Q&A Recap: 2021 Customer Success Leadership Study Results Revealed

With each passing year the Customer Success industry matures and meets new challenges along the way, and this year has been in many ways just as challenging as the last.

To help us continue to learn and grow, ChurnZero, ESG, and Higher Logic, invited CS leaders to participate in a survey for the second year in a row, to share their experiences of where they fit within their organization and the influence they have.

With the results from 2021’s survey in, we held a webinar with the CS leaders from ChurnZero, ESG, and Higher Logic to discuss the findings. During the webinar, we covered:

• How to benchmark your team against others in the industry
• Firsthand reactions from industry leaders
• Maturity and growth recommendations for your team

If you missed the webinar, you can watch it on-demand.

Q&A Recap

Speakers:

• Abby Hammer, Chief Customer Officer, ChurnZero
• Jay Nathan, Chief Customer Officer, Higher Logic
• Marley Wagner, Sr. Director of Marketing & Services, ESG

Q: What finding surprised you most from this year’s CS Leadership Study?

Abby: This was surprising, but I was also very delighted to see this. Last year and this year, we asked which of the following strategies have you implemented for CS. We go through a bunch of different things around like standardized process, health scores, consistent segmentation, etc. I always drop my eyes down and look to CS Operations and having a defined function for that.

I am of the opinion that – in a high-level way, of course – CS Operations and the role it does or does not play at your organization is a good indicator for where CS is at in its maturity scale at your organization. I was really excited to see that – when you look through all the other things that you could have implemented – it’s still an area that on the bell-shaped curve is not as implemented as other strategies, which is something we need to change. When we look at people who fully implemented, partially implemented, or were planning to implement, we saw all of those take a step forward. And that’s really exciting to me, particularly the fully implemented. We have these operations functions in all of our other counterpoints around the organization. When we started this conversation talking about what a good CCO looks like, and we call that operational excellence, that means having that be part of your organization ideally early on, so it’s part of how your organization grows, and thrives, and matures.

Jay: The question was which departments do you work with on a regular basis to help you meet your objectives. I was surprised to see that only 48% of CS teams are working with their Finance organizations on a regular basis. I think that’s such an important touchpoint. And again, it speaks to a lot of what we’ve talked about here, in terms of really understanding the business and connecting your work to the business in a tangible way that in some way, shape, or form maps up to revenue, retention, or expansion. As we do this survey in future years, I’d like to see more teams working with their Finance organizations because it will signal deeper business acumen on the part of CSM teams.

Q: What did the data in this year’s study validate for you that you’ve observed anecdotally yourself?

Jay: More CCOS are popping up everywhere. 13% have CCOs which is pretty cool.

Abby: I’m going to go back to what Jay was talking about with what departments we work with and Product being at the top of that list. CS and Product having a great relationship; I see that happening more and more. I see each of those organizations understanding what the other can bring to the opposite and really starting to find moments to work together.

Q: For operational leaders, what top characteristics differentiate a good leader versus a great leader?

Jay: Having clarity on the metrics that you want to measure for the team that you manage is job number one, from an operational perspective. What is your tie to the business from a numerical perspective? And then what are your targets for those metrics? How far away from the targets are you? What are you doing to get to the targets if you’re not on target?

Every team that I oversee has a set of metrics that map to the customer experience and outcomes in some way. We have some teams that we have all collectively set targets for those metrics. We track them on a monthly basis in our dashboards, and where we’re not meeting those expectations, because we know they have an impact on experience and outcomes, we have projects in place that are specifically designed to what we call “go to green” on those metrics. Not only do we have projects, but we have owners for tasks. We have dates for delivery. This is blocking and tackling. It really comes down to having accountability, making commitments, doing what you say you’re going to do, and having ways to track your progress.

Abby: I second you on a lot of those, Jay. I was going to say the answer that’s popping into my mind is similar to yours. A great operational leader really understands the levers that they can pull. There are the classic levers that we all know we can influence and someone who understands the broader scope of what you could pull, what the impact of pulling a certain lever is both immediate and in the longer term, having a creative, open mind, and really understanding how every single metric that you may track in CS leads back to the business. Jay, you talked about presenting a good business use case. Never present your metrics in isolation, always bring it back to that broader story of what it means to the business.

