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A Deep Dive into Customer Success Operations - Stephen McBride
Episode 261st April 2024 • RevOps FM • Justin Norris
00:00:00 00:53:32

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SaaS companies spent the past decade optimizing for growth and customer acquisition at all costs. For many, the plan to actually retain and grow those customers has been foggy.

Now with many businesses facing the reality of massive churn, it's become incredibly clear that helping customers succeed is just as important as acquiring them in the first place.

So we're here today to discuss the third leg of the RevOps stool: customer success ops, and by extension, the discipline of customer success as well.

CS Ops doesn't get as much love or attention as marketing or sales ops—one of my past guests jokingly referred to CS Ops as the "red-headed step-child" of RevOps. But I think, and hope, this is starting to evolve.

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About Today's Guest

Stephen McBride is a Customer Success and CS Ops leader dedicated to helping companies grow better. His career has spanned in-house and consulting roles, and he’s spent over seven years in total at Hubspot, five of them as a leader in their Customer Success Org. He recently returned to the agency world with Go Nimbly as a RevOps Delivery Director.

https://www.linkedin.com/in/mcbridest/

Key Topics

  • [00:00] - Introduction
  • [01:49] - Defining the role of customer success
  • [02:51] - Role of CS in a PLG motion
  • [03:37] - Strategies of a great CS team
  • [06:00] - CS strategy at Hubspot
  • [07:56] - Why do some big companies neglect CS?
  • [09:29] - CS as cost center vs. growth driver
  • [11:38] - Balancing the mindset of customer support vs. upselling
  • [14:09] - Defining the mission of your CS team
  • [15:36] - CS as a point of leverage in the customer experience
  • [17:28] - Impact of macro-economic factors on CS strategies
  • [20:06] - Identifying the impact of CS, factors you can A/B test
  • [21:35] - Scope and mission of CS Operations
  • [23:23] - CS Ops as a its own function vs. part of RevOps
  • [29:09] - Who should a unified RevOps function report to?
  • [31:52] - CS Ops vs. MOPS and SOPS
  • [34:42] - CS tools and systems
  • [40:19] - A best-in-class CS tech stack
  • [42:34] - Churn forecasting
  • [44:35] - Getting truly useful health scores
  • [48:34] - Reducing churn

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Transcripts

Speaker:

Justin Norris: welcome to RevOps FM everyone. You know, we've spent a lot of years in SAS optimizing for growth and customer acquisition at all costs. And for many companies, the plan to actually retain and grow those customers has been, well, let's just say a lot more foggy, something to figure out down the road someday.

2

:

Justin Norris: Well, the last year or two has given us a collective jolt and many companies are facing the reality of massive churn. And it's become incredibly clear that helping customers succeed is just as important, if not more important than acquiring them in the first place. So we're here today to discuss that third leg of the RevOps stool, customer success ops, and by extension, the discipline of customer success itself.

3

:

Justin Norris: Now, CSOps doesn't get as much love or attention as marketing or sales ops. One of my past guests jokingly referred to it as the red headed stepchild of RevOps, and there's maybe a grain of truth in that. But I think, and I hope that this is starting to evolve today's guest. Steven McBride has spent over a decade in customer success and CS Ops roles.

4

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Justin Norris: Most recently as senior manager of CS at HubSpot and just last month, he made a pivot and has gone back to an agency role as RevOps delivery director at GoNimbly. So Steven, I know it's going to be a super interesting discussion. I'm really excited to have you on the show.

5

:

Thank you very much. I'm excited to be here and share a little bit more about that proverbial redheaded stepchild apologies to all the redheaded stepchildren out there listening.

6

:

Justin Norris: There must be like two of those in the world and every time that expression comes up, they're just like, why do they have to keep using that phrase? So this is the show we'll know. I like start at first principles, philosophically. And so I would just love to understand from your point of view as a practitioner, how do you define the role and vision for a customer success team?

7

:

What are they for? Why do we have them ?

8

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Stephen McBride: Honestly if a SAS company doesn't have that answer, then they're probably not running their team. Right. And so for me, it boils down to what are the reasons that someone can't. Or isn't able to succeed on your software without human intervention. And that's what I view the role of CS as.

9

:

Stephen McBride: And because you know it has. broader concepts. Some folks will say customer success is just the customer success manager. Others loop in implementation, your technical support teams contract management if you have them. And I think all under that umbrella, the goal is that they're filling gaps that either are too risky to leave unfilled or that simply can't be filled through the existing tech stack that you have.

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Stephen McBride: So for me it's to ensure that the customers have that clear and smooth journey and don't have any barriers to succeeding and sticking around on your product longterm.

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Justin Norris: So there's a vision, like if we think of PLG, which is another big topic these days, you have a motion that doesn't necessarily require sales or at least as much intervention from sales. You could similarly think it doesn't require as much intervention from CS. So it's not necessarily a bad thing.

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Justin Norris: The objective from what I'm hearing from you is getting the customer to be successful, whether that needs a human, whether it doesn't, it's the goal that's important. Am I reading you right?

13

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Stephen McBride: things like PLG, diving into your product, using those indicators, they don't replace the human journey. They don't replace that need. They allow you to deploy the humans more intentionally and more diligently. That aspect of using automation, using product indicators just allows you to say, cool, I can send an email.

14

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Stephen McBride: I can have a pop up do this. My human's going to do something else that's more important that maybe AI or automation can't handle.

15

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Justin Norris: when I think about my experience as a software tool owner or as an admin it's really all over the map. I have tools where I will never hear from a CS person outside of renewal time. And then there's also cases where you can have CSMs that maybe are too needy. Like they want to be on your calendar all the time.

16

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Justin Norris: They're doing their job. I don't fault them, but sometimes it feels it's more about. Let's say them having a cadence to stay on top of you rather than ensure your success necessarily. I'm curious, how do you think about that balance and what does great look like? And I know that will vary from tool to tool and there's no like one universal thing, but if you were to jump into a new company as a CS leader, how would you define what those routines and strategies should be?

