measuring the impact of customer success and related efforts on customer retention

Customer success is the new kid on the block in most of our organizations. As we get to grips with this burgeoning field, we wanted to seek wisdom from five CS leaders on how they view their role and how to measure its success in boosting customer retention.

Sam Basile, Customer Success Manager at ZoomInfo moderated this lively session joined by…

✷ Melissa Hatter, Enterprise Customer Success Lead at Stripe,

✷ Michael Hill, Strategic Customer Success Manager at Madison Logic,

✷ Sean Konchan Customer Success Manager at Wix, and

✷ Yana Myaskovskaya, Director of Customer Success at ThreeKit

You can catch the full discussion on demand right here, but for now, read on for the highlights!

The role of customer success

Sam Basile: Customer success is something of a young department across the nation and the globe. Before we dive into the metrics, why don't we level-set and look at how CS aligns within your organizations?

What are the responsibilities of a customer success manager within your orgs? Melissa, I'd love for you to kick it off for us.

Melissa Hatter: At Stripe, customer success is a relatively new function. It's only really been a discipline for just over a year. So when I first joined Stripe a year and a half ago, we had an account management motion but we then pivoted to CS.

Our main reason for doing that was to align with one of our key corporate operating principles: users first.

And so today, the Stripe customer success org supports top-tier market segments globally. We have plans to expand to other segments and tiers, but it was really important to us that we first built on a super solid foundation.

For the past year or so, I would classify what we've been doing as a combination of building and designing. It’s honestly pretty darn cool to be able to build something from scratch and to do that in a way that works for Stripe and not necessarily how it's been done in other companies.

One of the things that our truly amazing Global Customer Success Lead Tim Smith has had us focus on is defining and documenting our charter and vision. Our mission is to ensure that our customers are deriving the maximum value out of their Stripe investment.

Sam Basile: I love that you guys are taking a unique approach. You're not just going for what's in the box, you're creating something bespoke for your customers, and I think that that's a great strategy. Sean, we'd love to hear from your side.

Sean Konchan: I'm kind of in the same boat as Melissa. I work with Wix; we're a website platform business and we're all about the user.

We just started building a CS function two years ago, and it was with the idea of making sure the customers using the platform are as happy as possible – like every CSM tries to do, right? And we try to emphasize that with everything we do.

We liaise on what our customers really, really want from the product and work hand in hand with the product team to make sure these features are updated within our platform.

We are commissioned based on what we do, but it's all really based on churn. Stopping churn is our number one goal, so if our customers aren't happy and don’t stay on the platform, that's where it stops for us.

We also have business impact goals, which are aimed at making sure that the merchants we work with are growing their business. We have a lot of small and medium-sized businesses, and we want to make sure that they are getting every possible use out of the tools.

CS has been nurtured from the start. We look into the feedback we're getting from customers and we change our KPIs based on that, all in support of our main goal, which is to reduce churn.

Sam Basile: I love changing KPIs. I think so many of us think that it should be perfect and we should know exactly what the KPIs should be, but it's not always that simple, right? You have to go through a little bit of trial and error.

Yana, how about over at ThreeKit, how do you guys have it set up?

Yana Myaskovskaya: I'm very fortunate to have worked with this entrepreneurial team across three companies, and we've always had a big focus on customer success.

We work with our operating functions, and rather than being commission-based, we’re seen more as strategic advisors within the organization.

The way we measure success is based on retention and expansion. We play a very active role in identifying expansions for our current executive team, and we partner with them very closely to make recommendations and understand the customer journey.

However, at the end of the day, we are not accountable for those contracts. It's very much a partnership based on leveraging that strategic advisor role to work with the exec to build trust in the customer base.

Sam Basile: That's the dream right there, being a trusted adviser and not having a quota – that makes all the difference, right? Because you're there to help, which is something unique and a little bit new. Thanks, Yana.

Last up, Michael. How about you?

Michael Hill: Thanks, Sam. So a little bit of background about me first. I’m a strategic customer success manager for Madison Logic, and I recently moved into this role, so I'm still kind of learning how they do things compared to my last role.

Madison Logic is a B2B account-based marketing agency that uses data and accounts intelligence to help our clients find, prioritize, and engage the most influential members of the buying committee throughout the customer journey.

So getting into your question. I've seen the responsibilities of the CS role change going from the previous organization, which was a startup with around 35 full-time employees, to Madison Logic, which has over 200 now and is growing rapidly.

At my previous company, the CSM was only responsible for helping with client deliverables, but we were incentivized for upsells, we were helping with onboarding, invoicing, training new team members…

You wear a lot of hats in a small organization. What's interesting about this new role in a larger organization is that CSMs are less focused on expansion and more on outcomes. Expansion is more or less the sales team’s remit.

Measuring customer health

Sam Basile: Let's talk about the elephant in the room, which is customer health, right? All of us have some variation of customer health metrics, whether it's fully baked out or you're just starting to measure it.

Melissa, where are you with calculating customer health at Stripe?

Melissa Hatter: Great question, but I do want to preface my answer with two things. Number one: we’re still new. Number two: we are extremely fortunate to have dedicated and very experienced CS ops and data partners working with us and helping us with our customer health efforts.

