Transcript

Note: this was AI-generated and lightly edited, so there might be some errors.

Greg Kihlstrom:
To fuel growth in 2024, organizations need to pivot to a customer-centric model by leveraging a customer growth platform that continuously delivers value and nurtures long-term revenue through exceptional post-sales experiences. Today, we’re going to talk about how customer success managers can prove tangible value to the C-suite while adopting a customer-led growth mindset. To help me discuss this topic, I’d like to welcome Chris Dishman, Senior Vice President, Customer Success at Totango. Chris, welcome to the show. Thanks, Greg.

Chris Dishman: Glad to be here chatting with you.

Greg Kihlstrom: Yeah, absolutely. Looking forward to talking about this with you. Why don’t we get started with you giving a little background on yourself as well as what you’re currently doing at Totango?

Chris Dishman: Yeah, absolutely. So I started at Totango about a year and a half ago. Prior to coming to Tatango, I was in Customer Success at a company called On24, which is a webinar-based marketing platform. I was with them for a very brief time, about 18 years. About two or three lifetimes in SaaS. What was interesting about my time at On24 is I started in, really before customer success was a thing, right? So there was really more of a focus on, you know, it was reaction-based support and technical account management and those kind of things. And so I started building out a team there. which really focused on those kind of areas. And then we had launched a SaaS product called Webcast Elite. And we decided, and that was right about the time customer success was starting to become more of a kind of a named discipline. And so I worked through a process of converting my team from technical account managers to customer success managers and really grew that team through the following years and through an IPO in 2021, which was pretty exciting. was actually a customer of Tatango at the time. So we used that product through all the scaling and growth that we did. And an opportunity came up to do something a little bit meta in the fact that I could do customer success for customer success, which is kind of exciting. So got that opportunity in late 2022. And then recently we announced that we’ve got a merger with Catalyst, which is another customer success platform and some really exciting things on the horizon for us as a company and for our customers and some of the growth of what we’re doing as it relates to what we’re talking about today with customer led growth.

Greg Kihlstrom: That’s great. Yeah. And I mean, what a great way to be in your role is to have started as a customer, right? So it’s, so yeah, no, let’s, let’s dive in here. So we’re going to talk about how customer success managers can both create and demonstrate value to the C-suite. And based on what you just said, you know, Totango talks a lot about customer led growth or CLG, as we might refer to it, and that, that mindset. So let’s start our conversation by talking about What is a customer-led growth mindset and how do we adopt one? So first, for the benefit of everyone, how would you define that customer-led growth mindset?

Chris Dishman: Yeah, absolutely. So customer-led growth is really growing your or expanding your revenue from your customer base or your install base, right? So we look at it really in a couple of different ways. One of them is protecting your revenue. So obviously, if you are going to grow something, it can’t go away first. So we’ve got to make sure that we protect the revenue that is under management under those customer success managers. and then find ways to really grow and expand that revenue. So, you know, a lot of times people talk about land and expand, or they’ll talk about, you know, just kind of general growth upsells, expansion motions. This is that. But the thing that makes customer-led growth a little different is it’s more like a practice. It’s a strategic focus that really needs to be throughout the entire organization. And that is going to help fuel that growth and really kind of expand what you do as it relates to, you know, growing from your install base.

Greg Kihlstrom: Yeah, yeah. And so, you know, definitely sounds good. But in practice, you know, how I’m sure a lot of organizations want to achieve it, what’s what’s kind of what are some of the hurdles that are keeping some, you know, B2B focused organizations from from achieving that?