17

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Stephen McBride: I don't think you'll ever have a perfect experience, but that you have as few gaps in your customer journey as possible. And so I think to know what great is, you have to dive in a little bit to like what you said and understand what that business is. Is your tool one that requires a lot of upfront leverage? Is it one where if I spend an hour a week with you for the first two months? I can go an hour a month for the rest of your lifetime. Great. Then it depends on where that customer is in the life cycle. Is it a software where it really is something where you set it up and they're good to go and it's just a quarterly email to say, hi, just checking to make sure you're still happy. Or is it something where, you know, every six months you need to have a QBR and say, this is an expensive investment. Are you feeling like you're getting your return on your investment? I think you have to sit down and have that conversation as to where is a human most beneficial and are you dropping at those moments? from a CSM's perspective, if we're thinking about their role, they're meeting with a customer on a regular basis, every time they meet with someone, there should be an outcome. There should be a deliverable, because if there's not, they're wasting their own time and the customer's time. And to your point, those are the CSM's where you say, you know, I respect they're doing your job, but, you We're probably talking too much everyone wants support from their software companies.

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Stephen McBride: And if you're feeling like you have too much, they're deployed wrong and they might need to move around. But for me, it's examining that and saying, are there times when folks are falling through the holes? Are there times when we know that we are presenting wrong? Either a risk because of where they are in the life cycle or something else and are we stepping up with those key moments and then just one thing that I like to say is if you are in an industry where you have a dedicated CSM. Does the team you're working with know your name? And if they don't, then you're not talking to them enough.

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Justin Norris: maybe just to make it a bit more concrete to the extent that you're comfortable talking with it. Like you just spent a pretty long run at HubSpot. it's like a type of tool type of category that, pretty much everyone listening will be familiar with. I'm a Marketo customer.

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Justin Norris: I don't know who my CSM is. I don't know if I have one. I've never really heard from them. I did 10 years ago, maybe in the beginning, but not lately. That could just be a function of that business and how it's evolved. How did you think about this at HubSpot?

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Stephen McBride: Yeah we did a couple cuts. And so some of those cuts were their overall spend. especially in the past couple years, the move to freemium, there's a lot of folks who were spending 50 bucks a month. them looped in kind of the normal atmosphere, we eventually evolved to say, if you weren't on one of those pro subscriptions, really with a significant investment, you would work with technical support. You had access to them, but you didn't have a dedicated CSM. You kind of had to qualify yourself up to that level. And then at a certain spend threshold, you were in hub spots, one to many teams. So that scale CSM of folks hear it where you don't have a dedicated CSM, but you've got a team of folks that are there for you.

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Stephen McBride: There was less expectation on an specific interaction cadence, but the team was there whenever customers would reach out we delve in to start to get product indicators to say, this is when you should reach out to someone. And so that team was there, you know, when customers raised their hands or when they showed a significant risk or opportunity. And then on the other side, for those folks above that regional dollar threshold, the expectation was a CSM would be in touch. At least twice a quarter. And so that's reaching out, trying to get not just an email, but having a meeting on the books and saying, Hey, let's talk about your strategy.

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Stephen McBride: Let's make sure you're executing. And that was just with the ratios that HubSpot had for some customers, you know, as you go more and more up that dollar threshold, it was frequently more than once a month. But for most customers on that average, it's at least, one to two times a quarter, depending on how things fall.

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Justin Norris: Now I can't by any means ask you to answer for the strategies of other companies, but as I'm listening to you talk there, you're like, well, under 50 a month, you know, I could be on a contract that's 50, 000 a year and not hear from somebody. What's a business thinking? Are they just thinking like we've got this on lock.

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Justin Norris: They're not going anywhere. They know what they're doing we don't really need to invest there or like what's the mindset of you know Speculate of course because you're not there, but I'm just trying to understand it

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Stephen McBride: you hit on it, saying with your marketing software that like you've been there for a while and you haven't heard from someone. I think the longer you get into software, the more assumed ingrained and sticky that you are. And so the less risk there is and not having that regular cadence. I think that's probably the gamble that some folks make is saying that it's so ingrained in their tech stack, they'll reach out when they need help. And beyond that, it's been going on for so long, they've got a handle on it. That's probably right for some businesses. I think it definitely leans into that idea that like CS isn't a core value that can drive revenue.

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Stephen McBride: It's just there to retain it. And I think that's the biggest miss is if you. So if you don't operationalize and leverage your CS teams appropriately, they can and should be money generators, not just money savers, they don't just keep the bucket from being too leaky, they can actually lead to positive net revenue retention and be a revenue generating source, which I think a lot of folks tend to miscount and they just view CS as a cost center and therefore everything else is kind of in that mindset of, how do I manage the cost of my cost center appropriately?

28

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Justin Norris: So I was gonna ask that question later, but you brought it up so let's go there I mean what is the mindset difference between a CS team that actually a cost center and a CS team that is a Is it a specific strategy? Is it a way of operating? How does it work?

29

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Stephen McBride: I think at first it's a mindset where the business has to be bought in that these folks can generate money. And so you have to have mechanisms in place that allow for a CSM to either close their own deals or pass them off to sales in a way that they get worked and are, you know, respectfully treated and run through the full funnel. Without that, there's no sense in pretending they're anything other than a cost center because you've given them no mechanism to generate that revenue. So you have to start by being bought in and saying. Okay, these folks can bring us money Then once you have that, it's figuring out how do you actively empower that?

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Stephen McBride: So you want to make sure that your team's goals are such that they're incentivized to drive revenue. If they are just looking at that, cancellation dollars or downgrade dollars, and there's no upward incentive, they're not going to focus there. So you have to shift that mindset and, either have net revenue retention, be their target. Or have them compensated if they're closing their own deals or sending them to sales. And then once you have that, you have to get the team bot in to say, You're good at this. That was the thing that I would struggle with most at HubSpot was especially when we get internal folks. Folks would come over from our onboarding teams or our technical support teams. They'd come in and say, I'm not a sales rep. Like I'm not good at selling this to people. And the conversation I would have was that you're right. You're not a sales rep. You're a consultant. And when you're talking to someone and they're identifying a problem and your solution is a 40 step workaround or a 400 a month upgrade, you're supposed to give them both of those, but be very clear.

