Customer success pipeline stages for building services

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so today we're going to be talking about how to build customer success into a profit center so for those of you who may not uh be familiar with this there are many organizations and not a ton but there are some that have successfully created a framework on how they are charging for customer success so think about it no longer as a cost center this is actually a profit center and so today's guest speaker is page musa who is going to join us today he is our svp of customer success and renewals at lakeside software and so page welcome to our webinar series today thanks christy thanks everyone for uh having me super excited to be here and talk about some of the journeys on how to monetize customer success it's definitely something exciting to do that has some great benefits for client success teams and for organizations in general so i'm looking forward to sharing some of those best practices yeah when we thought about this topic there is nobody that could fill your shoes on this very one i know that you've been successful doing this and not one but a couple different organizations so we're excited to hear all about how you've done that and the success you've driven for your team and your business so i will pass it over to you i'm gonna stop sharing my screen and uh let's get started sure let's get there so i am going to share the presentation and we can go from there um this is really about how do you monetize customer success right there's a a lot of us have started customer success organizations and you definitely hear about spinning them up and they end up being a cost center cost of sales and so forth um throughout my career i've been in customer success pretty much my entire career it was how do i do this so that i have my own p l so that i don't have to go to our cro or our ceo and beg for funds to hire more people to scale out something we all know really helps our customers renew at a higher rate and expand at a higher rate day in and day out so just way of introduction you can all call me page my name is benjamin you can call me peg uh i started in customer success in 2006 believe it or not um i think we could have probably trademarked the title customer success at that point and i'll never forget getting on one of my first customer calls where my title was customer success manager and the customer literally on the other side of the phone uh said to me wow what's a csm that sounds like the biggest bs title i've ever heard what are you gonna do to make me successful and that's how the journey really started for me and customer success um so that was a while back and now of course we all know customer success being one of the most sought out titles in the industry and hired for today um just a way of intro i worked at a company called integrity interactive a really global compliance company grew that team over time we were acquired by sei global the last about nine years i spent at a company called a software security company called their code grew that team to about a customer success team about 230 folks uh far north of 200 million in product arr and actually over 50 million dollars in cs business in profitability which was great uh that's how the team was so large and how we made the organization so successful uh that organization acquired three times over my nine years there most recently i've joined lakeside software right here in boston massachusetts where i reside with my family and that company we're taking off and growing very rapidly and we've already started to monetize customer success here taking it from a cost center to a profit center and really building out the customer success team and for me that umbrella includes renewals customer success engineers tech support professional services ops and enablement and that team currently is about 63 folks with a plan to double that team over the next 12 months so just for anyone who's wondering what lakeside does just real quick uh pretty fairly simple we monitor endpoints and i mean all endpoints when it comes to help desk we could tell you what's going on with your machine whether your cpu is low while you're running out of memory if your zoom's been running for five days we can tell you what assets are being utilized within your company's organization what apps are being used what version are people on how do we move them we help with vdi projects we help with windows migrations you name it at the end point we can basically tell you what's going on and we help organizations really at the end of the day improve their employees digital experience and more relative than ever as more and more folks are going remote and why is digital experience important you can just see it right on the slide organizations with highly engaged employees 270 percent more working hours per employee 59 percent less join over 21 greater profitability and believe it or not 30 of an employee's experience is all the machines we're working on today right so if you're having a hard time with your laptop you can't log in this isn't working your computer's not working your keyboard's not functioning we can tell you about all that proactively so organizations can fix it and make sure your employees are having a great experience so with that said this is how the lakeside customer success team is set up we have customer success managers who are really the trusted advisors working with our customers to really mature their digital experience uh process we have customer success engineers who work with those customers as well to make sure the products installed up running and technical excellence making sure we're working on the right use cases if you think of a tool like client success you would have a customer success engineer who would work with you on your success cycles or your policies or making sure using each product each part of the