On Tuesday I sat down with Michael Redbord, General Manager of Service Hub at HubSpot, to talk about the paradigm shift in customer service (CS) and how the function is becoming a key revenue driver for businesses. Prior to taking the helm of the Service Hub, which offers teams modern customer service tools to adapt to today’s empowered customers, Michael was VP of Services and Support at HubSpot, after having held support and CS leadership roles there for over 8 years.

We chatted about how leading companies are redefining customer service and eliminating the outdated perception of it being a cost center, and how to create an organizational culture that embraces the value of customer experience and success. Michael also recently touched on the value of customer education programs on the Guru blog.

You can watch a recording of the webinar below or keep reading for a transcript of our conversation. We weren't able to get to all of the great viewer questions in person, so click here to jump down to Michael's written responses to those questions. 

 

Thanks so much for joining me, Michael! I’m excited to dive into CS with you. I’m curious, what was your first entry point into the world of customer success?

Well, probably like many of the people listening in today, I originally started in CS because I needed a job. I was working at a very startup-y company that had taken a hit in workplace culture following a few acquisitions. It was then that I found myself looking for a new job, and I had a few friends who suggested I stop writing code and come talk to customers. I thought, “I can talk, how hard can talking to customers be?” So I found myself doing onboarding at hyper-growth SaaS company – HubSpot. As it turned out, talking to customers was hard, but I figured it out, and that was how I got into the SaaS service/success business.

That makes sense, I think that’s how a lot of us end up here. For folks who aren't familiar, what is HubSpot and more specifically, the Service Hub, and what types of customers do you work with?

HubSpot is a SaaS company. We make tools for marketers, salespeople, and service people – basically the entire front office. Our customers are companies with anywhere from a few employees to a few thousand employees. We consider that the small- to medium-sized market, which is a massive market, so it’s a lot of fun to work in. One of the things that I really love is that when you make an impact at a company in that size range, it really impacts the people there that you work with. And I have some great stories of how we’ve impacted our customers lives.

So nowadays, even though I’m a serviceperson by trade, I’m actually more of a software person. I’m a general manager of the Service Hub at HubSpot, which is all about helping service teams do better service, and grow better through customer growth. That includes things like help desk resources, a lightweight knowledge feature, and customer feedback things in order to get those customers to be your best marketers. We think a lot about how small business can use their customers to grow better. Again, I’m a serviceperson by trade, but right now I’m playing at being a VP of Product, and I’m having a lot of fun taking those learnings and feeding them back into our product.

That’s phenomenal, we use HubSpot here at Guru and we’re all huge fans.

Let’s get to the subject at hand: CS. When we talk about customer success, it’s really gone through an evolution through the years. Let’s rewind to 2010 when you started at HubSpot – how was CS defined at that point, and what were key business objectives that you were driving toward?

I’d rewind even further, and think, “When was the first time someone uttered the phrase “customer success” and was actually talking about what we’re talking about here today?” I think it was really the innovation of SaaS (read: Salesforce) that caused the business model to change. It used to be that you sold software on-premises with a big service contract to go with it, and you made revenue through that service contract. By front-loading revenue like that, if you could close the deal, your business would be healthy.

Now with SaaS, there’s no more on-premises software and no more service contracts. The change that happened was that software companies didn’t get all the money up front anymore, which meant that the lifetime value of customer became much more important. That was the era that someone first uttered “customer success” and considered the concept that customer lifetime value was important and it wasn’t just about closing deals.

If we go back 9 years to my 2010 experience at HubSpot, that was a time period when CS and account management was still a little frothy. There weren’t clear definitions of what was what. When I joined HubSpot we were just under 100 people, but our business practices were in line with those of a 10-20 person company. We basically didn’t have a CS function. We had some people who did account management, but that was closer to the end-of-life customer stuff – preventing churn. And my job was to do onboarding. Our onboarding team did all of the forward motion on the customer – the setup, best practices, etc. Things have since gotten more sophisticated both in the industry and at HubSpot.