Chris Dishman: Yeah, I mean, I would say that the biggest hurdle is, you know, traditionally, companies have really focused on acquisition, right, acquiring new customers. And, and that has been something that we, you know, when, when, quite frankly, when money was a little cheaper, it was easy to throw money at the problem and really kind of, you know, just kind of grow at all costs as it relates to the new business. what we found over the last year in a real painful way is that that’s not working currently, right? Budgets are a lot tighter. People are like holding their cash closer to the vest. They’re not really willing to invest in some of these things. And so, you know, the acquisition motion has slowed pretty substantially. And so, you know, companies are realizing that we really need to be focusing on how we protect the revenue that we have under management currently, what is currently in our install base, and then what can we do to help leverage and expand and grow that. And so, you know, those are a couple of the hurdles. Sometimes, you know, it can be things like teams not being aligned silos between teams or a lack of unified processes, you know, across the board. And so if that’s not a top down initiative, that’s going to be something that’s hard to kind of drive from each of the respective teams. And then last and something that obviously we’re super close to is around uh, data technology and tooling, right? Because a lot of the current tools like CRMs are not really equipped to handle a full customer lifecycle from end to end. And so, um, you know, understanding what those gaps are, understanding where the, the important data points are and how you can kind of draw that through that entire customer lifecycle, um, is a, is a pretty big gap for a lot of companies right now when they start thinking about how they’re going to truly expand and grow their, their revenue base.

Greg Kihlstrom: Yeah. And knowing that there’s lots of variance between organizations and, you know, even within industries, lots of, lots of variance and stuff, but, you know, what, based on some of, some of the challenges that you highlighted, you know, what are, what are some initial steps that an organization might take to, to take, you know, to get closer to being customer led?

Chris Dishman: Yeah, you know, as I said before, I think the first thing is it’s a shift in mindset. You know, as a overarching company, you need to be aligned on the fact that it’s like, hey, we want to really focus on our customers. That needs to be kind of our primary focus is making sure that they’re well taken care of, making sure that they’re healthy. And we can talk about health more later. and that they’re primed for growth. So it’s not so much a, yeah, we have pre-sales and then we have post-sales. It’s more of a strategy that kind of takes the customer from end to end. So that’s the first thing. One of the other things that people can do is it’s a shift in collaboration, right? Customer-led growth is not something that is achieved by just your customer success management team. You’ve got to incorporate CS. You have to make sure that you have sales aligned with CS. CS aligned with sales and marketing. Marketing and product need to be in sync with each other. So the goals and the initiatives that you have across the board need to be really in sync and lockstep in order to have a solid and efficient motion that’s going to get the most out of growing your customer base. You know, and then another one is operation, right? You have to kind of think about how you implement and track and optimize, you know, your overall motions as it relates to growing that revenue. And it’s something that is shared, you know, across all of those teams. So one example is customer success, you know, qualified leads, right? So CSQLs or CSQ opportunities, CSQOs. Those are things that the CS team can help drive as it relates to increasing your pipeline for your expansion motion. But additionally, there’s a marketing play in that, right? Just like you have marketing working through pipeline on your acquisition or new business, you have account-based marketing that is gonna help support you and support the CSMs and give that air cover, so to speak, as it relates to really kind of driving additional pipeline, which ultimately is going to result in in the revenue that you’re looking for as it relates to growth. So, you know, the thing that’s that’s kind of fun about it is, as you start looking at it, it isn’t it isn’t anything that’s earth shattering, it’s kind of looking at some of the things that we do already, in the new business or in an acquisition kind of motion, and then drawing that all the way through and making sure that we’re tying out things like, you know, why did the customer buy the product in the first place? What are the outcomes they’re trying to achieve? Did we baseline that? Are we, you know, growing on that motion? And all of those things lead to that healthy customer, which ultimately is going to result in the growth and what you’re looking for.

Greg Kihlstrom: technically you’re already measuring, you’re just kind of looking at them maybe with a new lens or maybe looking at certain things combined. Are there measurements, maybe this is a meta measurement, maybe this is a different way of looking at it, are there measures that we can use beyond those to see how we’re tracking towards that, you know, that North Star of being customer led, you know what I mean?

