Customer Success Metrics that Matter with Growth Molecules Founder and CEO Emilia D'Anzica

Items. This is an interactive 30 minute session, meaning we really do want you to stay engaged with the conversation and we ask that you keep your video on you. Keep your audio muted when you're not speaking, but feel free to bring up thoughts, questions, etc.

To the group.

There's a few different ways to really participate. You can simply add a comment, a question within the chat box of the Zoom platform, which is at the bottom of your screen. You can also click on a raise your hand option on the Zoom portal. And last but not least, you can simply unmute yourself and make a comment. These sessions will be recorded and so we look forward to having a really interactive, engaging conversation. Without further ado, I'd love to introduce Amelia Denzika. Sorry, I apologize.

You got it.

She's a customer success consultant and we are pleased to have her joining us today. I'll let you take it over from here.

All right, thanks so much for the introduction, Lindsay, and thank you everyone for joining me today. I also have my friend Renata Centurion of Winning by Design. She's Heads up Latam and she is here today to help me with some questions. I am hoping more of you will turn on your cameras and that we can make this more interactive. So to get started, if you don't feel comfortable putting on your camera, I'd love for you to at least put in your chat, your name, your location, why you're here and what you do. And while you're thinking or while you're typing, I'll let you know that I'm in Northern California, in Sonoma. No, my house is not burning down. Thankfully, even though there are fires around me, I work with customer success and professionals and companies who are seeking to grow their customer success teams and programs, including customer marketing, advocacy, and of course, scalable solutions that obviously include metrics. So it looks like we have lots of different people with different backgrounds who are joining us. Excited to see that. And we'll just move on while some more people add where they're coming from. So my next question for you is who has a process or system in place to measure customer success? Currently looks like Chris does. Okay, great. Is anyone on the call just starting for the first time? And I see here I have some people from British Columbia. I grew up in Kelowna, British Columbia. So I'm very excited to have you here, Kim. So, all right, so it looks like most of the people here just starting for the first time or wanting to learn what are some of the best things to do when it comes to Building out metrics for your organization. Well, today, what I'd like to challenge everyone with is canceling the noise when it comes to metrics. When I first started in customer success, we weren't really measuring or thinking about what to measure when it came to customer success. Except for Churn. We didn't want to lose customers. But now that the profession has grown and matured, there's so much more to measure that it's often overwhelming when you're thinking about what you want to report, what you need to report to be successful in your organization. So today, what I want to challenge you with is canceling the noise. Just focusing on a few key performance indicators. And what I've selected are three that I tend to focus on. And the first one is actually one that Dave Kellogg will be speaking on tomorrow as well. So if you're not registered for that session, I encourage you to. I was really excited that he's actually hosting a session on why this matters and stop focusing so much on Churn. So I think we're aligned, even though I haven't talked to him before about this. So what is net revenue retention? Well, it's really looking at your total revenue minus your revenue Churn, that is a customer leaves or they downgrade, plus any expansion from Cross sells and upsells. And a lot of companies only focus on gross revenue retention. And I actually think that's wrong. When you're only focusing on Churn, why not focus on how you're growing, where you're growing, what are the customers that are really successful with your product and how do you make more of them like those customers? So if you shift your mindset to think about net revenue retention instead of the gross revenue retention, you'll start thinking about how can we grow as a company? And what I really like is how lighter capital describes net revenue retention. They say it's a broad metric, a snapshot of what your company might look like over time if no new customers were acquired. So if no new customers are acquired, just like maybe during the beginning of COVID when so many people were panicked about, oh no, what are we going to do right now? Our sales pipeline has suddenly dried up or everything's being pushed out a few months, you need to focus on those upgrades Cross sells and upsells and really protecting your current customers. They're not just revenue, but they're customers who can help you grow during events like a pandemic, which none of us would have predicted. That's really the first metric that I would challenge you to really Focus on as you cut the noise, the second. So many people write about and talk about the first value or time to first value. But when I think about time to first value, I always think about the value of a product. Well, guess what? Your customer doesn't really care about your product or its value. They care about how is your product going to impact their business? How are they going to be heroes to their company? So when you're thinking about another metric, I really would