Webinar + Transcript: How to Scale Customer Success from $0 to $100M ARR
Our latest webinar is How to Scale Customer Success from $0 to $100M ARR. The 45-minute webinar features Nudge.ai’s CEO Paul Teshima who, as a former SVP of Customer Success and Product Management at Eloqua, is one of the original evangelists for customer success and led Eloqua from $0 to 100 million in ARR.
Webinar Recording (45 min)
Webinar Summary / Transcript
I was Senior Vice President of Customer Success at Eloqua, leading it from start to post-acquisition by Oracle for $957M.
Questions for the audience:
- How many are billable? How many have a quota? How many have received a cape?
- A member of my team received a cape from a customer, because her customer thought that she did such an incredible job that she was a superhero.
- That relationship can be the most important part of being a CSM.
Focus of this webinar: a multi-stage Customer Success Maturity Model including different comp plans and strategies for different areas of your team.
- Get to product market fit.
- It’s not every single market segment that needs Customer Success. Depending on what’s there, another role may be a better fit.
- Most startups today and emerging tech companies, especially trying to get to market fit, should invest in CS.
- CS wears many hats.
- This can often even be as a Product Manager. Operate between UX, tech, and business.
- Key tools: Intercom and Full Story.
- Understand every click and every issue that a customer encounters in your product.
- Book recommendation: HOOKED: How to Build Habit Forming
- Setup campaigns in Intercom that allow users to flow through your product and create milestone moments.
- Push to find the overall solution that works for your customer.
- And start thinking about how you’re going to scale it.
- Don’t hire just a pure CSM. You need a multi-disciplinarian.
- Culture eats strategy for breakfast.
- Have CSMs variable comp weighted towards corporate goals. But also give them sense of ownership over their vertical or area
- Tools: CRM, CSP like Gainsight or Amity
- Still too early for an AM
- Working with early adopters who can become great advocates for you
Anatomy of a great CSM:
- Naturally curious – find out about the customer’s business
- Optimistic but cynical – get them to success
- Have domain – gives you credibility
- Great storytelling – tell stories about customers to drive new revenue
- We turned a monthly part into a storytelling town hall for our CSMs
- Then ran a 2000 customer event called the Markies
- Huge win point for how to make customers successful and build a culture around it too
Enable your Advocates:
- Get to know them
- Build them up
- Start small and attach it to something bigger
- Don’t put AMs on accounts to upsell them
- Build up customer support so CSMs don’t have to do it
- This is the hardest stage – take it and scale it
- Measure by MRR, customer count, net MRR… but how about average time for customers to be onboarded
- Value adoption process
- Shift variable comp from corporate to personal ownership
- Bigger focus on customer marketing and account management
- Start on multi-divisional upsells
- Significant focus on managing relationships at scale as part of your customer success strategy
- CSMS are going to be pulled in multiple directions – by sales, marketing, product, and services – because they have such deep customer knowledge
- If you can do it right the first time, you will have a 2-3x rate of success
- It is very important to successfully onboard a customer within < 30 days
- Otherwise, the customer is more likely to blame you for the issues that occur
- If you have a direct channel to services, or partners, make it happen
- Create a comprehensive roadmap for adoption
- Growth: find hunters that should be farmers – growing accounts.
- Renewal stage –– broaden and deepen your relationships. Don’t just have one relationship or point of contact. People move. You need to pay attention to accounts and go deeper. Track understanding. It is critical to understand where your time is spent in order to maximize customer relationships.
- Land on your “ideal” customer lifecycle
- Don’t stop the career growth of your CSMs, for example to other roles in the company.
- Don’t hire AMs without domain or product knowledge
- If you want to drive net new revenue, you need to focus on renewals and upsells. The cost is 5x lower.
- Best practices are now the calling card of a CSM.
- Same comp package.
- Document, train, and sell the value of the success machine
- Over communicating is still important
- Don’t stop storytelling about customer success
- Customers may come for your product but they stay for your people.
- Separate AM for customers? Yes. For certain account segments. If the businesses are complex and big enough. And only at the stage where you can grow that account 2-3x e.g. 1000+ customers.
- What ratio makes sense for Sales:CS? It’s more a customer ratio to CS. Also depends on average selling price. Can a CSM manage 100K of MRR? Could be 5-50 customers. But 100K MRR is a good benchmark to start with.
- We already have traction. Do we need a CSM for more growth? My answer is yes. Because they can even operate as a PM and do solution discovery. Hire a generalist CSM. They can help you shape your roadmap.
- Were you the general CSM from 0 to 100? I was a CSM for our first customers. Then I hired someone to take over the role. And I ran the CS, services, and support group – then took over product management.
- Does a CSM cross stages? Yes. Product Management. Then Product Enablement. Then Value Adoption. Finally, at the last stage, they are very best-practice driven, and are more of an outward facing CSM, often in conjunction with marketing.
- If CS owns renewals, who does the contract admin work? Sales or CSMs? CS! Sales will not do work on deals they aren’t getting comped for. But, think about the whole strategy. You can also comp sales reps for long-term retention if they land big accounts e.g. for the full year. We had great success with this.
- How does storytelling overlap with customer advocacy and case study creation? Lots of overlap, and I do believe storytelling is more effective than traditional case studies. We also invited other departments to join our events, e.g. marketing and product. It’s not only about success either –– it’s about the trials and problems. Read the book Made to Stick by Chip and Dan Keith.
- What tool did you use to manage quality relationships inside accounts? Self-plug – that is a Nudge.ai chart from Nudge.ai for Teams. We measure strong and weak relationships for CS and help people track and manage relationships at accounts. We wanted to automate the process of managing relationships from manually tracking it in CRMs.
- How did you promote alignment across teams on customer experience? There was some top down organizational structure – as I ran the whole support, services, and CS unit – but I would ultimately attribute it to culture. If a customer needed something, we bent over backwards to make it happen.
- What is the max number of customers for a CSM to manage? If you own quota, you can push for this internally. It also really depends on what segments you are in. I use a segmentation model to help determine this. I would generally go back to that 100K MRR number as a recommendation.
- How do you stop CSMs and AMs from stepping on each others’ toes? This is inevitable but solvable. If you’re in an early stage, I would hire a junior AM and relegate the AM to focus more on deal maintenance and admin work. But if you’re at the 2-3x upsell range and they’re still stepping on each other’s toes, that means the CSM likely has a strong selling personality. Ultimately rely on the CSM as the main point of contact and make sure that AMs are appropriately assigned to relevant segments.