Latest / Partnerships Unraveled / 026 - What Partnerships Can Learn From Customer Success ?
Transcript
- 0:07Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries of partnerships and channel on a weekly basis.
- 0:16My name is Rick van den Bosch and I'm the CEO and founder at Channext.
- 0:19And I'm here together with Lotte Cohen, VP sales at Channext.
- 0:22Lotte, how are you doing today?
- 0:22Great, Rick.
- 0:25Super excited to be a part of the Unraveled podcast today.
- 0:28Likewise.
- 0:29And I think we're going to discuss a topic that's very exciting for our listeners as well because we're namely going to dive into what can we learn in partnerships from customer success?
- 0:40Yeah, something I'm super excited about as well.
- 0:43And I think one of the things that immediately popped into my mind is who better to do this podcast with than you?
- 0:48Because you've been in the customer success space for a very long time.
- 0:51You were a VP Sales at Inside, it a customer community platform previously, which was sold to Gainsight last year, which I think is arguably no, not even arguably.
- 1:01It's the largest customer success company in the world who actually evangelised the customer success category, right?
- 1:07Yeah, correct.
- 1:08Yeah, I think they actually indeed built the whole idea around customer success themselves so they could actually start selling software into it, so they know their bits and pieces about customer success.
- 1:17Yeah, super interesting.
- 1:19And I think maybe for our listeners to start with, how did you get acquainted with customer success?
- 1:25Yeah, that's a really good question.
- 1:26So I actually have been working at SaaS companies for the past ten years and I've always been in customer facing roles.
- 1:35I think that the shift from account management to customer success is really something that started to take place about ten years ago.
- 1:43And I used to be account manager at the software company that I used to work at, did all the traditional account management work, and we had a manager there that actually started to talk about the idea of customer success and that's how I first got acquainted with it.
- 1:59So really we're there from the beginning of the sort of implementation and movement onwards.
- 2:05Yeah, super interesting.
- 2:06So really like that shift, you really experienced that firsthand where you were first an account manager and then it shifted more and more towards customer success.
- 2:15What are some examples of things that you experience, like things that changed during that process?
- 2:21Yeah, sure.
- 2:21So I remember fairly vividly that I was building a very big Excel document with an overview of all of the accounts that me and my two other colleagues were responsible for, that we applied tiers based on revenue and that we were at least trying to touch the accounts that generated most revenue or where we did foresee upsell or growth to happen.
- 2:45And those were the accounts that we focused most of our attention on.
- 2:49But the interesting bit with software is that if you really want to drive revenue, the biggest chances of identifying where your biggest chances for revenue are at is actually making sure that customers have a very clear goal that you are aware of the goal and that you can actually see whether that customer is working towards a clear path right into achieving that goal.
- 3:14And if you think about it from an account management perspective, it's super hard to track if you have ad hoc meetings, also mostly commercially minded.
- 3:23So with account management, you were probably mainly also like very much managing the relationship with the customer.
- 3:30Well then it more and more it shifted towards that success approach with very clearly understanding like, what does my customer want to achieve?
- 3:37And then guiding them through that process to make sure every single day actually you're working towards that end goal together with your customer.
- 3:45Yeah, definitely.
- 3:47That's definitely the shift that I saw.
- 3:50And the nice thing with customer success is that if you think about account management, it's very vendor focused and not so much customer focused, right?
- 3:58You're managing an account, but the customer success title already implies, yeah, you're making the customer successful and that's your first and foremost focus.
- 4:07But to be able to do that, obviously you need to make changes, right, to facilitate teams, to really work in a customer success mindset, which requires quite a different way of working.
- 4:18Yeah, I think that's interesting.
- 4:20We've been talking a lot in recent podcasts about how important it is as well in partnerships to really understand what does my partner want to achieve?
- 4:28And I think that's immediately where the first similarities are.
- 4:32It's so extremely important if you want to keep a customer for a long term, if you want to retain such a customer, if you want to grow together, if you want to increase your customer lifetime value.
- 4:42The same really accounts for partnerships as well.
- 4:44So you need to know very strongly, what does my partner want to achieve?
- 4:48How do I fit with my product or my solution in the goals of my partners and where can I support them to actually achieve those goals and work on that on a daily basis.
