S6E1 – The CS Playbook: How to Scale Retention & Growth in B2B SaaS With Kristi Faltorusso

In the first episode of season 6 of the Grow Your B2B SaaS podcast, we discuss how customer success helps B2B SaaS companies grow by keeping customers happy and reducing churn. Our guest, Kristi Faltorusso, has 13 years of experience in customer success and SaaS. She shares how to create and manage customer success strategies. Kristi is the Chief Customer Officer at ClientSuccess, a founding member of the Gain, Grow, Retain CS Community, and a limited partner at Stage2 Capital. She also co-hosts three CS podcasts and offers valuable resources for SaaS businesses. Tune in to hear Kristi’s insights on customer success.

Why Customer Success Matters for B2B SaaS Founders

Kristi explains that customer success is key to keeping customers and growing revenue in B2B SaaS. When customer success teams are set up properly, they help customers reach their goals, which reduces churn and drives growth. She advises founders to make customer success a priority from the start.

When to Set Up a Customer Success Team

Kristi talks about when to start a customer success team. Successful companies think about customer success from day one, not after reaching a large customer base or high revenue. It’s important to focus on customer needs early on and set up processes to meet those needs. Kristi recommends starting to build your customer success team when the founder can no longer handle everything.

Common Misconceptions About Customer Success

Kristi points out some common misconceptions, such as the idea that there is a one-size-fits-all approach to customer success. Every company has different products, customers, and markets, so strategies need to be customized. Kristi shares her own experience of trying to use a successful strategy from one company, only for it to fail in a new context.

Mistakes in Customer Success Implementation

One mistake Kristi mentions is poor staffing ratios. Companies often expect one person to handle too many responsibilities, which leads to burnout and poor service. Kristi advises against putting all roles on one person as it can damage customer relationships.

Step-by-Step Guide to Implementing Customer Success

Kristi explains how to implement customer success step by step, starting with your current business goals. It’s important to focus on what customers need right now and gather data to improve processes. Kristi emphasizes using data to guide decisions and improve strategies.

Challenges in Customer Success

Kristi discusses challenges like not using customer data properly. This can lead to bringing in the wrong customers and causing churn. She encourages companies to use customer data to guide marketing, sales, and other business decisions.

Best Practices for Customer Success

Kristi shares best practices, including identifying signs of customer behavior and involving customers in product development. She also stresses the importance of making data available to all team members and working together across departments.

Recommended Resources for Customer Success

Kristi suggests resources like certification courses from Success Hacker and Success Coaching. She also offers templates and playbooks on her website, which can be used as guidelines rather than strict rules. Kristi cautions against relying on outdated books in the fast-moving SaaS world.

Risks and Opportunities in Customer Success

Kristi warns about the risks of relying on bad data, which can lead to poor strategies. She also cautions about using AI without ensuring the data is accurate. However, AI can help by automating tasks and personalizing customer interactions.

Final Advice and Summary

Kristi’s main advice: “Just because something worked somewhere else, doesn’t mean it will work for you.” She emphasizes the need to customize customer success strategies for each company. For SaaS founders, she recommends involving customers in every part of the business and constantly improving processes as the company grows.

Key Timestamps

• (0:50) – Guest Introduction: Kristi Faltorusso
• (1:28) – Importance of Customer Success in B2B SaaS
• (4:32) – Common Misconceptions About Customer Success
• (7:54) – Starting and Building Customer Success
• (9:25) – The Journey from Crawl to Walk to Run
• (13:46) – Challenges in Using Customer Data Effectively
• (17:16) – Importance of Early Indicators and Trends
• (19:40) – Involving Customers in Building Processes
• (24:34) – Risk and Opportunity of AI in Customer Success
• (33:08) – Best Advice on Customer Success
• (34:18) – Scaling from 10 Million to 100 Million ARR

Transcription

[00:00:00.000] – Kristi

Your early customers should be part of what you’re building. They should be part of your product. They should be part of your processes. They should be part of your team. Bring them into those conversations. The most amount of your revenue is being managed and coming through your customers. You need teams to ensure that your customers are successful so they stay and they grow. It’s a revenue play. The right customer success teams with the right mindset and the right configuration will help ensure that is the case. You can’t wait for churn to happen. You can’t wait for the renewal to happen. You’ve got to figure out what are the leading indicators that will suggest the right behavior before that outcome becomes a reality. I don’t want to collect three years worth of churn data to tell you you have a problem.

