The Power of Referral-Driven Revenue w/ Adam Dorrell, CEO @ CustomerGauge

All sorts of restrictions about referrals, you know, corrupt practices or taking bribes. So it's often not a monetary value that is transferred, it's a reputational thing. So you've got to feel totally comfortable about saying, hey, we had a great experience with this company. I think other people in my profession could use that. You know, that's a big bar to overcome.

Hello everyone, and welcome back to another episode of the Account Experience podcast. And today we have a special guest, our very own CEO and co founder of Customer Gauge, Mr. Adam Durrell. And in this episode, we focused on the ROI of experience based referrals. And as a CEO, Adam is really passionate about making sure companies tie their referral revenue to their experience programs and he's pretty candid on why. So let's dive on in to the latest episode.

Hello, everyone, and welcome back to another episode. I'm here as always with my co.

Host, Kerry T Self.

Say hello, Kerry.

Hello, everybody.

And today, guys, we're excited about our guest.

He is the OG of Account Experience, the CEO and co founder of Customer.

Gauge, the one, the only, Mr. Adam Durrell. How are you doing today, Adam?

Oh, man, I'm great. It's great to see Ian and Kerry, how are you? It's lovely to be on here, but I, you know, I, by the way, I've been loving the podcasts. I think they're fantastic. And I listened to the one with Trish this morning, but like, you guys are up to like 9 or 10 and it's the first one I've been on.

Yeah.

Should I take that as a compliment? If you've been warming up and, you.

Know, we wanted to get it right before we had you on.

Yeah, exactly.

At the bottom of the list, you know, it's like.

Yeah, I think I'm with Kerry. We're trying to work out all the kinks early on, but I think we're, we're at a point where we're cruising now, so it made sense to bring you on here. And I know you've been doing this, what, for like 11, 12 years now, Adam, and I'm guessing you just have a massive amount of experience. I know, obviously just working with you every day that you do. So we wanted to get you on this thing, kind of share some of that knowledge with the audience. So. And our topic today is the ROI of experience, which is something. We've been banging that drum for a long time now. I've been here five years and that's been kind of our go to. So the ROI of experience what does.

That mean to you in a B2B context?

Oh, that's a big word. So hold on. Let's just break it down. Return on investment. You want to dive in right now? I just want to get warmed up with some stuff. First of all, I'm just going to throw some stuff back to you guys, and I've been loving the thing that you've been doing. So actually, what have you guys learned most over the last 10 episodes? Tell me what. Tell me what really jumped out at you.

Oh, my God, Ian, are you looking at me to go first? I guess, obviously. You know, I think Adam, one of the. One of the biggest things of the takeaways are is I think the more Ian and I have been talking about this and bringing people into the conversation and then having conversations after we even listen to our own selves speak, I think I'm overly amazed by a. How much we actually do know. I know it sounds horrible, but we do some really deep dives on some topics that people, I think, normally just kind of gloss over or skate over and think, oh, I know everything there is to know about that. And we've really been able to punch through that curtain, per se, and see what the workings are behind that. I think that's one of my biggest aha moments and having other people listen to it and then call me and ask me a specific question like, what did you mean by this? And it's kind of been a nice segue or icebreaker of us to really talk about what's difference between customer experience and account experience.

Yeah, I think you've given back so much of the community, Kerry. I love this, and I think this podcast is really a great experience for you guys. And what about you, Ian? What did you get out of it?

Yeah, I think I'm kind of echoing what Kerry said. So we've. It seems like ancient history to me, but I was a program manager at a bank doing this type of thing. Kerry did it for Arius and a couple other companies. So I think we're pulling from our own collective experience. And that's also been. The feedback I got is like, wow, that was really helpful. So I think we underestimate how much of this stuff we've been through and how many struggles we've overcome and things like that that I think are valuable to the audience, which was great to get back a couple different times across the 10 episodes so far. So, yeah, I think it's kind of just making sure that we are putting, you know, that experience at the forefront, like We've been in your shoes. We know what you guys are going through. We can offer some advice because we've. We've failed before in these specific areas. And this is what you guys should focus on instead. So that's been really rewarding on my side.