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Stephen McBride: One is the 40 step workaround. It's going to take four hours weekly. One is. Another product feature and just give them, both lays of the land and pro con it out. And more often than not, they'll end up closing because that money is worth that time saving and you didn't sell them. You help solve a problem for them.

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Stephen McBride: And I think all those together is how you start to get into that. But it really starts with the business being bought in and saying, yeah, this team can make us some money.

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Justin Norris: You've almost anticipated the question I was going to ask and answer it, but you use the word consultant and you're a consultant. Now you have a consulting, but you're a boomerang. I go nimbly. I noticed you were there before and now you're back. And I have a consulting background too. So I really believe obviously in the value of that function.

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Justin Norris: My experience with CS quite often you can tell that they are following that playbook of trying to find features to upsell you on, but it feels a bit, I don't know what the right word is, but they're just trying to sell you. It's like, Hey, can you do that?

35

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Justin Norris: Oh, how about this? How about that? Like the mindset is too inward focused. And then there's maybe the opposite extreme of where you're just like. I'm just here to help you. I'm not even really identifying those opportunities. So it really feels to me like there is like this consultative sweet spot of like I am going to suggest them when it makes sense and I'm going to do my job.

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Justin Norris: Well, that's hard to do. It strikes me.

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Stephen McBride: It's definitely a delicate balance. Part of it is the incentivization model. So at HubSpot the teams they had net revenue as part of their metric, but also just how many of their customers stuck around. weren't the closers. And so if they were pitching a cross sell or an upgrade, their job was to qualify it, make sure that customer felt that the need was there and they pass it over sales. And so it allowed them to truly and honestly. Pitch things because they weren't then pivoting right into the hard sell. They were saying like, Hey, I just want to make you aware of this. I'm going to give you all the avenues and you can pro con it out with me. You don't have to negotiate with me. I'm letting you know what's there.

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Stephen McBride: And when we're bought in, I'm going to pass you over to your growth specialist, they're going to walk you through it. I thought that was a good model because it allowed them to. Honestly and earnestly pitch and not have to be worried about that bottom line because they had an upsell quote or something to that level.

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Stephen McBride: You know, they really could make sure that they were pitching things when they felt right. I think that allowed sometimes where folks wouldn't do that and you have to, like, train that motion into them, but that was the one piece that I would impart on my team was, never. Go into a conversation and make it look like you're pushing an agenda because customers can pick up on that.

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Stephen McBride: Your customer is already sensitive to that. And so at first whiff, they'll close down. They'll stop talking. So your job is just to help them solve their problems and make clear that you're presenting options. And it's a learned skill. It took a lot of time for some folks to recognize that. But as soon as you build that trust and let them know you're consulting, not selling, the door really opened up and you can have more open and honest conversation.

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Justin Norris: So much of that orientation I think is defined by the mission statement or the set of objectives that a team sets itself. When you're onboarding people and bringing them into the customer successful that a company like hub, so I'll just take it as an example. Cause your recent experience was there.

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Justin Norris: Do you say like, Hey, you're here to grow the business. Do you say you're here to like make customers as successful as they can be, make them love us forever? Like, how do you present that mission to them?

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Stephen McBride: Yeah, I have a t shirt that has the motto on the back and so I can't remember because it was always facing away from me, it was essentially the model that we brought folks in was that you're there to help organizations grow better. Your job is to help them exactly that. Love the tools, see success with the tools, remove barriers.

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Stephen McBride: it wasn't that you're there to raise a stock price. You're there to do it. It was, you are there to help organizations grow better. And that was the ethos that we tried to impress upon everyone in the success org, everyone in every org, honestly. And I think that's where you can really, if everyone's bought into that mission, it's so clear that everyone's rallying around it, but I think company agnostic, if you're training your CS teams, that their job. Is to make the tool as lovable and easy and thus hopefully profitable as possible. That's what they're there for. And if you can get the team rallied around that goal, you can start to see that success is like a truly unified CS vision.

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Justin Norris: It's a huge part of the customer experience and brand perception. it's probably the most massive, aside from the product itself, the most massive point of leverage that you have as a company.

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Stephen McBride: It's definitely the one that folks interact with the most outside of logging in themselves. It's that post sale, whoever is there to work with, whether it be support, whether it be implementation, their CSM, the account billing teams, there's a huge litany of teams that go on there. It's an enormous investment. And I think when deployed correctly, that is when customers can hopefully see the benefit of that. I think, yeah. That was always the one thing, you know, not to go too deep on HubSpot there, but that we always prided ourselves on was you can call the support line and someone will pick up. You can talk to them on the phone. And that was huge. That was not something that other competitors had. And folks knew that, they had made that investment because if we can make the customers more successful, more easily, they'll be bought into, one, the vision and the software, but also sticking it out, maybe when things don't go as well, when they run into a bug, they've got that bit of good faith that they go, I can let this one pass, or, you know, I will be upset, but I don't need to threaten to turn right now.

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Stephen McBride: We can talk through it. If you build that goodwill, it helps Keep you afloat in the tough times because everyone has crit sets to say they don't would probably be a big lie. And you want to make sure that when those happen, folks have that bit of grace and say this was a blip, but they've built trust enough with me.

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Stephen McBride: I can let this one pass.

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Justin Norris: No, I think they've done a great job building that tribe. And I mean, even I've been part of a different tribe for most of my career, but you can see the impact of remaining independent, you know, not being gobbled up by a bigger fish, but really becoming a big fish in their own right. and having that consistent, both I think product and company vision of how they want to be, how they want to relate to customers, have to definitely give credit where where credit is due for that.

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Justin Norris: I alluded in my little opening monologue about, current times, economic conditions, the macro factors, and I guess there's sort of two responses that a company can take to churn title wave that I think is sweeping many platforms now, at least platforms that are not as well embedded as like your marketing automation platform or your CRM platforms that are perceived as optional, you could.