encourage you to think about first impact or how long it takes your customers to achieve an impact from their your product. If it's going to take six months to onboard, there has to be some little wins along the way. Hopefully it's only in a SaaS model taking less than 30 days to have at least some sort of impact or win. But it's really, it's the beginning of expansion or churn. There's no other way. So you really need to be having impact with your customer and it needs to be continuous. And I'll show you what I mean a little bit in a few slides from now because this one I'm very passionate about measuring and keeping a close pulse on the third one. I'd love to hear how many people are measuring Net Promoter score currently at their company. Looks like I can only see a few people raising their hand, but all right, so it looks like a couple people have thanks Chris and reach and it looks like Gina's just starting. We have some others who are saying yes, we're measuring that. I have worked with people who think this score is not a good indicator of how customers feel about your product. And I disagree. I think it's incredibly important. And the Net Promoter score shows how many customers or are promoting your product. So those nine and 10 out of tens minus the percentage of detractors. So the people who are giving you a zero to seven, those people you should be listening to. One of the clients I worked with, I had proposed some pretty radical changes to their organization and the founders were on the fence about making these changes. So actually use Net Promoter Score to show them how dissatisfied their customers were. Their first NPS score was -48. I had never worked with a customer who had a minus number when it came to Net Promoter score. And you bet the board when we presented these findings, suddenly they started listening. They wanted to know how can we change this? How can we improve it? Because improving an NPS score is very difficult, even by a few points. And so it's incredibly important to listen to your customers be calling those zero to Sevens. They're the ones who need the most help. They're the ones who are telling their friends and former colleagues how dissatisfied they are with your customer. The other ones you really want to be conscientious of are the silent customers. Why are they not talking to you? If they're not talking to you, they're probably looking at another product or have already decided to churn. I worked with a client that had over 56,000 customers. We used a very robust customer success platform to do nps. We use gainsight and we reached out to these customers. I called 100 of their biggest customers who did not fill in that NPS score. And what I was able to identify and present to the head of CS based on those silent customers help them move the needle with their customer experience. And then last but not least, customer or clients asked me, how do you incorporate net Promoter score in your customer health score? I would challenge you to actually make that 25% of their bonus. Suddenly, NPS becomes very important. Put it in a Slack channel. There are different platforms out there, digital adoption platforms out there, wutrics, different survey platforms that make it very easy for you to funnel all this information into Slack. And then your entire organization suddenly becomes very aware of is it a product problem? Is it a customer support problem? Is, is it a customer experience problem? And once you have this kind of information that you're measuring, suddenly your entire company is aligned on improving the score because it means your customers are having a better experience. So these are the three that I would challenge you to really start focusing on if you had to choose. And there's so many more that I'd love for you to know about. And I've shared them, but they're going to be really, I'm going to go through them really quickly. So of all of these, there are a few more I'd love to talk about. Who on the call is measuring negative churn or when expansion outweighs churn resulting in positive growth. Maybe some of you, hopefully every Friday or on a day that's important to your organization, when you're having an all hands, you are reporting this, you're letting your team celebrate these numbers. It's incredibly important, especially during a time like Covid, when there's a lot of negative news in the world. It's, it's really important to celebrate your positive growth. Of course, the annual reoccurring revenue, the value of contracted reoccurring revenue components, you do have to normalize them over a one year period because so many companies have a monthly reoccurring revenue or they have multi year plans. And then the others that are really important are your LTV and your renewal rate. So the total amount received from your customers over time and if that number isn't growing due to expansion, cross sells upsells, maybe your product, you have a new product that now you can add on and sell to your current customers as well as your renewal rate. All of your customer success team should understand and know these metrics. After all, how can you expect your customer success team to be thinking about growth if they don't understand the metrics? And I've worked with too many companies, too many clients that they keep this type of information at the board level, at the executive level and they're not sharing it on a regular cadence at least on a quarterly business review with their own internal teams. So they start to better to have a broader understanding of their business. Of course. Yes. Renata, you have something you want to add? Yes.