So we're working through the measures that are gonna give us the most signal into customer health. We’re taking a crawl, walk, run approach, and I would say right now we're somewhere in between crawl and walk. We've determined the measures and have started litmus testing them with a pilot group of accounts.

Without getting super far into the weeds, we're looking at 30 plus different data points that fall into some specific buckets that are relevant to our organization. Health scoring should always be looked at in context.

So, just to name a few, one of the buckets is engagement. We want to see how meaningfully engaged our users are and whether they’re participating in key activities like QBRs and EVCs and that kind of thing.

We also look at product utilization and optimization – that's probably similar across a lot of your organizations. And then there's payment utilization and optimization, which is very specific to us.

But I also think there is a portion of health that’s hard to track with data – there's absolutely no substitute for CSM sentiment. I like to refer to it as the CSM 'spidey sense.'

CSMs have incredible and intimate knowledge of their accounts, and their gut instincts are usually the strongest signals of health, despite all of the data.

I think if you have a client that scores really highly in whatever rubric you're using, and the CSM looks at it and says, “Yeah, but…” you need to pay attention because that's probably one of the strongest indications that maybe your measures aren't right or they're not giving you the full picture.

So to me, that's another piece that absolutely should be factored in across the board.

Sam Basile: I completely agree. Yana, within ThreeKit, do you guys also take CSM sentiment into consideration?

Yana Myaskovskaya: We're in a similar place to Melissa, very much in that crawl-walk stage. We are fortunate in that we have really good data hygiene and a solid CRM, so we’re able to track all the main data points really effectively.

In Salesforce we have an indicator of the state of the account – red, green, or yellow, and within that, we also track CSM sentiment information that we then incorporate into other measures and our current reports.

The goal is to take that data and multiply it using software that is geared towards customer success oversight.

The value of NPS

Sam Basile: There's something else underlying customer health – NPS. So, Sean, How do you use NPS at Wix?

Sean Konchan: We tend to view NPS as a baseline. The sentiment from the leadership is, “We understand that our product is ever-changing. It's not always gonna be perfect and we don't want that to go against the sales organization or the CS organization.” So NPS isn’t like a rod to beat CS with.

We do track it and if we see that a customer just gave us a very low score, we’ll look into it further, check out their other metrics, and reach out to them to make sure it becomes a healthier score.

So it's more of a baseline to understand exactly what's going on with the customer. It might just be something like they had a customer care ticket out that took longer than expected, and we can deal with that.

So NPS is just a tiny piece. I think it's going to be built up once we feel like we can discern whether the score is coming from the product or how the CSM is doing. I would say right now, the NPS is more about the product than it is about the CSM and how they're doing on their job.

The evolution of metrics along the customer journey

Sam Basile: Something that's been an underlying theme in all of your responses today is the customer journey and how things tend to change as customers go through that lifecycle.

So Michael, how do the metrics change throughout the customer journey within Madison Logic?

Michael Hill: When I think about the customer journey, I like to relate it to your typical superhero in a movie. Take Star Wars for example. Luke didn't even know what the Force was in the first movie.

He starts to learn about the power available to him once he’s harnessed it and he's helping the Rebellion blow up the Death Star and he’s gaining the trust of his team.

I think you can relate that to customer success. Adoption involves not only the client implementing the proper integrations to connect their sales team with our software platform but also having their salespeople aware of how to use the software.

During onboarding, we work to understand the desired criteria of our customers and make sure that those expectations are clear from the start. And then, going back to Star Wars, in the second movie, Luke is faced with a new set of challenges.

That can happen on the customer journey too, and it's the CSM's job to guide them through it, like Yoda, and increase usage of the platform to help the customer find the results that they're looking for.

And then lastly, by the third movie, Luke is a Jedi Master. With great focus and proper application, he can achieve great success using the Force.

In the same way, once a client has properly adopted the product, their utilization has increased and they’re seeing great results. Success metrics involve the retention of that client.

Using metrics to increase customer retention

Sam Basile: I like it. That’s a great analogy. Now, you mentioned something right at the end about customer retention. So, Melissa, how would you say metrics help customer retention?

Melissa Hatter: It's super cliche, but I believe that the best defense is a good offense, and I think that absolutely applies to retention in our world.

One of the best ways to use metrics to prevent churn is by proactively seeking to ground them in what your customers care about the most.

So what are the metrics that our customers use to measure the success of their own business, and then how do we fit in? I think once you figure that out, you can support their goals, and in turn, help prevent churn.

But then once you figure that out, I think you need to expand on it a little bit. You need to communicate it across your internal account team and figure out how to align on those metrics.

One way that Stripe is doing this today is through quarterly performance scorecards.

Essentially, we ask our clients to provide us with the ranking factors by which they measure us, and then at the end of each quarter, we ask the client to grade us based on their experience and perceptions.

That scorecard then becomes kind of a forcing function so that our clients can tell us if we're hitting or missing the mark.

The data can then be used by the CSM to direct their attention to the most important areas.

I also think it's a great tool to use if you're doing a QBR because every client has a certain set of needs that have to be met, and those things can make or break your relationships.

The final thing I'll say about this is that I think it's really important when you're asking for ranking criteria that you're asking senior stakeholders at your client's organization and not just your day-to-day points of contact.

You want to make sure that you're making everybody happy at all levels – that’s super important.

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Measuring the impact of customer success and related efforts on customer retention

Anthony Witherspoon