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Justin Norris: So you say, you know what, we're just going to get down to basics and CS is a luxury is not a necessity. So we're going to, you know, cut costs that way. Or you could say, actually, we need, you know, we're churning because people are not seeing the value and therefore we need to invest more, even though it hurts to do that, what are you seeing out there?

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Justin Norris: Are people taking a mixture of these two approaches or favoring one or the other?

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Stephen McBride: what I've seen and what I've heard is that, they might not be cutting investment per se, but they're not. Doubling down on it. So they might say we're going to scale. That's kind of, I think the phrase that a lot of folks are using is we're going to scale. We're going to keep the team the same size, but grow by one and a half times.

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Stephen McBride: And so everyone's going to have a little bit more to do, but that's how we're going to do it. And I think that's the best worst case. I think worst case is to say, you know, we're going to cut ties and we're going to let some folks go or downsides or whatever that might be. I think yeah. I'm one who having been in the space for so long, like I just see the value that's there. I think when folks make that decision, my assumption would be that if I asked the question, what's your retention of a customer with or without a CSM, they couldn't tell you. And I think that does a disservice to the team. there should be ways that a company can AB test and find out, like, what is the true value of a CSM?

55

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Stephen McBride: What are they really bringing? So they know the risk associated with it. Cause It's a little tricky because right now, let's say that you do decide that you're going to, let a couple CSMs go or you're not going to backfill their hire. You're not going to backfill when they eventually leave. You might not know for six months to a year that you're having a negative impact on that because folks are in a contract. Maybe it's quarterly, maybe it's six months, maybe they don't start to feel the pain for seven months and then they feel that they've been set adrift and that contract comes up. So it's one where you might get immediate relief in terms of dollars freed up. But the long tail impact of that, you might not feel for 6 to 12 months and then you'll start to say, Oh, no, we should have kept our ratios higher. We're noticing churn is actually getting worse now and to fix that's going to take another 4 to 5 months because you can't hire right away. And so it's tricky because the immediate relief you'll feel, you might not even feel the pain all at once.

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Stephen McBride: You might look back at a 6 month retrospective and notice that Churn stayed flat or started to tick up a little bit and you can tie it back to that moment when you said, we actually don't need four or five more people on our team.

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Justin Norris: That's a fascinating point about the very long lag time when you compare it to like marketing and you turn off your search engine marketing, you'll see the impact tomorrow. What are the, because it kind of scares me as I was thinking about that, what are the, like some leading indicators? Or have you ever run that A B test that you described to really see the true value

58

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Stephen McBride: I've done tests in the past where you, maybe you remove a key communication. I'm sure everyone has moment in their CS lifecycle where maybe it's not automated, but a CSM sends the same email, maybe it's get a notification, there's a new point of contact. Maybe it's that you get a new admin in the portal.

59

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Stephen McBride: There's something where it's like copy paste. Hey, person. Nice to meet you. How's it going? We would remove that and we would see, okay, in three months that follow that, what is our activity different differentials look like? Do any of those customers pose more risk factors? So just as an example, there's ways that you can start to see like, what's the impact of a personal touch of having a person there without.

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Stephen McBride: Fully pulling a CSM and saying, what happens to this account if I let it go without a CSM for a while. So I've done tests like that in the past just to showcase what are meaningful touch points? Where do we really resonate and make a difference? And conversely, where are times where if we don't reach out? We don't see a difference in outcome. And those are some of the touches that we would pull out. So we've done that and I've done that in the past. I played around with that. I think it's a good A B test to run to find that out and find out, what's the true impact of your team there.

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Justin Norris: You mentioned needing to scale or doing more with less. And that's a good transition point into CS operations specifically and what it does. I think people are broadly familiar with marketing ops, sales ops. If you haven't worked with CS ops, you may actually have a thought like, what does CS ops actually do?

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Justin Norris: And so, I'm curious for your answer to that question. How would you define that scope and mission in relation to the broader team that it serves?

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Stephen McBride: Yeah, for me, that team enables your various CS teams to have the information they need to do their job effectively and removes the barriers as they creep up in their way. And then plugs the team in to the rest of the funnel. I think of the CS experience as part of that flywheel where marketing brings folks in sales, closes them, CS keeps them afloat. Marketing tells them, Hey, here's what we've got going on. Hey, here's how you become an evangelist. Sales either sells to whomever they evangelize to maybe picks up when they move companies, maybe ads on features. CS keeps that wheel spinning. And so ops make sure that the motions of the CS team. Are seen by the other members of the company as well. And then they also make sure that the CS team has the inputs from the rest of the company. If you're not in a rev ops function if each pillar is separate, a lot of times sales reps will be reaching out and CS reps won't see that they're emailing. And maybe there's a support ticket filed, but a sales rep doesn't see it. And maybe there's a marketing email that went out, but it shouldn't have gone out to a risky customer, but it wasn't flagged in the right way. CS ops make sure that those teams have those insights and that they're getting pulled in as well. I think in a simplest term, that's how I look at it is enabling that data to make sure that as you said earlier, that third pillar is on equal and level footing with the other two.

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Justin Norris: Has your experience generally been that CS ops existed as its own functional team, like reporting into CS, or was it part of a rev ops team? What's the trend out there in the market that you've observed?

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Stephen McBride: It had been for a while that they were on their own, they would either report into CS leadership or maybe just into like. finance or central operations leadership. I think in the past three to four years, as Rev Ops has really started to take off, it's gotten looped in where, it's marketing and sales were getting pulled under the same VPs or chief customer officers.

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Stephen McBride: CS has been that as well, or CS Ops is leaning in there. But it had really been on its own for a while and reporting just up through that, that CS infrastructure. But I think a lot of folks are starting to realize that. And then you have to ask, is there a way that all three need to work together in tandem?

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Stephen McBride: And so those operations teams need to be aligned as well.

