S5E6 – Leveraging Customer Success for SaaS Growth: Churn, Collaboration, and Strategic thinking With Mike Dry

Understanding Customer Success

When it comes to Software as a Service (SaaS) business, customer success plays a crucial role in keeping a business healthy and thriving. It’s not just about acquiring new customers; it’s equally important to ensure that existing customers are satisfied and see the value in your product. Customer success focuses on enhancing customer experiences and encouraging effective product usage, while customer support addresses immediate issues as they arise. Together, these components work harmoniously to maximize customer satisfaction and minimize churn.

In this exciting episode of the Grow Your B2B SaaS podcast, Host Joran Hofman welcomes back Mike Dry, the VP of Customer Success and Support at Dealfront, for a deep dive into how to leverage customer success for SaaS growth. Discover powerful insights on tackling churn, fostering collaboration, and honing your strategic thinking. 

What is Churn?

Churn refers to the rate at which customers stop using a service, and it’s a vital metric in the SaaS industry. While many view churn negatively, it can provide valuable insights into a business’s performance and customer satisfaction levels. According to Mike Dry, a leader in customer success at DealFront, churn can highlight areas that need improvement or indicate misalignment between customer segments and the product. By analyzing the reasons behind churn, companies can identify opportunities for growth and even re-engage former customers through enhancements.

Starting Customer Success Early

For early-stage SaaS companies, establishing a robust customer success strategy from the outset is essential. This involves defining what success looks like for customers and ensuring the product helps them achieve those goals. Being realistic and honest about the product’s capabilities is crucial. Founders should focus on understanding the return on investment (ROI) their product provides and ensure it is clear and achievable. As the company grows, hiring a customer success manager (CSM) can be a strategic move, especially when founders become too busy with daily operations to focus on scaling the business.

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Mid-Stage Focus on Customer Needs

Once a company has over 100 clients or reaches significant annual recurring revenue, the role of customer success becomes even more pivotal. A CSM can actively engage with clients, understand their needs, and ensure they continue to derive value from the product. This proactive approach not only addresses issues as they arise but also anticipates potential challenges and mitigates them beforehand. Insights gained from customer interactions should be funneled back into the company to drive product improvements and better align offerings with customer needs.

Using Technology to Help

As companies continue to grow, managing customer success without exponentially increasing headcount can be challenging. This is where automation and artificial intelligence come into play. By automating routine tasks and leveraging data analytics, companies can provide personalized customer experiences at scale. This allows human resources to focus on strategic engagement and complex problem-solving. Additionally, fostering collaboration between customer success, sales, and product development teams ensures that customer feedback is effectively integrated into the product roadmap, driving continuous improvement and innovation.

Improving the Customer Journey

At advanced stages of growth, particularly when aiming to scale revenue from $10 million to $100 million annually, the focus should shift towards refining the customer journey. Establishing clear communication channels and collaborative projects across departments can help break down silos, ensuring that every team is aligned toward a common goal: delivering exceptional customer value. By leveraging data to understand customer behavior and preferences, companies can tailor their strategies to maximize customer lifetime value and drive sustainable growth.

Conclusion: The Path to Success

In conclusion, customer success is a dynamic and evolving field that requires a strategic approach at every stage of a company’s growth. By understanding and effectively managing churn, leveraging automation, and fostering collaboration, SaaS companies can enhance their customer success efforts. This approach not only leads to long-term business success but also cultivates a loyal customer base that values the product. With the right strategies in place, companies can thrive in a competitive landscape, turning customer success into a driving force for growth.

Key Timestamps

• (0:00) – Introduction to Customer Success and Churn
• (0:51) – Mike Dry’s Background 
• (1:35) – Difference Between Customer Success and Support
• (3:06) – Importance of Linking CS and Support for Clients
• (4:03) – Understanding Customer Churn in SaaS
• (7:31) – Learning from Churn to Improve Customer Experience
• (10:12) – Foundational Customer Success Strategies for Startups
• (13:09) – Identifying Gaps Between Product and Customer ROI
• (15:23) – Responsibilities of a Customer Success Manager
• (15:42) – Hiring Your First CSM: When and Why
• (18:40) – Transitioning to Mid-Stage: Reducing Churn
• (21:50) – Reporting Churn Insights and Prioritization
• (24:16) – Defining and Utilizing Ideal Customer Profiles (ICP)
• (26:06) – Building a Customer Success Team in Mid-Stage
• (28:57) – Scaling Customer Success Without Linear Hiring
• (30:37) – Leveraging Automation in Customer Success
• (32:49) – Cross-Functional Collaboration for Expansion Revenue
• (35:22) – Advice for Early Stage: Climbing to 10K MRR
• (36:14) – Advice for Scaling to 10 Million ARR
• (37:57) – General Advice for Customer Success Professionals

Transcription

[00:00:00.000] – Mike

As those customers are churning, you can learn quite valuable lessons of, firstly, is that the right way that things should be done? Is there a case for maybe differentiating and treating these customers differently, maybe to prevent churn in the future? Find a way within your business to also celebrate the renewals. So it shouldn’t just be new business, churn. It should be new business, churn. Churn is a relatively small proportion of the revenue of the business. So if you all these renewals that are happening at the same time, let’s learn from renewals and let’s learn from churn. Very easy to start getting sold on the vision of what you’ve already created and it does this and it does that and does the other. Unless your customer is actually doing those things and actually reporting to you that they’re having the success that you are set out to do, you should assume that they’re not and you should be thinking about the ways to fix that.

