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Mastering CS – Canding Leader Insights – Ep 13 – Matt Kelso

Updated on March 27, 2024 24 minutes read

Summary points:

In our new episode of the Mastering CS – Candid Leader Insights podcast, Irina Cismas, Custify’s Head of Marketing interviewed Matt Kelso, Director of Customer Success at Teampay.

What You’ll Learn:

  • Customer success in 2023
  • Challenges in CS
  • Data shaping the CS strategy
  • Key metrics for customer success
  • Building the CS team
  • Selling CS internally
  • Choosing the right tools
  • Predictions for 2024

Key insights and takeaways for CSMs based on the interview:

Data in CS: Rather than focusing solely on basic usage metrics like logins or specific actions, a comprehensive approach is taken to interpret the data, seeking to understand the deeper implications of customer activity. This involves integrating various data sources, including traditional metrics and health scores, to identify patterns and trends that indicate successful customer engagement and renewal outcomes. Recognizing the complexity of human behavior and external factors, the approach balances the need for diverse data points with the understanding that perfect prediction is unattainable.

Renewals and expansion: The ability of these metrics to correlate directly with revenue growth is considered crucial for validating the role and impact of Customer Success Experience (CSX) within the business framework. The approach involves a thorough analysis of data points to distinguish between positive indicators (like renewals and expansions) and negative ones (such as contractions and churn).

Building CS teams: The approach to team structure and talent acquisition in customer success varies significantly based on the stage and resources of a company. In early-stage environments, such as Series A or Series B companies, where resources are limited, versatility and adaptability are key traits for team members. Individuals in these settings need to be comfortable with ambiguity and capable of handling a variety of tasks and roles, often requiring them to be resourceful and self-sufficient.

CS role: The crucial role of Customer Success (CS) teams is often underappreciated, especially when it comes to their contribution to a company’s revenue. This conversation underscores the importance of viewing CS activities not just as operational tasks but as significant contributors to the company’s financial health. The focus should be on the tangible revenue impact of CS efforts, such as managing renewals, which can be a substantial part of the company’s total book of business.

Podcast transcript:

2023: a challenging year for CS

Irina 00:00
Matt, with 2023 throwing new challenges at us, especially in the SaaS world. How have you steered your teams through this? Any key CS strategies that stood out for you this year?

Matt 00:16
Yes, I think this year has seen a significant emphasis on flexibility. The broad landscape has been undergoing many changes. From Q1 to Q4, we have been trying to understand the most important metric amidst all the noise and the macro environment. It’s been crucial to ensure that the team is comfortable with these changes. We’ve been focusing on the idea that it’s okay to try something, pivot, and then try again. So, that’s been the major emphasis for our team this year.

Irina 00:46
Because you mentioned, KPIs being different from Q1 to Q4, did the focus change? Did you start with some plan and then you shifted and adapted?

Matt 01:01
Yeah, we definitely had some shifted KPIs in terms of looking at the growth across accounts. We thought realistic metrics would come in and set the team up for success. I think we’ve certainly seen a lot of changes in purchasing cycles, audiences, and working through contracts. This includes what customers are looking for and how they’re looking at their businesses. So, really making sure we’ve set up the team to be successful is crucial. This involves understanding how the customers see value in the product and aligning our KPIs accordingly. We aim to make sure we’re on the same side of the table with the customers from that point of view.

Irina 01:38
If you had the chance to rewrite this year, in terms of customer success, what would be one thing that you would definitely do differently?

Matt 01:49
Hindsight is always 2020. There’s a never-ending list of things, I think. But the one that really stood out to me was the need to put a bit more focus earlier in the year on retooling to engage different executive personas. These personas haven’t always been involved as closely in the software procurement processes as they seem to be now, as we are moving towards the end of the year. So, you know, we’re working through those shifts now.

But looking back, if we had been able to leverage some of those strategies in Q1 and Q2 a little more quickly, I think we could always look back and say, “Oh, we could have done that a little bit better.” So, I think the big focus is really on re-engaging different personas and understanding how they interact with the procurement and purchase process.

Data shaping the customer success strategy

Irina 02:39
Okay, I want to dig deeper on this, but we’ll do it at a later stage during our conversation. Now speaking about challenges and also about tools, I’m really curious about your data-driven approach, because I know that you are a data person, what kinds of data do you find most valuable in shaping your customer success strategy? And how does this data play into your decision making process?