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Justin Norris: I've noticed in marketing ops that there is debate and in some cases, even anxiety about a rev ops function. I think because so often, and you see this when you look at job descriptions, the revops is often just become synonymous for sales ops. So you say hey come join revops It's a little bit like, you know The fox inviting the hen to a party and you feel like, you know, it's just going to be Subservient to sales ops essentially rather than like a truly unified function and so there are some marketing ops people not that they don't want integration, but that they Are worried about losing functional autonomy or they're worried about, you know, reporting into sales leadership that doesn't understand the value of marketing.

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Justin Norris: So marketing doesn't wanna lose direct control over their ops function. Are there similar concerns at all in cs, or is are CS in revenue just more tightly integrated and it's less less of a concern?

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Stephen McBride: No, I think it's still of huge

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Stephen McBride: concern. you hit on exactly what I was going to say was that a lot of companies, RevOps has just become the new name for sales ops. And when you talk to folks who are like, Oh yeah, I'm the head of RevOps and I run our sales force. I'm in charge of making sure that quotas are good and the sales team is there. And then they stopped their job description. They said nothing about CS or marketing. And you have to ask. That's not really it though. And so that, caution I think is always there where, especially if it's honestly the way that you phrased it kind of gets at the root of the problem, which is that RevOps usually starts by other teams joining sales operations, and it can't be that way.

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Stephen McBride: It has to be that you start a RevOps team. You have to bring everyone together at the same time. Maybe you move pillars, maybe there's a new VP coming in. But I think frequently what happens is it's an ex salesperson who then goes to lead the team and they run over that. So everyone kind of sees the way that it is.

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Stephen McBride: It's kind of similar to the way that in mergers and acquisitions, there's always one company acquiring and whoever the CEO is the person who won. And frequently that sales and that, that does scare everyone else off. it's about that intentionality for companies to ask. Is our RevOps just sales ops, and now we're expanding our empire to have marketing and CS, but we don't know how to run them and therefore we'll run them with the sales lens and we'll chase them away, or is it truly an opportunity to get alignment across the teams? I don't think it always goes well, but I think it is still the best way. If your operations teams aren't in lockstep, there will just be so many spots where you're running so inefficient that. It will not net out in the long run, so you have to ask those honest questions, push through and advocate for yourself.

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Stephen McBride: I think unified ops teams is the way, but to your point, to the entire premise of this question, it has to be done, intentionally to make sure that it is truly revenue operations. Everyone is an equal third of the pillars.

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Justin Norris: totally agree with you. And it is just interesting to see how rarely that is actually the case, at least based on. You know, I like to read job descriptions as a way of kind of keeping tabs on what's happening in the market. And so many RevOps job descriptions that just don't even mention the other functions, or maybe they'll mention CS and not marketing.

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Justin Norris: So I guess you could say that's better or worse that they're just excluding it completely. But it's odd that we've taken that term that was supposed to represent a unification and kind of just made it like, I'm tired of being sales ops. And now we have this whole other thing of GTM ops.

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Justin Norris: Which is because we screwed up so badly we messed up the rev ops term. We have to come up with something completely new. Why are we getting this wrong? ,

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Stephen McBride: There will always be hesitancy to share power. I think that's the core of it. Not out of anything selfish or anything nihilistic or nefarious, but it really just is that I know my job very well, and if I have to share that collaboration with someone else who doesn't know it, this won't go as well. And that is It's probably true.

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Stephen McBride: There are aspects of truth to that, absolutely. But it's that belief that I know what I'm doing and I know I can do it quickly and better if I'm doing it on my own. I think that's one big area. And then the other area is that if you're all under the same umbrella, it's much harder to point fingers when things don't go according to plan.

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Stephen McBride: So, I think, not to take the biggest stereotype that exists out there in consulting, but When the marketing to sales handoff isn't great, marketing points their fingers at sales points their fingers at marketing, and then it's a squabble up through the VPs and it kind of, it will go wherever it goes.

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Stephen McBride: But if your two peers on the same team, that working more collaboratively will allow you to partner together to find out truly where those breakdowns are, but in the event that it's not going well, it doesn't allow you to pull back and say, I've tried everything I can that other day. Business unit isn't cooperating. We can't do anything more here. And I think it's that level of intimacy can be scary because it does put a lot of vulnerability on the teams that are trying to impact that work.

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Justin Norris: if we want to have that unified function, then who's the ideal person for it to report into?

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Stephen McBride: I think chief customer officer,

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Stephen McBride: CCO

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Stephen McBride: that's where I live. Cause that person's function should be to make sure that everyone who's looking to become a customer. Can do so as smoothly and efficiently as possible and that once they become a customer, there's as few barriers as possible.

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Stephen McBride: And so they're there to make sure that the route to becoming a customer is smooth and unaffected. And once you're there, it's the same, which I think encompasses, you know, marketing is underpinning the entire customer journey. Sales is there obviously up to the point of sale and then any upgrades and things like that.

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Stephen McBride: And CS is there post sale. That person that sees it all to me is that chief customer officer.

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Justin Norris: that's interesting as I, I may not have a good. That's the definition of CCO in my head, but I know like in my company, we have a CCO, but she really oversees the customer success work. She's focused there. Do you see CCOs out there sort of have oversight over all three major revenue functions?

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Stephen McBride: Unless I'm mistaken, HubSpot has it for one, which may be

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Justin Norris: That's interesting. there.

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Justin Norris: Okay, that's cool.

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Stephen McBride: But it's in working in CS. You know, I really felt it because if you think of the chief customer officer is the job to oversee the interactions with the customers, sales and marketing are just as if not more involved sometimes than customer success. And so if they're not reporting up to that funnel, their interactions more or less go unchecked. And so marketing can. Send what they want to send, automate what they want to automate. And if their boss isn't unified with the CS leadership, then there's no place for it to come to a head until you're at the CEO. And so it's that realization that post sale everyone else is still just as involved as they were pre sale with the exception of customer success and bringing them together is, you know, so important in that way.

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Justin Norris: I mean, I like that positioning. It also has a inherently a customer orientation or a customer centricity to it that like, if you're just focused on revenue, the customer is like almost incidental. Like you're my way of getting revenue. I'm just going to suck you dry, you know, kind of thing. Whereas if you're focused on the customer, you know, sales and marketing make those customers and then customer success takes care of them.

