Fireside Chat: Scale Your Customer Success Organization for the Future

[0:00] All right, so welcome to TSW. And getting ready for this, I was looking at your LinkedIn profile and your background and you started Let's see, you started in product management. Then you went to support services. then customer success, but then left customer success over 12 years ago, went into partner management, than industry solutions. Right. So basically your career you have been in roles that touch the whole life cycle from designing the products selling the product supporting the product driving adoption and So you have a very broad perspective. And the first question I have is how does that broad experience shape your beliefs and what makes a customer success organization successful?

[0:46] Well, I have to echo John's comment that customer success is not a department. It's a philosophy, right? So I'm, you know, I'm from Salesforce. We're like the granddaddy of SAS companies and customer success is a value. In fact, if you listen to our CEO, Mark Benioff, he likes to say he was the very first CSM at Salesforce. Now, with Mark as the CSM, you want to operationalize a little bit. So then we think about customer success as a team sport. And what I was able to do is really see how customer, what's customer success meant to different teams as I went on my kind of tour of duty around the company. And what's really key, I mean, if you think about sales, for example, for us, Sales, customer success starts, first of all, it's through the entire lifecycle and customer starts with sales. Writing a good contract, having the right resources, right? The right services, you know, partner services, the right, we have something called success plan. So the right offers being written into the contract, setting the right customer expectation.

[1:48] And very importantly for us, trying to write a contract of longer length. because As many of you will know, in customer success, a longer contract length means you don't have to renew for a while, which means, you know, it's just another one less potential event where something could change. So for us working with sales, we say set up for success from day one. And that's the entire contract construction. So for us, when I review my customer success metrics, it's very clear to my audience that it's a team sport.

[2:21] So I'm going to click into a very tactical question, but this is one that we get all the time at TSIA, and that is how early. do customer success managers get involved in that sales cycle? So if you want to make sure you have the right contract set up for success, where do you try to engage the CSMs into the sales cycle? I mean, theoretically, it's as early as possible, but obviously from a resourcing standpoint, that may not work out. So we have a methodology. We call it Success360. It has four quadrants and three.

[2:54] 27,000 sellers at Salesforce have been trained on it. And so we go through what it means to set up the deal from success for success. What it means if you are a business value consultant in the pre-sales world, how we capture the key value metrics that you use to sell the deal and do a warm handshake into the success resources to understand, well, this is what success means to For us, we try to use the methodology to push ourselves earlier in the cycle. And then depending on the size of the deal and the customer, the team would engage sooner or later. So I'm going to give you another tactical question because these are ones that we get all the time. I knew it was going to go this way here in this conversation. So we had published a while ago this what we call checklist for success and the things that the sales organization should basically identify.

[3:48] codify, write document before you hand it over to customer success to make sure the customer is going to be successful. And since publishing that, some of the feedback we get is we just can't get the attention of sales. They look at that checklist and they go, I don't have any time for that. So this training of methodology and sort of how do you incent? salespeople to make sure they're following the methodology and getting you what you need. Well, I'd be lying to say we hadn't mastered. I think we have the framework for this, right? So the methodology is espoused by our CRO, Chief Revenue Officer. It is essentially designed to train on the entire lifecycle. So when I say 27,000 sellers have taken it, I'm not sure that all of them really wanted to, but they all have, right? So it's back to that point about customer success being a philosophy.

[4:42] I use as a cudgel when needed. And you know, this is actually a question from my own customer success team. It's like, they always ask me, but why doesn't sales understand? Why don't they solve for the long term? And what I tell them is, look, we're a growth organization. This tension between sales and success is it's a feature, it's not a bug. It is how we're set up as a company. We have people who go out and sell and we have people whose job is to make successful and we have the a methodology that ties them together and everyone at the end of the day understands the financial metrics and the stock price goes up and everybody's happy. But it is...