Matt 03:09
Yeah, I’m a bit of a data nerd, so I love digging into different ways we can understand how our customers are getting the most value out of the product. For me, it’s really about looking at data across the spectrum and not getting too hung up on whether they’re just logging in or just performing some specific action in the product, but really understanding what it means. If they’re doing things, does that imply they’re getting value from the product? And how does that activity tie back to our value proposition, both as a product and from our customer’s point of view?

We’ve tried to blend a lot of pieces of data together. We’re not only looking at traditional usage metrics and the red, yellow, green type health scores, but also trying to understand how that ties back to the customer’s sense of value. We’re looking at what metrics we can pull out and work to move more toward a leading trend indicator. We’re trying to see if there’s a pattern where customers do certain things that lead to a more successful renewal outcome, as opposed to those who may have missed opportunities to engage with the product or the team, leading to less successful renewal outcomes.

I think it’s important to look across as many data points as you can, understanding that you’re never going to have perfect predictors. We’re dealing with humans and a lot of factors outside of our control, but having those baseline definitions of what you think success for your product looks like is crucial. However, it’s equally important to ensure it aligns with how the customers perceive that value as well.

Irina 04:48
Can you give some examples about the data points that are important because you mentioned building health scores? So I want to correlate the two. Which data points do you use to build successful health scores and from where do you take this information, from which systems?

Matt 05:05
Absolutely. We pull a lot of data from our internal database. Our software package is designed to help finance teams manage and control their spend across their organization. We look at how much they are spending in a gross amount, which means assessing how much money is coming through the platform. Then, we analyze how that spending is distributed across different teams within the organization. We question whether a few smaller teams are doing the majority of the spending or if there is a larger distribution of spend across more teams. This analysis helps us understand the depth versus the breadth of usage across the organization.

This approach gives us a holistic picture of how they are thinking about using our product. We then combine this data with insights about our interactions with the organization. For instance, we consider when we last had a meaningful conversation with our product champion in that organization. So, we’re combining different aspects: understanding what the company is thinking about, knowing what’s going on with our points of contact, and observing how they are using the product. This helps us determine whether the way they are using the product is leading them down a path to maximizing its value.

Gaining actionable insights

Irina 06:17
What do you think are the biggest obstacles in gaining actionable insights for the CS?

Matt 06:24
I think there’s certainly still a challenge of data living in a lot of silos. So, you know, you could be looking at NPS or CSAT data from one place, then going into the database to pull usage or metrics data from another place. You’re going through calls to understand the types of conversations that we’re having. And then, now we’ve got a million different data points in 20 different places. How do we make sure that this is presented in an efficient way for the customer success managers to take action on? They’ve got a ton of noise in their world every single day, whether that’s an inbound email, a scheduled call coming up with a customer to discuss contract renewal, or working through partnering with our support team on maybe a technical challenge that a customer is going through.

So, making sure that when the customer success manager needs it, they can say, “Hey, here are the key accounts that I want to reach out to this week, based on some of these data points moving either positively or negatively.” That’s something we’ve put a lot of effort into, trying to distill it down to, “Hey, here are the key accounts that would be really helpful to look at, say, this week, or this month, as you’re working through your renewal segments and things of that nature.”

Irina 07:52
One of the challenges that I see when we’re talking about the data, there’s a lot of noise. So it’s a matter of how do I separate? How do I know what do I need to track? I think it’s a blessing and curse, I would say in the same time, because now we have the possibility to track everything. And we want to track everything. And after we implement, we don’t know what to do with the data. What does the data tell us? What are the what are the actionable things that we gather from? What’s your point for this?

Matt 08:42

Yeah, it’s always the magic question: What do we do with all this information? One of the things we do on a quarterly basis is a bit of a retrospective on accounts that either renewed or churned. We take a look through some of the data points we’ve been tracking and try to understand if, for example, an account churned, should we have seen that coming based on the data? Were we on point, or did we miss something? Similarly, when we have a successful renewal and an expansion into another feature of the product, did we anticipate that, or did we just stumble across it?

So, taking time on a quarterly basis is important. I don’t think you can do it too frequently; otherwise, you don’t have a large enough sample size. It’s crucial to look back and ask if the things we’re tracking make sense. Does it check out on a broad sense? For example, if we see customers engaging with a feature or not engaging, and they have a more or less successful outcome, does that align with how we think about usage and the prescriptive approach to using the product?