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Justin Norris: But it's a good orientation to have. I think it's healthy.

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Stephen McBride: I think so. I think that's why I like it. It recenters you on what's this all about? And it's about your customers and making them happy. Like even publicly traded companies at the end of the day sprung up because there was a need and there were people that saw that need enough to pay money for it.

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Stephen McBride: And it's about helping, you know, solve that problem and making business or life that much easier for someone. And that really comes down to the person paying you the money.

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Justin Norris: I'm going to turn back to CS Ops as a function and just think a little bit about like a day in the life on the marketing side, it's very tool centric discipline still, I would say we probably spend at least if we look at marketing ops teams globally different team members have different roles, but you know, we probably spent at least 50 percent of the time on tooling, administering the stack.

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Justin Norris: There's campaign operations, which is very specific. Functional responsibility that marketing ops has sales ops, I think tends to be more around, you know, there's quotas, territories, managing incentives. That's like a huge non technical component of the job. Sometimes Salesforce and their tool stack is split off completely, either to like a specific Salesforce team or under business systems.

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How does customer success, like what's the balance there? It's more between it's like tooling, more strategic, like impact focused work, or I don't know what you call it, administrative. It makes it seem menial. It's not, you know, the comp, the territory, that, that piece of it.

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Stephen McBride: It's probably honestly somewhere a little bit of both when I think about, , a fully realized top tier best in class CS ops team, some of them are a good chunk of time on the tooling, whatever they're using to, manage their CRM, their cases, making sure that is up to date is getting the right information is useful, is helpful. There's someone who is there to maybe not building things like marketing campaigns, but building out automation, making sure that those repeat touch points are ones that are consistent and are delivering on a simple example that I like to use is, you know, marketing has a campaign that they're launching and they're running. CS ops has the renewal touch point that happens for everyone. And when that. You know, 60 day or 90 day mark comes up, everyone needs the same communication. It's not that different from a marketing campaign. So you've got folks that are running those. And then you have folks who are. sitting along and watching how the reps do their day to day and taking that back to the systems team and saying, these processes aren't working, they're absolutely ignoring this part of what we've told them to do. customers aren't responding to this outreach in this way. And so it's a mix of that, being customer facing, having those money, there's still quotas, there might be territories, maybe not as advanced because there's less prospecting, but there's that aspect of book of business management.

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Stephen McBride: Like. That all exists, and so it really marries together marketing and sales. As long as you're buying into that idea that you can have automation, you can have marketing esque touchpoints that are reaching out there, I think the ideal CSOps team is focusing on all of the above.

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Justin Norris: How do you term that role or what's the name for that role that sits alongside the team, watches how they're doing work, like optimizes product? Do you call it like an analyst or how would you call that?

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Stephen McBride: business process analysts or just business analysts usually something in that term is what I've seen, what I've worked with in the past, and have been in the past at that.

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Justin Norris: And so then we get into tools. And there's a question on my mind about whether there's a big need for CS specific tools, like you could just use the CRM, whatever that is to do a lot of your work our tools like Gainsight because CS wants to, I'm being facetious now, but you know, they just like, Oh, we want our own system, you know, you have Marketo, you have Salesforce, I want my playground as well, but seriously speaking, is there a big need for those function specific tools for CS?

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Justin Norris: Yeah.

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Stephen McBride: yes and yes, I think a lot of them spun up in real part due to that gap that was there saying that there are these tools that are specific to marketing as specific to sales and not to CS and then it was okay. Well, what would that look like? And in gain sites, it was saying, well, let's give you a picture of what good looks like and tell you how close to good your customer is. there's a definite need for that. And I think, tools like that, you know, Gainsight, Tatango that are out there, tools that allow you to, like, ingest your business, your BI data, and then give courses of action and playbooks, like those all exist and are necessary, I think. It becomes the same question with those tools as it does with any other is, could you build it more effectively in some cases? Maybe it really depends on the size of your engineering team, the size of your internal ops team. Not everyone has that money to deploy an entire team to build out these custom solutions in which case buying is necessary But one the fact that they're still around shows that there's a clear need but to the fact that What they empower you to do is so Just logical at a baseline there's a need for, you know, the idea that you can launch automation based off of signals that you're getting that you can know and compare two accounts to say what is versus what isn't healthy and see those signals. It's so logical, but so difficult to do without a tool on top that says, yeah, there's a big need for tools like that. Can and should they be better? Absolutely. They should be, I think, easier to access, easier to manage, easier to run, but that need is definitely clear and present for me.

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Justin Norris: just playing the devil's advocate for a second because I don't think you're wrong necessarily, but I've had these conversations internally. Sometimes it's like, Hey, we want to do an automation. Like when X happens, do Y and it's Oh, I could build that in Marketo. It's like, Oh, but actually we could build it in Gainsight.

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Justin Norris: and I, to be fair, I'm don't know if I've ever even logged into Gainsight maybe once or twice. Like I'm not hands on with it. So I don't have a great understanding. Is there a benefit? To doing it within that platform versus, or spinning up a HubSpot workflow or, you know, doing something like that.

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Stephen McBride: I mean, I think Gainsight would definitely say that there is, and I'm sure that there is, uh, at that level. But for me, I think the question becomes if someone says, oh, I can spin that up in Marketo, that's great for that one. But now what if I want 15? Now, the question becomes not where do I do it, but who's going to do it and who's going to give me those resources.

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Stephen McBride: And I think that's a lot of times why folks go into the specific tools is because if I have a CS Ops team, they can advocate for their own budget to buy their own software and then manage that software.

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Stephen McBride: But if what we Determine is, is that Marketo has all the data we need and all the information. Well, now I, as a CS Ops person, have to go to Marketing Ops and say, I either need access to your system, read, write access at that. Or I need you to give me an analyst permanently and neither of those conversations tend to go particularly well. it's not a matter of, can we do that one workflow, but can we do 50 more? And that's when you have to decide, how are we willing to change? Because something has to change.

