7 Must-Haves for the New Customer Journey Playbook: 2020 & Beyond w/ Totango Founder/CEO Guy Nirpaz

for joining the amazing SaaS Tour 2020 annual conference, as I have. And for those of you who don't know me, Guy Nirpaz, that's my name. Accent is from Israel, and I'm the CEO and founder of Totango. So the topic is the new customer journey 2020 and beyond, and we're all feeling that, but just kind of to make a point out of it, I think what we are all seeing is a major shift in business driven by, you know, a lot of change that has gone through our lives. That means that our customers are, you know, going through these differences as well. And the 3 main ones that I want to focus on and drive the conversation from is, you know, the 3 new realities that are here to stay, but they're very obvious right now. So the first one is customers is where the revenue is. You know, it used to be a conversation whether or not it's, you know, about new business, existing business, but I think what's very, very clear is that revenue is where, you know, customers and customers' revenue. The second thing is, you know, as we are experiencing SaaStr Annual, the digital conference, Digital is at the heart of the new customer journey. And lastly, I'm not sure that it's very new, but it's very much emphasized these days, is that customer— it's focusing on value first, monetization second, just because that's the new buyer's experience and the consumer experience. There's a link down below if you want to look at those differences in a little bit more details. These top 3 are the ones that I'm going to focus on today. So most customer journeys look like this. If you are familiar with this image, imagery, I kind of borrowed that from Blake Bartlett, partner at OpenView Ventures. But most customer journeys look something like this. Marketing was responsible for driving leads to evaluation, sales on closing the deal, professional services to set up customers, support to fix and solve usage problems, and account management focused for renewals. And the genesis of customer success started with making sure the renewal happens. It was clear that what, you know, what companies had to ensure is that customers see value before the renewal, preferably much before the renewal, in order to, to get a renewal contract. And that was the original kind of thinking behind customer success. So let's put a team that is responsible for customers getting value before renewal. And, uh, you know, that's kind of the idea of customer success as the renewal driver. Over time, what we've seen is, um, companies have been focused on creating value much earlier in the process. So You know, let's make sure that customers very early on consume the features and the capabilities and the value of the product. So customer success was a little bit ahead of that. Customer success is, uh, you know, starting to drive value in onboarding, uh, the concept of value-based selling. And, uh, and even so right now, you know, all the concepts like freemium, free trial, product-led growth, all of that is It's a mindset where, you know, drive value first, make sure customers get value, customer success early on, and that's what's going to, you know, create a much, a much different journey. It's also very important to know that what we're talking about is a very, as I said before, value-driven customer journey. So we're kind of flipping things around here where it's about the customer, it's about value first, and the sooner we can deliver on that, the more successful business model we've got, right? So it makes a lot of sense. And these days, only emphasized with digital journeys in which buyers can potentially review many offerings and decide what's right for them. So if this is so optimal, this model, then what's the— you know, why not every business has done this before. So let's say that there were alternative business models that could have worked. Now with COVID and where customers is where revenue is, and digital is the engagement model, and value first and monetization later, why, you know, what do we need to do in order to transform this type of journey to the journey I just presented before? So there are two 2 key challenges here. One is organizational challenge. The model, the inside-out model where the company is organized around the functions, where marketing team is evaluation, sales is purchasing, and so forth, is very hard to, to manage in a way which is customer-centered. There's a lot of handoffs. And loss of customer context. How many of you have, you know, if you are familiar with this model, have experienced within your company or by being customers of other companies loss of context where the team is, you know, onboarding you and setting you up doesn't have the context of everything that's been discussed during the sales process? Whatever was provided is kind of lost and you've got to restart explaining to your vendor how things are going. And, and clearly, um, it is— it happens because, uh, a very functional operating model where, um, every function has a very narrow responsibility on the customer journey, and there's no horizontal focus on the customer journey. So think about this journey as a, you know, company-led journey versus customer journey. This problem is even more— becomes even more difficult as we look at the systems that companies have to implement in order to deliver on this customer journey. So you've all heard marketing, the concept of marketing cloud, sales cloud, service cloud, but when we look at all the various technologies, one thing that jumps out of here is that every technology, every package has its own database. To capture the information for the part of the journey that the customer is at. And there's a lot of integration that is needed. Furthermore, when we talk about existing customers, we're seeing so many different systems. So, you know, onboarding, using project management or project management-like for onboarding new customers, looking at usage through usage analytics products, looking at customer feedback through customer sentiment, customer experience products, analyzing conversations, and so forth and so forth, ending up managing tons of spreadsheets and Excel just to kind of figure out, figure out what's the current customer status. And it's even more complicated as you're trying to develop and change the customer journey flows for the company, for your company, to— for the business to actually cater a more optimized digital-first customer journey. So although it's very, very clear that there's a huge business benefit for driving a customer-first or customer success— you know, if you think about customer success as a concept, not necessarily just a team— a customer-led customer journey, it's just not that easy to do it, especially if you're a company that is already been built in a different model. So there are, as I mentioned, team alignment and technology and integration and change management and so forth challenges. So what I believe we need is some sort of a concept that I call it a customer operating system. And the motivation and the visual here of the maestro here is to kind of try to explain, you know, the problems that it solves. So think about this as a meta system that allows you to have unified customer data. So instead of multiple databases, all the information about customer is readily available in one easily access— in one easy-to-access system. The second thing, all of the workflows are not functional and they cater the customer journey itself. That leads to shared context for collaboration. So as the team for problem solving or taking action, there's a shared context about the customer and no handover and losing context between the functions. And lastly, unified communication. I know it is so important these days to make sure that your company communicates with your customer with a single voice and that there's an orchestration