[5:26] a constant tension yeah and i'll just make a comment and i'll get i'll get back to a regularly scheduled programming here but this is good good discussion what you just said is powerful that the tension between land versus expand and renew is is a feature not a bug and we we know there's a lot of companies are still struggling with this you know should i have sales people really care about the expansion do i really need cs and sales But we believe, strong point of view, that you need that tension because you want to focus on land, to your point, to have that growth engine. And a different group really focused on making sure they stay on the platform and expand. So I think I completely agree. And I think we're getting a little bit more sophisticated in our journey to think about it depends on the customer, right? And where is the customer on the cycle? And you could mix it up, and that's what we're starting to play with. Yeah, interesting. Interesting. Okay.

[6:21] your career is you did have this 12-year gap in customer success. This is a function that's been evolving and maturing, et cetera. What are the biggest differences you see from your first stint 12 years ago in customer success and then when you came back? Well, 12 years ago when I joined Salesforce in an organization called Customers for Life, we report it into sales. at the regional level, not even at the top level. So you can all imagine what the role was like. It wasn't consistent. You know, I don't have anyone do a demo. You go do a demo, right? CSM is like, Is it my job to do demos? So that happened constantly. So we've evolved a lot from then. And I'm lucky enough to have a CEO and an exec management team who really care about this. And so we have a seat at the table. And that's the big change. So it's separated out of sales and reporting. Yes, yes. And the other funny thing is back in 2009, nobody knew what a CSM was. So we created a whole job family. We're like, what are the competencies you need to be a CSM? And then we have to go explain to people, well, it's like a sales engineer or sales consultant,

[7:32] Like we had all these analogies to roles that existed that people really understood. End. And you look at this role now, I mean, it's a huge thing. The entire economy has moved much more towards subscription, much more. to having customer retention and loyalty actually be a CEO top of mind, not just top line. So with that, I think, again, we've come a long way. If you look at the job listings for CSMs, it's tremendous now. And that's probably been the biggest change. So I promised the audience here we are not colluding on these answers, but I just want to round out this concept of where does customer success report. And we do org structure surveys every year. And what we look for is, number one, where is it typically reporting?

[8:19] correlation analysis in terms of what's your best chance of basically making that a profitable endeavor versus a really expensive endeavor. And I say this all the time, the data is definitive here. Customer success does not do well when it reports under sales for some of the, all the reasons you articulated. It ends up being used as, you know, you kind of throw it in there, do demos, do this. We never, we never try to monetize it, right? And it's very, very difficult to scale it in that structure. So again, we're not colluding on this, but the data supports exactly what you're doing and you guys, I'm sure through the school of hard knocks figured it out. So, okay. So another question I was very curious because of your background, you were in this vertical solutions team, right? Figuring out how to verticalize. Again, TSIA point of view, we believe that pretty much all tech companies are going to have to have some vertical muscle. It's very hard to just have a generic horizontal solution and going to market because you have to understand the customers are, you know, their outcomes, what's important to them. So now turn that lens on customer success. How important is, you know, vertical expertise in the world of customer success now?

[9:25] You know, the answer is, bottom line, it is very important. So if we turn the clock back, four years ago, I was running the industry's go-to-market team at Salesforce that basically brought in people with deep industry experience into salesforce to help create the strategy help create industry products and help really create blueprints that we could train our entire you know, largely horizontal organization into thinking more like their customers and really speaking the language of the customers. So that has been a huge leverage point for our sales growth. And anything that we do in sales, we think about how we mirror in success. So, first of all, I do want to give a shout out. I think we have one of our industry teams actually here.

[10:20] And they're up there. Hello. And they are focused on nonprofit and higher education. It is an industry team that goes deep in understanding the key challenges, the key processes, everything to do with their customer base. And then we have similar teams for our biggest industries, for financial services, for healthcare, for retail, etc. And it is, if you're thinking about working with a customer to help them realize value, you need to understand what value means. for that customer. So we are obviously kind of retraining our organic teams, some who have industry experience just from working at Salesforce in a particular industry, but we are also hiring people from those industries. Yeah, I mean, there's just a lot of, I think, still resistance within a lot of technology companies to say, "Look, vertical's tough. It takes extra work. It's extra investment. And do I really have to do that?" And I just think, as again, our industry matures and it's really about outcomes and values, I don't see how you avoid