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Stephen McBride: Either we get a software that does it or we give a team access to a tool that is going to give your VP of marketing a little bit of of some caution there. And which one are we willing to acquiesce on?

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Justin Norris: It's interesting is the way that you just described that, which is a completely realistic to me. Like, I feel like I've seen those situations play out during my career. It raises the question of to what extent are these different tools performing truly functionally specific. Use cases better and how much of it is just people not being able to play nicely in the sandbox, having difficulties with power sharing, like you mentioned,

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Justin Norris: like if we were just okay, I think CS offs into Marketo, could we avoid another tool?

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Justin Norris: I'm sure Gainsight and Tatango and all the rest of them are doing things that Marketo can't do, but it's an interesting question.

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Stephen McBride: it should challenge everyone to ask the question, what are we buying this for? And if you're buying a solution where the first 25 percent is done by different software, you already have, you probably shouldn't buy it, but if you're intrigued at that software because it does that, and you want to use the next 50 percent of the features, well, now we're talking here you know, I think as gong as an example of this, where gong is a really powerful tool and it records calls.

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Stephen McBride: Absolutely. But it does so much more with AI and it can plug back into salesforce and it can tie your systems together. My assumption is that a lot of companies aren't taking the value in that exact way. And perhaps just recording your calls, you know, in HubSpot would be just as effective. So you want to make sure that whatever you're buying for you're getting that first feature that got you in the door and said, Cool, this is nice. But now you want to make sure you're taking advantage of the software and not just paying for a name, but you're paying for the features. when I was consulting on software, I would talk to someone and say, here's your two tiers of software. This tier that's more expensive is what you're on.

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Stephen McBride: Here's the features you only get with this tier. If you're not using them, do not buy it or downgrade like that was the conversation. I think with new tools, you have to ask that and say, does something in my tech stack already do it? And if I'm buying something else, does it do more? Now I make sure if I buy it, I go and use that more.

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Stephen McBride: Otherwise, I probably just wasted a little bit of money.

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Justin Norris: I don't know if this is part of your scope today. Let's pretend it isn't and bring you in. Steven, we need to build out our complete, CS tech stack. What is best in class look like from your point of view? What would the handful of tools be that are in it?

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Stephen McBride: It's a hard answer because it really depends on what you're coming into the conversation with. For me, from that full tech stack side, you need a tool where your CSMs are in one system and have a full picture of the information. Ideally, that's in a CRM, so if you've got Salesforce, if you've got HubSpot, unless you've got a really good reason, I would say they should probably be working in that system. depending on how you take in tickets, maybe you have a third party system that is, your chatbot and taking things on there. That should hopefully be pushing back and integrating back inside. For me it also matters what pain points are you feeling before we go out and, I don't think that we would start by saying let's buy Gainsight today or buy Tatango.

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Stephen McBride: Like maybe we would get there, but we want to start by saying, does your team have a full enough picture with what you already have? Let's max out your current tech stack and then we go and solve with more buys later on. it's not all the softwares they have. It's not what they have access to. The first thing is, do they have a full picture of what their customer is doing on a daily basis? And can they see what everyone else at their company is doing with that customer and vice versa? And if the answer to that question is not yes, we've got to solve that first with what we currently have. And then once that's yes, once we know what the customer is up to, we know what everyone else at the company is up to, Then we start to say, okay, how are you in taking tickets?

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Stephen McBride: Is the current solution you're on going to work? Do we need to buy a third party system? How are you managing that entire life cycle? can we build something in the system you have? Or do we need to go buy a third party life cycle management? how are you getting product insights in front of your team?

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Stephen McBride: Can we build that on the system? Do we need to buy something else on top of it? So it really says, let's get that core foundation solid. And then go and say, of any tool that's out there, do we build or buy it? What do we need out of it? What do we want to get? Because I'm going to tell you to buy something.

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Stephen McBride: Again, I'm going to make sure that you're getting the top 50 to 75 percent of the features used and out of it. Otherwise, you just won't get that ROI. And ultimately, then you come back to me and you say, you advised us poorly and we're going to see you later.

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Justin Norris: you've alluded a few times to knowing what the customer's up to and what they're doing. And I want to look at those things through the lens of churn, which. Is obviously a North star or the very least, you know, a core KPI for most CS teams, different schools of thought out there. What for you, do you look at primarily to forecast or predict churn?

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Justin Norris: Is it one key thing? Is it a blended range of things? Is it a health score? How do you think about that?

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Stephen McBride: For me, an ideal world, it's a blended range of things. It takes in customer engagement with your core team. So are they filing support tickets, which, to be clear, isn't always a bad thing. Support tickets mean they're using the tool. So you do get some positive correlation. A lot of support tickets, not so great.

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Stephen McBride: That means we're having trouble there. So, but are they contacting support? Are they reaching out and engaging with the CS team? Have we had emails and calls where, not just that a CS rep has emailed them, but have they clicked on a link? Have they booked a call? And then on the other side, assuming you have access to product data, you want to see, are they logging in? Are they logging in enough? , comparatively, I think you know how much folks should be using your tool in order to be seeing success. Are they doing that? Are they taking an advantage if you have a tiered system? If they're on a higher tier, are they taking advantage of those higher payment features?

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Stephen McBride: Or are they sticking to the lower downgraded free set of things? And so you want to start to build that picture both. How present are they with you and then the humans at your company, how present are they within the tool itself? And then if you have other avenues, if you have certifications, if you have a community, if you have other places, how active are they outside of those avenues and really looking to see where are they appearing? And then you want to measure both if they're there, that's a good thing. But if they were there and they disappear, that's a bad thing. And if they were never there to begin with, that's also. Potentially a bad thing as well, but you start to measure those all together and put something of an aggregate health score together.

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Justin Norris: I've seen some different, I think it was the CEO of Catalyst, if I'm not mistaken. He was making a few provocative posts. about the uselessness of health scores. Maybe his tool didn't have health scores. He was perhaps motivated to, to talk that way, but There is a common sense view there, and you can see it sometimes like in the marketing equivalent, which is lead scoring, where you just get this like, here's Steven and he's a 52, like, what the heck does that mean?

