Using data-powered insights to supercharge your CS strategy w/ Medallia, Dyanamic Yield, and NetApp

Fortune 500 since 2012 is a global leader in public cloud data service. Our other guest, Rona Young, is head of customer success operations and Education at Dynamic Yield. She specializes in improving existing processes, launching new initiatives that drives organizational growth. Dynamic Yield, founded in 2011, acquired by McDonald's in 2019, powers experiences for more than 600 million users each month across a lot of brands via personalization, recommendation optimization and one to one messaging. Let's get started with our topic using data powered insights to supercharge your CS strategy. I know both of you believe in the power of business transformation that drives customer retention. Can you both elaborate on transformation experience? Michael Absolutely.

Thank you Srisha. I really appreciate the opportunity to come and speak on this topic today. So NetApp was built as an on premise focused business. We ship a box to a data center, it gets installed, we sell service and support along with that, and then we wait for the customer to eventually log an issue through our support channel. As NetApp was moving into a transformational stage in its journey, as we moved from being purely a commodity vendor of hardware being shipped to data centers and moved to looking at data as our core business, we started adding services to focus on the multiple cloud consumption avenues that customers were using to really use their data where and when they needed it. As we started looking at that transformation as a business, we realized that our standard reactive support model really wasn't sufficient to meeting the challenges and the needs of our customers who are moving into that digital first experience. And so NetApp has been transitioning a customer success focused business, really embracing the layer model, the land Adopt, Expand, Renew, motion to really focus on the data in that journey, to understand what's happening with our customers and to much more quickly react to things that are occurring as customers begin to adopt more and more of our data fabric focused solutions in the market.

Yeah, great to know about the layer model, Rona.

So at Dynamic Yield, our shift has been more internal within the CS team. We've really evolved from what you often see of other CS teams, which is usually an extension of the support team, where weekly calls are used to help clients troubleshoot or maybe do some training on the platform to a place where CSMs are really seen as leaders in the personalization space. Our customers are actually coming to us asking us how they should shape their teams, what processes they should have around personalization, and our CSMs and technical managers are using time in weekly meetings to dive into the data and really uncover pockets of opportunities for our customers and work with them to actually create a personalization plan and you definitely see this in our numbers. We've had some of the lowest quarters of churn in years and it's also been great for our CS team which they're actually able to work on very interesting and meaningful projects for our customers rather than just being glorified support agents.

Great. Now would love to understand your organization a little bit. Can you give some background on the environment, processes and challenges that you have encountered? Michael?

Yeah, no Suresh, I'd love to speak to that. So NetApp coming into the customer success journey. NetApp is a 25 year old business that has built a world class execution chain for delivering boxes to data centers, getting them racked and stacked, getting them installed. We are excellent at getting hardware to the right place when the customer needs it. As we've evolved into a data fabric business where we really need to look at having data where and when the customer needs it. And as we've looked at needing to do much more marketplace style transactions as customers are coming to expect in the more cloud first cloud focused motion, we needed to deal with how we fold the customer success motion and practice into a long standing enterprise class business. NetApp has over 30,000 on premise customers that we've been doing business with for a very long time with very strong ERP systems designed to get that item to that place where it's needed at the right time. So integrating into that bill of materials system, into the ERP order management systems and being able to fold a software SaaS focused motion on top of those systems was a real challenge in all honesty, but it's been no mean feat. But we've done it. We've been able to move to serving our customers in that much more rapid, much more high touch motion that they expect of us as we've evolved the business.

Great. Rona would love to know from you as well.

Yeah, so our challenge a few years back was that our sales were kind of all, all doing their own thing. There was no consistency. So for example, when a customer would churn, there was no documentation or when a customer would go through onboarding. Everyone was kind of doing it their own way. And because there was nothing that was unified, it was basically impossible to measure, it was impossible to see what the trends were and to understand what was working or what wasn't. And so the way we've been able to transform our team was really starting with a foundation of creating processes for everything and being able to capture the data in a structured way. In Salesforce that then made it easy to report on to see the trends on and then to ultimately make decisions with. So for example, for churn, we created a process where CSMs had to create a churn case in Salesforce, fill out a bunch of standard information about why the customer churned, and then also assigned weights to a pick list of reasons that the customer churned. With that, we are then able to look back and see the trends of why it is a customer churned or what it was that made them turn. For onboarding, we actually started having the entire organization use one project management tool and we created an onboarding project plan that detailed out all the different steps of implementation. Once you have this very templated way of working, then you can actually measure the time in between implementation steps and see where there are inefficiencies and where there are bottlenecks. So this was the data that really helped. It was really our data that helped drive these decisions then that we could make about our team.