[00:00:50.650] – Joran

In today’s episode, we’re going to talk about customer success. I invited Mike Dry back on the show as this episode is still ranking in the top three most listened so far. Today, we’re going to dive dive deeper into CS. I’m basically skipping the basics, which we already covered in Season 1, Episode 2. As a really quick intro to Mike, he’s now the VP of Customer Success and Support at DealFront, which has 40 plus people in his team, had five promotions in the last five years, is responsible for 8,000 customers, and has been remote first for the last eight years. Welcome to the show, Mike.

[00:01:22.250] – Mike

Thanks, Jérôme. I appreciate it. Thank you for inviting me back. I suppose now that I’ve got a second appearance, this makes me officially a friend of the show, right? So I’m excited to be here.

[00:01:29.670] – Joran

You’re I’ve always been a friend of the show, so definitely, welcome, welcome back.

[00:01:33.430] – Mike

Good stuff.

[00:01:34.580] – Joran

Nice. So let’s just dive right in. In your title, Separated to Customer Success and Support. I guess the first question, what is the difference between CS or Customer Success and Support in SaaS, in your opinion?

[00:01:46.390] – Mike

Yeah, good question. I suppose the trite and simple off-the-shelf answer is that the CS customer success side of things is about more strategy, proactive work, this thing, and the support side is more reactive, responding to technical challenges that come up. The way that we work in my team, that is the distinction, but we don’t draw the distinction quite along that line. So as to say one team is strategic and the other team is just order-taking. It’s a case of one team focused on a particular type of request or challenge or thing that the customer needs to do, and another team working on a different version of the same thing. For example, a customer might come into our support chat and raise an issue with regard to some technical thing they’d like to achieve with our product. That can lead to conversations with CSMs as to, Okay, now that we’ve sold the thing that you raised in support, what can we do with you more? How can we take that idea that you have or that request that you hadn’t taken to the next level? I see it as one hand washing the other and feeding that customer journey on.

[00:02:45.560] – Mike

But probably the most simple definition is just simply how that request or how that interaction is happening. Is it coming to you and you’re reacting to it, or is it proactively being triggered on the customer success side?

[00:02:56.960] – Joran

As you mentioned, in the end, they work with the same clients, one proactive, one reactive, so you have to keep each other in the loop all the time on what is happening.

[00:03:05.440] – Mike

Exactly. And I think one of the key things that is important is that from the customer’s perspective, it should feel like these two things are linked and one is a continuation of the other. It shouldn’t be a case of, for example, if you’re going to get a support response in two minutes and you’re going to get a CS response in three weeks. It shouldn’t be like that. One should be very similar in terms of tone and experience And the way that you are dealt with as a customer should be hand in gloves, regardless of whether you’re dealing with a support professional or with a CSM in this case.

[00:03:40.060] – Joran

Yeah, nice. One of the big things happening right now or I see a lot on LinkedIn is churn. Companies are having a lot of churn right now. So I guess maybe to even dive it in or to turn it around into a positive question, is customer churn always a bad thing for SaaS businesses or can it sometimes be indicating something positive as well?

[00:04:02.280] – Mike

Yeah, it’s a good question. I think it just it depends on how important that revenue is to you right now. Maybe the better way of answering the question is to say that it depends on what the churn is a symptom of. So if the churn is a symptom of circumstances far beyond your control. For example, the types of people that you previously were able to sell to were people who were able to raise money and VC funds and so on and so forth. And that’s not quite so easy anymore. So your customers are pulling back on their spend because they need to safeguard other areas of their budget. That’s one thing. But if the churn is a result of, for example, product experience, or it’s a result of the customer not being able to easily extract the ROI from the product, it can be a positive thing in the sense of that’s a really good learning opportunity. So if a client is leaving you, so let’s just say you could be any business out there listening to this. So let’s just say for the sake of argument, you are dealing with small and medium-sized enterprises.

[00:04:56.680] – Mike

You have thousands of customers, and maybe the customer experience that you have is generalized across all of them. So every customer is going to have roughly the same experience with your product. As those customers are churning, you can learn quite valuable lessons of, firstly, is that the right way that things should be done? Is there a case for maybe differentiating and treating these customers differently, maybe to prevent churn in the future? Or maybe is there just something that customer has spotted that just by having a conversation with them on the way out, you can improve the experience for the next 500 customers to come through the door. And maybe Maybe one day that improvement that you make could even tempt that churning customer back. You might even put yourself into a situation, depending on how simple the problem is that they’re churning for, you might even be able to put yourself into a situation where you solve the problem, make a wider chunk of the customer base happy, and you’re able to go back to that customer and say, just so that we’re the business that listens to you and we listen to our customers and we’ve been able to tackle that issue.

[00:05:53.720] – Mike

So if you ever want to come back, you’re going to have a better experience with us as a result. Again, I think it basically just depends on what you’re making it? It’s up to all of us in the business world to make the best of the things that come our way. So if it’s a churn situation, is there something to learn from it? If it’s a customer, you could turn around really easily just by solving something about the experience they’ve had with you. Brilliant. If not, can you learn from it? Can you generalize that knowledge out to the rest of your team and try to turn the gears a little bit quicker in your business in terms of how to improve things? I think that can make all the difference. But I would say one of the things about that question, which is quite valuable, is churn can be seen as bad within your organization for various different teams. If you’re the organization that has a relatively, let’s call it a large organization for the sake of this conversation, a couple of hundred employees or whatever, People can be at a real distance from the problem of churn.