Yeah. Okay, well, let's start. Let's try and think about what you said. That was great because it gave me a couple of moments to think about returning investment on the experience. But I was thinking about this this morning. And because I try to talk to a customer or a prospective customer at least once a day. And one of the things I was struck by is that in all the time I've been doing this, in the 13 years or the 15 years since, I've really been thinking about retention and how experience interacts with that, is that there are very few tools around still that help people with retention. And then if you zoom out a bit on the picture is that retention is still really underserved, I think, as a kind of discipline. And, Ian, if you think about what you do, you know, you're measuring marketing to the nth degree. You know, what is the conversion ratio on this ad? You've got lots of tools that help you move somebody from the website through to. What is it, you know, attention and awareness to closing. And, you know, you look, where are the tools that help CEOs or the C suite people figure out when their customers are going to leave them or buy more for them? It's really a. And, you know, I'm going on this. You know, I've been doing CRM systems, been involved in them since the 90s. You know, if I could tell you some of that, some of the names in that you probably get, you wouldn't know who I'm talking about. You know, but the promise of CRM back in the day was that was to solve all the problems. Yeah, you're going to know everything about your customers in the end. CRMs, I still think it's like a glorified address book with, with knobs on and graphs. Right. Not, you know, and I'm not dissing Salesforce because these guys just made a record quarter. You know, I love Salesforce. We have it internally, but it's, it's in the end that doesn't tell you anything about what your customers are really going to churn on. So I think it's really about figuring out what the customer experiences and that then, you know, that leads us into the return on investment. I'm going to take a pause. Am I on the Right track with you guys?

Yeah, I think that's exactly where we're going, Adam, which basically is we've been talking about this episode after episode, but it really is making sure that you're focused on the right thing. So anybody can spin up a survey with like a survey monkey, send it to your CRM. That's not really what this is about. This is more. It's bigger, it's broader, like focusing on the business results. So you mentioned the marketing example, right? So my job as the VP of marketing is not only measuring that ad, but making sure it converts the revenue. That's literally my first task is to make sure these things are converting. And I think too often in these programs, we're focused on, like, measuring the score or we're focused on getting a good response rate or just reading the feedback from customers. And what we've been really talking about in detail, Kerry and myself, is producing an ROI from that program focused on revenue and really getting it to a business level metric. And I think that's really important these days to address. And that's what we're hoping to dive into the episode with you today. So what does that mean as the CEO to you as like tying it to revenue? If you hear tying your experience program to revenue, what does that do to you as a CEO?

We're lucky in our business because we're a SaaS business and we really. We've got retention metrics built into everything that we do. You know, the North Star for us is really net revenue retention, and we're able to bring all of our stats together in one meeting. You guys know that we have a weekly meeting about this. When we look at these things, you know, of course I'm really interested in growing the business with new logos, but also I want to make sure that we can hold on to our existing customers and grow those as well. You know, really thinking about this, I think most companies don't have all of those metrics in the same room. They're in different departments. So, for example, churn is somebody else's problem. Maybe it's nobody's problem. It's not getting managed. And new sales or sales from existing customers are lumped together with sales. So they're not thought about as. As a kind of a, you know, hey, that was a win from retention or a win from a referral. So they're not really thinking about this holistically. And if I think about the return on investment, I think it's really in three areas. The first one is pretty obvious. It's like stop your customers churning. So what actions can you do to stop the revenue bleeding out? You know, holding onto your customers for longer. That seems, I think it's the most obvious one that everyone comes up with in, in improving customer experience. Right. And Kerry, I can see you nodding on this. So you know, I think you've probably got, you see where I'm going with this. And the second one, which is the next logical step, which is, okay, if we got some of our customers who are happy or at least passive about what we're doing, can we identify opportunities to serve them better? Can we upsell them a bit? So this is the next area of return on investment, you know, what can we do? But of course that means in the sales process you need to track those customers upselling and you need to have some skills on those so you can't just leave it to supports. So CSM is quite a good solution. If you've got some really good customer success people who are bonused on meeting some targets, that's a really good area to get more revenue on. But you know, you don't want to be too salesy in csm so you need to have the balance there. So Area 1, reducing churn, holding onto your customers more second area, upselling. And there's this third one which is often overlooked and it's referral sales. And Ian, I think you brought that stat to the attention. I certainly read it on yourself. What percentage of companies think they've got a good referral system? Is it like 10% or something or.