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Justin Norris: There's no insight into the components that make it up. It is useful as a way of stack ranking people and sifting out the things or the people that I need to pay attention to. How do you view that? Do you like to see the components and the blend or you just focus on the blend and that gives you what you need?

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Stephen McBride: I think it's spot on the blend alone. Useless. I would agree with that. and this is where AI where machine learning can become very powerful. If you have that blend, you need to tell someone if they're not 100, if that's 100, if that's what we're going off of, if they're not 100, why?

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Stephen McBride: Because if I know that they're 50. But that's all I know, and I don't know much. I know that they're not great and I got to do some work, but I could probably go find out. But now I have to go spend an hour digging. But a machine model put together and said, Hey, these are the 50 things I ingested. 25 of them weren't great.

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Stephen McBride: What are the three worst? I think it takes a lot of time. It takes a lot of dedication. But if you do that right, if you make it so that I can log on a Tuesday morning and say, Hey, the health scores re synced this week. Here's my four ones that went from yellow to red. Great. here's why they did that. If you can go a step further and say, here's the action plan, even better. Run at that until the day is long. But I think definitely the score is it's good. It's not great. It's not super helpful. Score with intent is really where you take it and say, cool, this is why they got there and this is what you should do about it.

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Justin Norris: What you just described sounds good. Is there a tool that does that just like that today, or is that a future state or something that you have to combine tools and build around solution around to get that happy place?

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Stephen McBride: I'm sure there's tools out there that say they do it and maybe they do it very well. I haven't seen it done in a way that doesn't take a significant amount of investment. And that investment then tends to, as I've seen it stagnate. I think that's the other trick is that for as much as we like to say what a healthy customer looks like the day your product team rolls out a new feature, healthy changes, and these systems have to be agile enough to keep up with that. That's not always the case. We worked on one at GoNimbly. So we've done it with some product led insights to, to qualify someone for, pre sales motion. And so we found that like that internal build was more efficient because it gave us the flexibility to change those levers to oversee it. I'm sure you can absolutely do it by purchasing a solution and running on top of that. I would be lying if I said I didn't think it would be pretty complex.

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Justin Norris: Useful startup opportunity there maybe the three things you said that got my imagination going was like the simple work of just the stack ranking and identifying who you need to reach out to. The transparency into the signals, like, and here's why, and then the action plan that nails it on top of that, or at least a suggested action plan so that you have the consistency, the standardization the playbook, embedded right into the process.

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Stephen McBride: I think the space it's been hard and I think there hasn't been a ton of innovation in it because you need so much internal investment. You need your product team bought in to either pass over those signals or consult with you on how they bury them in there. You need your product marketers or your PMS in there to say, these are the features we're building.

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Stephen McBride: This is the road map. This is what healthy looks like. Then you need obviously your operations folks to tie it all together. You need your CS folks in there to say, obviously everyone can't be read and if they are read, we need to have a game plan. You need your leadership in there to say, this is how we're tying everyone together. It becomes very colossal ask because you're asking for the person that built the product to tell the person telling the customer how to use the product, whether or not they're doing a good job. And there's a lot of people between your front end engineer and your CSM.

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Justin Norris: So maybe the last question we have time for then is it's one thing to have great scores and know who's read and all that, how you actually take that and do something with it. That's where the CS person ostensibly is delivering value, realizing their purpose. What are a few of the things that you've seen are most effective at reducing churn?

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Stephen McBride: the first thing, the most effective way to reduce churn is to know why you're experiencing churn. And I think for some folks are going to hear that and roll their eyes and go, duh, but you just have to say that first. If you don't know the top reason why folks are leaving, you can't address it.

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Stephen McBride: So you have to know and know confidently, not say I feel or I think, but say, I have this report that shows these customers left for X, Y and Z. This is the data. That's point one. I think point two then becomes addressing the issues that you can address. The top issue a lot of folks are going to have is going to be budget. And that's going to be something they say I can't do anything about. But you can, because there is always flexibility. And maybe it's finding a way for folks to downgrade. Maybe it's looking at your pricing and finding out that it is maybe a little bit too expensive. And those are bigger conversations.

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Stephen McBride: But it's about making sure you're having those conversations and asking the customer. Is it truly budget? If I gave it to you at 50 percent off, would you stick around? Or is that really not budget? Is it you're saying budget? Cause you know, I can't really fight you on that. So I think it's understanding that, but it's finding, you know, the controllables that you can control and coming up with playbooks against it.

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Stephen McBride: So. Budget, I think, is understanding. Is it truly budget? Diving deep into that. Finding out if there is flexibility. Can you come up with discounting packages? Can you come up with creative ways to downgrade folks or move money around? It's about having plays for those that are standardized and predictable. And then for other things where folks say, you know, there's a feature I'm missing. I'm not seeing value. I'm going to a competitor. Find out what within there with folks that will talk to you. What truly was lacking. If they could wave a wand and have one thing to bring them back. Is that something you can accommodate, whether it's now or in six months or six years, do you think you could eventually solve that and start to go after it?

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Stephen McBride: But it's understanding the reason folks are leaving and having dedicated descript playbooks for your team to follow it to say, if they say this, here's what you have available to you, use every play in the playbook and you won't save everyone, you know, that's why everyone doesn't have 100 percent retention, but you can save more if you have a unified strategy is how to do it.

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Justin Norris: I really love that you've hit on the why there, because, you know, all the data and signals in the world can be descriptive and tell you what's happening, but they're not going to tell you why the customers stopped logging in and Those are the sorts of in depth discussions that you need the relationship for.

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Justin Norris: It's too late to show up out of the blue at that point. And that's very similar to marketing too. I mean, I think like I say about marketing data, it shows you what's happening, but the customer insights tell you why. So, interesting parallels there. This was a fascinating discussion, Steve. Really appreciate you spending the time with me.

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Justin Norris: We could probably go on for another hour. But love talking about CS and CS ops and thank you for coming on the show

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Stephen McBride: Of course. Thank you so much. I always appreciate the conversation.​

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