[00:06:48.590] – Mike

They can just hear about it one day and it’s like they’re seeing a car crash in front of them. We have a problem, we have something to worry about. But if you can create a culture where it’s seen as a learning experience and it’s seen as something everybody should be chipping into and should have an opinion on and should be trying to help, then you can create a virtuous circle where everybody wants to try to help, as opposed to everybody just shoving this problem into a CS corner or into a support corner. It can become something that everybody collaborates on, I would say.

[00:07:19.670] – Joran

Love it because in the end, it’s somewhat a negative business metric, but as you mentioned, you can learn a lot from it and actually improve the experience afterwards, as long as you treat it as a learning experience as well.

[00:07:30.660] – Mike

Yeah, exactly. And a lot of that depends upon who is listening to this and where they’re at as a business. What I would recommend against doing, just as one concrete tip, I would recommend within your business as you communicate churn, avoiding a situation where, for example, your sales team is only reporting on all the good news of new deals, new business, more money through the door. And your customer success team is only reporting on all the bad news of churn going out one side. Because no matter how nuanced and aware you may be of how that looks, the people that are within the trenches every day in your business working, one team is going to get the opportunity to feel very miffed about the way that is being presented. And one team over here is maybe getting off scot free to some of the reasons that the clients are churning in the first place. So you want to try and find a way that that could be communicated such that everybody gets an opportunity to shine, if then everybody gets an opportunity to win. One very concrete way of doing that is find a way within your business to also spend to elaborate the renewals.

[00:08:30.950] – Mike

So it shouldn’t just be new business, churn. It should be new business, churn. Churn is a relatively small proportion of the overall revenue of the business. So if you’re all these renewals that are happening at the same time, let’s learn from renewals and let’s learn from churn and let’s move forward.

[00:08:45.810] – Joran

Yeah, because in the end, if you’re just having to report on the bad news, at one point, you’re just not going to like it anymore.

[00:08:51.990] – Mike

Yeah, exactly. And also it’s quite a myopic view of the problem because it’s very easy, for example, to start just modeling based on churn. So just start, say, okay, for example, we have all this churn, we need to fix our churn problem. What’s our churn is caused by X thing in the product, we better just fix that, which is a good idea, probably. But you should also just double check what are your happy customers doing? It should ideally make up a much larger proportion of the call. And is there a reason why they need that thing that already exists that you’re about to take? So it just needs to be a balanced view between your entire client base and the churn problem over here to come to an actual conclusion as to what to do about it, I would say.

[00:09:31.810] – Joran

Nice. Today, I want to talk about CS and then build it up based on a norm of clients’ revenue. Because at SaaStock, I learned that a lot of early stage founders are listening, and they would like to get as much practical advice as possible. I just want to go early stage, mid-stage, later stage. We talked about tracking metrics already in our previous episode, so I’m not going to dive fully into that. Again, if you want to listen to that, listen to Season 1, Episode 2, when we’re going to talk about CS and I guess early stage, what foundational customer success strategies are critical at the beginning? What should early stage SaaS companies do from the beginning?

[00:10:11.820] – Mike

If we work through the perspective that there’s currently no customer success present within the organization and this is day one, blank sheet of paper. I think the first thing is, it’s good news if you’re already thinking about a strategy because that’s going to make life easier down the line because you’re not doing it in a reactive manner, right? I think if you have a blank sheet of paper, you’re looking at what should my CS strategy be in general. I think the first thing to do before you even think about putting names against things, we’re going to have CSMs, we’re going to have all of this. I think the first thing to do is just to simply figure out what is it that your customers are supposed to be extracting from your product? What is the return on investment that they have purchased in the first place? And I would encourage everybody to be really crisp in terms of defining that. It shouldn’t be something that you can summarize in three words. I know that’s normally ideal, but you want to reach a level of specificity to say, we want our customers to achieve X in X period of time, such that they’ll be happy with us and maybe they’re recommending us, maybe they’re sticking with us forever.

[00:11:07.420] – Mike

But it should just be really clear what that customer is supposed to be able to achieve. And it could be if you have a really complex product or you have various different in the cases within the product, it could be that there’s five different versions of this statement, and that’s fine, too. But just start with that. And then the next stage of the game is to try and figure out to what extent does your existing product experience fulfill those those statements you’ve just made. And you have to be really honest with yourself there, right? Because it’s very easy for all of us if we work for the business for a long time or you’ve got your own business, very easy to start getting sold on the vision of what you’ve already created. And it does this and it does that and does the other. Unless your customer is actually doing those things and actually reporting to you that they’re having the success that you have set out to do, you should assume that they’re not and you should be thinking about ways to fix that, right? So if we assume that we’ve done all that, we’ve got our value statements, we know what the customer is supposed to extract from the product, we’ve gone and checked if customers are already doing it and to what extent we can actually service it.

[00:12:07.270] – Mike

You should now be in a position where you can start to see what the gaps are. And there will be some. There’s gaps for everybody, right? There’s always a gap between what you set out to provide to the customer and what they’re probably experiencing. And then you just need to figure out what the best way is to service that now. And if you’re a founder, if you’re the person who’s in charge of the longer term strategy of the business, you need to now start thinking, okay, this satisfies today’s problem. But based on where I want to take the business over the next 12, 24, 36 months, what’s the journey we’re going to go on? So it could be for the sake of argument, you have a product today, single use case, relatively low price point. The customer can just come in, set their own account up, start using the product, and fine. But you might also have a strategy for the future where you’re going to grow that business with various different add-ons, various different services that you may be going to belt onto the product. You want to start thinking about not just the gaps you have today, but the gaps you’re going to start to open up as you move into that strategy that you’ve got, right?