Yeah, it's very low. Yeah, I think it's like 20%.

More than half of the companies out there think they could do a better job on referrals if they really want to. Right. So I think in a way this is the, you know, if retention, the whole retention side is the Cinderella discipline of most businesses, you know, the saddest part of it is the referral program. And yet this is the one that we can really identify and say, look, if you find people who are happy with your business and they can refer them to other people, really activate that. And you know, this is, this is also what I love about Net Promoter is that you ask the question, hey, how likely are you to recommend it to a friend or a family? And then somebody gives you a 9 or a 10, you can go back to them and say, thank you, thanks for saying that you would recommend us. Here are some tools to allow you to do it. And then of course the hard bit comes in is that you've got to then measure that. You've got to measure the how that customer refers it to somebody else and track it back and then bring the revenue in. And I think this is, this is thing in a way I'm actually most excited about at the moment. Ian, this is the thing I'm really, is really occupying my mind about how to really turn your whole net promoter program or account experience into something that brings money in.

Kerry, you have some experience doing that a couple of your companies, right? Just basically teeing off a referral program. Maybe speak to that real quick.

You know, I think in those three that Adam talks about, I think the first two are like no brainers, right? Hold on to what you have and grow what you have. But do we activate the people that are champions that are excited about us? I know we've talked about this in a couple of times, but I think having other departments, if it's sales out front, if it's product building solutions to draw in those referrals or new products, how do you activate those promoters in order to and like Adam said, and track those promoters, those referrals as they're happening? Because I think that's where your program takes off. I think that's where everything else is an addition, right? If you hold on to someone, you add incrementally. I think if you grow someone, you add on incrementally. But when you refer someone, the referral gets kicked in. It's like a multiplier. And now what happens is you're bringing more people in that are adding and it enhances, it takes off. And I think in the past that was one of the things that I really had to sell. And like Adam's my CEO. I have to go to him and say, look, this is the end game. This is what it equals on the bottom line. I mean, let's cut to it. And this is the value. And it's always a challenge for someone who owns a program to put a dollar amount on their effort and what they're doing for the organization. And in creating that program in the past, that was my key. How can I make that connection and show that number and getting multiple departments involved also? So I think that's the key takeaway from listening to Adam say that on really making referrals, part of that, I'm.

Going to add some flesh to that. Kerry, I think in B2C companies we see some really good examples and probably. Well, I'm going to use Tesla as an example. Ian, I think this is one of your favorites. You know Love it.

Yeah.

If you. Tesla had some really good, strong promoters, and it would be bring along a friend for a test drive and you would get a. You know, and I love the simplicity of that. But also, you know, refer a friend and get a freebie or something like that. Very simple. Dropbox is another huge example of that, you know, but I think in, you know, the area that I'm, you know, usually preoccupied in, most of our clients have got large, heterogeneous, complex accounts in B2B. And, you know, you can't just easily say, oh, well, we have a free one of those for all sorts of reasons. One is, you know, B2B. There are all sorts of restrictions about referrals, you know, corrupt practices or taking bribes. So it's often not a monetary value that is transferred. It's a reputational thing. So you've got to feel totally comfortable about saying, hey, we had a great experience with this company. I think other people in my profession could use that. You know, that's a big bar to overcome because you might be giving away commercial confidentiality or competitive advantage. But that's the thing that really preoccupies me. How can you make it comfortable for B2B companies to. To have a referral program?