The biggest thing is taking some time to go back and ask, does this check out? Is there something new we’re seeing or hearing that we should maybe add to our blend of data spices to freshen up the outlook a bit? We need to continue to be open to new pieces of data or new sentiments we might be seeing across the customer base. The conversations that customer success managers have with their accounts every day are really helpful in this regard.

Then, just trying to tie it back: Does this match up? Did that usage drop, and that’s why we see that customer maybe didn’t want to renew or had a contraction? Conversely, was that customer using XYZ, and they are set up for success, leading to a really great renewal outcome for that particular account?

Key customer success metrics

Irina 10:46
And in terms of measuring success, what are the metrics that you rely on? And how do you know if the strategies you’ve proposed and you’ve implemented it are hitting the mark?

Matt 10:58
Yeah, I think ultimately, the key is whether we are seeing the outcomes we need in terms of renewals and expansion. You know, clocking the CS metrics and linking those outcomes to the revenue piece is central to ensuring CSX has the right seat in the business. From there, it’s simply working back: Are we looking at those data points where we’re seeing more renewals and expansions than contractions and churn? If we’re not seeing the results we need, then it’s clear that these data points aren’t providing the necessary information. They’re not telling us what we need to see.

So, we go back, try to uncover the next layer of the onion, and find what else can give us that predictive power. But ultimately, it all depends on whether we see the revenue outcomes we need as a business. If we’re not seeing that, then we know we’re not being successful, and we need to retool. We go back to the drawing board with a slightly modified strategy.

CS dashboards and reports

Irina 12:02
What are your favorite dashboards or reports that you are always using? Speaking about KPIs, how do you how do you visualize the data?

Matt 12:16
Yeah, I try to keep it focused on those really core metrics, like I mentioned at the outset. Customer utilization, in terms of their dollars spent with us, is paramount. We want to see customers using our product, which means they’re putting money through the platform to run their businesses. We view this as our first layer of defense, asking ourselves, does this check out?

From there, we look at a couple of next-level indicators, like how many people are engaging in certain activities and the frequency of specific transactions. We’re interested in whether we see a high number of purchase requests or approvals across many teams. We examine this on a weekly basis to understand how those customers are trending compared to their previous month and the previous three months. This involves taking different slices of the trailing data to see if their behavior matches what we would expect based on their customer history.

We also pay close attention to call activity. Are we having good engagement with those champions, with those product users, from our customer success managers? This helps us understand if we can add any qualitative color to the quantitative data. That’s the important perspective that CS always brings: You can look at the numbers on a spreadsheet, but do they really make sense for that organization? Do we uncover, for instance, that they just went through a massive restructure, and we lost our contract signer from last year? Did they just raise a new funding round and are looking to expand? Did they just announce an acquisition, and now we might have a new partner that needs to be implemented into our software?

So, we’re looking at those key quantitative metrics and then pulling in the bigger perspective of how that customer might be viewing those metrics as well.

Building CS teams

Irina 14:24
We talked about data, we talked about processes. Now, I want to shift gears and I want to talk about the teams. You’ve led CS team in companies of all sizes, from 4 million to 14 million in revenue. How does the company size, the company dimensions, the organization influence the way you build and structure your teams? Do you have a different setup if you are acting in a 4 million company revenue rather than 14 and what’s different?

Matt 14:55
Yeah, absolutely. The setup definitely shifts, and it’s largely dependent on the available resources. If you’re operating in a Series A or Series B environment, resources are certainly at a much larger premium than they are in a really scaled company. In such scenarios, being more resourceful is key, understanding that you need players who are comfortable with a bit more ambiguity, with having to go out and piece a few more things together on their own. They may need to plug and play into a few different variations of roles.

Conversely, when I’ve led larger teams in a much more structured company, the organization is quite different. There’s an entire team dedicated to one component of onboarding, another team focusing on product training, another team that serves as the account managers, and yet another team that works on retention. So, as you’re looking at building out those teams in such environments, you can really dial in on more specific character traits. You find folks who really love to lean into that one aspect of the customer experience.