[00:13:08.020] – Mike

That should leave you in a situation where you’ve got a fairly clear list of gaps, and then you need to decide, how am we going to close those gaps? I would suggest probably a combination of inbuilt product experience, obviously it’s SaaS, right? So it should be an inbuilt product experience. It’s going to cover a lot of those gaps. Then you should think, what’s the human component on top of that? So what is it that as a business, you could be providing to those customers over and above just using your product and clicking around that can supercharge what they can get from the product? Because that’s really the game, right? We’re in the game of trying to provide the customer with an absolute maximum value that they can get from the product such that they will love it and use it forever, tell everybody about it. We’ll build big businesses as a result. So in order to achieve those things, we follow those steps. We should end up in a situation where you have a vision for where you’re going, a strategy for what is currently missing and what will become missing within the product experience.

[00:14:05.580] – Mike

How much of it you’re going to service through product and how much are you going to service with people? And that people bit, you then sign that to your CS and support people and everybody’s happy. How does that sound?

[00:14:16.320] – Joran

Sounds good. And I think it flows right into my next question because you already mentioned CSM, customer success manager. I think it’s going to go into the stage we’re going in right now. So maybe even go really quick on this one. What are, for example, the main responsibilities of a customer success manager? What is it? What do they actually do?

[00:14:37.030] – Mike

Good question. I think it can vary massively, but from my perspective in the organization that I lead, each one of the customer success managers that works within my organization, they have a book of business or a set of clients that’s assigned to them, and they’re trying to work proactively with those customers to find opportunities to use our product more, to gain more value from the product, to hopefully open up opportunities that using it more, maybe we’re going to expand our presence with them. We’re going to expand the account that we have with them. And if that happens, we’ll pass the opportunity off to our account management team. But the point is they’re there to explore the account, figure out with the customer how they can get the most value from the product, and try and create opportunities such that we will work together over time, hopefully on a broader scale than we do today. That’s the idea.

[00:15:22.480] – Joran

When we’re now early stage, we set that vision, we set the strategy, and hopefully more clients are coming in, and we want to start supporting clients to get more value, to get the ROI you mentioned. When should a startup decide to hire its first CSM, or is that even the best first hire? Maybe that’s even a better question.

[00:15:42.250] – Mike

It’s a good question as to when to do it. I think If it’s a relatively new business, it’s currently nobody within the business whose sole responsibility is to take care of the existing customer experience, it will usually reach a natural stage where the person who’s running it, let’s say the founder for the sake of argument, is themselves so busy with the overflow work from existing customers that they’re no longer able to do the bits in terms of expanding the business from there on out. And that’s ultimately the track, because it’s relatively easy for founders, if they don’t have to break that cycle, it’s relatively easy for founders to just create a job for themselves, which And this becomes part CS, part sales, part everything else. I think when it gets to the point where the founder is no longer able to provide the right experience for the existing customers and also do the things that are necessary to grow the business and deliver the vision they’ve got, then it’s time to bring somebody to work on that. Whether or not you want to start from up in terms of start with the CSM and eventually end up with a team lead and everything else, or you want to start top down, I think is a personal choice.

[00:16:43.360] – Mike

So it’s down to the amount of financing you have, because obviously the more senior hire that you’re going to bring in is going to be a lot more expensive, and that comes with its own pitfalls, but also benefits. I would say, and this is not just to open up opportunities for senior CS people out there, but I would say if you have the the freedom to do it, if you have the financing, I would start with bringing somebody in who’s done it a bit before at a senior level, at a leadership level, and let them define the plan and show you the gaps that exist in the process at the moment. And then you can build a team from there. Because ideally, I would imagine if you’re a founder and you tell me if I’m wrong, but I would imagine having somebody there as a right-hand person to be able to take that load and you know that they know what they’re doing is going to make it a lot easier than if you bring in somebody who’s relatively junior and you still have to worry about the client problem, but you also need to train up this new person to maybe try and substitute for what you’re doing.

[00:17:36.440] – Mike

That’s a more tricky option, I would say.

[00:17:40.230] – Joran

Yeah, I agree because if you can’t build a business anymore, as you mentioned, by spending a lot of time with clients, you don’t have the time to train somebody as well. Hiring a bit more senior person who did it already definitely makes sense. I guess what we did in the past, we had the applicants make assignments and make a plan. I think that’s perfect here in this scenario where you just ask them to to map it out. And then if they are hired, they can already implement the plan they presented during their application.

[00:18:06.730] – Mike

Yeah, and the beauty of that as well, if you’re working with people with that little bit of experience, is you probably won’t even need to brief them that much in order for them to have a perspective that they can offer you as to what to do next. I can definitely see that if you have the option, I definitely see the value of starting top-down for a role like that.

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[00:18:39.250] – Joran

We’re going to move to mid-stage. What does mid-stage mean? Let’s just say 100 plus clients or 1 million ARR. So at least you have a big chunk of clients you can work with, you have data, etc. Available. How can customer success really reduce churn in SaaS?