Yeah, because at the end of the day, it's reputation. It's a really good point, Adam, where literally you're putting your own reputation on the line, and that's not something people take lightly. Right. So let's just break that down for a second. So there's a couple things you got to be really clear about. Right. Which is what's expected. So what is going to happen? So if I give this person a referral. So if I'm literally saying, hey, go talk to Joe Schmo at this company, like, I want to know what's going to happen to Joe Schmo. I don't want to put him through the ringer where it's like a sales process and, like, all of this terrible stuff that could happen, then it just becomes a burden. So I think you have to be really clear at all, right? If you give us this name, XYZ will happen. This is why it's something good for you. This is why you should do it. And this is why it's also good for Joe. You have to be very clear up front. And I think one of the. Actually, I have an example here real quick. So one of the companies that did this extremely well is actually one of our customers, Verifin. They did a referral rally where they literally had this entire internal marketing campaign around generating referrals. They established what are called verifans, which was really clever. Yeah. And then they had weekly leaderboards that had big prizes. And. But they were very clear about what they asked for. They said, we want referrals that are within this icp. So, like, don't just give us anybody. We want these very specific people. And they were very clear about communications, like what happens once a name is submitted. And then they basically coach their customers on how to proceed through the process. And what they did was they generated over 150 new ICP leads in just a couple of weeks, which, as we know as a cg, those referral leads, Adam, I mean, we had a couple. I think we had one close this month. Right. I mean, that's the craziness of these referral leads. They close at, I think, 40 or 50%, which is very, very high in SaaS.

Yeah, there's a few things with that. Well, first of all, to give you some stats, about 20% of our sales comes from referrals, which I'm really proud of. And I think that, you know, we have a pretty high nps, and I'm certain the two things go together. We really try and do a great job with our customers, and when they move to another company or they refer. So that's where a lot of the business. Yeah, 20% comes. And a couple of things that happen. You know, you just said that business referred. Business close faster and generally at a higher price or at least less discount. So we're able to build that into a model when we're looking for new business and see that happening. And I think this is really something that the company should take away. Is that refer businesses. It is. You know, of course it happens. But if it's something you nurture, you can really do this. And I want to give you one other example, because it comes back to this thing about. It's not always about personal gain that does it. Sometimes you just need to say, look, you should talk to my friend so and so about this company. But what often happens is that unless you give an introduction to the right level in the business, it can really fall flat. And then at least the personal embarrassment for yourself as the referral. Oh, man, what happened? Yeah, well, I tried the company, and they just brushed me off or I had a bad experience. You're like, oh, God. You know, so you've got to really be on it, otherwise you can ruin the people that are your promoters as well.

This episode of the account experience podcast is sponsored by CustomerGage, the leading B2B account experience software that ties revenue to.

Your experience data in real time to.

Help you make better account centric decisions that drive revenue growth. Quick question.

What do you guys think is the.

Number one reason B2B experience programs fail? Believe it or not, it's Lack of C Suite Buy In Customer Engage's research with mit, they've found the quickest way to align yourselves with the C suite is to actually align with what they care about most, which is revenue. That's why Customer Gauge is literally built from the ground up to maximize and track the revenue contribution from your experience program in real time. Companies like dhl, Anheuser Busch, Heineken, yeah.

We get a good amount of free.

Bear 1 login, Iron Mountain, H&R Block, SuperOffice and SugarCRM are already using Customer Gauge to maximize their growth by tying their programs to revenue. And with over $10 billion worth of account revenue actively being managed in Customer Gauge, yeah, that's billion. With a B, they're the leader in the space. But maybe even more interesting, they found that once you get alignment with that C suite, the needs of these B2B practitioners or the program champions are evolving too. In such a complex account environment, it can be really tough to measure and act on feedback quickly across multiple departments, divisions, or even locations. Luckily, Customer Gauge has you covered there as well, with account native features that easily help you not only measure the feedback for multiple stakeholders in an account, but act on that feedback in real time. Because at the end of the day, if you're not empowering your frontline staff with the right insights to address customer issues, you're going to be dealing with a churn issue. It's not a matter of if, it's really a matter of when. Customer Gauge helps you distribute this experience data across your entire organization, regardless of department, regardless of location, regardless of division, all in real time. No manual spreadsheets or a team of analysts are needed. CustomerGage's mission is to help B2B companies harness the power of account centric growth to drive meaningful change in their businesses. And that's a powerful thing. If you want to see CustomerGage in action, go ahead and check out CustomerGage.com and get a demo of account experience today.

You won't regret it.