between who says what to the customer in a way that actually drives the right, the right outcome. So think about this as a customer— as an orchestration layer that is basically making sure that the journey, this new journey, is very much customer-focused. And it says here customer success, but think about this more as a customer-first journey model. So from our perspective, from Totango as being a customer success technology provider, we believe that— or personally, I believe that this is the time to invest in thinking about the journey holistically and delivering start to finish. And I want to give you a few of my learnings in the last, you know, 12 months, and especially in the last few months with COVID trying to solve this problem. So one of the challenges that I believe the customer success market had is complexity. So in order to, you know, when you look at how many companies want to implement a customer-centered business. There are many. How many companies actually do that? There are not so many, and the reason is because it is hard. The concept is simple: think about everything from the customer perspective. But the implementation is not, is not that easy because it requires solving a lot of the problems that we've, that we've talked about before. And when We went back to the drawing board and, you know, tried to kind of resolve this dissonance. Why the concept of customer center is so simple and yet there's so much, you know, resistance to just go and do it. We've identified various, you know, 3 key aspects of complexity. One is, you know, it's hard for people to really wrap their heads around how to do it exactly. The second one, it does require heavy lifting of data integration. And lastly, building and changing existing processes is, you know, is not easy. So the idea was to come back and say, okay, so how are we going to solve that? And we've decided to take the exact same concept of look at this from a customer journey perspective and not from, you know, what we as a company need to do. What's the best way to cater to a buyer of customer success technology or someone that wants to implement a customer-centered strategy? So one of the things that, you know, and I'm sure that this story could resonate to your specific business, but One of the things that came across very, very, very, very early on, and we learned very quickly, is that, you know, although the best optimized way for us is to build a, you know, marketing and sales process which is very standard, it doesn't cater well to what the market needs. There are many buyers with different experiences and different perspective. And when they want to buy customer success solution, they are evaluating it differently, coming from different perspectives. So trying to kind of, uh, uh, standardize all of them into one model is not going to work. And one of the things that we've kind of experimented heavily on is intent-based models, basically allowing for a lot of allowing the buyer to first and foremost decide what's their path. And we've done this on the digital marketing and the same thing on the content itself. And giving choice to the buyer to choose their path is very, very customer-focused. And every business will do this differently. The second thing is managing very carefully the efforts-to-value ratio, meaning that we talked about value first. So if you can do value without any effort, that would be great. It's not always realistic, but making sure that, you know, whatever you can deliver as a value first is very, very important and take the heavy lifting outside of the, of what the, you know, what the customer needs, needs to do. And this idea of putting the value as first as, as early as possible with minimal effort would be, would be very good. And one of the key things that we've also seen, very importantly, is, you know, all of our initial assumptions about what is the best customer-first or customer-centered journey, product-led growth, whatever you want to call it, a lot of our initial assumptions were incorrect. As an example, this idea of intent-based was not the original idea. The original idea was let's create a very structured guided tour to allow buyers to, you know, we can educate them and train them as we go along. And very quickly from looking at data, looking at conversion data, looking at customer feedback, we've learned that it doesn't work. This is not what the customers want. They want a different experience. So the idea of being able to very, very quickly see what's going on, identify what works in the journey, what doesn't work in the journey, and make quick changes is very, very critical for that. This is what led us to those 7, I think, key principles that you have to have in place in order to design and implement a customer-first journey. So here those are. One is you have to design it for a customer-centered journey. And it's very easy to say, very hard to do. As you quickly turn the design to implementation, you know, you go back immediately into a very operational inside-out versus outside-in mindset. You got to resist that and manage to it. The second one is being able to define what success is and manage a scorecard that has both the customer perspective and the operational KPI. So not just conversion internally, but also metrics that are important for the customer, like metrics that capture value to the customers. And lastly, cross-functional customer journey team. This is not owned by a single team. In some companies they call it a growth team, but the key is that it's cross-functional and requires marketing and product and, and go-to-market and, and design and so forth. And these are the top 3 which are related to the organizational alignment in order to be able to implement a digital customer journey. The, the other 4 are, you know, technology that you have to have, and, or capabilities, let's put it this way, capabilities that you have to have, otherwise it's just very hard to implement. The first one is unified customer data. If, you know, in order to make those decisions and make changes, you need to have all the dimensions of customer data readily available to review and decide on, such that, you know, the right decisions are being made. The second one is ability to easily change but build a unified digital orchestration. Clearly, if this is kind of people-driven, it's not going to work that well. But if it's— if there's a digital fabric that orchestrates all those customer workflow and responses to, you know, the journey changes, This is very, very important and allows you to quickly change and implement shared customer context for collaboration. That's point number 6. You know, one of the things that I've noticed is that the organization initially resists the, uh, that the, you know, the customer context is the truth. Uh, everyone has their own point of view and perspective. And the way to deal with that is to make sure that this entire customer journey, there's a shared customer context that is available for anyone who is part of the customer journey. And lastly, you know, that it's very easy to send emails or in-application notifications and so forth. The question is, how can you as an organization key to the customer journey. While functionally, you know, sales is responsible for sales communication, and the onboarding team is responsible for onboarding communication, and customer success is responsible for existing customer communication. And regardless who's responsible for what, the important part is from a customer perspective, it has to be It has to sound like a single voice from a single company that drives a single customer journey to work through that. So with that, I'll open it up for some questions. But as we recognize the importance of customers and the importance of running digital customer journeys, these are my 7 very practical takeaways that I would highly recommend for companies to consider.