- 4:58I think that's immediately already the first cool thing I think we can extract from customer success.
- 5:03Yeah, you're absolutely right.
- 5:03Yeah.
- 5:06Awesome.
- 5:06And then I think indeed customer success.
- 5:09I came a bit late to the party, to be honest.
- 5:12I think it was about five years ago when I started reading more and more about it on LinkedIn and reading blogs.
- 5:17But it really intrigued me, like, what did you feel?
- 5:20I think we were saying it in the beginning, gainsight evangelised that customer success path, so to say.
- 5:26What were some of the things that they said that we had to change in terms of mindset or in terms of technology, maybe even towards customers to make them more successful?
- 5:35Yeah, definitely.
- 5:37So I think one of the key bits we already touched upon a little bit, but from there I can build the explanation bit further is really try to understand, right?
- 5:47If you're selling software, this is potentially a very important thing to touch upon as well, is that customer success really started within SaaS companies.
- 5:55Nowadays, I think a lot of companies are applying the same principles, but it started with SaaS because with SaaS you have the recurring revenue, right?
- 6:02So if you close a contract for a year but the customer does not achieve success, they will churn.
- 6:07And the end goal for software companies, obviously, right, to skill lifetime value.
- 6:13So that is an important point because when you're focusing on success for the customer, you want to make sure that you deliver that value as quickly as possible.
- 6:23And then if you have sort of like reactive meetings, right, if something is going wrong or potentially they need something, you're not really in the driver's seat to create success for that customer.
- 6:35And that's the cool thing with customer success.
- 6:37You start with understanding the value that the customer is looking for and create a path with tools, but also with a team of people making sure that you have the right touch points to really drive to that ultimate value for the customer.
- 6:51Yeah, I think that's super important.
- 6:53And that's also where onboarding plays a vital role, right?
- 6:56Where you immediately want to find out what do you want to achieve and what are the milestones in how we're getting there.
- 7:02Yeah, exactly.
- 7:03And onboarding is one of the key bits in success because you can probably right, if you think about a customer using a software product, you probably know what are one of the first signs or signals that they actually started using your product in the right way.
- 7:19So if you have an onboarding team working towards that first success, at least you know that that customer is off with the right attractive success.
- 7:28Yeah, I fully agree.
- 7:29I think that's interesting as well.
- 7:31From an onboarding perspective, I read that a lot like your renewal is one during the onboarding because that's the place where you really create that plan together, but also make sure that you execute very strongly on it.
- 7:43And I think that's the same within partnerships.
- 7:46I think what we see there a lot is that a lot of partners are turning inactive, 80% in the average partner programme.
- 7:52And the Onboarding is crucial because that's when you have the highest intention with your partners, you just close them just as in sales, right?
- 7:58You just close the customer.
- 8:00They are very excited to start, but from there it's like, okay, and how are we now going to achieve the things that we have agreed upon together before signing either the customer agreement or the partner agreement?
- 8:12And I think that's crucial there that your onboarding is super strong but also that you measure indeed those steps, those milestones where you know both you and the customer real time, like how are we achieving our milestones at the moment?
- 8:25Yeah, definitely.
- 8:26And if I put on my VP sales head and potentially in the future, if you have CRO types of responsibilities, if you think about the way how you're managing direct revenue right, that's often via this approach.
- 8:40But then if you think about the indirect revenue, it's done in a fairly traditional way with channel account managers and it's very interesting to think about it in the same way because you can apply very similar principles like you're explaining.
- 8:54So yeah, it's an interesting way of thinking.
- 8:57I fully agree and I think that's so crucial because partnerships has been around for a long time but it's also getting a lot of new insights at the moment with tech partnerships and alliances and combining all those type of partnerships.
- 9:10But I always really like to look at other departments or other sectors and learn of how they have approached things and they've invented the wheel, so to say, to use those learnings in your own area as well yeah, that's always.
- 9:24Good to better steal it well then think about something yourself in a bad.
- 9:27Way, right, fully agree.
- 9:30I think what I would like to dive into a little bit deeper is that shift from account management to customer success management.
- 9:35Because I think that's an interesting way as well to look at because, of course, in partnerships, we have a lot of what we call the Cams and the Pams, the channel account managers and the partner account managers.