[00:00:50.480] – Joran

In today’s episode, we’re going to talk about customer success. More specifically, how to scale retention to increase your BDB SaaS growth. My guest is Kristi Faltorusso. Christie is the Chief Customer Officer at ClientSuccess, a founding member at the Gain, Grow, Retain CS Community, a limited partner at a capital firm called Stage2 Capital, and she’s the host/co-host of three different CS podcasts at the moment. Overall, she has 13 years of experience within CS and SaaS, where she mostly helps SaaS companies to scale, drive, retention, and unlock growth. She created a lot of templates, playbooks, and resources around CS with practical and actionable advice. Really happy to have Christie on the show today. Let’s just dive right in. Welcome to the show, Christie.

[00:01:28.330] – Kristi

I’m so thrilled to be here. This is going to be great.

[00:01:31.430] – Joran

We just dive right in. If we’re going to talk about customer success, why is customer success so important for B2B SaaS founders today?

[00:01:40.190] – Kristi

Honestly, listen, the most amount of your revenue is going to be managed and coming through your customer customers, you need teams to ensure that your customers are successful so they stay and they grow. It’s a revenue play. The right customer success teams with the right mindset and the right configuration will help ensure that is the case.

[00:01:59.620] – Joran

Yeah, In the end, they need to protect the revenue to make sure you can actually keep growing.

[00:02:04.380] – Kristi

Yes. Some folks don’t want to have the customer success teams thinking so commercially-minded, but that’s the reality of it. We do the work that we do to ensure those business outcomes, and so that’s why it’s so critical that you have the teams in place to really drive that part of the business. Once you’ve sold a customer, now you have to make all those promises that happened in the sales process. You have to make that a reality. Unless your product is as simple to use, it’s going to probably take a little work, a little handholding.

[00:02:32.270] – Joran

Yeah, and you make a good point, right? When should you have a customer success department?

[00:02:38.520] – Kristi

When do you have the customer success department? Then when do you have the motions around customer success? Because as far as I’m concerned, the companies that get it right are thinking about customer success day one. You bring your first customer in the door and there is focus around, what did this customer buy, what are they trying to achieve, and then how are Are we going to make that a reality? So I think that those are two different things. People think, okay, we don’t have to worry about customer success until we have 100 customers and we’ve got X amount of revenue. No. You need to be thinking about the design and execution of it from the first time you bring someone into your organization, the first customer you bring on board. So there is a little bit of a difference there, and I’m hoping that more founders start to align with my philosophy that it is the day zero initiative. But listen, when you start to think about the infrastructure structure around customer success, when you start hiring support reps, when you start hiring CSMs, I think you get to a point where the founders can no longer support that.

[00:03:41.290] – Kristi

If you’re early stage, you’re a founder and you’re doing the sales and you’re doing the marketing, you’re doing the customer success, you will inevitably get to a capacity where you can’t do all of those things. When that model starts to break, maybe it’s five, maybe it’s 10. I don’t think there’s a number. There’s not a number of customers and there’s not a number of revenue because every business is different. If you’re selling enterprise software and it’s a behemoth to get your customers up and running and it takes a year to get it deployed and your platform is powerful and it’s going to do all these cool things, but the time intensity that it takes to help make your customer successful is going to dictate a little bit around when you need to scale the resources to support that.

[00:04:22.320] – Joran

Yeah, it makes sense. I already had one misconception about CS. Are there any big misconceptions people have when they think about customer success, especially with B2B SaaS companies?

[00:04:32.860] – Kristi

Oh, my goodness. I feel like everything is a misconception about customer success. We’re not support. We can own revenue. We can just be consultative. We don’t need to be technical, but we can be technical I think the big misconception is that there is a one size fits all. Organizations think about customer success as this plug and play, the way you might think about sales or demand gen. There are certain motions there that are just philosophically That’s always true. It becomes this templated model of you can do these things because once you figure out the equation, the input equals a specific output. Customer success doesn’t work that way. It looks different in every organization because everything is different your product, your buyers, the maturity, the market, your resourcing. All of those nuances play a big part in designing what the proper customer success infrastructure looks like. The biggest misconception is that there is one way to do it or that there a magic number or that there is a certain revenue. Those are all misconceptions. Those are all wrong. If you’re thinking that what you did at one company will work at another company, and if someone is selling you that, you’re going to fail.

[00:05:41.820] – Kristi

You’re going to fail miserably. I’m telling you that is true because I myself have failed trying to take that approach and saying, I built customer success at this one company and I was so successful. I’m going to take exactly what I did there and I’m going to apply it in my next role. The whole thing went up in flames. Do not do that. Heed the warning. It’s going to look different. Design for your customers, design for your product, design for the market.