Awesome, thank you guys. This has been fantastic, and I hope you guys have all enjoyed it. We have a few minutes for questions, so I want to give you the first one from Brett. He is asking, are there customer operating systems out there?

Um, I know that, Brett, thanks for your question. I'm sure that there are a lot of, uh, people out there that are working through that. There's a big group that is focused on CDP, which is a unified customer data platform. I'd like to believe that the journey we're going with our product, with the Tango product, is on path for a customer operating system. But there are others as well who are trying to solve this unified customer journey management use case.

Perfect. Uh, do you— this is anonymous— do you, um, have some key customer success KPIs?

Uh, sure. So I, I think customer success— so the way to look at that is you've got the results KPIs, uh, which in, uh, recurring revenue— and this is the conference for recurring revenue to discuss— are, you know, net revenue retention, customer retention, metrics, but the idea to break it into a journey— every journey stage has its own, has its own KPIs, and these are the leading KPIs to those results. As a quick example, onboarding customers successfully, which means on time and with great experience and with appropriate level of adoption, is going to lead eventually to higher retention rates and net revenue retention. So the way to think about this is take every part of the journey, have the KPIs, which are customer-facing KPIs and operational KPIs, which— and consider those as drivers on path to ultimately the results.

Perfect. We have another one here from John that asks, how do you ensure your customer journey design gets implemented properly across the organization?

Wow, that's a, that's a very good, good one, and that's kind of the, the million-dollar question. And, and, and the key is, uh, those 7 points that I made. I think, uh, you start with, uh, V1 of your design, version 1.0, and, uh, you have the data to track it. You make sure that the, the way it's being run is automated and continuously make changes. I can tell you that in, on our team, there's a— in Totango, there's a team that meets daily at 9 AM to review every aspect of the daily progress of every customer on the journey. And there's a weekly review, which is a cohort review, which compares this week's cohort of signups compared to previous cohorts of signups. And every week we're looking at areas that needs improvement and implement those improvements. And that's kind of— that's the key. And as I mentioned, it has to be a cross-functional team to make sure that, A, all teams are on board with the program, and secondly, that when there are decisions to be made and implementations, it could be implemented across the organization.

Perfect. We're going to give you one more question, and then for the others that we did not get to today, please make sure to stop by Totango's booth if you can in the Barela app. If not, we'll get back to you on some of your answers, but the best place to reach them right now is through Brella in their booth. And the last question for you is from Jesse. Did you build a custom dashboard for the unified customer data? And if so, how do you visualize it?

Yes, we have, we have built a custom dashboard. Our advantage is that we have Totango, so we use our own product to do so. But I couldn't stress, I couldn't overemphasize the importance of having a shared view that could be shared across the organization.

Wonderful, wonderful. Well, thank you, Guy, and the Totango team. It's been a pleasure having you guys. We always enjoy you guys being part of SASter, and we look forward to welcoming you back to another event.

Thank you very much. Thank you for everyone attending.

Thank you. Have a good one, guys.