So 10 years later, what are some of the big changes you’ve seen from that initial account management-based mindset you mentioned and what caused those changes?

I could go on and on about all the ways we report on things differently, or the different metrics we use, and the teams that have mitosis-ed out of those early days. But if I really think about what changed, those metrics things happened but they weren’t the seminal things that spawned the change. What really happened was that as our business grew, and we got to know our customers and our business better, we discovered that when you’re really small, the loudest voice about your company in marketplace is you. You are your best marketer, you are your best salesperson. Because you don’t have that many customers yet and you don’t have that many reviews online, that voice is small. As you get bigger, that company/customer voice seesaw begins to tilt. You still have a voice, your marketing still matters, but your customers’ voice matters more.

The way we understood those pressures at a gut level was when our salespeople got on calls, they were no longer the experts. Prospects were better prepared: they’d already talked to existing customers, they’d already read five reviews, they’d already seen 50 tweets. They already knew us. The balance of power shifted. That caused us to realize that customers are in the driver’s seat now, so how do we work within those constraints? And those constraints are very different constraints than when you are small.

We decided then that the customer has to come first in a practical way, not just in a philosophical way. We changed how we measured, how we operated, and codified the rights of customers from our founders in a formal customer code. It’s been a long journey from just us, to us and our customers, to really just our customers. All of you webinar attendees today are probably somewhere in that journey.

So many companies go through that evolution where you have to invest in the success of your customers. If customers can’t self serve and aren’t successful, that hurts you as a company.

You've written before about CS moving from being a sales activity to more of a philosophy. Can you unpack that a bit and give us some color as to what that looks like as a philosophy at HubSpot?

I’ll preface this response with the fact that it’s hard for me to pull apart the evolution of the industry and the evolution of HubSpot, which is the life I’ve lived, so take this with a grain of salt and find the pieces that speak to you. Back in the day, CS was a sales activity because it was just a different way you got to the same revenue number. The question was, “How do we do all the revenue mechanics-focused things to keep our business whole in a post-SaaS world?” Over time, for most businesses, that’s the easiest place to begin. They have that first customer success manager and they want to see them earn their keep as soon as possible. So they begin by doing the most obvious things.

Over time, the CSM function evolves a bit til the company reaches a tipping point where CS matters more. CS teams run out of rope with QBRs and help scoring – there’s only so much you can do to make your customer successful when your tools are a phone and Google Slides. CS teams eventually get more sophisticated and the whole company begins to rally around them to make them successful at their jobs. It’s that point where you start getting diminishing returns from the little tweaks and edits in CS-land and you realize you need to pull in product or sales in a meaningful way.

And that’s the point where you move as a business from the reactive sales-focused part of CS to the more powerful notion of customer success as a philosophy. The point where the CS team runs out of new tricks and the whole company needs to rally around the mindset.

Do you have any specific examples of how that has manifested at HubSpot or any other company? Any time where you’ve identified the opportunity to better serve customers and that opportunity has gone outside the scope of a CSM?

Something I’ve seen work really well is aligning your sales compensation plan with customer outcomes. One of the most important documents in any SaaS organization with a sales team is that compensation plan. It defines the rules of engagement for the sales team. So one of the most powerful relationships you can have as a CS leader is with your sales leader. Getting alignment on that compensation plan is a total game changer.

For instance, we have callbacks for our customers for sales people. If you sign up a customer that cancels right away, you don’t get paid on that. They need to stick around for a certain period of time. We also have incentives for salespeople around promotions where they need to sign up a number of customers with a certain length of contract. The better you can align those interests of CS and sales – and I recommend doing it through the compensation document – that’s a good indicator that you’re starting to walk the walk around company alignment around CS.

I totally agree, that sales to CS collaboration and having that shared vision is one of the most important cross-department collaborations to improve the customer experience.