[00:06:06.900] – Joran

Yeah, love it. I guess this is already one common mistake that companies make, right? When they probably want to implement customer success, they’re going to think about what are other companies doing, and then they copy it. Do you see any other common mistakes companies make thinking about customer success?

[00:06:23.240] – Kristi

I think the next big thing is the staffing ratios for it. You can’t have If you’re an enterprise company with enterprise-grade software that requires a high level of support and engagement to help make your customer successful, your CSMs can’t manage a hundred of those customers. You cannot expect a white glove service approach with structured ratios. I think that there’s this idea that if you have one body, that person can do it all. The reality is there’s so many different skills that are required to execute the different motions of customer success that you have to be very thoughtful around how you resource and how much you resource. For example, the person that you hire to be your first technical support rep, this is the person who’s going to answer all the technical bugs and questions about your product, that person is not likely to have the same skills that are going to be required to be an effective customer success manager or to be a successful account manager. The next resource that you would have aligned to helping drive the partnership forward, they’re going to be different. There’s this This idea that one person can do it all, that one person has all the skills and they should be able to wear this hat of I can context switch, and I can be really technical, and I can be really consultative, and I can be very revenue-focused.

[00:07:42.370] – Kristi

That’s the unicorn that doesn’t exist that we all believe or want to think that anybody can do it. Just remember, if you are staffing that way, they’re not going to be great at all those things, and you’re going to find landmines fast.

[00:07:54.670] – Joran

Yeah, makes sense. We’re going to dive into the mistake. Let’s turn things around. Let’s just start from the beginning. If people listening right now and they think, yes, I need to implement customer success or I want to start a department, what is the step-by-step approach? The first thing you said, think about it from day one, or day zero. What would you recommend people listening probably already have maybe a retention problem, churn problem. How would they go about it and think about proper CS, in your opinion?

[00:08:24.530] – Kristi

The first thing they could do is recognize that I was right and they were wrong and they should have thought about customer success on day zero. But since we’re already past that point, I think you need to focus on what is the current business objective. There are so many different stages of maturity when it comes to customer success. If you’re at a very early place where you’re just starting to get built out, you have to think about what is the current state and what is the objective we’re solving for. If the biggest gap you’re solving for is that you have a lot of customers who have a lot of product-related questions, great. Then we’re going to start by designing around support. If you get past that stage and now you have customers who actually need that handheld motion to support them from that sales process to proper implementation and onboarding and enablement, and then what does that ongoing support look like? Great. Then we’re in an early stage where we can be looking at the maturity of customer success through that lens. The big focus is to align and design around your current business objective.

[00:09:25.910] – Kristi

Some folks get it wrong when they think, We’ve got to build something that’s going to scale. You can’t be thinking about scaling something day one. You have to be thinking about solving for the current problem. Scaling is what happens when you get to a mature state where you have proven that the processes you’ve designed are effective and driving the right impact. But that takes so long. It’s the whole idea of crawl, walk, run, which is not a new philosophy. It’s how you would think about it in anything you’re designing. Let’s focus on that. What does crawl look like today? Crawl might just be, I need somebody who help get our customers implemented, get them deployed, get them up and running on our solution, get them enabled on how to use it, and then we can move on to the next thing. That’s usually the first place you’re going to start once you get past the technical support resources.

[00:10:12.990] – Joran

Then once you figure out what are the current challenges they run into, you help them one on one. Then you start walking, you probably create help center articles, you probably do all kinds of other things, videos, etc. Then at one point, you can start running when you actually know what problems they’re running into.

[00:10:29.590] – Kristi

Absolutely. The first challenge that I face when I meet with early stage companies and founders is that they have this ideal state of customer success that they want to get to. Everyone always says, I want to build a world-class customer success organization. And I’m like, great. Do we have 20 years because that’s how long it will take before your idea of perfect will actually come into fruition. So you have to be realistic around what is the business need today? What are the things that we need to get there? What are the resources? What is the technology? What are the motions? Something that’s something else that a lot of organizations fail to do early on is actually get access to the right data. Data drives everything. I bet if you ask your CFO, he will agree or she will agree. We want to make sure that we’ve got access to the right information a lot of companies today, even at various stages of maturation, don’t have good, sound, accurate, and current data. Early on, to the extent that you can get access to information around how your customers are using and engaging with product, be able to keep track of or have some place where you can understand how are they engaging with us.