[00:18:55.770] – Mike

Yeah, good question. So I suppose the answer to that question depends a little bit. So at least you have a big chunk of clients you can work with, you have data, etc. Available. How can customer success really reduce churn in SaaS? Good question. So I suppose the answer to that question depends a little bit. So in terms of how much churn you already have and how that problem emerged in the first place. So if we assume, just for the sake of argument, again, that there’s a reasonable amount of churn happening, maybe you’re a month to month subscription business and you’re seeing a fairly substantial chunk of the subscriptions that you sold six months ago already churning out for the sake of argument, right? If your CSMs have been engaging with those customers, engaging with their client book in general, they should be able to give you a pretty good understanding of the risk that already sits in the client book. So how many new problems are going to be coming up every month from here on out? Any trends that exist in the clients that have already churned? And they should be able to tell you a narrative as to what needs to be fixed.

[00:19:47.920] – Mike

I’m a big believer in general that I know we all go looking for miracle solutions and other problems outside the business to solve problems. But the vast majority of the time, The answer is in the head of somebody that’s in your business. And oftentimes, it’s in the heads already of the people that are working with your customers, because in order to support your customer, they are having to go through probably the same challenges that the customer is going through when they’re not around. And it should be very clear what the problem is. And then in terms of how they can reduce the churn, it depends on how fixable the problem is for the sake of argument. If the issue is, hey, this product is quite tricky to use. It’s very to find the value within the product. Or for the sake of argument, maybe your product requires a lot of configuration. There’s not that much guidance in the product. Somebody always has to come in and help them. Maybe there’s not ROI calculation or there’s not some dashboard within the product that shows the value. Any one of these problems, right? They can be the root cause of churn.

[00:20:49.890] – Mike

So in some cases, what your salesman can be doing is cloud covering those gaps for you. They make the manual report, they do the configuration for the customer, they hold their hand through whatever whatever it is that needs to be done. But the most valuable thing they can be doing is proactively finding a way to get that information in the hands of you, the founder or the product team or whoever can solve whatever the issue of the day is, provide them with the exam calls, provide them with the opportunity to speak to the customers that are most vocal about these problems, and just shine a light on the problem that would otherwise just disappear into a Tableau report somewhere that just says the churn number is up by 10% month over month or whatever. They’re the people that can give the actual descriptive detail that you need to solve the problem. And that’s how they can help most, I would say.

[00:21:37.150] – Joran

You guys have a lot of clients, right? So if you would report things back internally, would you also look at what is the MRR of the clients who are reporting certain problems, or is it more how many times the problem actually got reported?

[00:21:50.390] – Mike

A bit of both, actually. So one process that we’re working on, or that we already have in place, but we’re iterating on it over time, we have a Slack channel specifically dedicated to this now. So if any client of ours does churn into the channel is dropped a profile of the customer. So name of the business, size of the business, degree to which they fit our ICP, which I think we can talk about in a bit, the challenge that exists. And that’s a channel that’s seen by the entire company. So our approach has been to say, here’s the core information that’s required for everybody to understand the case. And here’s how important it is in terms of what fit this customer is to what we’re trying to achieve. So for example, if a customer is pretty much dead on the perfect ICP fit for us and they’re churning for a problem that should be solvable within our product, that’s a bigger issue than if it’s a customer that probably couldn’t be a good fit for our product in the first place due to something about them and they have an issue. It’s not quite as black and white as that because obviously we want to solve problems for everybody.

[00:22:54.750] – Mike

But we were prioritized based on how close they are to exactly what we set out to achieve. Because, again, if you’ve modeled your ICP, which maybe if I just explain briefly. So we have a internally within our organization, we have done the research within our existing client base, within the leads that we’re signing up, to see what is our sweet spot? Where do we do best in terms of industry, in terms of size of customer, and a few other features to profile that is the customer that we want to be working with, right? If you think about it, then the logical conclusion to that is if you have a customer, if you’re almost designing the product towards that customer and it still doesn’t work, that’s a real red flag. Then we really need to solve something quicker. If the customer is not in the right industry for us for the sake of argument, not of the right size, if it was always going to be a struggle, but we’ve sold to them because maybe they purchased themselves the product But you can understand it a little bit more because they’ve just run into the roadblock that was always going to be there.

[00:23:49.910] – Mike

But if it’s a customer that there shouldn’t even be the roadblock, focus on it a little bit more.

[00:23:55.240] – Joran

This ties back to, I guess, the first question, is during something, it’s always something negative or positive? You guys use the churn probably way in the past before, identify who’s the ICP, who doesn’t churn that much, who actually fits it, who gets the product, who gets value out of it. Then from there, you’re now just reporting everything based on that as well.

[00:24:15.280] – Mike

Yeah, exactly. And the value of doing that ICP research as well, which is run very well by some colleagues that we have in our robots department. I appreciate not everybody will have a robots department, but if you can invest in this somehow to get this data out, it’s worth its weight in gold. The value that you can extract from having your ICP clearly defined is really astronomical, right? Because if you can get that level of clarity as to what you’re doing, it takes so much guesswork out of what you need to do in other areas of your business. So for the sake of argument, let’s say you offer a product that is generally applicable to everybody, but would be really a good fit for people in the transport industry, for the sake of argument, right? It becomes a lot easier to target those types of customers in the first place, to attract those types of leads, to run the campaigns that would appeal to that customer. And it also makes it a lot easier in your post-sale experience to start saying, okay, let’s train our CSMs on what’s relevant to people in that particular industry, as opposed to, they have to be generalists in everything and hope that there’s a little nugget in this conversation that they can use somewhere else.