Building on that, you mentioned this idea of CS as an org-wide philosophy. The way I think about it is your company “delivering on the promise.” Outside of sales, what are some of the ways that other teams can contribute to this philosophy?

Probably the most obvious one is the product itself. Alignment there is really key. The way you go to market with your product on your website might not actually match the intended value that your customer is looking for. One of the things CS can really help with is defining the intended value the customer wanted when they came on board. What was the use case the customer signed up for? If you can identify that, then you can begin to draw straight lines from there that get really interesting. You can say, “Okay this customer signed up to do X. This is how we would measure if they did X. Now that 90 days have passed since they implemented, have they actually done X?”

The better you can define the intended value the better you can draw the line through to key business outcomes. Then you can better work with the product team to say, “This is why this customer is blocked: they wanted to do X but they tried and failed because they’re missing this feature.” My strong encouragement is to really focus on what was the intended value upfront and capture goals in a structured way at the point of sale by CS team. Then product has a big piece on delivering on that.

But there’s even more to deliver: as you get bigger, there are various documents and policies that begin to govern how your customer experience works. If a customer is going through your experience and can’t do something because of a weird policy, have you created a sharp edge that you need to round off? And those edges might not be things a CSM or support person comes into work everyday and thinks about, and internally we get used to navigating around sharp edges. But customers don’t. Rounding off those sharp edges is really important.

In summary: if you can capture original intent, make the path smooth, and remove sharp edges, you are probably doing a lot better than your competition.

Couldn’t agree more. I want to underscore the importance of identifying what the very specific goals and outcomes your customers are looking for. Those can be nuanced from customer to customer but are essential to nail down.

From what you’ve said, it’s important to have not only internal alignment into what customer success looks like, but also external alignment in that the customer understands what success looks like, which is easier said than done. How do you manage that at HubSpot in terms of tools and systems?

It’s hard to do. When you talk about alignment on the goals, you’re talking about a very human process. You’re asking, “Do Mike and Chris look at where we’re going in the same way? And to what degree do they share the same vocabulary?” Human factors like that make things squishy. It doesn't matter if the dropdown in your CRM says the customer’s goal is X if your point of contact in that organization turned over and no one there knows who you are.

My basic answer for how you get external alignment is not a systems-based one. The place where I see the most leverage is in understanding your customer, building trust, and getting deep into their business as a CS person. Once you have that trust you get introductions to their boss, to their teams. This sounds old school, but it’s the one of the most effective ways you can spend a calorie to ensure that what you’re doing for them is a priority in the world you play in. Once you do that, then sure, go spend some time on systems and operations and all that. Most CS teams out there have a lot more leverage in their own human-to-human efforts than they do around systems. Spend your calories on people.

I love that. I think the point you just made that a lot of folks lose sight of is that you don't have just one customer. Depending on your type of customer, if you’re in a CS role, you're gonna serve your company well if you understand who the other people are who have a stake in this.

Right. I’ll share a stat that solidified why we think of it like this at HubSpot. Traditionally we’re a marketing software company and a lot of our software is sold on annual contracts. We were happy to get those contracts, but when we looked at the customer side, the average tenure of a marketer is 14 months. So we come in with a 12 month contract somewhere in the middle of that average. Which means that the point of contact that we formed a relationship with in the sales process most likely will not be the person doing the rollout. There’s no way we can sustain a business that’s predicated on a singular person on the customer side. We must, for survival purposes, expand that relationship to other folks. Understanding the mechanics of the people you’re selling to and the people you’re then trying to make successful is super important.

That’s a great segue into the next topic I wanted to talk about.

You’ve mentioned CS becoming an engine for growth. Can you unpack what that means? How does that manifest at HubSpot and other companies?

I’ll give you two mechanisms for how CS drives growth.

