Episode #26: A Deep Dive into Customer Success Operations - Stephen McBride
With apologies to red-headed step-children
For the past decade, the trend in SaaS has been to optimize for customer acquisition at all costs. Customer retention and expansion were a relative afterthought.
Now with many businesses facing the reality of massive churn, the chickens are coming home to roost. We can no longer afford to be indifferent to customer success.
Of course, I don’t mean to suggest that companies have literally had no customer success function.
But it’s rare to have a CSM that’s truly committed to your success—that won’t be satisfied unless you’re getting deep and meaningful value from the product.
(I’ve had a few, but they’re the exceptions that prove the rule.)
CSMs should be obsessed with customer outcomes. Instead, they often just show up at renewal time to upsell you on more stuff and on occasion prepare a fancy QBR deck to pump their own tires.
We need to do better and be more customer centric—and operations may be a key part of that process.
To explain how, Stephen McBride joins us today to discuss that third leg of the RevOps stool: customer success ops, and by extension, the discipline of customer success as well.
CS Ops doesn't get as much love or attention as marketing or sales ops. One of my past guests jokingly referred to CS Ops as the "red-headed step-child" of RevOps. But I think, and hope, this is starting to evolve.
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About Today's Guest
Stephen McBride is a Customer Success and CS Ops leader dedicated to helping companies grow better. His career has spanned in-house and consulting roles, and he’s spent over seven years in total at Hubspot, five of them as a leader in their Customer Success Org. He recently returned to the agency world with Go Nimbly as a RevOps Delivery Director.
Take-Aways
CS should be revenue generators, not a cost center
To succeed as a function, CS needs to be seen as a function that contributes to revenue.
This means being having an ability to close deals directly or generate deals that will be worked by sales.
However, this doesn’t mean that CS should sell. Rather, they should see themselves as consultants helping the customer solve their problems.
Those problems could be solved with work-arounds or possibly by a product upsell—the CSM should be the one to identify those choices and let the customer decide.
CS builds good faith for when something goes wrong
All customer relationships have bumps in the road (product issues, misunderstandings, etc.).
A great CSM relationship puts a lot of credits into the bank. This can help smooth things out when those bumps occur and reduce the severity of escalations.
Identifying the long-tail impact of CS is very difficult
Measuring the impact of CS on churn is difficult.
Because customers are in contracts, you won’t see churn immediately show up on a dashboard by removing CSMs.
The impact may only be felt months later, at which point it could be too late to easily correct.
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Key Topics
[00:00] - Introduction
[01:49] - Defining the role of customer success
[02:51] - Role of CS in a PLG motion
[03:37] - Strategies of a great CS team
[06:00] - CS strategy at Hubspot
[07:56] - Why do some big companies neglect CS?
[09:29] - CS as cost center vs. growth driver
[11:38] - Balancing the mindset of customer support vs. upselling
[14:09] - Defining the mission of your CS team
[15:36] - CS as a point of leverage in the customer experience
[17:28] - Impact of macro-economic factors on CS strategies
[20:06] - Identifying the impact of CS, factors you can A/B test
[21:35] - Scope and mission of CS Operations
[23:23] - CS Ops as a its own function vs. part of RevOps
[29:09] - Who should a unified RevOps function report to?
[31:52] - CS Ops vs. MOPS and SOPS
[34:42] - CS tools and systems
[40:19] - A best-in-class CS tech stack
[42:34] - Churn forecasting
[44:35] - Getting truly useful health scores
[48:34] - Reducing churn
Resources
Net Revenue Retention Hub - Go Nimbly - Go Nimbly's excellent hub on NRR and CS topics.