However, when you’re in the earlier stage of a company, everyone needs to be a bit scrappier and more able to flex in a few different directions more often. I think that really informs the type of people that you need as you’re looking to build the team. Then, through that growth process, you start to uncover those strengths and where people can naturally start to move towards as you’re able to put more specific roles in place and add a bit more structure to the operation.

Crucial roles in startup teams

Irina 16:35
When you are founding or forming a team in a startup environment, what are the roles that you first hire? And how do those roles evolve? What do you add, once the team is scaling together with the organization?

Matt 16:55
Yeah, I mean, we traditionally start with your basic kind of catch-all customer success manager. When you’re trying to acquire logos and just get customers in the door, you need someone who can pick up the customer from day one and start getting them up to speed on the product. This person should be comfortable working in the product from a technical perspective and able to carry that relationship through.

For me, the next role I always like to bring into a team is that specific onboarding specialist. From the customer experience standpoint, that’s where you have a really important segmentation of the activities related to the experience, especially in that first step of the customer journey. The onboarding and activation lifecycle is so critical. As soon as I’m able, I really love to lean into that aspect of the customer journey because it pays dividends all the way through the rest of the lifecycle.

As people’s times get more stretched, the easiest thing to segment is the onboarding process. We know that’s when the customer is going to have the highest level of outreach, the most questions, and the greatest number of thoughts of uncertainty like, “Hey, did I choose the right product? I just spent a lot of money, is this going to work the way I thought it was going to work?” Having a team that can really lean into that aspect of the customer journey is incredibly impactful.

Then, as you move through, the customer success manager can start to handle a bit less in terms of that full lifecycle. That’s when it starts to make sense to move into, “Hey, do we want to have just a separate renewals manager?” or someone who separately handles customers who’ve said they want to leave, and now you have a kind of retention team or something along those lines to separate things out. But I always start with that core Swiss Army knife of the CSM, then move to onboarding. And then from there, you can also break out the renewals and retention aspect as the team scales.

Irina 19:07
What’s the difference between the renewal and the retention specialist? Or is it the same role but with a different label?

Matt 19:18
Yeah, so we’ve done it in the past, at that scale, where the renewals involve someone who’s already in a positive mindset. They’re using the product, and you’re really just discussing the commercial terms, like how they can use more of the product and moving forward. In contrast, the retention specialist’s role is more of a kind of remediation or rehabilitation. We had a team for when someone says, “Hey, I don’t want to continue with your product.” This separate team could really spend some time with them, digging into questions like, “What challenges have you had? Where did we go wrong? How can we rehabilitate you to actually get you back into the fold of continuing with us?”

That’s how we separated out those roles. The retention specialist was almost more of a rehab person, to say, “We know there have been some challenges here, we know things are not looking good, but we’re willing to partner with you to help course correct.” This could involve really spending some time to help enable some technical features or doing a retraining for the users or the team. Having someone who could dedicate a lot of time specifically to customers who were in that place in their mentality with the product proved to be really impactful for our organization.

Irina 20:41
What about the CS ops role? Do you hire? Do you value? What’s the definition? Do you think it’s important? I know that in every team, it means a different thing? What’s your definition about? What’s the definition of a CS ops for you?

Matt 20:58

Yes, CS Ops, to me, is that much more data-driven, technical backbone of the team. Currently, I have an amazing ops team that we work with, and I have that endless list of requests like, “Hey, I want to tweak this data point. Can we pull some new numbers around this? It looks like something is broken in Salesforce, can we check and see why this contract end date didn’t correctly regenerate with the renewal?”

They’re really underrated in a lot of ways but are essential to the team, particularly as you start to gain some momentum and begin scaling. You move out of, for lack of a better term, Google Sheets, and you’ve got some integrations and pieces of different softwares, whether you’re in Salesforce or HubSpot, that all need to start talking together more intelligently. That’s where the ops team really adds a ton of value.

They also work as a nice bridge to teams like FP&A or the finance team to understand, “Hey, is all the activity we’re undertaking on the CS side, whether that was a major expansion or a renewal, how is that all getting fed to the broader finance organization?” This enables the finance team to have the insights they need to correctly forecast. They can assess what renewals look like, how cash flows are looking, and how we need to think about the next six to 12 months of the business flow. That’s where that ops person can really spend time to ensure that everyone else in the business can see the right amount of information coming out of CS from a financial and revenue standpoint.

Recruiting the right people

Irina 22:44
Speaking about roles and building teams in your recruitment process, what’s that one skill that you don’t compromise on? And it’s very essential and you are looking for?