Mahara is sharing with us that they do have a Slack channel with all NPS reviews and everybody interacts with it. It's great advice to bring awareness to the subject.

I agree. And the last client I worked with, what we did is we set up a Confluence panel page and decided who is responsible for answering what NPS scores. So if it was product related, support ticket related, customer success management issue that needed to be addressed and we put an SLA or a service level agreement around it that was internal, we had to respond within a certain amount of time. And the feedback from the customers one they were super surprised. When you call someone who gives you a 0 out of 10 with genuine concern and empathy of how can I help. So I love that. Mahara, thank you for sharing that example for NPS and Slack. I actually set it up for CSAT as well. Your customer satisfaction score. Products like Zendesk, Intercom, they all work with Slack and then of course Twitter. If your customers are speaking through Twitter, you better be listening and having it a way for it to all be measured together. So your customer, what do they really care about? Well one they care about quickly seen benefits. Companies talk about going live, but what does that mean to your customer? You really need to be able to explain to them in one page a one page journey. One when will I see the benefits and how long is it going to take me and what do you need from me to be successful? So that's what a customer is thinking when you're telling them we're going to be live in 30 days. Okay, well what do you need? What do I need to do? Because I want to see the benefits tomorrow, not in 30 days. Next, they care about return on investment. You're worried about making sure they adopt the product. But guess what? They don't want to. They don't want to use your whole product. Let them adopt and leverage the elements of your product that matter to them. If you have a product with nine different features, ask them why did you purchase this product? Or Salesperson X has told me that your main goal is to lower support costs. Tell me more about that. And then just focus on on making sure they adopt that part of the product that helps them reduce their support costs. And then last but not least, there's no way they're going to renew if they don't see the benefits. So at the beginning, while you're going live, be measuring and tracking what's really important to them and what does success look like in a year from now? When I've managed teams in the past, I've always encouraged them and actually made it as part of our CRM. Three fields that ask them what are their three most important metrics they're going to measure and then one that asks them what does success look like in a year from now? If you can answer these questions, you bet you can measure them through the entire customer journey and what you're looking at here is the the full funnel growth plan. It has been created by Jaco Vanderkoos of Winning by Design and Renata, who she's part of this organization. Kindly let me put this in my presentation. If you work closely with the sales team, which I'm assuming either customer success rolls up into sales or is closely aligned with them, you can probably guess that your marketing and sales team have everything in a CRM and it's measured. They know exactly how many prospects are coming through the funnel, the mql SQL and how many deals they're closing a month. But many companies are not measuring how many customers are going live in a month. What were their key achievements during that time? What were the key motions that they needed to achieve in order to be successful and see those benefits as well? During using how are you measuring engagement? Is it just logging in? There has to be other ways of knowing that these customers are engaging in your product in a way that's showing them impact. And then last but not least, and hopefully your company is measuring this your lifetime value, but through renewals, upsells, resells and cross sells. I want to challenge everyone and think about one other thing that you should be measuring as part of this customer journey. And that is where are the roadblocks? Often I've worked with clients that say our customers are not going live fast enough. We don't understand this product's easy. Help us out identify what's going on. And often it's because they are not getting their customers contacted by the sales or the customer success team fast enough and taking them through a journey that they understand. So if a customer commits, there has to be an SLA that says the customer success manager is going to interact with them in X number of hours. I would challenge your teams to contact them, especially if they have a white glove service that same business day. And obviously if it's low, touch those email nurtures or those videos that help them get up and running quickly. Even better when they first log in just in time adoption guidance that helps them through a product. So that's really important to to think about when you're thinking about metrics that matter. And I see Renata is flagging me because it looks.

Hobbs in chat.

Yeah. Okay.

She shared that usually she asks her clients to write down what are the benefits of each of the features that the software has. And they have a lot of difficulty doing this. They always stay with the technician. How to connect this technique with the perceived benefit between CS and development?