[00:11:36.040] – Kristi

Even if it’s an Excel spreadsheet, and I always say the most powerful tool in the universe is Excel. It is widely under myself included, but I know the power of It, put things in Excel, even if it’s the manual tracking there. Getting information that you can use to drive the right behaviors is going to be a game changer.

[00:11:54.560] – Joran

Yeah, and that’s especially when starting, but also when implementing CS. I was head of customer We’ve seen success in my previous role at a company. We thought it was a good idea to personally onboard all the new clients coming on board, but then we figured out that the low-tier clients didn’t have an impact on retention. If they wanted to churn, they would churn anyway. We did not see any correlation between personal onboarding and churn in the low bucket, but in the higher buckets, we did. At one point, we decided to fully automate the lower-tier clients.

[00:12:26.600] – Kristi

You know what you used to get that? That information about your customers that empowered you to make that decision. That’s what a lot of companies fail to do. I cannot tell you how many times I have a conversation with someone who is, I think, I feel, no one cares what you think, no one cares how you feel, what is the data telling us? You don’t need a multitude of data. You don’t need all these different data points. You don’t need the day that they did this thing and how many people. You don’t need to get to that point day one. But what are some of the early indicators that would suggest to you, this customer is in a good place. They’re getting the value that they need from the solution. The partnership is working for them, and they will likely renew because of it. That’s the stuff you need to start to get a handle on early.

[00:13:12.230] – Joran

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[00:13:46.250] – Kristi

I think something big that a lot of folks do is that they don’t listen to the data. It is so easy, especially when you’re an early stage organization and you want to bring in new logos. You want to see new companies coming on board, number of logos count, revenue growth counts, year-over-year growth counts. Those metrics are important. They’re early indicators that there is a good market fit. It’s proven that your product is actually providing value. But when you don’t use customer data to inform all motions of the business, you’re going to have a problem. When you start to sell at all costs, you don’t set proper expectations, you’re selling to the wrong ICP, that’s going to drive impact later down the line. These are some early indicators and behaviors that we can control that will help us ensure Our customers are successful long term, they stay and they grow. A big challenge there is that we don’t use the data the right way. That’s something organizations can be more cognizant of. How do we inform the right motions earlier in that process, earlier in the journey? That way we’re doing the right things that will ultimately drive success.

[00:14:49.040] – Kristi

So I’d say that’s a big part of it where we start to get it wrong or it’s a little fuzzy for folks. They think we’re using that data around our customers to enhance the post-sale customer journey, when in reality, we should be using that to inform everything, even going back to marketing. You’ll learn a lot about your customers, especially with some of those early ones. What about your product they love? Where are they getting value? What are those strong use cases? What is the right persona? What’s the right industry? When you start to get those insights early, you should be feeding that back to other parts of the business. Your marketing team should be rallying around the ICP they market to. Once you’ve landed on a great industry or a great use case or a great persona, go all in on them. Don’t worry about the bigger TAM right now. Get that one thing right, get your flywheel going, and then figure out, Okay, great. Finance was the industry for us. Awesome. Once you nailed Great. Move on to healthcare, move on to manufacturing, whatever the case may be. But figure out some of those things early, go all in on that, and then start to watch, rinse, repeat.

[00:15:56.920] – Joran

Yeah, love it because you mentioned beginning, CS can own revenue, but in the end, if you don’t communicate to all the other different departments, then you might bring in the wrong revenue, and then you can do whatever you want within CS, but you won’t be able to keep the clients if they don’t actually get value out of your platform.

[00:16:14.800] – Kristi

Sadly, I see companies buying churn is the way that I refer to it as. They buy churn. When you make decisions to bring in new revenue at all costs when it’s not a fit, and you just make it work, or you miss that expectations, or you’re selling on future product innovation, which is the worst thing you can do, please do not do that. When that is happening down the line, you’ll start to see that maybe not the first 30 days, maybe not the first three months, six months. But depending on how long your contract term length is, you will start to feel that.

[00:16:43.340] – Joran

Yeah, because in the end, they will churn, I guess.

[00:16:45.960] – Kristi

It’s an inevitability that something will not work out in your favor. But you’ll come up with a hypothesis that will suggest otherwise.

[00:16:53.030] – Joran

Yeah. Maybe a good practice, what I did, for example, within the company is to give information back. It was based on data. You can always say sales is selling to the wrong client, but if you can actually put it into numbers, why are people churning? What has been promised to them? Where’s the misfit? You can put it in buckets, you can put the revenue against it, and then you can say we lost X amount of revenue because of these things.