[11:21] And let me tell you, verticalizing and having industry solutions, industry products makes it sticky. Yeah. It makes you go deeper in your customers' key business processes. Absolutely. Absolutely. So let's talk scalability because this is such an important topic to the customer success function. I can tell you, JB used the term yesterday in his opening keynote. We use it all the time at TSIA is that many customer success organizations are financial art projects. tippy top for my largest accounts. I'm funding it maybe out of sales and marketing expense or cogs, I'm not sure how I'm gonna scale this thing. So what do you believe are some of the key levers to actually scale this? And obviously, you have customer success at scale at Salesforce. What are some of those levers?

[12:09] I mean, we can always do better. This organization, our customer success team was built um, you know, CSM to top account. Right. That that is how we fund. We have the classic pyramids. This is top of the pyramid. And this is where actually it used to be practically the whole pyramid. We would try to fund CSMs and For those of you in the customer success world, I am sure many of you have been in the same position as I was 12 years ago, where you're manipulating some spreadsheet, trying to get your coverage ratios to actually have your math tie out with the number of resources you have. And then you end up with one CSM to 40 accounts, 60 accounts, 80 accounts. I mean, something that's really honestly kind of pointless because you don't have that customer intimacy, which is what you really want from that CSM to customer relationship. So we are trying to break that and I and it's a journey. But the other side of the coin for Salesforce is again, 12 years ago, we had essentially one product, maybe 1.5, if you were being really generous. And now we've got

[13:12] I'm losing track, 25, 30 products. So the expertise needed, if you're working with a customer who's running, your multi-product set goes beyond B2B sales. It's B2C marketing, it's e-commerce, it's whatever else you're selling. So having that one CSM be kind of the Uber person, is really hard to have that one person actually understand at a deep level what's going on in all these products so we still do have that pure play csm to strategic top account whatever you want to call it model but we are gradually mixing in more of a skills based engagement model so the idea that we have shared success resources that specialize it could be in a product it could be in or security or compliance, like key IT concerns. And we deploy these experts who are in a shared success setup into outcome-based engagements that have a beginning and an end. So it looks a little bit more like little custom consulting engagements. And that's what we're looking at in terms of scale. It's a work in progress. We're also rebuilding our digital foundation. We've got a whole new digital tech stack.

[14:32] all around Salesforce for all our properties that we are actually have started deploying. So both those are our avenues to scale. Well, so two things. Number one, I think Salesforce org has spoken at previous conferences about that sort of dynamic engagement models where based on what the customer needs right now, apply more resource. But if there's somewhere else, you can pull some of that resource off. So it creates more flexibility. So that is a lever for scaling. And what about... monetize in terms of when you can and you're adding value and you can charge the customer for that value to basically feed the engine of resource. What's your perspective on that? That is also key. It's a little bit.

[15:13] setting up for success for day one, right? Making sure customers understand what they're entitled to, And if they're expecting more to sell that delta. Yeah. So we have offers, we call them success plans. So they include enhanced support. When you get up in the higher levels, you've got technical account managers that really help. And then you have proactive monitoring that our product team does. So we can instrument a lot more. The key for us is selling the right plan. That helps us. It doesn't fully take us out of the financial gyrations, but it helps us a lot. And it's a huge business for us now. And one of the key things, again, our perspective is being prescriptive with that customer as you're going through that sales cycle and saying, look, based on where you are, your complexity, your size, what you're trying to achieve.

[16:01] here's the right prescription for you. That is going to involve some of these value-add services, which you should pay for, but you're going to be more successful if you follow this as opposed to a different plan. Yeah, absolutely. And the prescription isn't necessary to buy stuff from us. It could be you need these skills. How are you going to get these skills? Are you going to get them from a partner? Do you have internal people that you want to skill up? Let us help you. You need an integration architect because of the complexity of what you're doing. And we don't want to be kind of the SOS call all the time when you realize your architecture isn't performing, for example. Absolutely. We benchmark customer success organizations. We look at the tracking. Some are very focused on health scores, adoption, metrics, others are very focused on commercial metrics, you know, renewal rates, expansion rates. Your perspective, what metrics matter the most to your organization?