The first one has been a trend in the industry for five or six years. It involves starting customers off with the smallest part of your product. This “land and expand” tactic It’s not a new one. But it is new to reframe it as “Start as small as you can, win business with as little investment as possible, then use the CS motion to grow the account.”

This is a huge driver of our business. It’s why we have so much free software out there; we’re able to deliver a lot of value and layer on a light human touch. Compared to a vendor someone has no product or experiential knowledge of, we look pretty good. Starting in a freemium world and layering in a little experiential-led CS motion is key.

The second mechanism is as you grow, the math of CS matters more. When you’re small, the leak in your bucket is small you can pour a lot more in to counteract that. You can go find new markets, hire new salespeople, etc. The math gets harder the bigger you get because at some point, a single point of revenue retention is going to be worth more than one salesperson. It’s unlikely that you're acquisition numbers will scale at the same rate as your install base. Eventually, the install base has overwhelming gravity in a SaaS business and the math checks out. You can get way more leverage by improving customer retention than you can by spending same money getting new customers. If you retain better, that money will eventually be better spent obtaining new customers.

I’m a big fan of the freemium model and the harsh reality of SaaS at scale. If you are a growth company and that is your future, prepare before you get there.

At Guru we have a similar philosophy, not with a freemium, but with a pilot. I think it’s also about matching a discrete need, which often that isn’t an org-wide need. By honing in on a particular department and delivering on that discrete need amazingly, you’re better positioned to expand from there.

Another side effect I’ve seen from that approach is as you’re doing that, you build advocates. Those customers will spread the word for you. Have you seen that happen at HubSpot?

You said “those customers” will spread the word, but those freemium, non-customers will also spread the word for you, and even better. We care about the sentiment of customers and users who don’t pay us money. We have so many free users that their sentiment actually really matters. Over time, they can be your best marketers if you’re actually serving a discrete need that makes their lives easier.

Sentiment in marketplace is one of the most important things. And you can put your thumb on the scale with free users.

We have a lot of folks from all different backgrounds watching this webinar. What do you think some of the nuanced differences are in approach to CS as a growth engine between B2B SaaS companies and B2C companies?

If you really boil it down, Both B2B and B2C companies have the same underlying principles. The way they do this work is different. For example, if you’re selling plastic cups to consumers, there’s not that much headroom. But if you’re selling to a company that uses hundreds of plastic cups every day, there might be a reason to have a real CS motion in place there that’s backed by humans as opposed to machines. For the B2C, it’s more efficient to automate with emails, but for the B2B, you may want to use humans and take a heavier touch because that investment will pay dividends in the future.

I get this question a lot because I think the CS phrase was born in the B2B world and that sometimes B2C companies feel left out of the conversation. I don’t think that’s the case. The same philosophies and mechanics make sense for both areas, but the tools to unlock value are different depending on the specifics of your customer profile.

Once companies hit a certain scale with their CS organization, they start to specialize functions. When does it make sense to start to develop specialization in favor of having generalized CSM functions?

Most companies evolve from the very early days when the founders themselves handled customer experience, to hiring someone whose job is to handle the customer experience, to hiring a team to handle the customer experience. That’s the natural evolution of service teams.

Companies in the earlier stages of growth often look at problems they have (renewals are hard, we’re not very good at this part of implementation) and they start to think that specialization is the answer. They think adding a specialized person to cover implementation is the answer and that the problem will go away. My number one piece of advice for teams in that stage is to think very critically before opting for specialization. Because it’s hard to walk that split back once you’ve done it.

Do you want someone specialized in implementation because implementation is hard and that person would simplify the process? Or could it be because you have the wrong policies in place? Or because you sold to the wrong customers? Could it be that your product has reliability issues? What are the real reasons implementation is hard? If you ask and answer those questions and an implementation specialist is still a need, then sure, go specialize.