Great. I'll ask a question that I often hear which is how does a company without perfect data or without much data can still build a data driven customer success practice?

So Shreesh, I'd love to speak to that. So I think one of the key first steps as you're beginning your customer success journey is identifying what are the metrics that really matter. There can be a lot of different signals out there as you're trying to go and dig into different channels of data and different places that you might capture data. I think you really need to boil down what is most important and measure just those couple of of things as a starting point. So I think that as you're looking to have successful adoption, you want to know that customers are onboarding well, that they're getting into the product, getting the value from the product, and therefore are likely both to expand and to renew. I think you have to decide what those couple simple signals to start with are and go after them. For example, in our Cloud Insights product, our product team started by giving us simple measures on customer login frequency, license consumption. And then and we had one additional metric that we looked at that let us understand kind of that aha metric, that thing that let us know if the customer was really deriving value from the product. And we started with those three basic metrics as a way to understand for our success managers when they did outreach to those customers in their onboarding journey whether or not we were really getting the value in early and whether we were measuring the right things to identify if we were failing to do so so that we could course correct on that.

Michael, I love that you said that. Focus on those one or two KPIs. I definitely agree, and I think that you're really lucky to have a product team that can get you that data. I would say, though, that that's not always practical, especially for those smaller organizations where your product team is laser focused on creating new features. They're not always focused on getting the CS team that data, which is what we experience would say, if you're in that bucket, measure whatever it is that you can get your hands on or whatever it is that you can control. So for us, we actually didn't have login data until fairly recently. And so instead we created a process where we had CSMs log their calls each time that they talked to a customer. So specifically what the call was about, they had a pick list. And then what the sentiment of the call was. Was the customer really happy because of the results they were seeing, or were they really frustrated with the feature of the product? And then we actually used that and rolled that into our health score so that we could see how customers felt about and were engaging with the platform.

So, Rowan, I think you make a great point there. And I'm curious if you could speak a little bit more about the signals that you found when you started having your CSMs put those free text notes into Salesforce after their customer calls. I'm really interested to know what you were listening for in those signals and what KPIs you're able maybe to derive from them once you had that in place.

Yeah, I don't know if we were looking for anything specific, but something that quickly jumped out at us right after we implemented this was the number of days customers spent in onboarding. And you could see that as the number of days increased, there were more calls that were logged that were frustrated because the number of days a customer is in onboarding is directly. The flip side of that is directly customers not seeing the value from the product. And so when we realized customer frustration was tied directly to the number of days in onboarding, our VP of CS took a very, like, dramatic decision, I would say, to increase the headcount on the CS team, to have onboarding managers kind of dedicated to onboarding so that we could get the product quickly and correctly implemented for our customers. And I would say, like another. Another indicator that we realized that we probably wouldn't have from these logged calls was that when you have power user who's so entrenched in our product suddenly leave the company, it often led to a decrease in usage and Often a churn. And so for us now, in our health score, we take that into consideration. So accounts actually get a higher score when there's more than one power user at an organization.

Those are great insights. Thank you for sharing that.

Michael, based on what you said, I have one question for you. Why are leading and lagging indicators important for customer success organizations? And what are the ways to quantify the health of your customer base?

So I think that if you are looking at what's happening, I think one of the key elements again is looking at the key user activities that are occurring within the product and within that adoption phase. I think when you're considering those measures, you want to look at them from measuring what's most important to you, measuring what matters, and really drilling down to those couple key measures that your CSMs can use to spark a conversation. Whatever you're looking to capture from any of the signals you're looking at, I think are only as useful as the conversations that can come from those signals. And so if we're talking about user logins, capturing the frequency and looking at the patterns, and the frequency then can be used by a CSM to have that leading conversation. Oh, I see that you've logged in only once in the last week. I'm curious if there was something happening there that was preventing you from being able to come in and use the product, or if there was something else going on that you were not finding what you were looking for. Or on the flip side, if you're seeing them log in frequently. Gosh, I see you've been in there quite a bit this week. Love to see if we can help other users on your team be as successful with our product as you have been. And so I think measuring what matters, having those simple signals to drive meaningful conversations, are really the starting point for any good success motion. And then having those signals and those conversations allows us to, just as Rona shared, dig back out what our customers are saying so that we can find additional measures and metrics to really understand if we're getting the value that we promised to our customers at the end of the day.

