Shifting the Dynamic from Vendor to Partner with Customer Success
In this interview, Kevin Scheper (VP, CS at Drift) talks about the importance of understanding customers’ behaviors, motivations, aspirations, and what drives their success.
Customer Success aims to develop two types of loyalty: behavioral and emotional. You aren’t sticky with a customer unless you have both because you might be doing the job for a customer. Still, if they aren’t fond of the experience they have with you, they’re always at risk of deciding to try someone else that they think might be able to do the same job but make them feel better at the same time.
Background and Career
Scheper spent the first twenty years of his career in a variety of customer-facing roles at athenahealth, the first web-based platform in healthcare — and he said Athena’s focus on delivering customer results, rather than on selling software, was a primary driver of their success.
Now leading Customer Success at Drift, Scheper sees an opportunity to help customers establish a clear vision of success and provide them with a personalized experience that delivers the value they expect.
He believes that CS organizations must be built in a more customer-oriented way. That includes leveraging critical information and insights to develop a proactive strategy that helps customers understand the product and find value in it. This is a departure from traditional account management. Apart from developing and managing relationships, Scheper said, CS is not just a designated team handling expansion and renewal, but also a driver for revenue growth.
The real value of Customer Success
With the SaaS industry’s explosive growth, there is a high demand to understand how customer success changes affect how customers engage with potential vendors, how customers view these changes, and the implications if not addressed.
Scheper shared an important lesson he had in his previous organization. He recalled that while their customers consistently achieved significant ROI, some were not as satisfied as one would have expected.
“What we realized is that we were entirely focused on getting the technical job done right, and we did well - our customers were achieving their expected ROI, but it came at the expense of a delightful experience. Implementations were massive change management exercises, and clients were exhausted at the end.
While the product’s value might come first, the experience causes a customer to become intensely loyal. Customer success drives toward two things — behavioral and emotional loyalty. You don’t become sticky unless you develop both.”
How does CS drive lasting business value - and growth?
In the SaaS economy, the rules of growing the brand are still the same: meeting customers’ expectations and delivering the brand promise. And it all starts up-front. There are a couple of things that need to happen at the beginning of any new relationship with a customer:
1. As partners, we need to establish a shared vision for what the customer will accomplish. So, why are they investing in Drift? More bookings? Higher quality leads? Lower expense (Drift automates much of the qualification process)? They need to have success measures that we all track together — and agree that these are the ways we will determine success with this relationship.
Once you have that vision and measures for success, the customer needs to sing it from the mountain tops. Everyone needs to hear their company leaders talk about why they’re doing what they’re doing — and what they expect to get out of it.
2. We also ask that key decision-makers come to the table and participate. We see in the sales and marketing universe, whether sales will do something or marketing will do something. But to be truly successful, both of those parties need to be involved and work together.
All of the most successful modern SaaS IPOs have had multiple products, and they have excellent net retention performance. When you think about that, not only do you need a sales team that is hunting for new logos, but you also need a CS team that is nurturing customers and helping them realize the value they’re expecting so that they want to buy more services and learn more value.
Thus, CS is a clear driver of growth. And when you start to see companies get to significant revenue thresholds, your revenue expansion from existing customers can eclipse the revenue you get from new customers. And at that point, you realize that both the sales and customer teams are in the driver’s seat for its growth.
The structure of a CS organization
In an age when there are almost always multiple companies offering any given business solution, Scheper notes, ‘” there are several building blocks of a well-functioning customer success organization that drives competitive advantage.” Some key ones are:
- Dedicated customer onboarding.
- Customer success managers are measured against customer health and value realization.
- A customer support team that is focused on availability, efficient issue resolution, and customer satisfaction.
- Customer success shared services, which could include experience design, customer marketing, the voice of the customer, and more. These shared services encompass all the efforts to enable a deep understanding of customer product feedback, a finger on the pulse of sentiment at the user and buyer level, and an ability to close the loop with customers. Hence, they are aware of all the things that are important to them.
The future of CS
Scheper believes, “Customer Success was born out of the transition from upfront fees to subscription-based business models. But now we see it proliferate further into areas of our economy that are more traditional and not necessarily web-based.”
He continued, “What I can see ahead of us is that the experience our customers have with us will become more of a differentiator, and as a way to strengthen relationships and drive up retention. And do this, CX will become less of an art and more of a science. Besides, the self-service element of a customer’s experience is going to become more and more important.
We need to find ways to enable them to have self-driven experiences while also maintaining a meaningful relationship with them.”
You need to face the good, the bad, and the ugly
When it comes to your business’s success, most would agree that there is nothing more important than your customers’ success. Therefore, organizations must understand that the success or failure of their customers is in everybody’s hands. Scheper says he sees many companies that “exclusively focus on their best, most successful customers because they are the ones that expand the most.
While it’s true that you shouldn’t exclusively focus on the customers leaving, ignoring them is short-sighted and a recipe for disaster in the long-run. When you choose to focus on your healthiest, happiest customers, you end up losing a significant portion of your customer base cycle after cycle - much of which is avoidable. But you only end up focusing on customers who, for whatever reason, are tolerant of the problems you have. That’s not a way to build an enduring business.
“Sometimes, customers leave you because they are not a good fit — that may be an excellent opportunity to think about product-market fit and how you sell, but put that aside. But generally, when customers leave, it’s because you failed them. And that could be that you made mistakes in onboarding them, they do not realize expected value, or you didn’t catch issues soon enough, so they can’t see themselves investing in renewing.
Sometimes they have leadership turnover and your point of contact changes, but you’ve failed to engage them and resell them on the value you can deliver.
“At Drift, we spend a lot of time understanding the kinds of problems that cause customers to leave so that we can make structural, process, or product changes to prevent those problems in the future. We focus on the one or two most important issues each quarter to try to make some progress against them and ultimately have a bigger and more significant portion of our customer base that is excited and happy to stay.
The truth of the matter is that, in addition to the ROI, a positive customer experience is what causes customers to remain loyal and invested. And if a customer sees the business value and has a positive experience, they likely won’t consider going elsewhere.
On the other hand, customers who have a dissatisfying experience might think they can get the value somewhere else — somewhere that would also make them feel good. If we do what’s right for the customers, we’ll never have to worry about the business’s success.