[00:17:16.490] – Kristi

Absolutely. But listen, I think something else that folks fail to do is you can’t wait for churn to happen. You can’t wait for the renewal to happen. You’ve got to figure out what are the leading indicators that will suggest the right behavior before that outcome becomes a reality. I don’t want to collect three years worth of churn data to tell you have a problem. We could get ahead of it if I start to understand, Hey, listen, this customer, they didn’t have the right resources. They don’t have the right use cases. They don’t have the right infrastructure. They’re not on the right tech stack. Let’s start to share that information early. We don’t want to hurt someone’s feelings. We don’t want to make assumptions. But you start to know and can identify trends really early on. We need to be able to say, Okay, look, every 30 days, those 30 30-day milestones, whatever it is. It could be 15, 20. I don’t care what your milestone markers are, but 30 days, what is happening with this customer, especially when you’re early on and you don’t have your first churn, you don’t have your first renewal. We don’t want to wait a year or two years or three years to get or formulate a hypothesis on this.

[00:18:16.890] – Kristi

What are some of the things that we need to say, Okay, does this look or feel right based on what activities, what engagement we’re seeing, whatever those, again, the measurements are that you’re using, what are those leading indicators that will suggest X?

[00:18:29.210] – Joran

This is It’s almost like a best practice, getting the leading indicators, getting the trends, identifying what’s going on. Any other things you would definitely recommend companies do?

[00:18:40.530] – Kristi

I’m big on the democratization of data, which is making sure that all the data is accessible by all people to use and that they’re educated on what the data says and how to use it. The second thing, there needs to be closer collaboration between all of the different departments. I won’t even say departments because even early stage, you’re not departments, you’re people. You’re not teams, you’re probably an individual. There needs to be more and deeper collaboration around what’s working, what’s not working, and that needs to be happening early and often. Do not wait for team meetings. Do not wait to have a report. Don’t wait till month’s end. Have the ability to share insights and learnings in time. Now, what I am not saying is react to everything that you hear, see, read. But we need to be able to take those insights and digest them and start to figure out what are the learnings that can come from them. I say don’t react because sometimes, especially when you are at an early stage, you don’t know for sure yet because you don’t have the lagging indication, that data, to say that this will actually be the reality.

[00:19:40.300] – Kristi

But what can we take and interpret to help us formulate better business decisions So I would say that collaboration is going to be really critical. And then the other thing I would say is bring your customers into the fold. That doesn’t happen early enough in organizations. Your early customers should be part of what you’re building. They should be part of your They should be part of your product. They should be part of your processes. They should be part of your team. Bring them into those conversations. This should be something you’re designing outside in, not inside out. A lot of organizations will make a lot of assumptions about who their customers are, what they need, what they want. Why are we doing that? We know what assumptions do. It’s not good. That doesn’t usually drive good business decisions. So let’s be more thoughtful and say, if we brought in the right types of customers, let’s use them to our advantage and make them It’s part of this process. I’ll tell you, usually, companies and customers and those people who are early adopters of your product, they want that. They want to be part of building something.

[00:20:42.420] – Kristi

Pull them into that process, listen to them and iterate with them.

[00:20:45.230] – Joran

And real practical, what would you recommend doing? Creating a Slack group, putting them into some group, or talking to them one-on-one with all the ideas you have? What is something you would work with?

[00:20:55.940] – Kristi

Listen, I know everyone loves Slack. I’m not a Slack early. I can’t It’s too much. It’s too overwhelming. That said, it probably is a very great place for you to collaborate with your customers asynchronously. So you can do things like that. I’ve seen folks have like, I won’t call it a customer advisory board or a product advisory board because you’re too early for that. So please don’t use the nomenclature to misrepresent what this is. What is our customer feedback process? It could be once a month we meet with our customers to hear in a very formulaic way, what do you like? What don’t you like? What do you need? Basically, almost like a start, stop, continue framework, light version of that. That way we’re getting that feedback. It can be asynchronously collected, so you can have your customers send a Loom video. They can prerecord something and share it. You can invite them to a meeting so that there is that Q&A. Figure out what works best for your customers, not what works best for you. Just because you want to have a Slack channel doesn’t mean they want to be in a Slack channel.

[00:21:54.840] – Kristi

Just because you want to have a meeting doesn’t mean they want to have a meeting. Lean into your customers and really early start to give them options to design the things that make sense for them. If I was working with a vendor and they were like, Christie, we want to get your ideas and we want to throw you in this Slack channel, I’m panicked. The last thing I need is another Slack channel blinking at me, telling me I haven’t engaged. Lean into your customers and ask them what’s an appropriate way for them to share that feedback with you.