- 9:48And what do you see there for partnerships as well?
- 9:50Like what are things, what partnerships could also learn in that shift from account management to success management?
- 9:57Yeah, definitely.
- 9:58Well, I think what I see when I'm speaking to channel professionals is that they allocate the resources, right, the human resources on the top 20% which you were mentioning before as well.
- 10:13But that also means that there's quite a big percentage of the partner base that's potentially not getting the attention needed to, first of all understand the required success and then to really drive that success.
- 10:25And if you want to do that in a scalable way right, because you can't add an unlimited amount of account managers, that's one of the main learnings in customer success as well.
- 10:37Right.
- 10:37At some point you start scaling so fast and you get so many new customers that you need to think about ways to apply customer success in a more scalable way and then you really start to use technology to help you allocate the human factor in a way more tactical, strategic way basically.
- 10:58So one of the main things that companies often do when they start with customer success which could be similar thing if you think about partner success is first of all really understanding what does the partners/customer want to achieve and are they undertaking the right actions and showing the right signs to actually being on the path of having that success.
- 11:21Yeah, I think that's an interesting one because I think if I think about account management to success management in the customer success environment at first, I think it was also about really scaling your own time because all of a sudden SaaS companies were getting so many more customers for a lot lower annual contract value as well.
- 11:42So Customer Success Managers had to manage many, many more customers.
- 11:46But it's not necessarily that all those customers have way less questions or way less support need than the larger customers.
- 11:54So that really required a very different approach there where we can't have a weekly one on one with every customer, we can't continuously give them the support manually and stuff like that.
- 12:08So they really had to rethink how are we going to scale a lot of our efforts and really drive in it like make our partners successful at scale so we can put our human resources really to those top accounts or to the customers.
- 12:20Where there are some issues where you really need the manual interaction.
- 12:23Yeah, that's very correct.
- 12:27I think one of the things that you mentioned technology, and that's maybe nice to dive into that as one of the first topics of what you can do practically there as well.
- 12:37Because I think one of the things that Customer Success figured out quite quickly is that they were actually lagging lead measures that could predict future outcomes of customers, whether they were going to churn or whether there was an upsell opportunity, what the revenue or the customer lifetime value was going to do long term.
- 12:56What was the first step customer Success had to take to get more insights into that?
- 13:00Yeah, and maybe to help with that, I'll give a very practical example.
- 13:04So let's say that I'm selling software to drive meeting bookings, right?
- 13:10So I have a BDR team and I need to book meetings.
- 13:12So I purchase the software.
- 13:15Then when I'm a Customer Success Manager, the first thing that I probably want to understand is did people create accounts?
- 13:22So did the BDR team create accounts?
- 13:23Is there a Head of Sales that's looking into it?
- 13:26So do the right people actually sign up to my platform from there?
- 13:30What's very important if I want to drive more meetings is that there's sequences loaded into that tool, right?
- 13:36So sales scripts that the BDRs, the Business Development Reps, can follow to really execute their day to day work and influence the amount of meetings they're booking.
- 13:44So potentially also something I can track as a Customer Success Manager, right?
- 13:48If I have certain pillar or how do you say it, like signals in my product and I can see this in a dashboard, they created the right accounts, they've used this part of my product.
- 13:58Then potentially other things you could start thinking about is if you have a knowledge base or had training that you're providing to that sales team to help them better utilise the software.
- 14:07Are they participating in that?
- 14:10Did they ever file a support request because they noticed something wasn't right in the product?
- 14:14And what you're ultimately doing as a customer success manager is then getting signals from the product but also broadly speaking, any type of engagement with you as a company that can indeed be a leading indicator to show that that company is on its way to success.
- 14:33So they were really focusing on first getting a lot of the product usage data of which they know that those type of steps actually lead to the end goal that they want, which is intra calls booked and eventually revenue, of course.
- 14:47And at the same time also really tracking all the customer engagement.
- 14:51So whether it's email with support or indeed like the company you work for, when you have a knowledge base and when you have a community like are they interacting there as well and really engaging with the company?
- 15:04Because that type of engagement oftentimes really is a sign of that.
- 15:08If the engagement is high, the future revenue will be higher as well.