The first specialization most companies should make is creating a clear line between success and support. Support is primarily reactive. Success is primarily proactive. In support interactions, the customer comes to you, you answer their question, and then you’re done. It’s transactional. With success, it’s ongoing thing where you create the energy in the system. You go to customer saying “I have an idea of something you can do better.” Or “You really wanted to do X, it’s been a week, let’s do it.” In success, you create energy in the system. In support, the customer does.

Dividing the reactive and the proactive is a healthy thing to do for a of couple reasons. One, because the trade crafts are different. Two, because if you group them together, you typically don’t get to proactive since you’re stuck putting out reactive fires all day. Creating a bright line between reactive and proactive – support and success – is the first split teams should make, and it’s the right one for 90% of businesses. Once you get past that, then do different, more complex specializations.

I’m very passionate about this because one of the biggest challenges for growing companies is calling the right play at the wrong time, when they should have waited a year or two.

That’s such spot-on advice, especially if you’re a company that has raised a new round of funding and you’re tempted to use that money to hire up a support team or do whatever everyone else is doing. Specialization varies widely depending on your business and customers.

One question that came in from the audience is around retention: What are some of the tactics most successful in terms of methods of retention and who executes on them? Frontline support, CSMs, the entire team?

Let me give you two really basic tactics first: One, get your customers to their intended value that they had at time of purchase as fast as you can. I talked about capturing that value at the onset, so once you have it, get them there fast.

A lot of companies, SaaS especially, are pretty decent at this. It’s a known thing that when a customer buys your product, you need to deliver on it. It’s sort of obvious but worthwhile to look at as a company and ask how well are you doing that. Are you a center of excellence when it comes to onboarding? Getting to value quickly is the foundation for any type of retention play you want to run.

Number two is when you actually have your customers up and running, talk to your customers. One of the biggest things we did at HubSpot in the early days when we didn’t really know what we were doing was literally just talk to our customers. We spent time with them helping them with their problems. We trained CSMs to be industry- and trend-aware enough to add some value as an external voice in that user’s life. Having those conversations built a lot of trust and touchpoints for us. Human touch makes a difference.

Over time, you get more sophisticated. You start to look for leading indicators of health, leading indicators of unhealth, trigger events where you can go in proactively and say, “You should try this.” Or “Something weird is happening, let’s get back on track.” Alerts and customer health measuring is the second stage for going after retention. Most businesses don’t do a great job of maintaining those relationships after the fact of onboarding.

Totally. I think another baseline metric in terms of understanding if you’re delivering on your promise is usage. Are customers actually using your product? What does ideal usage look like? Is it once a week? Once a day? If they’re not using it, chances are they’re not getting value out of it.

These are all great points. Do you have any other common metrics of good health indicators?

I’ve talked about SaaS revenue mechanics numbers in that they’re key to every business with a customer model. Customer retention is a foundational metric for any CS manager. How many customers are still with you a year later? That’s the size of the leak in your bucket.

After that, take a look at your upgrade/downgrade rate. For the customers that do stick around, does their spend go up or down? Net out a net revenue retention number. Percentage of revenue can be over 100%. The balance between the percentage of customers you keep and the amount they upgrade is important tension. I would hang my hat as a CS professional on those two outcome-based metrics.

We had a question come in related to that:

Customer experience is comprised of a lot of different things – interactions with CS, support, sales, the product itself. When you think about those sharp edges that a customer faces using a product, it can be difficult to be tie the impact of CS and support to revenue and retention. How does HubSpot draw those ties from the amazing work CS does to impact revenue and retention?

This is a hard one in terms of showing actual value. One way (and this is not the way I’d recommend, but it will give you the truest answer) would be to have your existing CS operation as one population, and another population that doesn’t get any CS help, and compare those populations. What is the retention on population in CS purgatory? Presumably – hopefully, if you’re doing your job well! – it would be worse. But no CFO wants to run that experiment. They know there’s value in CS, it’s just hard to quantify. It is an interesting conversation to push finance leaders on why they don’t want to run that test.