[00:22:19.800] – Joran

Yeah, that’s a good point. In the end, if you’re going to force things on them, they won’t do it.

[00:22:24.420] – Kristi

No, bring them into the bill. This is, again, so if the intention here is we want to collaborate with you to bring you in, Don’t change the focus by saying, But we’re going to tell you how to do that. No, the whole point is bring them in a way that they want to share the feedback to build what they need. It’s all about them.

[00:22:42.950] – Joran

I mentioned in the intro, you wrote a lot of playbooks, frameworks. I checked out your site before the call. Would you recommend people using that? Would you recommend people reading certain books if they wanted to dive into CS? What resources would you recommend to people?

[00:22:58.960] – Kristi

There’s a ton of resources available, whether it is certification courses like Success Hacker, Success Coaching. They’re one of my favorite partners. They do a wonderful job with education and enablement, folks that want to learn more about customer success. I have tons of templates and playbooks on my site. I just ask that people be very intentional around what they’re trying to accomplish when they’re diving into this or any of the books that are available, especially when it comes to books, because we know how long it takes to write and how long it takes to publish a book. I don’t know how outdated a lot of these philosophies become very early on. Take it with a grain of salt. You want to just understand that it can help educate and inform you, but it shouldn’t be dictating what you do. Even the templates and the playbooks that I offer on my site, they are a guide. I explain to people that they should be used as such. You should not be taking this and deploying it exactly as it’s built because it’s a template and it should be molded to meet your business needs and to meet your customers.

[00:23:58.060] – Kristi

Same thing with the courses you take. It’s going to help you understand principles, language, philosophies around certain things. You then have to take that and understand how to apply it to your business, even with the books you read. A lot of these books are going to say, Do this and don’t do that. When was the book written? If it was written in 2004, maybe it’s helpful to just understand the history of what happened in our space, but maybe it’s not exactly what you want to go do. Books that were written even a year ago may not even have AI mentioned in it. Technology changes so fast that even all of the resources that are available today will be outdated tomorrow.

[00:24:34.430] – Joran

Yeah, especially nowadays when things are moving so fast. I think maybe that goes into a really nice way to the next question. You might say AI or not. What is the biggest risk and opportunity within CS?

[00:24:48.490] – Kristi

The biggest risk is data. Ai is powered by information. When you are sitting on quicksand because your data is wrong, there’s no governance, it’s outdated, it’s inaccurate, it’s only partial data. You cannot use AI. If you’re using it to drive automations, if you’re using it to drive predictive analytics, if it’s built on bad data, it’s going to give you bad information. The biggest issue I have with companies who are like, move fast with AI and AI and AI. I’m like, stop. How’s your data? Nobody wants to listen to me and nobody likes that answer because everyone’s, Oh, innovateate and go fast and scale back and this and that. They love all the buzzwords. I see a lot of VCs pushing AI on their port codes. I will tell you, I love the excitement. I do. Trust me, as somebody who uses AI every single day, I love it. You have to be very thoughtful about how it’s being utilized. If you have bad data, it is garbage in. Pump the brakes, check your data. If it’s no good, start there. Now, the upside to AI, it will be transformative. I’m definitely a very proceed with caution and slow down so you can speed up because once you get the data right, sky’s the limit.

[00:26:02.660] – Kristi

Now, I don’t think AI is going to replace people in customer success. It is going to enable and empower them to do the job they were hired to do. Ai should be removing all the administrative overhead. It should be like, you have a personal assistant, and I don’t know about you, but my whole life I wanted a personal assistant. I am embracing that about AI. I think that’s the way people need to be thinking about it. The possibilities are endless. I cannot even tell you, every single day with AI, I come up with a new thing that it can do for me. I’m just talking about ChatGPT and some other basic tools. I use them every day. I will say it’s the best $20 a month I spend. In fact, take all my money because the creativity I drive from having these things available is so powerful. But that’s the upside. You got to be very creative with it. But again, garbage in, garbage out. I think that’s the pros and the cons there. Share.

[00:27:00.830] – Joran

Yeah, because if you don’t have the right data regarding your clients, you don’t know what actually causing churn because you don’t have the data around it. Then in the end, it can’t make any conclusions on it and you won’t be able to improve on that.

[00:27:11.670] – Kristi

The hypothesis will be wrong, I promise you, every time.

[00:27:14.390] – Joran

Yeah, Because I can clearly see some really nice things. In CSF, you have health score. I can clearly see that it could, for example, indicate having a lot better because it’s often super static on certain criteria in a business or even indicate if somebody is about to churn.