[16:54] Well, we do, we have that, we face that same set of, you know, which metrics are key. Well, we look at metrics in two big buckets. One of them is what we owe the company in terms of financials. And that is the attrition rate slash renewal rate, depending on which way you like to look at it. And also, attrition. grow growing the business right so that is kind of the land and expand motion so what is the expand based upon the fact that the landing actually create a lot of value for the customer. So we have we have our but our biggest metric that that finance tracks with an incredible amount of precision is our is our attrition rate. And that's the number one. That's the one that I will get calls about. What does it look like? We forecast against it, you know, like a business.

[17:41] But beyond that, I mean, because that's, you know, it's a trailing 12 month. That's how we look at it. So it's a little bit after the fact. Right. So so the other metrics we look at are more, you know, traditional. Right. We have an early warning system based upon adoption and usage. That really is an early warning for potential renewal risk. And we like to engage early. We like to engage nine to 12 months before the renewal date. If it looks like these adoption and usage metrics are not good. Yeah. But we also have a metric around just technical health.

[18:14] of the customer's instance of. Salesforce. So that would be how many lines of custom code are written in there? How are their key business processes performing at peak loads? It actually includes human knowledge like, well, do we have The do we have buy in from the executives? Do we see huge amount of tech debt sitting there that's preventing a customer from actually taking advantage of the latest innovation. Because even in a cloud-based world, this does happen. So that is kind of our health rating. And we look at that as well and really try to formulate how are we actually going to attack that. It's interesting you said we like to engage 9 to 12 months before the renewal. I love it. We buy SaaS products like everybody else. And I love it when you buy the product and you get this call from the CSM and they want to introduce themselves.

[19:10] about 30 days before the renewal is due. And I go, "I didn't mean the CSM, I meant the renewal manager." That's who I meant. That was not the CSM. But anyway, so yeah. So let's talk about futures here. Because again, customer success is not a static concept. It keeps evolving. That's what makes it fun. Yeah, absolutely. So what do you think the future of customer success looks like? Is it more AI? Is it more personalized? More, you know, digital experience for the customer? What do you think it looks like? Yeah, we didn't have the...

[19:41] plethora of digital tools that, you know, 10, 12 years ago. So I do think that the personalization, and the idea of targeted engagements because the customer wants a particular outcome, as we understand better, and understanding better doesn't just mean deploying people to go sit at the customer site and attend all the steercos. Yes, that's nice, but there are other ways of kind of gathering that intelligence, loading it into a system, and making sure everyone has that data.

[20:13] I think that data-driven insight and personalization and targeted outcomes will be will be the secret sauce of the future that will also help us scale And for more rote tasks, there is obviously an amazing amount of self-service that's available. Our Slack counterparts, as many of you know, Slack is now part of the Salesforce family. And I sit down with their success team and I'm like, "So how do you do this?" And they're like, "Oh, we Slackify everything." And I'm like, "Okay, what does that mean?" But they have bots, they have a lot of automation just built into Slack channels. And we're looking at that thinking, "Well, what can we learn from it?" And I do think that that is the future, that the simple things can be automated.

[20:58] And then the high value things, you've got enough data to make it targeted. So it's not quite so much, you know, spray and play, spray and pray in terms of how you want how you want something to land. Yeah, absolutely. I mean, we were on this topic yesterday. JB was on the square with really data driven, you know, sales motions and those analytics helping you be much more targeted on the sales side. Same true than after they're on the platform, much more targeted in your efforts based on where they're at, what they need, and to kind of fold instead of having to have a person intervene, that's definitely going to be key. Yeah. And if I could just riff a little bit on what Lisa was talking about on partners, I Right. 90% of the work in the Salesforce world is done by partners. So that's something we spend a lot of time thinking about. Like we have CSMs, we have our own success resources. We have this motion. But how then do you make that motion inclusive of this 90% of the world that's sitting in partners who aren't Salesforce badge employees? How do you make sure the knowledge, your best practices, et cetera, are all shared? So however we would train our own success managers,