Something I like doing is taking the sentiment data that you get through things like net promoter scores and understanding what percent of those sentiments are attributable to CS. By reading customer feedback or reviews online, you can identify how often service is mentioned and measure the lift in those categories. The trouble with this method is that manually combing reviews is something no one really wants to do.

Love it. Shifting gears a little, I've been in a lot of conversations recently where people wonder about having these success and support functions driving revenue. Immediately folks think, “Would that involve having CSMs cross-selling and upselling?” and they get nauseous. It feels icky and counter to what we believe in serving customers to have those agents sell to them.

Do you have any right and wrong examples of CS driving revenue?

Okay, some of this is opinion and some is experiential, so again, take it with a grain of salt.

There’s one category that I think is really interesting: what we at HubSpot call service qualified leads (SQL). We have marketing qualified leads (MQL) where our marketing team says based on engagement levels, this person is ready to talk to salesperson. SQLs are powerful. There are a lot of interactions between service people and customers. My firm belief is that service people they are not salespeople, but they’re also not stupid. We know as service people when the solution to a customer problem is to buy something else. I think it’s totally fine to plant a flag and turn to a salesperson and say, “Go dig here, there’s something there.” Those SQLs passed from CS or support are some of our highest converting leads sources. That gives you a very clear sign of money made by CS. Talk about ROI calculations.

The second category is a partnership with the marketing team. I talked about how when you’re at scale, customers are powerful voices of new customer acquisition – of marketing, essentially. Well, there are ways to quantify that. If you have an advocacy program, or a customer reference program, or if you care about how reviews look online, you can understand the influence service had on that. Identify how many reviews mention service, then partner with marketing to create advocates and spin that wheel faster.

Such great points. A lot of it comes down to really understanding what your customer is trying to accomplish. Shopify is a Guru customer, and they serve folks running ecommerce stores, so their entire support team is laser-focused on ways to help their customers sell more product and be more successful. Optimizing for customer success often leads to customers expanding and using other Shopify tools.

If you keep that focus on making your customers as successful as possible, and really believe that your product can do it, it’s not a slimy pitch.

Right. In fact for us, it’s not a pitch at all. We say “Did you know this product existed?” And the customer says “Yeah, maybe someday.” And if you put your sales hat on, that’s really cool. Most businesses out there with a tight support operation where support understands customer goals, they’re already having these conversations and planting the flag to unlock a whole bunch of revenue from CS. It’s a nice way to grow through existing customers and interactions.

Looking at the evolution of CS at HubSpot, what’s on the roadmap? How are you looking ahead to make it a growth-focused function throughout the organization?

In CS-land for us, when you get to the stage we’re at with this platform suite-based universe, the types of problems you encounter start to change. There are two categories we’re trying to figure out: One, how do we make the onboarding work for everyone? Not just customer who buys one collection of products, but who buys product #73 out of 150. We have started to dig in and have found that we are serving some of those segments of customers really well, and some not-so-well. We’re trying to get onboarding for everybody to be in a really good place. It sounds fundamental but it’s tricky at scale.

Second, we’re trying to balance the investment on the human side in terms of ongoing efforts in customer success with what customers need. 10 years ago every customer needed us to talk to them because our product was immature. Now, our products are low price and relatively simple, and having humans in the mix could be a bad thing. We’re looking at where the human time is best spent, and where the opportunity is compared to the risk. We’re trying to understand where to invest those human calories to get the best outcome for the customer.

That’s great, I’m excited to see how that continues to evolve. We’re almost out of time. I want to take a second to remind people that early bird pricing for Guru’s upcoming event Empower 2019 ends on Friday December 12. For webinar attendees we’re offering an extra 25% off.

I’ve got one more fun, personal question for you. If you could be any fictional character who would you be and why?