- 15:12Yeah, definitely.
- 15:12And I think the word engagement is a key piece there.
- 15:16I remember discussions when we were positioning the community product at my previous company and what do you call a platform like this?
- 15:23It leads to success.
- 15:24But we were also saying everything we're trying to influence is based on types of engagement.
- 15:30The assumption was the more engagement a customer has with your product, the more likely it is that they're doing the things that will lead to achieving success.
- 15:39So engagement is a very interesting KPI to measure there overall.
- 15:44Yeah, I really like that one because I think that's a thing we are very much lacking in partnerships.
- 15:50We have the lack measure so we know how much pipeline was created and what was the revenue that eventually came out of certain partnerships.
- 15:58But we have very much difficulties.
- 16:00We speak to many partner people of course, both of us, and we hear it all the time.
- 16:05I have so few indicators, the lead indicators which predict what the future outcome of a partnership is because right now with portals for example, they can only measure logins and content downloads.
- 16:17But that's very limited if you think about it in terms of what is that eventually going to tell about future pipeline generated together or future revenue outcomes there.
- 16:27And I think that's an interesting way to look at as well.
- 16:29And I think what we should really embrace within partnerships is start and try to track everything, every interaction a partner has with you in your partners platform, whether they follow training, whether they participated in campaigns, whether they created deals together with you, whether they are actually following up on the leads and the deals you create together.
- 16:48So those kind of things, but also all the other engagements.
- 16:52So if you send out communication to partner communication, are they actually reading it and interacting with it when you send out other type of emails or when they ask you certain support questions.
- 17:03Those are all very good indicators of how engaged a partner is with your organisation.
- 17:09Yeah, definitely.
- 17:10And that actually triggers the next step.
- 17:15Right, so how do you then make sure that you get all of your customers engaged or right, partners, some of them are really big, so you want to spend time and effort, but how do you handle the smaller ones?
- 17:27And that's also a very popular topic within customer success.
- 17:30Right?
- 17:31And that's something we'll dive into in a SEC.
- 17:35One thing that I was thinking there as well is if you're tracking engagement, you can also create a formula which helps you predict, based on all the engagement metrics that you're measuring, whether a customer is likely to achieve success, potentially renew or grow or detract.
- 17:54So churn and that's called the Health Score.
- 17:57Customer Success Health Scores.
- 17:59Super interesting to see what you think about that metric.
- 18:04Potentially also for partners.
- 18:05Yeah, I think for partnerships, that's very interesting.
- 18:09And maybe it's interesting to elaborate a little bit on what is a health score?
- 18:13Like, how do companies actually make those health scores?
- 18:18So how do you decide where to put the weight, et cetera?
- 18:21And is it one size fits all for all SaaS companies or is it more customised per SaaS company?
- 18:28Yeah, I think it's actually so the idea of an Health Score is very similar amongst companies, but how it's exactly built varies massively depending on, indeed what's the most important leading indicators for success.
- 18:43But a couple of categories you can think about building into an Health score is indeed product usage, which we touched upon marketing engagement.
- 18:52So if you do any customer marketing or product marketing to help customers understand your product better, how often do they engage with that?
- 18:59Do they read it, do they share it?
- 19:01Support engagement, but have from there also users like is there a growing amount of users that start to make use of the platform as that can be a really good indicator for growth and then there's different ways to actually measure it.
- 19:17So you could actually say we do it very simple, so we give points per activity or engagement type and then we say, okay, based on the amount of points, they're either red, orange or green.
- 19:29Or you can make it a lot more complex where you indeed put weight into certain types of activities and then you sort of like create an average of that and build a scale on that.
- 19:40So there's different ways that companies apply this.
- 19:43An interesting bit there as well is that there's a whole new software segment that started to build upon this health scoring right, which is customer success software.
- 19:53Being able to track all these types of engagements, build your own health scores into that, but then also based on that, really start scaling your customer success motion in the most effective way possible.
- 20:05So that can vary, for example, from making a health score from zero to ten or if you want to make it more complex, zero to 100.
- 20:12And then all your customers, based on how they're scoring, will get a score somewhere in between.
- 20:17You can rank them, see who are my top customers, who are potential churn customers with indeed, maybe the red, orange and green lights.