Chris Dishman: Sure, sure. Yeah, absolutely. And I would say, you know, I mean, obviously, the the board level metrics that we all look at are things like, you know, net revenue retention or gross revenue retention, right? So so that is the the end game. So we, you know, being good customer success folks, we’re going to start with the end game in mind, and then we’re going to back into that and figure out, okay, well, how do we get to that? And And that’s where you start looking at things like, okay, I’d mentioned outcomes. So making sure that you understand and you have a very clear measurable outcome for your customer and why they purchased. you know, your product, your software in the first place, and then being able to say, okay, what’s the baseline of that? What is that today before launching said product? And then what is it that you’re going to be doing or using within our tool in order to grow that? And so, you know, that is a measurement where you say, okay, yeah, we achieved these outcomes, or we’re 80% towards your goal with this specific outcome is something that is very it’s very clear and specific for your customer. And then it also starts showing the value of what they’re getting, which then allows you to do even more. I mean, I was having a call or a conversation with a customer yesterday and they were like, you know, the key thing is making sure that they can speak to, you know, it was in the context of Totango, Tatango’s value, like what the value is that we are providing him so that he can show that to his board and same thing that he’s doing for his customers as well, right? So again, it’s tracking that value and then from that you can start tracking other things that are kind of upstream from from your typical NRGR things. So like pipeline or customer led customer success QLs, right? Those qualified leads that are coming out of that or referrals or NPS is another one not a huge fan of it, but you know CSAT and referrals and things like that all kind of go into Understanding where your customers heads at and also then how that’s going to ultimately result in some growth Yeah, and so is this

Greg Kihlstrom: You know, I want to I want to talk about alignment between teams in a second, but to kind of go there a little bit. Now, you know, is this for some, this may not be much of a mindset shift, but is this, you know, are there kind of mindset shifts that need to happen with with some teams more than others here?

Chris Dishman: Yeah, yeah, absolutely. And, and it, you know, and it, it varies a lot between, uh, from company to company, organization to organization and, you know, verticals and everything else, but making sure that, you know, we’ve historically, I say historically, I mean, there’s, there’s often been, you know, a little bit of friction between sales and CS and, and that’s kind of a longstanding thing. Well, breaking down those barriers and making sure that you’re aligned and supporting each other is a critical aspect and a critical mind shift when it comes to driving a solid customer-led growth model. But that extends beyond into marketing. If you don’t have marketing alignment, if you don’t have product alignment, as it relates to how you’re taking care of your customer and how you’re supporting them, then it’s going to be a miss. You need marketing for campaigns and for events and for that customer-led marketing efforts. And you’ve got to partner with sales to make sure that the handoff is completely solid and that they’re doing things on the front end of the sales cycle that bring in a customer that’s the right customer for your product and that you understand some of the goals and objectives and and then what those expansion motions can look like. And then, of course, being aligned with your product team on, you know, adoption and roadmap and areas that are potentially setbacks for customers or areas that you can grow additional, you know, product usage and even, you know, add on products and, you know, things from that standpoint as well. So and then the CSM, they just their point is to really kind of champion and focus with the customer, make sure that we’re constantly Appropriately calibrated with what it is that they’re trying to do what their goals You know and focus are throughout their journey.

Greg Kihlstrom: Yeah, and so you mentioned, you know some of the alignments there I think there may be some you know, those more familiar with us probably are are nodding their heads as you’re mentioning some of these things, but are there other maybe operational areas or other alignments that may not be as obvious to, you know, like sales, marketing, you know, some of those, like, when you start getting really customer focused, you start thinking across those kinds of things. But you know, what other what other operational alignment helps in making this happen?