This verifan approach, not only did they activate the referrals right, they educated them. Again, I'm the education guy, so I got really excited to hear that, but it's almost to give a playbook to Your referrals to say, look, these are the wins. This is who we're looking for. This is how we want you to kind of say it, and this is what we're trying to get out of it. And, you know, this is what's in it for you. But this is what, you know, this is your playbook. And I think, to speak to Adam's point, sometimes, you know, we have really great referrals. But the challenge with that, their expectations are higher. They're expecting more from you. Your reputation's writing, so now you're a little sweating and stressed, like, they better. They better not make me look bad, you know, And I think all those pieces come together. So, yeah, they close quicker. They spend more. They're not resistant to. They trust us almost out of the gate, like, no, you need this. Trust me. You need to buy this, and this is what it's going to do for you. But on the flip side, if you drop the ball, if you stumble a little bit or you don't keep that promise, their expectations are much higher. But I think, Adam, you said the thing that I like to hear, though. The MPS is higher. So that means on those referrals, we're keeping our promise. You know, we found that formula.

Yeah. And I think if somebody gives you a negative score or they're not responding, that's when you really need to jump on it. Ian, just to sort of. I mean, I could talk about ROI all day long, you know, but just in the interest of time today, if we just stick with the referral part of it. Of course, you know, if we look at. First of all, let's just take one step back on the return and return on investment. What I think is that whenever I talk to CEOs about retention and I work out for them the cost of doing nothing, it's a real shock when you do the stats. And the conversation typically goes like this. First of all, us three know that the. You know, the average for Churn out there is about 20% a year. Or let's put it another way. You can keep 80% of your revenue year on year, but if you lose 20% of your revenue a year, that's like having to sell five quarters to get four. Now, I like to think that most of the companies that we deal with have got a. Their Churn rate is lower, so maybe 10% or something like that, you know, which is great. But, you know, for somebody that's got a $50 million business, $5 million are going out the door just on Churn. Customers. And it's like, well, you know, the cost of doing nothing is not. Well, it's not just 5 million, but it's the cost of marketing. You've got to do acquiring the new customers to fill it up. So before you know it, it's about 6 or 7 million people sit back and go, wow, that's pretty serious return on investment of this. You know, if we go back to it, it's about reducing churn, increasing upsell, but also doing the referrals. Any one of those three alone can make a big dent in that in there. You know, maybe, maybe you get a million dollars back from just doing a program on that.

I love that cost of doing nothing. That's such an important thing to bring up, Adam. So thank you for that. And I think there's a lot of examples of this, but the one that comes to mind, you mentioned it earlier, which is Dropbox and they're B2C, B2B. So they do both, they do consumer, but they also do a business style thing. And their referral business drove their user base from 100,000 users to 4 million users in 15 months. So 100,000 users to 4 million Users in 15 months and they have a $10 billion evaluation. But the cost of doing nothing of that, like if they didn't have that referral program, they're leaving all those users on the table, they probably wouldn't grow nearly as fast. It's crazy to me that there's companies out there that don't think that a legitimate referral program will generate revenue for them. And I think the cost of doing nothing is just so massive that even if you just start with one basic program, just start. Because there's money that you're leaving on the table, whether it be in cost savings or in revenue growth. And I really do want to get that across in this episode that just start something. I mean, Dropbox went through eight or 10 iterations of their program. So that's another piece is like you need to test this thing. So once you launch the first version, don't stop there, keep testing, keep iterating. But Kerry, what are your thoughts on that as the education guru?

I think you guys brought up Dropbox intentionally because I'm just a raving fan about that approach from a user perspective or level. Think about this. They empowered the group that loves them the most. And what they said is, we can give you something that costs practically nothing. We're going to give you a little bit more space. It just took off. It was almost like a game that started to get playing on that and we talked about why this is a great thing. I just remember, like ringing my friends up and like, you need this and why. Well, it's connected to all your apps and it's, you can keep your stuff wherever you're at. And you know, and it's just, it was, it's like you said the other emails I got before from them didn't resonate where this one was like, oh, yeah, you've just activated me and educated me. So I think that's key. What works for your customer base, You've got to make it easy and I'm gonna take it a step further. But you gotta make it exciting. If you're going to activate your referrals, you have to make it exciting for them. There's gotta be something in it in the end game for them too. And I think education or anything we.

Do reciprocity is big on this for sure. And also a system, right? Bake it into the onboarding process. So literally just make it part of your onboarding for new customers is like, hey, we have this program, da, da, da, da, da. I mean, it's, it's really important to just start and build it into your process for sure. So. And I'm sure we could rant about this for hours upon hours, but we have the CEO on the line, Kerry. So what's going on with you this week, Adam? And maybe just give us a quick overview of that.