product properly and then of course we have technical support for break fix and then the other two teams we have is an internal ops and enablement team really driving operations on tools like client success sales force making things up and running with our csat surveys and of course working on building certifications and enablements for our customers on our products and we have a renewals team whose main job is getting in front of customers six months in advance to drive and execute renewals through the process so this is the whole organization today a very similar setup to what i've had in my past organizations and really the question that always came up is so how do you monetize this team because if you look at this team if i just told you again lakeside not a huge company about a third of it is customer success man that's a hefty cost for the organization and of course you meet with your board you meet with your ceo and they say why do we need so many people can't the product sell itself this is a big cost against our profitability so how do you get against that and if you think about it there's a lot of things you can do and i'll walk you through that just at a high level just sharing these so you have them in your decks kind of what are the roles and responsibilities of each of these groups most of you know most of these but customer success doing kickoffs use case planning making sure customers enabled online setting up road map reviews regular status calls with customers making sure we're delivering roi metrics to the customers doing 30 60 90 day plans and really defining roles and of course the success engineer driving that technical excellence with demos dashboard setups environment health checks and so forth and again the journey and thanks to christie client success some of these uh journey uh are from your organization aligning execute realize and advocate and what do you do in each of those with those different touch points so big questions why do this why monetize customer success and then i'll walk you through the journey of three different ways we i've done it before with my teams and really depends on the maturity of your organization on which one's the best one to step into so why monetize well first can you build your own p l and control your own journey man if you can do that there's no more going back and saying why do you need three people is there expansion what's the renewal rate it's more nope this is dollars we have this is how many people we can put on the team by the way customers are paying for this level of service so we have to deliver it um just i talked to it about before my last organization 50 million dollar p l we built out of the customer success organization with 40 margins um really i could tell you this we got acquired and i never got one question about the team size because if you look at our stat sheets there's nothing to really ask about the team it was a it was a beautiful thing and we're actually moving right towards that same journey at lakeside um we've closed close to 2 million in business at lakeside and customer success in just several months since i've started from literally 25k we closed in q1 of this year to where we are now um how do you get buy-in uh really cs packages for me the buy-in is you get buy-in from sales and the customers and your internal group because if you build the packages it actually builds an exact roadmap of what your customer journey is and more importantly what you'll deliver against that journey so no longer is there a question about what are we going to do as a cs team it's oh no we sold tasks and obligations we're going to deliver against and we're going to do that and that's how you get buying internally value message to me it's always making sure we can drive positive business outcomes for organizations around the software your organization sells right lakeside isn't a service company we are a software company with the service in the cs branch that helps make sure that we're successful there does this have an impact on subscription business yes you do not want to build a big cs monetized group where most of your bookings end up being cs you actually have to work with your cfo to say what's the acceptable threshold where what mix do we want to go to market with from what i've seen most cfos will tell you 15 in services and 15 to 18 in services or cs monetization versus the rest being product so 85 product why of course product is close to 90 margins versus cs depending on how much you sell it for and deliver against you'll be break even and then over time you'll make it a profit center and really who shouldn't do this if you have a super easy product where it's instantly on and really there's no value touch points outside of checking in with the customer it's going to be really hard to sell a cs package but we all know most products aren't like that most products there are many different touch points like we just talked about where customers more than happy to pay for being kicked off having regular check-ins with a customer success manager having a success engineer helping them with live demos and engagement and driving that forward in this day and age everyone wants to buy some kind of package to go with their software to enable their success of that software so let's talk about the journey um and i'll walk you through it and it starts all the way back in 2011 and through where we are today so 2011 uh there was an a la carte approach we used on monetizing 2016 we moved to a bundle approach and 2019 beyond it's a value delivery approach so i'll walk you through those different approaches if you think about the a la carte approach um what i had done in this organization was we had what we called security program managers truth be told they were csms who went really deep on our largest customers and we charged for that we told customers if you want that white glove treatment we'll charge you