Yeah. So, Rona, what's your AHA metric?

So, like Michael, we also look at consumption, we look at login data. I would say that our one key metric, our AHA metric, is really around personalization rate. So this is the metric that tells us basically how personalized is a website. And it kind of takes into consideration a bunch of things, right? Like how our customers using our product, are they using it the way we imagine to and really this is the metric that differentiates us from our competitors.

That's great. Michael, can you talk about how to build baseline and track progress towards global CS goals and what prevents customers from achieving their outcomes?

Certainly. So I tend to think about that from a very granular level and what I focus on first in our motion is capturing at that handoff from sales what the value proposition was that sales positioned with the customer? What was the return on investment that sales used to secure the deal to ensure that the customer was really bought into the vision? And once we've captured that and that warm handoff from our sales team, we then go back in our first onboarding conversations with the customer and revalidate that we've really heard correctly from our sellers what the customer believed the value value proposition was going to be. Once we have that captured and once we have our success plays laid in there with the ROI matched, we then go back and we revalidate at every step of the journey that we are continuing to move towards those objectives. So our overarching goal is to understand the upfront return the customer expected to achieve. We then remeasure that at each step rolling into our either our quarterly business reviews or our executive business reviews those measures and show the customer how they're tracking against those objectives so that when we end the term, whether that be an annual or quarterly or however frequently you look to renew that customer, you're coming in with an already proven return on investment and the conversation about renewal is pretty much fade out complete. We're already done with that because the customer knows you delivered what was promised and now we're really talking about what's that next return. They want to see how do we expand to do more for them to further improve our value to the client.

That's great. We've had some great insights in our discussion. I would love to ask you both to provide few key takeaways that other listeners can take with them. Rona.

I would say the main key takeaway for me is don't worry for the perfect KPIs. Don't wait for your product team to give you the data that you need. Start with what you can control, start with what you can get your hands on basically and use that to understand your customers and understand the trends that they are facing. Then I would say along with that, in order to get your hands on that data is to really have a customer success operations manager who can create those processes and that structure for you to have organized data captured in a way that you can really act on. Right. Like you can't really build a strong CS team without that great foundation behind it.

Yeah, I couldn't agree more. I think Rona is absolutely right that having that operational excellence in your success practice is the foundation for success. Capturing data without having someone who can internalize it and operationalize it is not the place to begin. And I think on the other side of that coin, as we're looking at what we should be capturing, having those three simple signals at the start, whether that be login consumption and whatever that aha metric is that's specific to the product in question. I think starting simply listening to those signals, getting them operationalized well and then figuring out if they're the right signals or not, and then changing where you need to and looking at a different signal if you're not getting the value you expected from the ones you chose at the outset. Additionally, I believe fundamentally in capturing from from that sales to success transition, the ROI that was positioned with the client so you understand what their objectives are, what their expected outcomes are as you begin that journey with them. And then I think you must absolutely remeasure against those initially committed return on investment targets throughout the journey. So that's not just something you talk about at the end of the cycle, but it's something that you're continually reinforcing with the client in each engagement to make sure that you are delivering what was promised and that you proven to the client that you delivered what was promised.

That's great. Fantastic takeaways. Let me pick some questions up now. One question that I hear again often is at what size of the company should you invest in customer success operations?

Well, $0 from my perspective. I think that's one of the first things that you should do. Rona, what are your thoughts?

I agree, Michael, but practically I would say, you know, when a company starts there's usually a success operations person and if you. Sorry, a sales operations person. So if you can have that sales operations also work on customer success in the beginning, that's probably a better approach. And then I think that once you get to maybe a customer success team of 15 or 20 CSMs, that's probably when you should start branching off and have a dedicated customer success operations person.

