In this interview, Kevin Scheper (VP, CS at Drift) talks about the importance of understanding customers' behaviors, motivations, aspirations, and what drives their success.
Customer Success aims to develop two types of loyalty: behavioral and emotional. You aren’t sticky with a customer unless you have both, because you might be doing the job for a customer but if they aren’t fond of the experience they have with you, they’re always at risk of deciding to try someone else that they think might be able to do the same job but make them feel better at the same time.
Background and Career. Scheper spent the first twenty years of his career in a variety of customer-facing roles at athenahealth, the first web-based platform in healthcare — and he said athena's focus on delivering customer results, rather than on selling software, was a primary driver of their success.
Now leading Customer Success at Drift, Scheper sees an opportunity to not only help customers establish a clear vision of success, but also to provide them with a personalized experience that delivers the value they expect.
He believes that CS organizations must be built in a more customer-oriented way. That includes leveraging critical information and insights to develop a proactive strategy that helps customers understand the product and find value in it. This is a departure from traditional account management. Apart from developing and managing relationships, Scheper said, CS is not just a designated team handling expansion and renewal, but also a driver for revenue growth.
The real value of Customer Success. With the explosive growth of the SaaS industry, there comes a high demand for understanding how changes in defining customer success affect how customers engage with potential vendors, how customers view these changes, and what the implications are if not addressed.
Scheper shared an important lesson he had in his previous organization. He recalled that while their customers were consistently achieving significant ROI, some of them were not as satisfied as one would have expected.
“What we realized is that we were entirely focused on getting the technical job done right, and we did well - our customers were achieving their expected ROI, but it came at the expense of a delightful experience. Implementations were massive change management exercises and clients were exhausted at the end.
And while the value of the product might come first, the experience is what causes a customer to become deeply loyal. Customer success drives toward two things — behavioral and emotional loyalty. You don’t become sticky unless you develop both.”
How does CS drive ongoing business value - and growth? In the SaaS economy, the rules of growing the brand are still the same: meeting customer's expectations and delivering the brand promise. And it all starts up-front. There are a couple of things that need to happen at the beginning of any new relationship with a customer:
1. As partners, we need to establish a shared vision for what the customer is going to accomplish. So, why are they investing in Drift? More bookings? Higher quality leads? Lower expense (Drift automates much of the qualification process)? And, then they need to have measures of success that we all track together — and agree that these are the ways we are going to determine success with this relationship.
Once you have that vision and measures for success, the customer needs to sing it from the mountain tops. Everyone needs to hear their company leaders talk about why they’re doing what they’re doing — and what they expect to get out of it.
2. We also ask that key decision makers come to the table and participate. Because too often what we see in the sales and marketing universe, is either sales will do something or marketing will do something. But to be truly successful, both of those parties need to be involved and work together.
All of the most successful modern SaaS IPOs have had multiple products and they have really great net retention performance. When you think about that, not only do you need a sales team that is hunting for new logos, but you also need a CS team that is nurturing customers and helping them realize the value they’re expecting, so that they want to buy more services and realize more value.
Thus, CS is a clear driver of growth. And when you start to see companies get to significant revenue thresholds, your revenue expansion that comes from existing customers can eclipse the revenue that you get from new customers. And at that point, you realize that both the sales and customer teams are in the driver’s seat for the company’s growth.
The structure of a CS organization. In an age when there are almost always multiple companies offering any given business solution, Scheper notes, '”there are several building blocks of a well-functioning customer success organization that drives competitive advantage.” Some key ones are:
The future of CS. Scheper believes, "Customer Success was born out of the transition from upfront fees to subscription-based business models. But now we’re seeing it proliferate further into areas of our economy that are more traditional and not necessarily web-based.”
He continued, “What I can see ahead of us is that the experience our customers have with us will become more of a differentiator, and as a way to strengthen relationships and drive up retention. And do this, CX will become less of an art and more of a science. In addition, the self-service element of a customer’s experience is going to become more and more important.
We need to find ways to enable them to have self-driven experiences, while also maintaining a meaningful relationship with them.”
You need to face the good, the bad, and the ugly. When it comes to the success of your business, most would agree that there is nothing more important than the success of your customers. Therefore, organizations must understand that the success or failure of their customers is in everybody's hands. Scheper says he sees a lot of companies that “exclusively focus on their best, most successful customers, because they are the ones that expand the most.
While it’s true that you shouldn’t exclusively focus on the customers that are leaving, ignoring them is short-sighted and a recipe for disaster in the long-run. When you just choose to focus on your healthiest, happiest customers, you end up losing a big portion of your customer base cycle after cycle - much of which is avoidable. But you only end up focusing on customers who, for whatever reason, are tolerant of the problems you have. That’s not a way to build an enduring business.
“Sometimes customers leave you because they are not a good fit — that may be a good opportunity to think about product market fit and how you sell, but put that aside. But generally, when customers leave, it’s because you failed them. And that could be that you made mistakes in onboarding them, they’re not realizing expected value, or you didn’t catch issues soon enough, so they can’t see themselves investing in renewing.
Sometimes they have leadership turnover and your point of contact changes but you’ve failed to engage them and resell them on the value you can deliver.
“At Drift, we spend a lot of time understanding the kinds of problems that cause customers to leave so that we can make structural, process, or product changes to prevent those problems in the future. We focus on the one or two most important problems each quarter to try to make some progress against them and ultimately have a bigger and bigger portion of our customer base that is excited and happy to stay.
The truth of the matter is that, in addition to the ROI, a positive customer experience is what causes customers to remain loyal and invested. And if a customer is seeing the business value and having a positive experience, they likely won’t consider going elsewhere.
On the other hand, customers who have a dissatisfying experience might think they can get the value somewhere else — somewhere that would also make them feel good. If we do what's right for the customers, we'll never have to worry about the success of the business.