for a csm who will work with you there then we had other csms worked on everybody else but it was free and they weren't renewal reps but they really were discussing to customers what they could do to get those business outcomes then we sold a la carte separately advanced tech support because we all know we have break fix tech support and then there's typically other things your tech support team does that you should be charging for whether it's writing api scripts for your product or building custom dashboards for your product for the customer and then of course we had some consulting things we did for customers and if you actually step back and think about the consulting gigs you do for your customers typically there is about 50 of activities you do nearly for every customer so why not package those activities and make them repeatable and really we had six choices of those great fix was for all customers and everything was sold a la carte so i'm going to show you what those examples look like but before i do i'll tell you a little about the good and bad of the a la carte approach um attach rates were only for our largest customers so our smaller ones really didn't pay for csm activities csm function was stood up and showing good outcomes but customers weren't ready to pay for it and there was huge value in taking some of those things we did as a ps organization or consulting or services i'm making them into a subscription business where if a customer needed those things we were readily available to provide them so what was bad about it it was hard to report on what we were doing it was really only focused on our largest customers csm was still free and i would tell you it was a struggle to get more of those free resources even though i could show our renewal rates were going up our net retention rates were going up it was still well wouldn't that just happen without the csm large conversation to have right in the boardroom customers weren't buying exactly what they needed we kind of did this all a cart approach so it was kind of like taking a child to a restaurant with hundreds of things on the menu and they're probably not going to pick the right thing because it's just too much to choose from i guess you could put an adult in that situation too and probably do the same and so that was not great our incentives didn't really align and procurement discussions were brutal because we were selling one of these one of these in one of these so you get the procurement they say why do we need all of these different cs packages and services to go so just to show you what this looked like you would pick a tech support package one of these and as you can see you get unlimited break fix at the top but the advanced support was where the value was it was things like onboard assistance well you're going to pay for that upload assistance helping them whether it's an upgrade an upload or integration talked about integrations and apis or helping them compile certain things they need to do for your product so mainly every customer would say yeah i need some of that advanced support my team's going to utilize it i'll pick one of these and then we would tell the customer okay now which cs package do you want customer success package we have these ones and the first one was customer success management free and guess what nearly everybody went with that because they didn't know what they were paying for our largest customers would buy some of the things all the way to the right and you can see the different stages we had at that point again we're going way back here 2011. somebody would say hey you know what i do want to kick off meeting milestones 30 60 90s i do want to define roles and responsibilities i do need best practice workshops i do need regular check-ins when i'm executing i don't have the resources to do this and you would be helpful so some of them would buy these by the way just to put in perspective our pro cs package sold for 300k a year was pretty much a dedicated csm i don't think if you look at the items on the left anybody on this call couldn't say that there's a bunch of those your csm does today where you could build out kind of a menu where you charge for it so that was really the a la carte approach then we said is this still working there's a lot of goods but there's just as many bads so how do we make this simpler because we were selling those but it wasn't great so we went to a bundle approach we said hey why are we selling these all differently why don't we take the csm some of those great things consulting does some of those great things advanced tech support does and bundle them into packages where somebody just simply says that's the one i want and there was six sizes in this scenario all csms were charged for because we built small packages to large packages for different customer sizes based on how many licenses they purchased you have to look at your license type to figure that out we added the cust smaller customers brake fix was still for all customers and pretty much anything that didn't come in the six packages truth be told we almost stopped doing it because what we realized was these six packages covered 80 if not more of what customers needed and we would start there and if they asked for another thing or two we would just say great we'll just add it and we'll just do it for you we're not going to go through that so the good was our tax rates were crazy through the roof um we start to attach to every deal it was a much easier conversation with procurement all you're saying is here's your software and you picked one bundle package to go with the software csm was paid for sales loved it there was no more big menu a la carte they could stand in front of a prospect and typically they wouldn't even show all six bundles they would say here's the two bundles you get to choose from because you're this size customer which one do you want to go with and we got