[00:27:30.100] – Kristi

If you have the right inputs around how your customers are behaving, then yes, it should be predictive in that nature. If you have great historical data that it can use for learning, that’s going to be really important. It’s all of those things you need to consider.

[00:27:43.010] – Joran

You helped a lot of SaaS companies to implement CS, and you work within a lot of SaaS companies. Maybe dive a little bit deeper because we make it sound so simple sometimes. But what are the common challenges if people do have the right data, if they do start working with CS, start hiring people within? What are some common things they will run into or could try to avoid now from them running into?

[00:28:07.630] – Kristi

Understanding how to segment your customers is important. I feel like that’s something that a lot of people don’t, or a lot of companies rather, don’t do early enough. They’re not very thoughtful in that. So whether it is by industry, whether it is by use case, whether it is by products that they have purchased, thinking thoughtfully about how you segment your customers. And I say that because a lot of companies, because easy, will segment their customers based on revenue. It’s very easy to say, these are my most strategic customers because they are paying us the most. But what that does is you’re organizing your customers based on you, not based on them. And it is impossible for you to design the right customer success motion to meet their needs if you’re basing it off of something that has nothing to do with them. For example, in the organizations that I work at, I will look at all of the different data about my customers. Is it industry? Is it resourcing? Is it Is it product that they bought? Is it use case? What are the things that make these customers the same that will indicate a specific motion has to help them be successful?

[00:29:11.010] – Kristi

So segmentation is where a lot of companies get it wrong. Revenue is almost always the primary criteria, so I’m going to ask that people stop doing that. Instead, think about who your customers are and what they need and group them that way. The second thing I would start to think about is, what does success look like by the different value propositions your company offers. The hardest thing you’ll have to do is work with your customers to define success. When I ask CSMs today, could you tell me, or even just hypothetically, do you have a very clear, measurable way to define success for all of your customers, not one hand will be raised because it is very difficult for your customers to articulate how they’re defining success. If you are working in marketing or sales where it is very easy to track input to output. If I do this with your product, it generates this amount of revenue, those are great. Those are just not for everybody. Not everyone has an input/output model that says, If I use your product, I see what the output is. It’s very easy to measure. So So if you’re working in an organization where that’s not the case, help your team understand how to define success and measure it based on the problems you’re solving.

[00:30:25.240] – Kristi

If it is time, if it is money, if it is some other metric. Then Then get very clear on how do we understand they’re using the product in the right way to drive the right outcomes. That’s something else that I think a lot of organizations fail to do, sometimes even at all stages of maturation, so not even just early. You have to get very clear on that. Something else that needs to be considered are what are the appropriate motions? Now, when I say motions, not all of your customers need to talk to you weekly, not all of them need to talk to you monthly, not all of them need to talk to you quarterly. What is the appropriate level of engagement that is going to ensure for their success. Now, things like business reviews. I’m sorry, I do not do them. I do not do an EBR, I do not do a QBR. It’s not because they can’t be valuable, but it’s because our industry broke the model. If you think about where business reviews originated, it stems from consulting. It was a great way for consultants to be able to circle back and demonstrate the value of the work that they had done together.

[00:31:25.270] – Kristi

Now, there is still value in that as the objective, but we killed the model when we started showing up to business reviews talking about ourselves for an hour, talking about our product and how you’re using it. No one cares. Now, and I say that because that is one of the many motions that you’ll hear a lot of people design around. We’re doing EBRs and QBRs. How are you measuring the impact of those meetings? You’re not. You’re measuring activity. We need organizations to move away from activity tracking and start to learn how to track impact, which is harder. I get it why nobody wants to do it because it is harder. But if you’re not doing that, you’re not tracking the right things. That’s what I say when I start talking about the motion. It’s what does the engagement need to look like? What are the conversations we need to be having? What are the metrics we should be looking to measure? Because you shouldn’t just be doing things to do things. I see a lot of leaders are like, Yeah, we meet with our customers monthly. Why? Do your customers need to meet with you monthly?

[00:32:22.500] – Kristi

Do they want to meet with you monthly? How are we measuring? What is the impact of that monthly meeting outside of the activity tracking that says, We met monthly? That’s what we have to move away from. That is another design flaw that is just baked into customer success, that we believe that we have to do certain things because it’s part of what we should be doing. It’s part of the work of a CSM. Instead of being thoughtful and saying, This is what my customers need them when they need it.