- 20:26Yeah, definitely.
- 20:28I think that's actually awesome for partnerships as well because I think that's one of the key things that we're seeing all the time is that so many of the partners, because they are not guided in the right way in the first year or in the first onboarding, so to say, of the partnership.
- 20:42We don't know where they are at exactly, because we only see the lag outcome.
- 20:46So the revenue that they have generated.
- 20:49So we have very little insight into which partners are immediately engaging, whether they are doing the right things.
- 20:54And another thing I find very interesting, what I've learned about customer health scores is that you can create two separate ones as well, that you can have a set up health score, so to say, which you could call your onboarding health score maybe is everything set up properly?
- 21:08Are all the users on board or in partnerships?
- 21:11Like, do you have the marketing person, the salesperson, the technical person?
- 21:14Because you need all of them to have a complete partnership.
- 21:18So that's first the setup health score.
- 21:20So how good is a partner connected to you as a vendor?
- 21:24But then secondly, it's the continuous health score where you also want to see, are they continuously doing the go to market motion we want to do together with training, with marketing, with selling, et cetera, because you want to see like if it was very high last quarter, but it's dropping now, then that might be actually a signal where you could say, hey, the sparkling is dropping in engagement, we need to talk to them.
- 21:47Is there something, can we go do something together?
- 21:51Etc.
- 21:51Because then instead of only finding out once, it's already too late that the partner is already shifting attention to another vendor or it's not going that well with their sales, for example, you know, it way earlier in the process and therefore you can be much more proactive.
- 22:06And I think that's that big shift from account management to success management, it's really that proactiveness in knowing things way earlier, so you can act on it way earlier as well.
- 22:16Yeah, absolutely.
- 22:17And thinking in customer success terms, let's say that sales onboard your customer and then after three to four months, they don't engage anymore.
- 22:25That's probably the worst sale ever.
- 22:28And if you think about it from a partnerships perspective, right, there's so much time and effort wasted if you onboard a partner and then after three to four months, nothing happens anymore.
- 22:37So, yeah, I think these principles could definitely be applied to make sure that there's a lot more partners engaged in that way.
- 22:45We always call it the partner engagement gap.
- 22:47Right.
- 22:47A lot of vendors are suffering from it, where they keep pouring in more partners, but 80% is dropping out.
- 22:53So from all the partners you're recruiting, 80% turns inactive very quickly.
- 22:57I always try to compare it to selling a usage based deal because that's like a partnership is always free to sign, but then 80% of all your customers you would sign will never actually use and therefore pay you in such a way.
- 23:12And I think that's really a pity.
- 23:13So that's really the challenge for us in the partner space.
- 23:16How are we going to get way more partners to actually use and engage a lot more and drive revenue together?
- 23:23So we're all successful.
- 23:23Yeah, absolutely.
- 23:25And even if you have a small partner base and making sure that you're really focused on driving value and engagement from the first moment onwards and doing that in the smartest way possible is a win.
- 23:37Right?
- 23:37Fully agree.
- 23:39I think then onto our final topic as well, which is actually a thing th at your previous company evangelised a lot, it's skilled Customer Success.
- 23:48Can you explain where that trend came from and what the impact of that was, both for the SaaS companies and for the customers?
- 23:55Yeah, definitely.
- 23:57So I think that the trend for digital customer success.
- 24:02There's lots of names for it, but I think the most common one is digital customer success is as a SaaS company i n the startup phase, you have a couple of dozen of customers which can still be managed by account managers in Excel sheets.
- 24:18Right?
- 24:18But from there, you can start scaling fairly quickly, and then you always need to have a healthy balance between investment in employees and also return on investment based on the revenue that you're driving.
- 24:29And what a lot of SaaS companies experience is that you can so quickly start onboarding higher volumes of customers, but it's not possible to get the same amount of resources needed and to really manage those accounts one by one.
- 24:42And I think that's a very similar thing you see happening in the partner world.
- 24:48So if you then think about it in the fact that we just spoke about, okay, if we can measure product usage, engagement rates, if we can combine that into a health score and then we obviously want to start taking action to make sure that we set up a journey for that customer to get to success.
- 25:08There will be partners that are generating very little revenue.