Well as I said earlier, I was first an engineer by trade, and engineers don’t like doing any unnecessary work. So I think I would love to be Garfield. I think Garfield had the dopest life. He had John feeding him lasagna all day, he just kicks it, he’s a little sarcastic, doesn’t do much. I think Garfield is probably one of the happiest fictional characters out there even if he sometimes got sarcastic and dark. So I’d like to be a big orange fluffy cat who eats lasagna all day.

That’s amazing, what could be better?

Okay, if you could give one final takeaway, especially for people who are bought into this construct but maybe their leadership isn’t, what is it?

Push the conversations at your companies. If you’re working at a place where you feel like you’re toiling away in a basement in CS or support, that’s not going to change unless you change it. You can sit there and manage the work that flows to you all day if you want. That’s one path. You choose that path when you fail to get a seat the table to talk about why CS matters. To talk about the fact that you want to own a revenue number and create impact. That you want to do some of the things we talked about today. Those things don’t happen to you, they happen because of you. Take the risk to put yourself out there. If you don’t, you’ll just keep doing what you’re doing today. You really need to create the energy in the system at your company to make the change you want to see.

What a great way to end! Thanks so much for joining me, Mike.

michael_redbord

We weren’t able to get to all of the great audience questions that were submitted during the webinar, so see below for Michael's written responses to those questions:

How has HubSpot identified the value of the sentiment of free users? Is this based on the potential lifetime value / upside?

At HubSpot, this has everything to do with reducing friction of folks who may someday be our customers. This “friction” play is a central philosophy for us as a business; we aim to reduce friction at all points of the lifecycle based on the observation that, in a competitive world, the vendor that’s just the most delightful to work with will often win and keep the business long-term. And in the meantime, happy free users who had good experiences can really help your brand and word of mouth. If you can afford to run a large, happy, free pool of users/audience, the growth benefits are excellent.

When you use the term "operations" in the context of a SaaS company what does it mean and include?

“Operations” could mean a number of things depending on the stage and complexity of a given SaaS business. In the context of this webinar and customer success, it most closely refers to the group of people and the systems they own that structure the work of our success teams: a “Customer Operations Team”.

At smaller SaaS businesses (HubSpot’s a big one nowadays) "operations" is often a more centralized, analyst-centric rather than systems/process-centric function. It may be one person, like an MBA intern, to start. These folks tend to focus more on the key metrics of the business (e.g. total lifetime value (TLV), CAC, retention) in an attempt to bring order to a fast-growth startup.

Over time as the business grows, you end up with more specialized operations that begin to work more on process (e.g. "How do our CSMs run a QBR?") and systems (e.g. "How do we track a successful QBR in our CRM?") than business-level metrics.

How do you think about Customer Experience in relation to CS and Support?

In my circles, “Customer Experience” is most often used to refer to two related things:
(1) The experience of the customer, which rests at the intersection of product, sales, support, and more
(2) An
employee who is responsible for understanding and spreading the truth on #1

As businesses grow in complexity, employee count, or number of products offered, the experience that a single customer has becomes harder and harder to see, represent, and measure cleanly. Mapping the experience can have value for fast-growing companies who have expanded so quickly that they lost track of their customer along the way, or larger companies that have enough natural complexity to make it hard to map the customer journey/experience.

Meanwhile, customer experience people (the folks who do this work full-time) tend to have a multi-disciplinary set of experience. If effective, they can be exceptionally important to driving a singular, clear-eyed view of your customer across the business.

What is your opinion on leveraging Support for the proactive approach?

Many companies need to start proactive customer work somewhere, and using your existing support folks instead of hiring new employees specifically for this purpose is commonplace, as a result. Is it ideal? No. Will it start your proactive momentum? Yes. Is this an easier case to make to your CFO than hiring a new employee to handle this unproven work? 100%.

Longer-term, if companies don't grow out of that mindset and into a reality that demonstrates the value of this work, they won't ever truly succeed at proactive customer success.