[00:25:19.450] – Mike

You can start to build genuine subject matter experts in particular industries as well. And then it really starts to grease the wheel because you start to see that customer not just has the product experience that was designed for them, but they also then have the CS experience or the post-sale experience in general that’s designed for them because they have somebody to talk to who understands their problem from a product perspective, but also from an industry perspective. And that can, again, it can move you on leaps and downs, really.

[00:25:46.380] – Joran

Yeah, love it. And I guess this is already assuming we have a CS team talking to the client. So if we’re a bit mid-stage, you mentioned if you can have a wrap-up, teams definitely have one. I think mid-stage might be a bit too soon. So I guess mid-stage, how would you build a CS team? What department, people, specialists, would you get in there?

[00:26:06.050] – Mike

Yeah, good question. Again, I appreciate now everybody’s going to have a RevOps team, but you will need somebody, maybe even yourself in this case, if there’s nobody else to do it, you will need somebody technical in place to hook up all of these systems to make sure that the data ends up in the right place and people are able to work from it. That would probably be enough, as in if you’re just on this track and you’re just getting started, just having somebody who can make sure the right post-sadic information finds its way into a system that you see them or whoever can use, that is a good thing. In terms of how you would staff the team, again, depends a little bit on the challenge. It depends upon the technical complexity of the challenge as well. Maybe you’re the business who you’re producing a very technically involved tool for the sake of argument. And if you are, then probably the people you’re going to staff that team with are going to be more technical solutions, engineers types of people who can handle complex integration related questions and so on and so forth. If You’ve gone the other way and your product is far more its generalist in its application, it’s relatively easy to use, etc.

[00:27:05.920] – Mike

Then I would start with, as we talked about before, a standard CSM type of a position, somebody who can pick up that book of business, assuming you put a leader in place who knows what they’re doing as well. But if you start building out CSMs, you can hire a generalist CSM who will be able to look after a book of business for you. And as we talked about before, what they’re going to spend their day doing is looking into the accounts of the customers, looking into what they’re using, looking what they should be using, finding the gaps, solving those gaps, and hopefully, building that relationship that will allow you to do more with that account over time. On the support side, again, depends a little bit. Same thing. How easily configurable is your product? What issues are being raised? Et cetera, et cetera, et cetera. If there are going to be a lot of issues that are going to have to flow to somewhere, you don’t just want to load your, let’s say, strategically focused CSM with just more stuff to do. Set in this form, press this button for the customer, blah, blah, blah, blah.

[00:28:00.750] – Mike

Ideally, you would have a separate support person, at least one person, to do this, to begin with, who can, again, they can be tackling some of that more day-to-day stuff that’s coming up for the customers. Again, just fueling that good customer experience. Because if you can create a circumstance, like we said, maybe at the top of this conversation where it feels like one consistent experience, and it’s not just a case of, I’m speaking to three or four different people to do one thing. Support person has a particularly defined role. Csn has a really clearly defined role, you can start to move from there, right? I think the obvious question I think that comes up a lot of the time is when you think about staffing this from there on out, is it just a linear progression of, okay, every time I acquire 200 more customers? Shall I hire another CSM? Is the question. And obviously, especially in this market where it’s not quite as easy to raise money as before, it’s not quite as easy to be financed, the answer to that question is no. You’re still going to need somebody to do it, right?

[00:28:57.300] – Mike

But you don’t need to have some graph that goes So every time you hire a new client or bring in a new client, you have to hire a new CSM. The way that this should most probably work is, coming back to what we said before, if you’ve defined what that customer experience is supposed to be, you’ve defined where the gaps are, you can start to make a relatively easy approximation of the type of workload that’s going to come from that. And you may be able to create a situation where many of your customers, let’s say half of your customers, can get that experience in a relatively automated fashion. So now you’re just assigning your high value, really customers you have highest hopes for to your CSMs, and you’re trying to devine a high value automated experience for the rest. And then you can move those levers as your business progresses. Maybe you’re able to lean more into automation, maybe you might need one extra person, but it’s not just going to be a one for one deal.

[00:29:52.310] – Joran

Makes sense. It almost looks like you listened to the last episode because what Jacob and Nicole mentioned, if you want exponential growth, you can’t be dependent on a linear system them, so hiring more people. That’s exactly what you’re trying to say here as well. Don’t hire a new CSM every time you have X number of new clients. Love the consistency during the podcast here as well.

[00:30:12.290] – Mike

Good. I’m glad we’re in sync.

[00:30:14.110] – Joran

Exactly. You already are going to the next phase. That’s the phase you guys are in as well, going from 10 million to 100 million ARR. Because my first question was going to be, how can SaaS companies scale customer success as they grow? You mentioned it right. Don’t hire a new CSM every time you have extra number of new clients in, leverage automation, any other things they can scale CS?

[00:30:37.370] – Mike

Yeah, I think the key thing at the moment, and obviously it’s very in vogue, is automation and the use of AI and everything else. The key exercise to go through is defining what is the experience you want your customers to have and what value do you want them to actually take to the product. If you can get that bit right, you can start to see areas that you will need to scale and improve over time. And that can play a role in all of these things. I’m a firm believer that there’s a role for automation and AI and stuff in most roles, most probably in most customer experiences as well. And that’s obviously the direction of travel for the industry at the moment. In order to get that experience, you have to, again, find what is the customer supposed to extract from this product. If you have that bit clear, these tools can start to play a role in your success as well. It can be that you’re automating certain parts of the product customer journey within the product. It can be that you’ve created workflows and automations in the that just automatically sends the right information for the customer into another tool, the way they use it for something else.