Matt 22:58
Yeah, it’s always the toughest question, because there are so many little things that come out during the interview process. The one thing I’m really always trying to get a sense of is whether the candidate has a sense of ownership, especially now as I’m working through earlier stage companies in my most recent roles. Do they say, “Hey, I was in charge of this project,” or “This was my number that I was responsible for in my previous role”? And then, do they explain why that was important to them, or how they were the driver of making sure that number improved?

So, are they able to talk about how they took responsibility for a metric or a result and moved it forward? Or are they more of a “Oh, well, I was on a team, and we did this thing, and yeah, this was the outcome that the company had,” but they’re not able to clearly articulate how they owned even a piece of the project, or how they took real ownership of a relationship with a customer or driving an outcome? I’m always trying to key in on whether the candidate really just grabbed that responsibility and made it their thing to do really well.

Irina 24:16
What does the CS team need in order to be performing above expectations?

Matt 24:23
Truthfully, I really think customer success team members need the support of knowing that their role is critical within the organization. I think everyone works incredibly hard in customer success, and the challenge is that there are so many little pieces of it that are just hard to quantify. This is especially true when we look at counterparts in the sales team, for example, where it’s really easy to say, “Hey, here’s your pipeline, here’s your close rate.” It’s a much more conveyor-belt style outcome from start to finish on a deal.

Whereas once you’re in the customer success world, particularly in SaaS, you’re managing so many pieces of that customer experience from day to day. So much of it exists in these worlds of gray, like did you follow up on this ticket with the support engineering team, and then how was this communicated back to the customer. So, there really needs to be that base level of support to know that they can go out and try things. And it’s okay if everything doesn’t come off perfectly, as long as they put in the effort and followed the processes that we put in place.

In my experience, what really sets the team up for success is understanding that there’s a baseline of support behind them, and that the customer experience becomes truly central to the drivers that the company is looking to achieve.

Advocating internally for CS

Irina 25:47
Thinking about that support that you mentioned, how do you advocate internally for the CS team? And how do you make sure that your peers, for instance, or the executive team knows exactly what they do and how they impact this? What speaks the truth in your case?

Matt 26:07
Yeah, that’s always a really fun conversation when you’re talking about, “Oh, what does CS do all day?” I’ve gotten that question more often than not from the exec team. And it’s always kind of a fun exercise to drill down and say, like, how much time are they spending chasing down an engineering ticket, or a support request that came in versus trying to round up a point of contact for a renewal?

So, yeah, I think the way I always try to pull it back is to focus on the revenue aspect, because that’s typically what speaks the loudest to leadership. I say, “Hey, what the team did is managed to renew this many dollars of our total book of business.” Depending on your scale, it can be deceptive sometimes if you only talk about a percentage. You could say, “Oh, we’re at 90% gross revenue retention (GRR)” or something like that, and “We wanted it at 95%, so we missed that mark.” But what often gets missed is that 90% of GRR was, say, $7 million, which is a lot of money that the CS team was handling.

I always try to pull it back to the fact that percentages matter, but the raw dollars at stake, that are in the bank so to speak, are really impactful. So, as we’re talking about a new software purchase, or whether we have the right players on the team, or if we need to scale the team, I really try to set the tone in terms of here’s the net quantity that we continue to manage. And that’s only going to continue to grow as the sales team accelerates their motion, or as the Marketing Team drives in new leads.

We need to make sure we’re set up to retain this dollar pot that we’re working with, because that’s truly where the long-term customer value comes in. If you’re constantly leaking money out the back, it’s going to show up in your Customer Acquisition Cost (CAC) and Lifetime Value (LTV) numbers and all those other things that finance really likes to dig into. But the central thing is, if you retain the customer, all those numbers get so much better, so much more quickly.

Choosing the right tools for CS

Irina 28:38
Speaking about software acquisition, because you mentioned it several times, I want to ask you: How crucial is choosing the right tools and technology for a CSM success? And also speaking, how do you advocate?