to the point where our pitch became you have to have the cs package go with the software because we want to make sure you're successful our tagline really became you don't buy us you hire us and so you were hiring us as a software provider and a cs provider we increased bookings and margins customers got all the core services they need it was no longer they missed because there were so many items on the menu and the incentives were very aligned to what our teams were aligned on csap product usage billable utilization um the bad parts uh and i'll show you why a lot of it became focused on hours of delivery it was hard to get the right mix per bundle we were more talking about hours of delivery than we were talking about value delivery hence while we'll talk about value being next a lot of our customers were under utilizing their packages now this could be good and bad right when you have breakage like that it means you sold something they didn't use it here is the beauty of these packages and i didn't mention this on the first slide or this one and i should have these are all subscription services packages these are not use them like professional services and we count the hours it literally was hey you get 15 hours a month you use it or you lose it there's no rollover so finance love these packages because you could actually treat them just like arr you were just running rate every 12 months if somebody bought 120k package we even rolled the hours every month there was no rollover you use it or you lose it some customers would ask can i add a special term that says i'm gonna front load the hours sure but guess what from a revenue collection standpoint you are taking of that 120k 10k a month because you were using it or losing it and it was a beautiful thing and it became true arr through our subscription business for all of the help i'm describing here so there was no if they were underutilized they don't pay you like a professional service no these are called subscription services you use them or you lose them over a 12-month period and by the way our renewal rate was nearly the same for our product as it was for the subscription services so they ended up proving out that the cs subscriptions once the customer knew their csm they knew their customer success engineer they knew they had tech support and advanced services they didn't want to get rid of it they just saw too much value in what we were delivering so i just want to show you what our tatch rates look like when we did this the first box is the beginning of 2018 the second box is really the end of 2018. look at our attach rates for 50k and under customers 50 to 100 100 to 300 we went from 2 9 and 42 to 29 55 and 78 in under in under 12 months this was to an existing base that previously was hardly buying any cs and we were able to go in front of them and say hey we know what can help you out to drive you forward and so our attach rates went from 58 to 84 on our customers in literally less than 12 months it was amazing by the way by the time i left this organization we were in the mid 90s on our tax rates we basically sold them to every customer so what did these look like super simple view you had six bundles you had your customer success manager advanced support security consulting you had activities that you would get in certain amount of hours every week or every month that rolled off and again they didn't roll over so you used it as a subscription business and they would come in or go away and it was again these packages the standard started at 3k all the way to enterprise at 200 enterprise plus at 280k so you could literally sell these from your smallest customer to your largest customer and mainly we sold the premier premium and premium press and you can see we had max number of applications or licenses that customer could have so sometimes we had customers who would buy 600 licenses we would actually sell them two enterprise plus packages maybe even three so this was a beautiful one to put in perspective this is what we're selling right now at lakeside 2. we weren't ready for the value discussion yet which i'm going to show you next so please note i'm not telling you you should go across the journey and go all the way to the right you should think about which one of these journeys is right for your organization and again i just started lakeside of under a year ago we've sold a lot of these and we've sold packages that more look like this than anything else one final note i'll make is again we're all in this together we're all part of cs or sales organizations look at the items on the left i can guarantee you i know uh client success delivers a lot of the things on the left to us um as a customer program kickoffs milestones 30 60 90s regular status calls helping to build standard metrics and deliveries setting up program goals regular ebrs all things that customers are willing to pay for if you set them up in the right packaging so i'll move on to the last one and then i'll make sure we leave time for questions is we decided to say wow can we make these even better like these are sticky but man the bads were i'm gonna go back a lot of people got fixated on those hours at the bottom oh well we only use four hours this month or we only use two hours should we move up should we move down and it became a lot of back and forth when we actually averaged it out we had nothing to lose by saying there were no hours to worry about and that all you have to think about is what do you want us to deliver to you what we realize is most customers don't want to just take up all of your time some of them do and we all know we have those customers where they take up a majority of the time because they're the loudest and they need the most help but actually most customers want to be self-serve and so you get them the right outcomes and they're willing to sign up for that so what we said was man can we take this down to three