Strikedeck Radio - Episode 41

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In this week’s episode of Strikedeck Radio, Ed Powers joins Kristen for a discussion about the science behind how people make a decision to renew, as well as techniques that CSMs can use to engage on a deeper level with their clients. Ed is the Vice President of Customer Success for InteliSecure and has experience speaking on the topic of neuroscience and CS. Enjoy!

Strikedeck Radio is a partnership between Strikedeck and The Success League. You can subscribe on Apple PodcastsGoogle Play, and anywhere else you get your podcasts or follow us on LinkedIn or Twitter to get updates on new episodes.

Lessons Learned: The Importance of a Product-Led Customer Success Onboarding Strategy

Guest blogger Frederik Müller shares his experience with looping his product team into a redesign of the company’s onboarding process. We hope you enjoy his perspective on this critical part of the customer journey.

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By Frederik Müller

A successful customer onboarding is one of the most important steps in the SaaS world. As with many things customer success-related, applying best practices is sometimes easier said than done. Here at Klara, our biggest “lesson learned” with respect to customer onboarding was realizing that the product team, not customer success, should define our customer onboarding journey.

Our product team is amazing and has been a key contributor to Klara raising an amazing Series A round with an even more amazing investor. Even with all the best of intentions, it is easy for a gap between the product team’s vision and the customer success team’s implementation of the platform to open up and even widen over time. As a small, growing company with limited resources, our product team had always been focused on pushing the product to new frontiers. The customer success team, meanwhile, focused on developing and refining the most effective way of onboarding customers to our product. If we needed to invent workarounds for deficiencies in the product, so be it.

At Klara, the gap between the product and customer success team was caused by not having the product team lead our onboarding approach. Here are some of the key takeaways from our work to correct this issue:

The product team, together with customer success, needs to define the onboarding process

Having the product team involved in identifying key steps in the onboarding journey will ensure that the product is configured to deliver on the expected outcomes. Importantly, it will also help create very clear goals for customer success during the onboarding stage.

For example, prior to these changes, the customer success team measured a completed onboarding to not only include training and installation of features, but also customer usage of the feature up to a certain benchmark. This caused a lot of frustration for the CSMs because while they could control the training and setup of a feature, they couldn’t always control user adoption. As part of our work with the product team, we reduced the customer success team’s responsibility during onboarding to just training and installation of features. Now, every CSM can directly control the redefined onboarding process, and we are able to quickly identify and remove bottlenecks, further streamlining the process.

Product and Customer Success should establish an Onboarding Service Level Agreement (SLA)

Once the customer success team successfully completes the onboarding steps defined with the product team, what should the product team deliver? For a long time at Klara, the leading indicator of success was the number of patients that our clients communicated with using our platform. Understanding what an optimal level of usage should look like enabled us to create clear SLA: Customer Success will handle the training and technical implementation of certain features. Product will then guarantee that these features create an optimal level of patient adoption.

A clearly defined customer onboarding process will show the product team if the product is achieving the desired customer adoption levels post onboarding. Without a clear SLA from onboarding to product, it is tempting for customer success to compensate for lack in product adoption with human interventions, which robs the product team of a great learning opportunity.

Our experience over the past months and my conversations with others in the customer success community has validated my belief that product teams should continue to define the onboarding process. At Klara, we are hiring an experienced Product Marketing Manager who will jointly own onboarding KPIs with the CS team. A conversation with a leader of a 40-person CS organization drove the importance of these steps home to me. She shared that her team kept having to “throw bodies” at a product that was not driving the desired adoption levels. Because the KPI was only owned by customer success, the product team did not prioritize customer onboarding until the company realized that a weak Customer Success - Product alignment would stand in the way of the company going public. Don’t wait until then!

Need help defining customer onboarding in your organization? The Success League is a customer success consulting firm that offers consulting engagements that focus on onboarding as well as the entire customer journey. Visit our Consulting page more details.

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Frederik Müller - Frederik is the Head of Customer Success at Klara. He is passionate about Klara’s mission to revolutionize healthcare communication for everyone involved in the patient’s journey. As such, he has spent the last years researching how to maximize patient/user adoption of Klara’s platform and worked extensively with medical practices on streamlining their operations using better communication methodologies. In his free time, Frederik enjoys reading The New Yorker, cooking, playing sports, and traveling.

We've Made More Time for You!

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Before you get wrapped up in the holiday busyness to come, be sure to book your CS Leadership or CSM Training program classes! Starting in January 2019, we will be proudly offering two (2!) time slots for all of our classes, allowing for greater scheduling flexibility for those on the East Coast or even in Asia Pacific time zones as well as our Pacific Coast friends.

Sign up for any of our CS Leadership or CSM Training classes and pick which time works best for you from the following options:

9am Pacific / 12pm Eastern

-OR-

4pm Pacific / 11am Australian Eastern

Accepting sign-ups now!