Matt 28:51
Yeah, it’s definitely important, and it’s typically one of the harder conversations because again, trying to really tie down how a software expense is going to impact the customer experience or result on the customer success side is a bit more challenging typically than, say, allocating a marketing budget or some of those more traditional expenses. So, we’ll pull it back, and anytime I’m looking to add a piece of software, I spend a lot of time with the team understanding, “Alright, here’s what this software would do to your day. Let’s talk internally first about whether this is where we want to go to bat, so to speak. Is this going to make the biggest impact on your day?” The team really gets a lot of input into how this would save time in their day and whether we really want to push for this in terms of our budget.

Then, we’ll back that up with considerations like, “If my team is spending two hours of their day chasing down support tickets or answering a customer question that we believe maybe the customer could have self-served, where do we plug in a piece of software that can help us just eliminate that piece of friction from the customer experience? And now, we’ve got those two hours a day to go do something else.” If we can improve our renewal rate by X percent, or move X number of dollars through the platform through better adoption, how does that then play into the cost of that software?

So again, when you’re going to that in terms of budgeting and looking at those costs, you do have to be very tactical on how you tie that back in terms of an investment back into the business, and not just like, “Oh, this new thing seems cool, and we want to try it.”

Irina 30:45
Why do you think those conversations are definitely much more challenging, rather than the traditional one? What’s the part that it’s not so easy to quantify?

Matt 31:04
Yeah, I think it’s about looking back and understanding how saving time, for example, impacts the renewal rate, and questioning whether that was the factor that impacted their renewal rate. If you’re looking at the top of the funnel, it’s pretty easy to draw the conclusion like, “Hey, this marketing channel resulted in this many leads, and sales closed X amount of them. So here’s our cost, here’s our return on investment.”

However, if we’re looking at a piece of software to improve our customer communication, and then we see a drop in tickets, we can say, “Hey, maybe that saved us some headcount.” But does that translate directly to retained revenue or expanded revenue? And how tightly can you make that connection? There’s just a lot more nuance on the CS side when you’re trying to tie out that presentation.

So, I think that’s where you do have to be tactical, you have to make some assumptions. But you should have a thoughtful process, like “Here’s how I’d like to reallocate time,” or “Here’s how I believe we can maybe slow the need for additional headcount as we’re adding customers as we’re scaling.” Based on our current activity levels and staffing levels, we might need to add a new CSM here. But, if we can reduce these hours across the workload, we wouldn’t need to add a new CSM until later.

It’s about getting tactical on how it relates back to the business and understanding that a lot of those inferences are going to be a little bit fuzzier. But it doesn’t make them any less true in a lot of cases.

Irina 32:51
What’s the pitch, you have to give to secure the budget that you need for the CS team?

Matt 32:57
Yeah, it’s really about drilling down into the need and framing the context or the challenge because, again, you’ve got execs or finance folks who might not be as in the weeds of all the daily Customer Success activities as we, as practitioners, are. So, it’s important to remember to quantify the challenge that the CSMs are dealing with. And then from that, propose the solution.

I think it’s really important to show that kind of vetting homework of not just asking for a particular software because they signed you up on a webinar. It’s more like, “Hey, based on our current problems that we’re facing, we went to the market, we evaluated XYZ solutions. We demoed them, looked at their pricing model, and what that means for the cost of that software today versus the cost of that software next year and the year beyond.” So you’ve done your homework on why you think this is the best solution.

Then, you need to demonstrate where you think that solution is going to impact the business most. That could be reducing the need for scaling headcount as quickly, or hopefully impacting the retention rate because we can have better insights into what a customer is doing in the platform or what they might be doing when they’re not in the platform.

The key is not to assume everyone understands the problem. Show that you actually put the work in to find the most valuable solution and then draw it all the way through to, “And here’s the anticipated business impact, and here’s how we’ll measure it to understand if we hit the mark that we thought we were going to hit.”

Irina 34:38
What do you think makes the difference between a great CSM and a good CSM?

Matt 34:48
It goes back to that ownership piece. It’s really about whether the team loves to solve problems, find solutions, and get creative. Do they have that sense of, “Hey, the work I do and the accounts I own impact the outcome of this business”? The more tightly you can draw that connection throughout the team and have people getting excited about the challenges, rather than just feeling totally overwhelmed by them all the time, really sets those high-performing teams apart.

Learning from mistakes

Irina 35:28
Now, I’m a true believer that the biggest lessons that we learn are coming from mistakes, even if everybody is trying not to make any mistakes. Now, I want to ask you, what was the mistake that you remember, and you can share that transformed into a valuable learning experience?