Yeah, that's a great question. I love the companies that have their customer success managers and everyone in the organization start in support so that they understand what are the developers who support, often works with or often support is a very technical team. I always encourage people to at least have them shadow when they start their business or their job with the company and then join them on a regular cadence so they understand what these technicians do versus customer success. And I really believe that if you want to connect or to explain the benefits of having these two people work with you on a challenge, you really should be doing it during this first impact, in the first 30 days, explaining to them who are the different people that you're going to engage with and when. When does one person come in? When does one drop off? When do you contact support? When do you reach us through chat and when is. Maybe companies like HubSpot, for example, have a Twitter channel that you can reach out to them for support. So it's just really your job as a customer success leader to educate your customers early on before they develop bad habits. So that's a great question. Thank you. All right, so to wrap it up with six minutes and feel free to keep adding your questions if you have some I always say identify milestones that matter to you, that is your boss, your company, your board and your customers. If you're just focused on what you need, then it's a problem because you're not listening to your customers. Then you have to have a way to measure them. Sales teams always have these fancy CRMs and these administrators for these CRMs, but customer success managers don't. I remember building a team and begging the founders to give me an ops person. It took six months of convincing before I got a CRM in place with the fields I needed, with the metrics I needed and with at least part time administration help on the back end of the of salesforce. So how do you measure? Well, you measure, but you also have to act. What good is an NPS or CSAT score if you're not actually acting on them? Having a service level agreement internally with your company of who's going to act on different measurements. And thirdly, listen to your voice of customer. Too often people, people aren't listening to their voice of customers on social media. They're on things like TikTok, they're on Instagram, they're on Twitter, LinkedIn, Facebook, they're on all these different platforms. And if you don't have someone who's aggregating this data and making sense of it, is it noise or these valid concerns that you're hearing, reoccurring themes around that you need to start actually paying attention to. And then last but not least, everything I've shared is not a one time. Okay, we fixed it. Our NPS is, is high. No, it's continuous. It's something you need to reflect on. I love the companies that have Friday, every Friday reflection on their top key performance indicators for that quarter and then for those that say no, once a week is too often, well then your executive team should report be reporting at least to their own teams on a regular cadence and at a company wide level on a quarterly cadence. Because it's not just your board that cares, but it's actually your employees. They want to be educated. It will inspire them to feel educated and to really understand the metrics and that are driving the growth behind your business. And so with that, I'd love for you. Yes, go ahead. Yeah.

We have two questions. One from Phil. It's great to hear time to first impact as a metric. How do you measure that? It's just a number written down by CSM during onboarding process.

Yeah, I don't think it's a number at all, but I think it's an exercise that you have to do with your team for your different kinds of customers. So one, you need to segment them and two, you need to understand from sales during the handoff, why did they purchase their product. If you have a one to many product that they purchase online, consider asking them with a drop down on the purchase page what is the number one item that you hope to achieve by engaging with our product? And open ended questions are rough to create metrics around. I would say pare it down to the main use cases of your product. Is it to reduce support cases? Is it to increase adoption? Whatever your product does, pare it down and start understanding what your customers need. So from there then you can start measuring impact that your customers are expecting to achieve.

Yes. And another question from Rich, I don't know if it's his name.

Yeah, hi Rich.

What do you consider a good NPS score? And how do we know how we compare in the industry?

Such a good question. I know we have one minute left. I will say that products like SurveyMonkey, and I'm sure there's so many others, when you create an NPS survey with them, you can benchmark yourself with companies in your space and your size. And then as your customers are answering those questions, you will start seeing benchmarks in the tech. I want to say the average nps, the last time I worked with a client was about 19. It's really low. The best customers in the world, the best companies in the world. You'll probably guess this, it's Apple. They have the highest NPS score in the world. Usa. The insurance company is right up with them. Most people hate their insurance companies, but apparently everyone loves usa. So for tech, I would say the companies that I see thriving are the ones who are over 30. It's very hard to move your number even just a few points. It's something you should be measuring on a quarterly cadence. So thank you for these great questions everyone. If you have any other questions, feel free to reach out to me. Appreciate your time.

Thank you everyone. Have a good day.

Bye bye bye bye.

See you.