- 25:12So you need to start thinking about ways, how can we make sure that they have all the tools and the same possibilities as the bigger accounts to drive revenue on their own?
- 25:26And this is exactly what happened in customer success, right?
- 25:28You want to still enable all those smaller customers because they're in ICP they're just paying a little bit less.
- 25:32But you can still drive a lot of success through these smaller accounts.
- 25:36And that's where customer success then started to set up self service channels, LMS systems.
- 25:42Right.
- 25:42So customers could actually take online training.
- 25:46So a lot of the, let's say repeatable or repeated tasks that didn't really add massive human touch value were taken over by automation and digital platforms and touch points.
- 26:00Yes.
- 26:00So by enabling more of that then you'll make your smaller customers a lot more successful.
- 26:06And I think your smaller customers or partners is really also your talent pool which could become the very large customers or partners eventually.
- 26:14So I think for that it's super interesting.
- 26:16But there's also the other side where you automate and digitise more and more of your partners journey for all partners.
- 26:24So you can also give more focus and attention to your largest customers, make them more successful.
- 26:30And I think by automating and digitising a lot of your journey, the interactions you do have on a human to human level because that will never go away.
- 26:38Let us be clear about that.
- 26:39It's forever a people to people business, especially in partnerships.
- 26:44But by automating and digitising a lot of the journey, getting a lot more insights there, you can make sure that the human interactions you do have are very impact and very relation driven in such a way and I think that's very strong.
- 26:58Yeah, you're absolutely right and I think also a lot more targeted because based on the data and insights you have, you also know a lot better where potential bottlenecks sit.
- 27:07So you can be a lot more proactive in your human touch to solve certain challenges that you're seeing coming from the data and engagement with the partners.
- 27:17Yeah, that's also great about it.
- 27:18I think an idea like usually you're helping every customer or partner one on one.
- 27:22But now because you have everything in a central place, you track a lot more, you know a lot more about them.
- 27:28You very quickly find out trends of which more partners are struggling with and then you can use those trends and that information to set up webinars to indeed create articles, announcement, trainings, marketing assets, really with the input of your partners base.
- 27:46And that's so valuable because then with the information you gather there, you make sure that you help as many partners as possible.
- 27:52Yeah, super nice.
- 27:55I think we touched upon some very interesting things here and thanks a lot for sharing your knowledge and experience on customer success as well.
- 28:03Yeah, you're very welcome.
- 28:04If one of our listeners would like to learn more, how could they best contact you?
- 28:10Well, I'm obviously on LinkedIn, so super happy if anyone wants to send me a connection request and talk customer success in general.
- 28:17I'm very passionate about it and love talking about it.
- 28:19But the cool thing is that there is so many similarities between customer success and how to manage your partner base successfully.
- 28:27We're also transitioning the Channext platform into a partner success platform.
- 28:31So I also have lots of thoughts and ideas on how it could be applicable for partner teams.
- 28:37So my email address is lotte@channext.com and send me a LinkedIn request.
- 28:42Super happy to speak.
- 28:42Awesome.
- 28:43And I think to briefly summarise for our listeners, we touched upon the origin of customer success and the shift from account management to customer success.
- 28:51And I think there's also a very interesting similarity there from partner account management to partner success management.
- 28:58Secondly, it's how can we also learn from tracking a lot more about our partners?
- 29:03So full partner engagement tracking in every single aspect, then turning all those insights into a customer or sorry, into a partner health score that we can utilise.
- 29:13So we know very quickly which partners are going well, where do we need to adjust and where do we need to focus our attention and then use all that information to really create a digital partner success journey where, you know, on a real time basis, where your partners are at and can provide them with the right content and the right enablement.
- 29:31As such.
- 29:31Yeah, and allocate your human resources in the most strategic and valuable way possible on top of that digital strategy.
- 29:38Yeah, that's crucial.
- 29:39So I think that's indeed, really the conclusion, like the more you digitise, it will never take away that personal piece or that human to human interaction, but it will just give you more time to focus on those kind of things instead of all other administrative or other kind of things as such.
- 29:59Yeah, you're absolutely right.
- 29:59Yes.
- 30:01Awesome.
- 30:01Well, I'd like to thank you Lotte first of all and then also of course our listeners and see you next week.