[00:31:36.270] – Mike

All of these things can play a role in helping you to scale the CS because they’re taking away the mundane and the day-to-day activity, and they’re allowing people to focus on what hopefully people are going to still be employed to do, which is that strategic big picture thinking activity that will ultimately lead to success for customers as well, right?

[00:31:58.490] – Joran

I think that’s really nice because automation can do a lot of things you mentioned. And yes, you’re repeating yourself a lot, but I think that’s the thing within CS. You have to repeat yourself a lot. We need to focus on the ICP. You need to be focusing on getting the clients to value. You need to be repeating yourself all the time why people are churning to actually get things moving within the company product-wise, sales-wise, because I think that’s one thing as well. Reporting things back into the company is probably repeating yourself a lot to get things done.

[00:32:27.370] – Mike

Yeah, I would say so. It’s finding new ways to the same thing again and again. But that’s okay. That’s part of the game, I think.

[00:32:34.370] – Joran

When we talk about that, because you’re now in a full-ground company, right? How does it work, cross-functional collaboration between CS, sales, product, and then especially towards driving expansion revenue for yourself?

[00:32:48.930] – Mike

Yeah. So we have quite a number of cross-functional projects that are permanent fixtures in terms of what we do as an organization. But for example, we have an ongoing project within our company, specifically a churn and retention that brings together senior leaders in various different departments to tackle exactly these issues. For example, if we see that we have an issue where a certain type of customer is not adopting the product in the way that we want them to, we can bring this group together. We can illustrate the issue, we can get the information immediately into the hands of the people who can make decisions in terms of how do we modify the product to solve this problem. And is there time to do that in the next cycle or is it the cycle after? Those are the sorts of operational in the moment discussions that you can start to have when you have clear functions and clear line of sight as to what everybody is doing. And that’s maybe one of the benefits of a slightly larger company. One of the downsides is maybe a little bit of siloing, but on the positive side, there are defined groups of people with defined responsibilities as to how to handle given issues.

[00:33:52.110] – Mike

And if you just bring them together in the right forum, you should be able to make decisions fairly quickly. Because even the company that I’m part of, it’s not IBM, it’s 250 people. But that’s enough to achieve what I’ve just mentioned, where you can bring the right people together, you can discuss the issues, and hopefully, you can come to rapid conclusions as to what needs to be done.

[00:34:10.370] – Joran

Yeah. I think these projects, as you mentioned, will also help in a way to get rid of those silos a little bit. You’re always going to be staying in the silo, but at least you get familiar with each other, you talk a lot, and you can also bring up other problems you’re seeing with the clients, and then you can report them one-on-one, basically.

[00:34:29.490] – Mike

Exactly. And whenever you bring that group together, it’s a timely reminder that everybody’s in it together. Everybody’s all working to achieve basically the same goal, which is to deliver a solution and grow a company. So just bringing the group together helps you to be reminded of that fact. And it’s not us against them, it’s us against the problem.

[00:34:47.630] – Joran

Exactly. I think that’s the most important thing. It’s not just CS is responsible for churn, it’s going to be an entire company challenge to tackle.

[00:34:56.080] – Mike

Exactly.

[00:34:57.210] – Joran

Cool. I think I’m going to ask you to repeat yourself a a little bit. We know the last two final questions. We have these in the summary episode, where I’m basically going to summarize 20 guests in the season on what advice they would give at certain revenue stages. If you have to summarize your advice, what advice would you give somebody who’s just starting out and growing to 10K monthly recurring revenue? So really early stage SaaS founders.

[00:35:22.080] – Mike

I think probably the key bit of advice is just to get moving as quickly as you possibly can. Urgency is key at that early stage. The quicker you get to a decent amount of monthly revenue, the more you’re building yourself an opportunity to have the opportunity to do all the things that we’ve talked about today, because that’s where the fun starts, I think. There’s the fun bit in the beginning when you have a really interesting idea, and it’s probably the last time when it’s the perfect idea because it’s not yet met, not yet encountered reality. And then you’ve got a valley of struggle, and then you get to a point where you have enough revenue so you can actually look over the hill. I think just climbing that as quickly as you possibly can is the goal. However you go about doing that and giving yourself the opportunity to succeed. I think that’s the main piece of advice I would give.

[00:36:04.060] – Joran

Nice. Let’s assume we’re on the hill and we’re going to climb a mountain because we’re going to go from 10K MRR towards 10 million ARR. What advice would you give here?

[00:36:14.330] – Mike

It’s a slightly more tricky one. The good news is you’ve already got to the 10K, so you’re already on the track and it’s now just about building from there. I think I’ll probably reference something I said way back when we had the last meeting, really. I think the most important thing to do is to try and look ahead and think about, not just CS, but these various different functions within your business that are going to start to exist from 10K onwards. You’re going to have a fully defined sales team for the sake of argument. You’re going to have a CS team. You’re going to have to start to have other functions. And start to think for your business, for this thing that you’re building, What do you really want those things to look like? And what is it you want each of those groups of people to do? What is it you want them to know about you, about how you work, about your business and everything? And just start writing this stuff down. I know it’s difficult at the early stage. You don’t have that much time. You don’t have the the opportunity to do all these things.