[00:32:47.850] – Joran

It fully aligns with everything you said, right? Don’t copy paste this framework from somebody else and then figure out what your client defines success and then build a playbook around it. How do they get there? I wanted to ask one final question before we dive into the summary questions. This is our summary question. If you had to summarize your best advice on customer success in just one sentence, what would it be?

[00:33:08.580] – Kristi

It’s going to have to go back to, If it works somewhere else, it doesn’t mean it will work where you are.

[00:33:12.620] – Joran

I think that’s perfect. Cool. I’m going to ask two questions regarding growing in BTB SaaS. You can make it fully specific towards CS or not, depending on how you want to do it. What advice would you give a SaaS founder who’s just starting out and growing to 10K monthly with current revenue right now?

[00:33:31.540] – Kristi

Pull your customers into your process in every part of it. Pull them into marketing, pull your customers into product design, pull them into sales, getting that feedback, pull them into customer success. If you design for your customers from day zero, I promise you the motions and the scalability of that will go infinitely faster. You will see much more success. You won’t have that bleed. So many companies right now are trying to solve for churn that they shouldn’t have because they didn’t address it early on. Yeah.

[00:33:58.430] – Joran

So really taking them into everything is going to make sure that they get the success they need, plus actually how to sell the next batch of clients. Let’s assume we pass 10K MRR, we’re going to make a huge step. We’re going to grow towards 10 million ARR. What advice would you give a SaaS founder here You have to figure out what works and scale that.

[00:34:18.400] – Kristi

It’s easy to build process and infrastructure that works at a specific period of time to solve a very specific objective. That is going to be and needs to be iterative. Just because you built something and it’s working today, what works at 5 million, won’t work at 10 million, won’t work at 20 million, won’t work at 100 million. So your processes and your infrastructure need to be iterative, and you need to continue to measure the success and understand when those moments where you have to pivot, when those occur. And it doesn’t happen at 10 million. It doesn’t happen at 20 million. I wish it was that clean and obvious for us all to say, Yeah, okay, great. We hit 20 million today. Let’s go back to the drawing board. It doesn’t work that way. So you have to have the right indicators that say and suggest, Oh, we You’ve gotten to a certain place where the process is starting to break down and be able to get ahead of it and start to design for that future state. There’s going to be certain parts that are going to be scalable, and you’re going to have to figure out how do you pull those levers at the appropriate time.

[00:35:14.930] – Kristi

I think that’s going to be the hardest part of going from that 10 million to that 100 million is understanding those pivotal moments and when to go on to that next stage.

[00:35:25.460] – Joran

Nice. I’m going to try to summarize why CS, first of all, protect the revenue. Think about it from day one or even day zero, as you mentioned. Common mistakes, there’s no one size fits all for CS, so don’t copy paste playbooks, processes, things like that. There’s no person who can do it all. Don’t find that unicorn. If we make it into steps, I first think about customer success from day zero, then get access to the right data, align and design around current business objectives. Think about scaling when becoming more mature, so crawl, walk, run. Figure out what the resources are needed, inform all other parts of the business, so really nail down your ICP and double down on it. Get ahead of your attention, so identify trends within the business and have the ability to share insights real-time, but don’t react right away. Bring early customers into the conversation, learn in what makes sense for them and then communicate that route. Segmentate your customers. Revenue is easy but wrong. It has nothing to do with them, so look at what your clients need. Educate yourself on CS, leverage the principles, but they will be out there tomorrow, so don’t copy paste everything.

[00:36:34.380] – Joran

Figure out how your clients define success and measure things based on the success they want and iterate your emotions around it. Again, bad data is bad information, so don’t use AI when the foundation is not good.

[00:36:47.180] – Kristi

You nailed it.

[00:36:49.010] – Joran

These are all your work. If you want to get in contact with Christie, how can I do?

[00:36:52.700] – Kristi

There’s two places you could find me. One would be on LinkedIn. You can search for Christie Faltruso. You’ll find me. Please add and connect there. I would love to keep me in contact. The other place you can find me is christiefaltruso. Com. My website has a ton of free resources, things that are available, things that have worked for me. I like to say that these things are tried and true, and I like to offer practical, tactical advice to help you build and scale your success.

[00:37:15.490] – Joran

We’re going to add your link to LinkedIn, to the website, to the resources, and probably a link to the podcast as well if you want to dive even deeper into CS. Thank you for coming on. For people listening, please leave us a review so we can beat the algorithms and let us know what what you thought of this show. Again, thanks, Christie.

[00:37:32.630] – Kristi

Thank you so much.

[00:37:34.540] – Joran

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 Reddit, feel free to reach well. But for now, have a great day and good luck growing your B2B SaaS.