No, I agree with that. And let me actually add one other point on that topic. I think the real question that I would ask anyone who's asking when they should get customer success is how important are renewals to your business? And if winning new business is all you're focused on and you're not concerned about loss or churn, then maybe you don't need a customer success organization. I would argue though that renewals are just as important, winning new logos are. And so I think customer success should become front and center as soon as that motion is important to your business.

Great. So next question is an interesting one is how does data oriented approach impact your customer communication? So how should we go about communicating with the customers when we have a data centered approach?

From my perspective, we have a broad swath of products at NetApp that are focused on very different portions of the customer business, whether it be virtual desktop infrastructure, caching, edge consolidation, data storage in the cloud. Each of those have very different measures, but all of them have a measure that can drive a conversation and indicate whether the customer is driving value. I believe fundamentally you should always be having an honest conversation first. First start with the data. I see that you've spun up an instance, but you haven't added anything to it. Love to understand what your barriers are to adoption or you logged in 50 times last week. That's wonderful. I love that. Can I ask why you're logging in so frequently and what value you're getting? So that's how I think about it. Rona, your thoughts?

Yeah. So for us, we actually we only have a few products, but each product you can go very deep in. And so by having that data, our CSMs can actually see very clearly. Okay, I see that you're using, you know, email as one of your personalization metrics or one of your personalization platforms, but you're only using one part of email. Let's talk about how you can use the other parts of email to really create a personalized email strategy and not just one off email campaigns. So definitely our CSMs use the data to help our customers find those opportunities for them to use our platform even more.

Great. The next question is, if users have fully adopted your product, then how do you continue to engage with the customers they are fully adopted.

Yeah. So I'm happy to take that. So I think there's two ways that I look at that. And part of this is probably going to be specific to NetApp's customer base. Oftentimes we're dealing with large organizations that have business units that sit adjacent to the business unit. They may have acquired the solution that we've sold them. So oftentimes we're looking for who sits next to the people we've been working with to see if there's opportunity. So that's one place we look to expand. And further, I Think there's always more that you can do. There's always more features coming out. And so from a product roadmap perspective, pivoting from what they originally planned to consume and starting to talk about what's next on our roadmap to see where there's further opportunity to have them continue to adopt and love what we've given them, I think is how I look at that.

Yeah, I totally agree. I don't think that fully adopted is really a real thing. Really. I mean we have customers who've been with us for five years and they're very mature and they are running personalization campaigns, but they are testing out, I mean, you know, they're, they're testing out new things. When Covid hit, they were the first ones to say, okay, we need to change our model. We need to figure out how to change the strategy of how we sell online. I mean there's just, there's never ending. Even if we weren't growing in features, I think that there will always be opportunities for our customers to continue to grow and utilize our platform to make their websites more personalized.

We've got a lot of questions coming in. I'm going to combine one question which talks about omnichannel strategy. Like you can reach out to customer through email, phone, chat, SMS and others. So how do you figure out which channels to use with less engaged customers? Any thoughts on strategies that you have used?

So from our side, of course, as is the case in a lot of businesses, the majority of our spend is with sales and so our digital sellers are often operating through Salesforce, are laying multiple applications on top of Salesforce, things like gong or other sales focused tools to drive engagement intercom for chat that we're using off of our cloud.netapp.com as I look at all of those channels, my strategy has been to work with those teams through the tools they've already laid in. Where I need to have something that is dedicated to my business moving with a solution such as striketech from Medallia for my customer success platform that does things like give me my health score calculations, integrate data from multiple channels that I can't do in Salesforce. But when it comes to those omnichannel engagements, I want to just ride along with those tools that the bigger boys in the house have put in place for that sales motion that drives a lot of our business.

Yeah, I would say, I mean, how do you define less engaged? Right. Like some of our customers, maybe they don't want weekly calls with us. Maybe they only log in once a week or once a month. But they have 10 really strong campaigns that are running that is showing value, and they're happy with that, and they continue to get a great roi. And so that is where we can use our Health scorecard to see maybe you're not engaged in that. You're not logging in, but you're very engaged in the number of campaigns you are running or how your campaigns are being personalized. So that's kind of where we would start, is looking at our health scorecard to determine who those customers are, not, like, where they're not engaged. And is it really not engaged or is it something else?

Great. I think we have run out of time. Fantastic discussion. Thank you, Rona. Thank you, Michael. It's a pleasure to have you both.

Thank you so much.