[22:08] and our own consultants in our services organization, Making that available to partners is incredibly important. And then we've got, you know, some technical logistics. And so we spend a lot of time with our partner team trying to figure out how we can make this as seamless as possible. Because, again, setting everything up from success from day one, as I talked about, includes partners. Right. But partners, you know, may have slightly differing incentives. metrics or health metrics are shared with partners so we can all be as aligned as possible. Okay, so I'm going to riff now based on what you put on the table. So, on the partner side of this, so we see, if you look at the industry and you look at, you know, people have been in this industry a long time selling traditional products, whether it was a Microsoft or Cisco, whoever, they usually had very robust channel partner ecosystems because that was really important for how they went to market with that product. Then you have this next generation SaaS companies come along and a lot of them because it was direct, right? They didn't have as a robust

[23:15] the channel partner ecosystem. I mean, but it sounds, you know, it's Salesforce. How has that thinking evolved in terms of the role of the partners and how important they are? Do you think that's changing for sort of the born-in-cloud companies? I do. I think earlier on in our journey, partners helped us get bookings, right? They knew the market better, especially outside of what we consider our core markets where we had a lot of employees and expertise. But that philosophy has changed because of the whole idea of of being set up for success, which can't involve just Salesforce people. And so that whole philosophy is permeating our partner team as well, because we are aligned on making that customer successful, and we can't do it without our partners. So the channel is being pretty much a sales channel. Hey, I'm just an agent. If you can point me, now I got it. Thank you. They're on the platform too. Hey, the channel is really not only sales, but helping with that delivery motion, helping drive expansion, help very

[24:19] Thank you for taking that one. So I'm going to switch gears on you again here. And so tomorrow we have a keynote from Eva Helen, and she is a longtime tech exec, and she's publishing a book titled Women in Tech, a Book for Guys. And so I had an opportunity to interview her. We're doing a podcast now, and I had a great conversation. And in that conversation, we were talking about the fact that only 28% of employees in the tech workforce are women. I mean, very low. And so we as we were talking about that, this concept that diversity and inclusion is not the responsibility of HR or just a diversity and inclusion task force, that it's really the responsibility of every frontline manager. And I'd just love to know your perspective on what you believe frontline managers can do to help recruit more diverse talent into our industry.

[25:10] Absolutely, and just to do a little horn tooting, we look at, I look at my team's metrics all the time and we're at 47% female and I'm very, very happy about that. That's pretty impressive. Yeah. That's awesome. We have work to do and a whole bunch of other fronts, but I have that one statistic that warms my heart. It is everyone's business and it comes back to the statement earlier, it's a philosophy. Mm-hmm . Right. And as We need to have teams that mirror the diversity at our customers. This seems kind of obvious. So for a frontline manager, I would say open your aperture.

[25:52] If you're you know, trying to staff a role that helps manufacturing customers. You should look at someone who maybe is a shop floor supervisor who really understands the business processes really well like the whole industry approach actually gives us more access to non-traditional backgrounds meaning non-traditional tech backgrounds right don't just go for you know a tech person who's worked at all these you know enterprise software stalwarts and think that that person is going to be the best person for the job and that i think is a big It is a mindset change. It's an attitude change that needs to be supported by the culture of the company. So everyone feels that they you know, they should be doing this. And, uh, And at the end of the day, think about the person who can deliver the outcomes that you're looking for.

[26:41] When I was speaking to Eva in this podcast, we talked about the concept of when safety became a big thing in manufacturing plants and people created safety departments. But if everybody working on the front line felt that safety is not my job, they're supposed to worry about that. Safety in the plant is usually not that great. But if they all feel that they own safety, safety improves. I think it's the same exact issue here with diversity and inclusion. Everybody's got to feel that that's their responsibility, not ours. Somebody else's yeah, and everybody can have some impact on that absolutely absolutely so so I really appreciate the time here today And we went through our our time like that and I appreciate your your insights And in Salesforce continues to be a great role model I think for a lot of companies look at in terms of what does customer success look like at a much larger scale? So really appreciate the insights. Thank you for having me great conversation