drive acquisition and land new customers. How so?
CSMs are in touch with your best (and sometimes worst) customers every day, giving them deep insight that nobody else has. Who else in the company has anecdotes and customers stories at the top of their mind like they do? There is a good chance that your CSMs have a good grasp on the good and bad fits for your product. They know which customers are able to use your product best, and which ones constantly struggle. You can learn from this and use your CSMs’ knowledge to target similar prospects.
One important function that Customer Success can help with in a growing organization is providing customers for references and case studies. You can take those rock star customers, analyze them, and show them off to the rest of the world. A case study can help prospective customers see a real example of how your product is being implemented successfully. If you have a customer reference on hand, they can give your Sales team a successful story to point prospects to for more detailed information.
“In the beginning, I was a one-person IT operation, but Linode’s Professional Services team became my infrastructure team, almost like they were working in-house with me. They helped me select the best nodes for our requirements, and as we migrated our services, they were in constant communication with me, available to me whenever I needed them—that was true then and still is now.”
Eduardo Fortes, Head of Infrastructure, Retargetly.
These efforts can also benefit your existing customers. Linode has a mature Marketing team and access to resources that many startups don’t have. By teaming up and publishing new content, we can give a boost to our customers’ exposure and possibly drive more traffic to them. This of course benefits us in turn, as those customers grow and use our platform more.
“We’re not just getting infrastructure from Linode. Their Success team adds additional value for no extra cost.”
Ana Dzida, VP Marketing at NSoft
For the first quarter of this year, our team set an OKR to introduce a number of customers to our friends in Marketing for new case studies. Linode runs 11 data centers around the world, and our customers come from almost 200 different countries. Our goal this quarter was to introduce customers from each of 6 global regions; North and South America, India, Europe, APAC, and Australia.
We work with a lot of really interesting and unique companies at Linode. From small developer agencies to huge managed hosting providers, we have all kinds of folks who deserve to have their stories told.
Here are five customer stories we published this quarter:
My goal for 2019 was to read 24 books, or two every month. I ended the year almost right on target, with 25 books read. Goodreads puts a wonderful summary together which can be found here. I love seeing my stats at the end of the year (total pages read, most popular, etc.) and reflecting on which were my favorites.
If you look at the books I read in 2019, you’ll see a variety of history, business, and personal finance, with a little bit of fiction tossed in. I don’t strictly keep to any single genre, but rather am happy to pursue whatever interests me at the time. For much of last year, it was WWI-era history, as can be seen by the streak of Barbara Tuchman books over the summer followed by Rogan’s The Fall of the Ottomans. This was sparked by my thoughts while reading James C. Scott’s Against The Grain and Calloway’s The Indian World of George Washington.
This coming year, I’ve set a more ambitious goal of finishing 36 books, or three per month. I started my third book of the month this morning (The Black Jacobins), so it seems like I’ll be on pace to reach my quota for January.
I find that reading is one of the core activities that help me recharge and do my best work. It always has been. So, I’ll be doing more of it.
Sometimes, the three most popular letters in Customer Success seem to be “QBR.”
It’s impossible to visit any kind of community or forum for Customer Success without seeing a constant stream of questions regarding QBRs. How to build the perfect slide deck, who to invite, and what information to present are all common topics.
Gainsight runs a great Slack workspace where questions like these come up every few days:
If you’ve been tasked with QBRs you may have similar questions yourself. How do we do them? What do we call them? Does anyone have a good slide deck?
Slow down. Take a deep breath. Let’s start from the beginning.
First of all, what are QBRs?
QBR stands for Quarterly Business Review. These are regularly scheduled meetings where we check in with our customers, review progress and plan ahead. We can also collect valuable feedback and spend quality time with our customers face-to-face (or at least screen-to-screen).
But we call them something different at my company!
If you don’t like the term QBR, that’s ok. You can call them whatever you want. At Linode, we call these meetings EBRs, or Executive Business Reviews. When we were first starting out, we said QBRs. However, since not all of our meetings are held on a quarterly cadence, we thought the “Quarterly” part didn’t make much sense. In most of these meetings we are also speaking with executives, so EBR is a better description for what’s going on.
Ok… so what are we supposed to talk about?
Regardless of what you call them, the benefits of QBRs are twofold: we bring value to our customers, and we bring value back to our company.
What are you bringing to your customers in the time slot they’ve graciously given you out of their busy day? What kind of valuable information can you bring back to your own internal teams after each meeting? This will vary depending on your situation.
One piece of advice if you’re just starting to do QBRs: don’t overthink them. Ask your customers what they’d like to see, come prepared with some neat usage stats, and make the slides look nice. If you’re doing it right, a slide deck should just be a rough guideline for your conversations with customers, anyway. You can even skip the slides and have a normal conversation, if you’d like.
How do we run EBRs at Linode?
For our first quarter of reviews, we put together a few slides on account usage, Linode’s product roadmap, etc. and then asked each customer, “was this useful to you?” From there, we continued to iterate. To this day we continue to experiment with different content and agenda items for our meetings.