Chris Dishman: You know, it is truly a full company-wide kind of initiative. I mean, I think about some of the struggles that I hear within customer success teams, and it could be in platform support, for example. You know, if there are lagging tickets that are not getting responded to, that becomes a rock in the shoe of the customer that they can’t get over, right? If there are engineering issues or bugs that aren’t fixed or downtime, God forbid, or things like that are going to create blockers or barriers when it starts coming to a customer having a great experience and them ultimately getting the value out of what they’re doing. And this is where it gets tricky is because You can have a great experience and not get any value and the customer will ultimately churn. but you can also be getting the value and have a horrible experience and then they’ll be like, I just, I can’t put up with this anymore. There are other options out there. I will go to other options. So, um, you know, so it’s really important. The, the, the experience of the customer and their overall satisfaction, you know, can’t be understated. Um, it’s not what we’re going to hang our hat on. That’s not a customer health score, but it is something that, allows you to understand, hey, they are satisfied. We are taking care of them. We’re not putting things in the way that are going to impede on some of the progress we’re making as it relates to really trying to grow and expand on the customer.

Greg Kihlstrom: Yeah, yeah. Well, last thing I wanted to talk about, we’ve touched on this in a couple of different ways, but I want to make this specific to customer success teams here and talk about ROI. definitely important in all things and investments and so on and so forth. And, you know, really talking about customer success teams proving tangible value to the C-suite. What would you call the status quo here? And, you know, do you see, you know, a problem here that needs to be addressed with that status quo?

Chris Dishman: Yeah. I mean, for customer success specifically, it has been pretty tricky over a number of years, quite frankly, where the measurements that they’re using are, I would just say, a bit fluffy, right? So if I go to my board and I say my average customer health score is 86, they’re going to say, OK, what does that mean? They know what GRR means. They know what NRR means. a retention percentages and they know where pipelines fits into the mix of things, but you don’t have a baseline to understand what that is. That’s one of the benefits of things like MPS is it’s a pretty standardized format. So people know, yeah, if you’ve got a 50 MPS, that’s fantastic. If you’ve got a five, that’s not good, right? So I mean, there’s some things that are pretty standard in that. As it relates to how we go or where we go from here, I think the big miss for customer success over the last number of years has been an aversion to revenue, right? It’s been that they have not wanted to really own a piece of that revenue pie and be ultimately responsible or accountable for the loss and or growth of that revenue. The CS leaders that I see really excelling now are the ones that are leaning into that motion and that are saying, hey, listen, I want to take the renewals. I want to be responsible for driving some of the growth and the expansion. And having sales leaders that partner with them that say, hey, that’s great. I’ve got a whole hill to climb over here on the acquisition side. you go do, you know, renewals and, and also now you’ve got a really solid partnership there. So when we think about ROI, um, specifically and kind of measures for the customer success team, you know, I, I look at, you know, obviously the NRGR things that we talked about before, but, um, okay, what, what is the revenue that that team is managing and, and how much are you protecting? And if you start looking at, customers that are risk that you pull out of risk, are you measuring that appropriately and kind of calling out those wins? And, you know, we talked a little bit about CSQOs or CSQLs. So what pipeline are they responsible for? And, you know, are they incentivized to really drive that appropriately? So, and this kind of goes into that overarching mindset as well, which is, you know, when you think about comp structure for a CSM, You know, you need to be considering what it is you’re trying to do as a company and how that’s going to fold into it because that absolutely should be a part of a compensation plan and in some way, shape or form.

Greg Kihlstrom: Yeah, yeah, absolutely. Well, Chris, thanks so much for joining. One last question before we wrap up here. You’ve given a lot of great advice and insights already. Even if it’s something you touched on before, what’s one recommendation that you’d have for those B2B marketers listening out there to stay agile as well as take one step towards customer-led growth today?

Chris Dishman: Yeah, I would say one thing I would highly recommend is reach out to your CS leader. Have a conversation with them. Ask how they feel they’re being supported by your marketing team. Ask how you can work more closely with them. and they will likely do the same for you. You know, this is one of those things where a great relationship between CS and marketing is an incredible sweet spot, right? And it’s something that I know I’ve had great relationships with CMOs at the companies I’ve worked at and And it does a tremendous amount as it relates to how I can support my team, how I can help hit the numbers that I’m expected to hit, and that we can do that in a way that makes sense and is efficient. So I would absolutely say just reach out to the CS team. and figure out how you can work with them to help drive some customer-led growth.