Jay: One other practical suggestion here is, as a leader, learn how to run a great meeting. There’s a book by Patrick Lencioni called Death by Meeting. It’s a really good framework for how to do that.

Q: When creating a CS department for the first time, what should you focus on to set a solid foundation?

Abby: For brand-new CS departments, one of the strongest things you can do out of the gate is define who you are. There’s still a lot of misconceptions or lack of clarity around that. The number of CEOs I talk to who still think that success and support are the same thing makes my heart hurt a bit. Out of the gate, you need to know who you are. You need to understand what your objectives are, and then you need to socialize the heck out of them internally. You need to take on that education piece so that you are helping cultivate an entire organization that understands the purpose of this new department. Then, hopefully it’s less likely that they try to push you into what would be useful for them for you to be. For example, Sales might want you to be something because it’s going to help them in some way. But if you are rooted in what your purpose is, what your goals are, what your metrics are, and then you really socialize that around, that should be a really strong place to start from.

Jay: Totally agree. I was going to say the same thing using slightly differently language, which is be clear about what it is you do for the customer and for the business. Everything else, exactly the same as Abby said. Just get that foundation and know that you’re going to have to iterate on it.

Q: How does the role of CS differ when the customer is on a monthly subscription without an annual agreement?

Jay: When I hear that, I think of smaller customers, as in smaller spend on a monthly basis that’s maybe at a higher volume. Customer Success is, in that role, more of a product-led thing. Is the product facilitating the right kind of interaction and engagement, initially?

But beyond that, having a CSM to call customers and be there for customers, is a high-cost way of doing business with a very small account like that. Your support team becomes really important. Again, that’s different from CS. I think CS is more the scaled model in that world where you’re doing one-to-many outreaches, you’re doing marketing-type interactions with big cohorts of customers all at once. I will say, if this person is saying, “OK, that’s true. Our contract values are also high or our dollar values are also high,” then I would say, you need to look at using your CSM team or an Account/Sales team to convert accounts from monthly to annual. That can be a big way to grow the valuation of the business. We actually helped some customers do that back in the day.

Abby: I agree with all the points you made there, Jay. I would add in just one other thought. Sometimes with monthly versus annual, we think all of the rules and goals around understanding the customer journey and knowing what gets them to value and to the renewal changes; it doesn’t. You’re just working on a shorter timeline. And while you’re working on a shorter timeline, you’re also working with a less intense commitment. So, when someone comes up to that annual commitment, you best have done enough in the last year that they’re ready to commit another 12 months to you. That hill is higher, and the dollars associated are probably higher. Sure, you only have a month with, let’s say, a brand-new monthly contract. You’ve only got a month, so your timeline is shorter, which means what you’re trying to accomplish in that needs to be even more focused. You’re not trying to do six things in that month. You’re trying to do two really important things in that month. But again, when you come up to the renewal or the continuation, it’s not as steep of a hill. So, those things are still in balance with one another, for lack of a better way to say it. A lot of the same principles around understanding what needs to happen in what timeframes to get that next “yes” remains.

Q: What are the main goals that every CS team should have with their clients?

Jay: One, do you have the right relationships with the right people in the organization? Executive sponsors, champions, key users. Are you tracking it?

Two, are you having the right interactions with those people, whether that be engagement, QBRs, having frequent calls, having them respond to surveys, or having them do things as advocates for your brand?

Three is product adoption and utilization. Are enough people doing the right things in the product and can you drive that? At a very high-level, I would say those three are key for me.

Abby: Relationships are incredibly important, do not get me wrong, particularly for certain types of contracts of certain sizes. But the consistent thing, whether you’re a high velocity or high-touch CSM, is that if you have a product, it’s about the use of that product and meaningful use of that product. So, when I say that a login is great, but a login isn’t great if that’s all that’s happening. What comes next? What can you see of value outside of the things that are actually occurring within your platform. That’s the coal on the engine to me. You have to be really focused in around that. You’ve got to hope and work towards making sure that your customer understands how you are participatory in their success when it comes to their adoption of the platform.

To hear more from Abby and Jay as they discuss the study’s findings on the influence of CS in the organization, organizational alignment, and CS operations, check out the webinar.

You can also download a free copy of the full 2021 Customer Success Leadership Study here.

 

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