[00:37:00.640] – Mike

But if you can at least give yourself a starting point and just define for yourself what you want from all these people, especially the people you’re going to hire, but obviously the customers as well, what do you want this to end up as? That clarity of thought that you will hopefully come to is going to mean a hell of a lot down the line when you start to explain that vision to your team members and you start to try and inculcate them into what you’re trying to build. Because it’s clear to you, give yourself an opportunity for it to be clear for everybody else.

[00:37:27.210] – Joran

Nice. And I think the final question from my side, a bit more general advice. I think at the previous episode, I send a lot of CSM people who reach out to me to go and listen to this episode. So let’s assume a lot of customer success managers, people who are just got into the job, maybe even who are even the same role as you are right now, what advice would you give them? General, could be anything. How can they succeed or how can they make themselves important within the company?

[00:37:57.320] – Mike

Good question. I think the answer to all of it is just to Confirm for yourself that what you’re doing is something that you can have passion for. So I think it always sounds like a really trite thing to say when somebody says, Do what you love and everything. And then the thing that you’re doing is like a relatively standard office job to a certain extent, right? But you just have to figure out where you find the fun in it, where you find the joy in it, and where you can bring passion to what you do. Because if you can do that, you can basically do anything, really. Because what that will allow you to do is it will allow you to start to say to yourself, not that this is what I’m… Not that what I’m about to say is what I’m suggesting, but just run with me for a second. If you start to justify to yourself, let me invest more time, let me invest more effort, let me have that extra conversation with a colleague, let me sit here for an extra hour and figure this thing out. And the accumulation of all those, let me do this extra little bit to make this better for everybody over a long enough period of time is how you become important to a business, is how you also succeed in your career.

[00:38:56.510] – Mike

It’s also how you succeed on a personal level because It doesn’t just become a job. It’s not just a job that you’re doing every day. You have to drag yourself to the desk to get through. It becomes something that you actually look forward to doing. If you can create that to yourself, then it’s easier. I think there’s a noget of wisdom in getting there somewhere, but I think it’s just about finding the passion in what you do. It doesn’t necessarily have to be, Oh, I have passion for explaining a product for a customer. It can be, You know what? I’m really passionate about working with my colleagues every day and finding a way to make this fun and having a laugh as we do it. In order to do that, I’m going to make sure that I offer the best experience to our customers such that this thing gets bigger and better for everybody. It can be that. I love it.

[00:39:42.440] – Joran

I think I’ve seen that firsthand, of course, where working together. It’s nice to see that you still have it because that’s how I always remember you. You’re always going the extra mile, always trying to figure out, do things, learn new things, do new things to figure out how can we do better while having fun in the meantime, which is nice to see.

[00:39:59.280] – Mike

You’re too kind, my friend. I appreciate it. Thank you.

[00:40:01.700] – Joran

Nice. I’m going to try to see if I can summarize you, let’s say, in one and a half minute. We’re going to start at the basics. Customer success is proactive, customer support is reactive, but they are going to work closely together because they handle with the same type of clients. Treat Churn as a learning opportunity, learn how to prevent Churn, improve experience, create a virtual circle between the different teams, create celebrations within the CS team, and not just punish on Churn. When you’re going to go early stage, set a vision where are you going, strategy on how to actually get out there, define what is the ROI clients want to get, so what is the value they’re trying to get out of your tool, and don’t assume clients are actually getting the value. Check this with them. Help them to achieve it with product experience plus human assistance. Then we’re going more early or more mid-stage, higher first CSM. When you can’t build a business anymore, you want due to spending a lot of time with clients or other things, ideally a senior person which already did it, so you don’t have to onboard them as much as you need to.

[00:41:00.200] – Joran

Then reduce, churn, leverage the experience knowledge from the people already within your company after it’s already there. Make sure you show the value in-app plus human assistant. Report the issues back to the company, get insights into data, how much do they actually match your ICP and why are they churning? Then more in a later stage, don’t hire a new CSM every time you have X number of new clients. If you want exponential growth, you can’t be dependent on a linear system, so hire more people. Use automation to help them achieve the get value and human is more focused on the strategy. Then, of course, set up cross-functional collaboration projects to tackle certain problems. When we’re diving more into the revenue stage, just 10K MR, urgency is key. 10 million AR, define what you’re trying to build and build a strategy on that. For the CS people out there, do what you like, have fun, go the extra mile, and then it’s going to bring you in new places.

[00:41:54.450] – Mike

That’s it. You got me perfect. There we go.

[00:41:57.130] – Joran

Thank you, Mike. We’re going to link back to your LinkedIn profile. Any other ways people can reach out to you if they want to do so?

[00:42:04.350] – Mike

Yeah, for sure. I think LinkedIn is the ideal place. Feel free to send me a DM or a connection request or anything you like, and we can have a chat there if there’s anything in particular that I can maybe help you with. But thanks for the invite. It’s been a great chat. Appreciate it.

[00:42:18.450] – Joran

Likewise. Thanks for coming back, Mike. For people listening, make sure to follow the podcast if you haven’t and leave us a review or fill out the poll, which we always put to the podcast episodes. Love to hear what What you thought of this episode.Thanks.Thanks. Thank you for watching this show of the Grow Your B2B SaaS podcast. You made it till the end, so I think we can assume you like this content. If you did, give us a thumbs up, subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about Reditus, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.