The reason for this is that it’s hard to place both opportunistic/proactive AND risk-aversion/reactive work in the same human being. Customer people, and especially empathetic support people, will run to the biggest fire and try to put it out. When you’re busy at a fast-growing company and have a mix of work, typically the proactive work gets left undone. (And if it's the reactive work that's not getting done, well, that won't go well either!)

Over time, then, using support people to do proactive work doesn’t tend to scale for companies who understand the value of proactive customer success. In fact a clear separation between “support” and “success” teams is the first clear organizational split many customer teams make to partition that work and get good at both reactive and proactive practices. But at the beginning of this story, having reactive support folks undertake certain key proactive activities can be a fine way to get going on those first, few, critical customer success actions. It'll help you build the business case for why proactive success is a lever of growth for the business, which will eventually help you hire those specialized, proactive team members.

How do you recommend implementing a customer success program when the client’s lifecycle is a single transaction (i.e. buying or selling). They may become repeat customers in the future.

One clarification off the bat: the goal of a customer success program is not just to run after the closest upsell. It’s to maximize total lifetime value in the long term. So for this business which does not have repeat customers, we can ask ourselves two questions to get at what the customer success program might look like.

First, ask yourself: What makes a repeat customer? What makes a customer who defects to a competitor the next time they need your product/service? Identify those key moments in the buying and re-buying lifecycle.

Second, ask: What could we do at those key moments leading up to a re-use of our service? Where can you “put your thumb on the scale” to improve your repeat business rate? Are those moments knowable, predictable, or guessable? If even a slight yes, then customer success has an opportunity to improve your TLV with the right action at the right time.

Identifying the key moments across the repeat buying behavior and applying mutually beneficial effort at those key moments is what customer success is all about.

How do you draw the line in regards to retention/compensation when dealing with dissatisfied customers? How flexible CS should be to retain a customer?

The easiest thing a CS person can do to make a customer happy is to refund them, pay for “time wasted”, or otherwise use monetary instruments and incentives to make customer issues go away. Sometimes this is the right thing to do, but it should always be the last thing you do. (Customers will mostly ensure it's the last thing you do, because they'll consider this renumeration a "breakup," too!) That said, every company is different, and you may or may not find a refund or monetarily-driven policy appropriate.

In general, though, companies should be flexible to retain customers within the bounds of T&Cs, contracts, and other “structural” guardrails. For instance, if your terms of service forbid refunds, you shouldn’t be doing refunds. If you do one, you’re breaking your own rules. If your contracts are annual and a customer is unhappy two months in, you shouldn’t be breaking contracts. In turn, you should be super thoughtful about these structural elements of your business; they’re key to operating smoothly at scale and ensuring long-term growth. And they need to be accurate to be an honest, transparent actor to your customers.

Once you feel like you’ve got the structure roughly right, and you’re willing to operate 99% of the time within that structure, outliers should be rare and handled as such. I’m a fan of escalating these types of customer scenarios to the executive level and having the resolution come from there.

Why make these into big problems for the boss? Times when you have to break your own rules should be viewed as a "bug" in your structure. They need that extra level of visibility and post-mortem. Over time, if you're listening and acting on the experience "bugs" in your customer experience that are causing you to get these renumeration requests, the structure of your business will improve to snag fewer customers, producing fewer bad experiences in the first place. And that's extremely important work. 

What mechanisms do you use to track Service Qualified Leads (SQLs) and is that used to help reward your Support team in any way?

At HubSpot, we track Service Qualified Leads (SQLs) in two ways:
(1) Number of SQLs submitted (tracked by counting the number of support tickets associated to support-created leads)
(2) Revenue closed as a result of SQLs (tracked by attributing the deal to the support-created lead in our CRM).

The team cares much more about #2, revenue, but we can use #1, volume, as a leading indicator of revenue, plus can understand who on the team is exceptionally talented at spotting these opportunities to surface best practices.

I’ll tell you what, though, when we inevitably crush our SQL target every year, that’s one of the best parties our support team has :)

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