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.
You hay have heard these terms before, but what do they actually mean? How do we define them at Linode? What makes one of our customers “High Touch” and others “Low Touch”? I’ll give a brief overview here.
Customer Success can be delivered in different ways. Each segment of Linode’s customer base is approached differently, depending on several factors like their spend, potential, level of complexity, and desired experience:
Communication: Primarily one-to-one
High Touch customers are those that we proactively schedule hands-on touch points with. These customers are each valuable enough to “store inventory” for (educational resources, hands-on meeting preparation, personalized presentations), and deliver it in a one-to-one fashion. The High-Touch cohort tends to contain many of Linode’s oldest, largest, and best-known customers.
One of the primary mechanisms of our High-Touch process comes in the form of Executive Business Reviews. These are meetings held on a regular cadence where we set and work towards goals with our customers. We work closely with this cohort to plan and execute projects, collect feedback, and clear any roadblocks to retention and growth.
It’s important to note that not all high-spend customers warrant a High Touch relationship. Some are more hands-off and self-sufficient, and that’s perfectly fine. It’s all about delivering the appropriate experience to each customer.
Communication: Both one-to-one and one-to-many
The Low Touch approach can be considered “just-in-time” Customer Success. This means we reach out at critical points in the customer’s lifecycle to influence their success; spending just the right amount of effort to make one-to-one interactions valuable to both Linode and the customer. There are no proactively scheduled hands-on touch points with these customers. Unlike the High Touch cohort, we aren’t “storing inventory” but delivering it as needed.
One example of a Low Touch approach is our Variance Outreach play (more on this play in a future post). When a customer has a dramatic change in spend, we engage them to identify any opportunities to help.
Communication: Only one-to-many
All customer interactions in this area are technology-driven with zero hands-on intervention. Touches are timely, relevant, and include useful information to influence a large segment of low-MRR customers. The one-to-many communication in the Tech Touch realm allows us to scale efforts efficiently, reaching across our customer base. Approaches here may include surveys, guides and documentation, or triggered, personalized emails to customers.
What does the Customer Success team at Linode look like?
Currently, there are five of us in the organization: one Vice President, one Manager, and three Specialists. We all work together as a tight-knit unit to help our customers, undertake exciting projects, and establish new policies and strategy to drive Linode forward.
Over time, our team will of course grow larger. This is just a snapshot of its current state.
First, let’s start with our CS leadership team.
Richard Myers is the VP of Customer Support & Success at Linode. He has his own blog that I would highly recommend. Rick successfully led Linode’s Support team for several years before branching out to take on Customer Success.
Joe Bower is our Customer Success Manager. Having risen through the ranks of the Support team over the years, he was a natural choice to break off and create a completely new CS organization from scratch in 2017.
I first started in Linode’s Support department in 2016 after a brief career in Finance. When the chance to join Joe and help build our Success team came up, I jumped on the opportunity. I was drawn to the idea of creating something new at Linode, and after reading Guy Nirpaz’s Farm Don’t Hunt, the Customer Success approach just struck me as a perfect fit for our company. It was a no-brainer to take the leap.
Joe and I ran the team as a dynamic duo for a few months before getting the green light to expand further. Tom joined us in September of 2018, and Caleb followed soon after in November.
Tom is another convert from the world of Finance. Despite not having a background in Linux, cloud computing, or anything at all related, his ambition and desire to learn made him a natural choice to join the team. Tom has since grown to become a crucial part of our organization, nurturing relationships with some of our largest and most important customers.
Caleb was the only one of us to actually work in CS before his current role! With his experience and unwavering emphasis on acting as a constant champion for our customers, Caleb rounds out our team as the newest member. Caleb has been able to apply his experience since day one, already leading a few major initiatives for us.
Well, that’s the whole team! In the coming months, we’ll be hiring more and expanding the reach of our department to engage with Linode’s entire customer base. This will require new hires, new promotions, and perhaps most interestingly, new personality types and skillsets within the team. I’m looking forward to seeing what we look like at this time next year.
This has been my first post about the Customer Success team at Linode. I could write more about the typical CS topics like CLTV or churn, but I think it’s more interesting to get into the specifics of our approach and experiences at Linode. There is a lot of CS material out there, but a lot of it is pretty vague. Calculating CLTV doesn’t help if you don’t know how to hire a team and engage with your customers. Knowing the churn rate of every cohort doesn’t get you anywhere if you can’t find a way to impact it. And, most importantly, none of your metrics will matter at all if you can’t find a way to communicate the importance of Customer Success across your entire organization.
I’d like to give a more personal, practical view of how to build and run an effective Customer Success team that others can learn from. More to come soon!
Earlier this month, I was quoted in my first article on Customer Success. While I’m not technically a “SaaS expert” (Linode is really IaaS), many of the same principles apply as we still rely on recurring revenue.
There are some great quotes here from experts at Shopify, New Relic, and other companies. This was my tip for maintaining long-term success. Without buy-in from our CEO and the rest of the Linode family, we never would have been able to build the kick-ass department we run today:
Involve the entire company in your approach to customer success. My number one tip for maintaining long-term, scalable success with customers is to involve the entire company in your approach.
It’s easy to think of Customer Success as just the name of a department, but true Customer Success is larger than that. It’s a mindset that should be embraced by all members of your organization. At Linode, every team member and department is responsible for our customers’ success.
Many of our customers have been with us for years, and have built entire businesses on Linode’s platform. This kind of deep investment requires close collaboration at all levels of the company to deliver the reliable, high-performance infrastructure that our customers depend on.
While our team itself acts as the voice of the customer within the company, we can’t solve all of their challenges ourselves. We bring together different teams and keep customers at the center of all decision-making, allowing us to build scalable solutions that enable our customers to reach their long-term goals on our platform year after year.
There you have it! No matter how good your CSMs are, they can’t do this alone. The entire company needs to put your customers at the center of everything you do.
Hello! My name is Sam Smith, and I’m currently a Customer Success Specialist at Linode. This is my blog about Customer Success and whatever else I decide to write about along the way.
Throughout my life, I’ve always been a voracious reader. What started with a story before bed each night eventually evolved into a lifelong love for learning, and a habit of never leaving home without a good novel in my bag. Some of my favorite topics are history, finance, and other areas of business. More recently I’ve been diving into the field of Customer Success.
Without the help and shared experiences of so many who have come before me, I never could have made it to where I am today. So, I feel it’s time to pay it forward in my own small way.
I hope you enjoy my blog, and take something useful from it. I’m looking forward to sharing more about my own experiences in Customer Success!