While we do have a slide template to start with, we let our customers determine most of the QBR content. In an initial onboarding or discovery meeting we try to determine what’s most important to them (is it our roadmap, platform usage stats, etc.?) and go from there. Ultimately, each QBR ends up being unique as it focuses solely on that particular customer’s stated goals and how to achieve them.
When it comes to EBRs, our focus right now is on a small number of high touch customers, so that allows us to take the time to customize each one.
Do I even need to hold QBRs?
Maybe not! Are you getting anything out of these meetings? Are your customers getting anything out of them?
If you’ve been mindlessly scheduling the same meeting every quarter and narrating from a slide deck, it may be time to go back to the drawing board. Our time is valuable, and there are plenty of other things we could be working on. For further reading on this, Lincoln Murphy has a great article called A QBR is NOT Required for Customer Success.
He’s right; QBRs aren’t required. If you aren’t seeing value in QBRs, ditch them. Then you can obsess over something else.
The actual function and organizational structure of Customer Success can vary across companies and industries.
Close collaboration across the entire company is important- it takes more than just one CSM to get customers where they need to go.
Customer Success is one of the fastest-growing positions on LinkedIn, recently ranking as “#6 most promising” career paths.
CS is still on a journey to become a distinct discipline.
82% of attendees have a distinct CS org in their company. The rest are ambiguous or a sub-team of a larger department.
CS works with the rest of the revenue team to coordinate and meet company goals.
Depending on the company, CS can often report to Marketing, Sales, or Support; or these can even report to CS.
It’s important to keep in mind how we approach customers themselves- what is our role?
Are we trying to simply sell them something, or come up with a real solution for their business?
Customers are looking for advice. It’s often about making “heroes” out of our customers and helping them outperform their peers.
Post-sale, the real work starts.
We need to make sure customers actually get what they’ve purchased.
This requires close collaboration with sales and pre-sales teams.
Customer acquisition can cost up to 25x more than retention. Companies and investors are noticing, and mentioning CS more in earnings calls and reports.
There isn’t one correct answer to organizational structure.
CS might report to the CEO directly, to sales, to support, etc. depending on company’s market, goals and lifecycle stage.
There is definitely still ambiguity surrounding CS in the field. Don’t let semantics or titles get in the way of what you need to deliver.
KPIs will vary depending on what the company’s and team’s goals are.
Think of the Peter Drucker quote: “What gets measured, gets managed.”
When creating metrics like a customer health score, just start with a few simple points at first. Don’t try to “boil the ocean.”
Customers are often excited to participate in health scoring because they want to see these metrics themselves. Don’t be afraid to reach out for collaboration.
How to staff for CS roles?
Hire for culture fit.
Candidates should have a service mentality. Think about where they stand on the “me -> we” scale.
There is no particular background that is a clear winner. Good CSMs can come from anywhere; support, sales, finance, etc.
What kind of compensation models are standard for CS?
“We serve, we don’t sell” – this must be reflected in the compensation plan.
Avoid revenue-generating terms and incentives like expansion or upsells. Closing a sale doesn’t always contribute to the customer’s success, and incentivizing this way alludes to more sales-focused goals. There’s a different team for that.
Instead, focus CS compensation on activities and outcomes tied to the actual customer’s success, like engagement, activity, NPS, retention, and advocacy.
While the typical Customer Success metrics like churn, renewals, CLTV and retention are important to track, they are all lagging indicators. This means they are a reflection of your work, and your customers’ activity, after it happens.
If you are doing the right things to make your customers successful, these financial metrics will eventually reflect your hard work and start moving in a positive direction. For that reason, we keep a close eye on some more fundamental, day-to-day, activity-based metrics. One of these, and the most important, is the number of escalations received from our Support team.
At Linode, we have a world-class Support organization available to our customers 24/7/365. This team is highly trained and empowered to fix almost any problem that arises with our platform. Server down for maintenance? No problem. Website unavailable? They’ve got your back.
With such an excellent team handling most of the day-to-day customer interactions, if we get an escalation from them, we know something has either gone horribly wrong or wonderfully right. That’s why we track both negative (trouble) and positive (opportunity) escalations to Customer Success.
On the negative side, if we receive an escalation about an issue that is beyond Support’s ability to fix, it’s a good indication of a systemic issue with our product or a feature that needs to be added, potentially affecting many customers. Do we need to rally additional resources and teams (Product Development, Engineering, etc.) to work on a solution? A “trouble” escalation might also act as an early warning of a customer about to churn, and gives our team a heads-up so we can step in for the save.
On the more positive side, an escalation from Support may be a great opportunity. Is a new customer growing quickly? Are they interested in a longer-term contract or a case study, both of which our team coordinates? Great! We’ll get the ball rolling. An escalation of this type lets the Customer Success team step in at an important part in the customer’s lifecycle, helping to steer them in the right direction and clear any obstacles to future growth.
In short, whether good or bad, an escalation to Customer Success tells us that something out of the ordinary is happening. These are critical points in the customer lifecycle, and present opportunities for our team to positively influence our customers’ experiences at Linode. In doing so, we see retention, growth, and other metrics improve across the board.