packages and can we put some of these things together again consulting support customer success can we focus on outcomes instead of hours like purely outcomes let's not even talk about how many hours they get can we pack more value into this can we adjust some services incentives to say hey customer success team if you help us move these packages you get a spot bonus you get this and so forth can we help them sell more supplements of those packages how do we bring in and again now we're hitting 2019 more digital experience into these packages so it's not only you're purchasing a bundle of people outcomes but you're actually purchasing a bundle of digital outcomes as well so access to your customer community portal right access to regular webinars and demos on your product and i'll walk through some of those things we did and pre-sales support how do you boost some of that to help drive these and so here's some great things that happened when we went down this journey we created these with sales and so we sat down with sales and we literally i remember it was like a war room we had hundreds of stickies on the walls and said what are the things customers tell you they need from our cs team what do you hear the most what are those outcomes don't worry about hours don't worry about joe versus susie or who's going to deliver it i just want to know what do customers actually want guess what we did the same thing with our customers i literally got on 40 customer workshop calls with my team and we said hey you use our product what do you actually need help with and they'd be and they would do this they would say well joe helps me with this and susie helps me with this but i don't know why i care who helps me this is what i actually want to accomplish and so what we actually learned was they weren't even stuck to the people that they were attached to it was more they just wanted the outcome so when we were saying you get this from a tech support and you get this from security consulting you get this from your csm it was actually confusing them because suddenly they were like why do we have so many different people they were like i just want to know that when i want a status call i can have a status call and so it was really interesting and eye-opening to us because we always were like well they love you know lucy we know lucy has to stay on the count we were wrong they liked lucy a lot but they were actually more concerned about the outcome than they were the people or the hours so we thought about less hours and more outcomes how do we do track these easier how do we increase bookings and margins while doing so and how do we bring in the digital experience and all that was goodness so some of the bad was you know we had to transfer a lot of customers again we had great attach rates on that last packages so now we're saying hey we're crazy enough to say we're going to take these great packages that are attaching and actually move every customer and we did 2 300 customers we moved transferred we're going to monitor and upsell start to become difficult because now what are you up selling if there's no hours to track right you're just delivering outcomes but at an org we also knew deep down we were a software company did we really care about upselling cs we just cared about there being cs involved in accounts to drive their success to drive their renewals to drive their net retention and so we really have to leak deep in our hearts and say yeah this isn't about upselling this is about just landing attaching and becoming super sticky so this is how simple it got and by the way these were priced differently on the other packages i told you they were 3k all the way to 280k these were just a percentage of your product cost so if you went with the standard you literally were spending 100k on product 10k cs package got attached to it it was a standard one and you can see anything with a solid circle you just got that you could have a kickoff ten times if you wanted we don't care you could use our verified program you could use our community very simple to do what was what wasn't included were certain features that our smallest customers didn't want they didn't want program management consulting they didn't want cs consulting what you wanted some features of those are the open circles and those open circles were ones where you would go ahead and say wow okay on these open circles i just need three sessions of those this year or i need 10. well i need 15 and those were different types of sessions and those were more the consulting things that we would have brought into tech folks for well let me tell you something we never talked about who would deliver these for you we never said it was going to be a csm versus texas war versus advanced consulting we just said here are the outcomes we know you want working with us to be successful you're going to need a kickoff you're going to need planning you're going to need some consulting on getting this working you're going to need help with integrations you're going to need help setting up your policy you're going to need help optimizing your program through ebr's where we come and consult you on that you're going to want access to our community site and by the way that comes where the digital well you can give that to everybody at literally close to no cost to your org and so super simple converted your customers got these attached and it was beautiful by the way sales loved these because it was such an easy attachment it would just say hey you know what mr customer let's talk about what outcomes you're looking for well i actually think and this is just like selling a car you're gonna have your low end your medium and your high eighty percent of customers are gonna go towards the medium right some are gonna go towards the low and a few are going to go to the high and we ended up attaching these getting them in there and really driving a lot of success