Oh, well, thanks. Actually, I was really prepared for a rant today. I was actually hoping you would wind me up so I could really get my soapbox about some stuff because that, you know, my grumpy old guy and I love to, I love to complain about stuff.

Stuff.

Well, it's funny, a couple of really interesting things happened to me this week and, you know, to speak to you on Friday afternoon here in Amsterdam, I'm kind of looking forward to my weekend. But two things came out. Well, first of all, I was in touch with one of our clients, one of my favorite ones, Hans from Super Office, who we were talking about what he was up to and he's like, yeah, we've got this project this week. We're going to activate our passives. So I just wrote a little bit on LinkedIn about that. I said, do one thing today. Phone up everybody that's given you a seven or eight recently and say, what's it gonna take to get you a nine or ten? And I bet you get some revenue. He said this week, he said that it happened, you know, they made 10 calls out of these guys, say, you know, why couldn't we not get you to a 9 or a 10? And they're like, well, you know, because of this. And we love and just that human interaction got a couple of, you know, tens of thousands extra revenue about it, which everybody needs in August, I'm telling you.

Of course. Yeah, that's great story.

That was the number one thing. And then the other thing I think was a real topper this week. And I don't know, I also put this on LinkedIn and I hope you can put a link to the video is the video we had, which was. Was actually shot seven years ago this week, which was Jamie Clark, who runs this outdoor E commerce business. He's an incredible guy, I've got to tell you, a mountain climb. He's climbed Everest, nearly died on Everest, and tells a story with passion. He shot this video to ask people for feedback. And he's up this, you can't see this is a tight shot on his head. And he said, hi, I'm Jamie Clark, and I'd like to ask you for feedback. And the camera pulls back and you realize he's 3,000ft up this vertical wall of rock. And he's like, you know, I love it. He says, I promise I'm going to read everyone. And he does this pause. He goes, and I just want to say thank you for being our customer, but it's everything in it. It's like 30 seconds of gold in that video. And Jamie also came back to me this week and he said, yeah, he says, I remember it. He says, but sit on a serious note. He says, you know, I really take this feedback seriously. I think it's, you know, so that kind of passion, it parallels the passion that people have for my product, and I really love that. But to top it, I had two calls. It was actually Brandon in your team, Kerry, that came back to me and said, hey, one of our clients is going to use this. So they get their CEO is going to do it, although I don't know if they're going to do it up a mountain. And I had another one from one of our other clients in Telco that she's going to persuade her CEO to hang off a 4G master to talk about this. But, you know, in a way, I think we were really ahead of our time with that. But this getting, you know, I speak as a CEO, right? Getting. Getting in this and really saying, look, I really want to hear what you're saying, and I promise you I'LL act on it is the kind of human contract that I wish more CEOs would have with their clients.

So, Adam, this is a perfect segue for the hot seat moment in our podcast where we ask the CEO a really hard question. What are you going to do to get feedback? What can we put you on?

So I love cycling, so I could do it on a bike. I'd just be a bit worried about the wind noise, you know, stuff like that. But I don't know. Challenge me, guys. You know, it's like, I love the idea of doing this. Maybe I will go away this weekend. I'll try to come up with a video.

No, but I think that's a really good point. And it's how do we challenge our CEOs and the leaders of our companies, right, to get that return on that investment? And that simple ask for feedback. What was the return on that investment? It was valuable information that helped make strategic decisions and guide the company. And I think it all locks into the one theme. If you're going to put forth an effort, whether it's financial or physical, what is the return on that and can you measure it? Can you go back and say, yeah, this had an impact on what we did.

I got it. So we're have Adam, tight walk across a canal. Come on. I mean something.

I won't do that.

So, guys, I'm sure we could talk all day long, but Adam, we're going to have to have you back. It's been a great episode. So ROI of Experience is such a broad topic. I think it's great we picked off referrals today. Maybe do upsell, cross sell in a different time. So love to. It's been a great episode. Thank you for joining up, Adam, as always, guys, subscribe. Share with your friends. This is the Account Experience podcast and thanks for listening.

Thanks for having me, guys. Much appreciated.