When to Hire Your Next CSM

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Since we’re in budgeting season right now I thought it would be a good time to write about how to plan out your 2019 hires. You’ll be much more likely to get headcount approved if you have solid logic and a great plan behind your request. Before you get started on this step-by-step guide, you’ll need 3 items:

Customer/CSM Ratio – First, you need to have a customer/CSM ratio for each of your customer segments. If you haven’t done this yet, here’s an article I wrote a few months ago that describes how you can arrive at the right ratio for your company, team and segment. There is no one-size-fits-all ratio, so you’ve got to do this work yourself.

Sales Plan – Next, you need to know how many customers to expect month by month over the next year. Generally, your sales leader will either have this planned out in terms of number of customers and dollars they represent (ideal) or just in terms of dollars per month (less ideal). If it’s the later, you can still arrive at the number of customers expected by dividing the total by the average deal size.

Churn Rate – Lastly, you need to know how many customers you’ll be losing. Use your average monthly churn rate to start with, and you can apply seasonality if your churn rate changes over the course of the year, or reduce the churn rate over the year if you have active churn reduction initiatives in place. Once you have these pieces in place you can start to build your budget. Here are the basic steps:

Step 1 – Set up your plan using a spreadsheet. Across the top, list each month in a column. Down the left side list Starting Customers, New Customers, Churned Customers, Total Customers and # CSMs. Also create a section for your Customer/CSM Ratio and Churn Rate. Here’s what it should look like to start:

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Step 2 – Add your Customers/CSM Ratio and Churn Rate into the spaces you’ve created for them.

Step 3 – Add the number of customers you’ll be starting with in January. You’ll be making an educated guess, but you can fill in actual number once the end of the year is in sight.

Step 4 – Add in the number of new customers your sales leader is estimating your sales team will be closing each month. After steps 2-4, here’s what your spreadsheet should look like:

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Step 5 – Use your Churn Rate to calculate the number of customers who you expect to churn in January (Starting Customers x Churn Rate). Then calculate the Total Customers you’ll be left with at the end of the month (Starting Customers + New Customers – Churned Customers).

Step 6 – Carry the January Total Customers number up to the February Starting Customers field. Then repeat step 5 for February. Keep going until you’ve filled out all of the months of the year. Once you’ve completed steps 5 and 6, your spreadsheet should look like this:

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Step 7 – Calculate the number of CSMs you’ll need each month by dividing the Total Customers by the Customers/CSM Ratio. Once you’ve finished this calculation, your spreadsheet should look like this:

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As you can see, according to the math you should add a CSM in March, May and July. Seems pretty simple, but I want to note a few things:

  • If you have segmented your customer base, you’ll have a different Customers/CSM Ratio and Churn Rate for each segment, and you’ll need to perform this calculation separately for each segment.

  • Sometimes, your sales segments and your CS segments are different. If that’s the case for your company, work with your sales leader to come up with a New Customers number that makes sense for your CS segments.

  • This plan shows when you need someone, but it takes time to hire and train a new CSM. If you need someone in March, for example, you should probably be recruiting now. Work with your HR department on a timeline.

  • This is based on averages, estimates and plans. As you go throughout the year you’ll replace the planned numbers with actual numbers. That might slow or accelerate your hiring needs, so review the actuals on a monthly basis and adjust accordingly.

  • If you don’t have money to hire as quickly as your plan says you should, you need to revisit your Customers/CSM ratio. Look for ways to increase this ratio by scaling back expectations or increasing automation.

Having a math-based plan for hiring CSMs will give you credibility with your finance team and increase the likelihood of your headcount being approved. Have fun playing with this calculation, and good luck with budget season!

The Success League is a customer success consulting firm that offers training and coaching for leaders. If you need help with challenges like planning a team structure, building a compensation model, or hiring the right CSMs, check out our coaching program at TheSuccessLeague.io

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Kristen Hayer - Kristen believes that customer success is the key to driving revenue, client retention and exceptional customer experiences. Her areas of expertise include developing success goals and metrics, designing the optimal customer journey, selecting technology, training teams, and building playbooks. Prior to founding The Success League, Kristen built and led several award-winning customer success teams. Over the past 20 years she has been a success, sales, and marketing executive, primarily working with growth-stage tech companies. Kristen has her BA from Seattle Pacific University and her MBA from the University of Washington.

Join Us for SuccessCamp, SF Bay Area!

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Didn’t make it to SuccessCamp, Seattle last week? Don’t worry…The Success League will be at Customer SuccessCon West 2018 heading up another SuccessCamp in the San Francisco Bay Area at the end of November. Our CEO, Kristen Hayer, will be leading a special add-on session of SuccessCamp for CSMs and CS Leaders directly before the conference. As a success camper, you will have the opportunity to learn together with people from other companies about the following:

  • Planning and asking great questions to uncover customer values

  • Setting goals with customers to drive toward business outcomes

  • Building relationships with key executives and budget owners

  • Talking about both positive and negative results

  • Adding value to every customer interaction

When: Thursday, November 29th from 8:30AM-11:55AM Pacific
Where: Hotel Shattuck Plaza, 2066 Allston Way, Berkeley, CA 94704


Click here for more information and here to purchase tickets.

Looking forward to seeing you!