Matt 36:02
Of course, we probably need another whole conversation for all the mistakes I’ve made. But I think the one that comes to mind, just based off some of the pieces we’ve talked about, is when I first got into more the director, executive level. I remember going into my first board meeting and putting together my first board presentation. Looking back, I was like, “Man, that was a disaster.” I just did not have the right level of insight for where the board was looking in terms of the company goals. It was much too down into the weeds, and I didn’t really present the data of the CS team very well.

So, looking back at that, I can say, “Hey, I really need to spend some more time learning how to get information to that board-level audience.” That was something that, you know, when I came out of that first board meeting, I thought, “Man, that did not go well at all.” And I just kind of took ownership of that mistake and the miss on the data and how I was presenting stuff, to say like, “Alright, we need to try to spend some time improving that part of your game.”

Irina 37:23
And speaking about board meetings, what’s your piece of advice for other CS leaders? How should they prepare for board meetings? What’s important? Want to know when it comes to CS?

Matt 37:36
Yeah, I think it really comes down to understanding the numbers and asking yourself, “Do you understand why your performance is where it is?” So, we need to look at key aspects like gross revenue. What do we see as the key drivers of success? And then, where do we see those headwinds in terms of pulling all that together into a coherent view? That, I think, is where the kind of magic happens. It’s very easy to get too far down into the weeds, focusing on things like not having a certain feature that customers want, or there was a bug that week, or whatever the topic might be. Instead, really just distill it down to “Here’s where we’re having success. Here’s where we’re seeing those challenges. And here’s what our thought process is on how to overcome those challenges.”

Making sure that all those numbers tie back to the metrics that the other teams are presenting is also crucial. Like, how does that gross retention revenue match up with the new sales revenue forecast, which matches the total revenue target? This puts you at the right burn rate. Just understanding that CS is a really important revenue engine for companies right now, and you need to be able to tell that story of how your part of the revenue engine is going to impact those numbers that the board is trying to get to in terms of runway, burn rate, and calculating the runway, and all that type of stuff.

I think that’s the piece that, again, I missed early on – not being able to correctly tell that story of how we plugged into that revenue outcome.

2024 predictions

Irina 39:25
As we wrap up things, I’d love to hear your thoughts on the future. What are your predictions for the customer success industry in 2024? Are there any trends or changes you foresee that we should all be keeping an eye on?

Matt 39:39
Yeah, I think 2024 is going to be a really interesting year. You read through the predictions, and there’s everything from “we’re back to the upside” to “customer success is dead, and SaaS is never going to make it out of the first quarter.” But as I look through the conversations within my team and chat with other leaders, here’s the big piece: the changing buying motion that we’re seeing across software, and the conversations we were having in terms of renewals and expansion a year ago, or even two or three years ago, look entirely different as we go into 2024.

CS teams need to be comfortable communicating with CFOs or procurement directors, and the level of scrutiny that’s going to go into keeping your product on another company’s balance sheet is higher than it’s ever been. And the bar is probably only going to go up in 2024. So, I think the nature of those conversations will continue to evolve. The CS teams are going to need to be better equipped to have really executive-level conversations about return on investment and how your software impacts their business.

With that, we’re seeing a lot more third-party contract negotiation. So now, you have a whole new vertical of companies that are basically selling their services as contract negotiators. Now, in customer success teams, you might not have as direct a line of communication as you even thought you were going to because there’s another person asking, “Why does this cost so much? Where does this plug in? How do we change that cost?” And they’ve never even used your product or interacted with it before. Now, they’re funneling information back over to those CFOs and procurement teams on the other side.

So, I think the complexity of the financial conversations about how customers are using your product and then how customer success is going to have to navigate those is going to continue to get more complex and more specialized in the next year.

Irina 41:57
Thank you so much for sharing your insights with us today. It’s been a pleasure having you on Mastering CS Candid leader insights. I wish you an incredible end to the year and look forward to seeing how your predictions for Customer Success industry unfold in 2024.

Matt 42:15
Awesome, thank you so much for having me. I really enjoyed the conversation.

Nicoleta Niculescu

Written by Nicoleta Niculescu

Nicoleta Niculescu is the Content Marketing Specialist at Custify. With over 6 years of experience, she likes to write about innovative tech products and B2B marketing. Besides writing, Nicoleta enjoys painting and reading thrillers.

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