so i'm just going to give you some takeaways and then we'll open it up for conversation bundling makes it a lot easier and don't worry about functions just outcomes month over month run rate is important to put in the language that your outcomes will run month over month or your hours will run a month over month and expire monitoring usage is important for upselling and setting expectations focus on outcomes rather than hours if you can but again it depends where your company is with their maturity scale services through repeatable methods whether it's tech or community we used to give customers individual demos because we had one where and there are a lot of end users we took two people in tech support set up weekly demos on a webinar our attendance rate was through the roof and customer success managers and customer success engineers if they ought to ask for a demo we would say oh great there's a demo of that product line on tuesdays and thursdays at these two times you can join them anytime suddenly we were taking something we used to do across like 80 people moved it to two an hour of their time a week and just repeatable customers loved it because they would get on and they would be able to hear the demo ask questions and we you know we never had to share who anybody was if they didn't want to uh sales training is a must don't do this in a vacuum you're probably not selling these somebody else is selling them on your behalf and so how do you work with sales with your cro with the vp of sales to bring in them with buying this say yeah we could sell that if you if you package it the right way and um don't just go live we did a lot of incubator programs what we did was we moved 15 customers we tried the packages with them did they like them that did not we did a lot of research before rolling these out by the way it was a big risk to go from our second level package or third level financially too so we actually did a ton of financial metrics to say hey if we move these customers from these old packages to these new value packages what level could they end that and we would put two levels we would average those out and say at the end of the day we actually saw a net increase of over a million dollars when we said we would do that and our margins remain the same so that was really exciting and again when you think about it how do you start to bring in some of those digital aspects that are almost free wins you know entitlements community tech support weekly demos knowledge base you can add all these as value things customers get with your cs package it's not just people it's all of these things customers ask for all the time workshops we used to do monthly workshops but it was one person doing the workshop on the product so if you were workshopping a policy it'd be join the client success monthly policy workshop great conversations run through our community website and so forth so i'll leave it at that to say there's a lot you can do that involves folks and a lot you can do through a digital experience but it's really how do you figure out what value is to your customer the hardest part is the graphic the bar on the left what is value to your customers where they're willing to say yeah i'd pay for that yeah that's important enough that i pay for it and unfortunately for a lot of cs awards you end up doing this stuff for free and you don't realize your customers absolutely love it and actually would pay you for it if you just had to ask them up front or package it for the sales organization um so that's what i had for today hopefully it was helpful and it was quite a journey we went all the way back a couple decades and moved forward from there but um i'm hoping this was insightful you got some good information and i'm happy to take really any questions that might come up as this was awesome i i myself took a bunch of notes and i won't capitalize on the fact that you're our speaker and ask all of my questions selfishly i will i'll i'll save mine to see if we can get through some of them first so there were a few that came through the chat so we'll start with those and then we'll shift over to q a um so edgar had two questions uh first was he wanted to know how you segmented your customer base and the cm the csm to cse ratios so you talked about customer success managers and engineers what was the ratio how did you determine that yeah sure so what we ended up doing was uh twofold um i've always thought about at least my segments as small mid-market small big and then enterprise um and so for me small is the customers and typically truth be told it's usually about 25k or below um that you look at and these obviously i've worked for companies that have grown to larger enterprises over time um so what i did was take our customers and say where the dollars fall actually and that's where i segmented customers um and the reason i say that to you is quite frankly to me cs's job is very simple protect the money like if you're asked as a cs leader what your job is of course to make your customers successful in csat and all of that but let me tell you i've written four point eight out of five season and had terrible renewal quarters and let me tell you that doesn't land with anybody oh i'm not supposed to swear here i don't think uh so for you you have to think about how do you protect your money i could tell you most organizations at least i've been at if you look at your customers over 100k they probably make up 80 of your revenue so the way i think about is 80 of your resources ended up there um and over time as you build out each market you start to bring in more resources down a segment down a segment and build it that way um same thing with the ses and so to me i always tell my team hey you know what if we don't lose one customer over 100k this year we're gonna have a 83 renewal rate by the way i don't anticipate we're going to lose all of our customers under 100k so suddenly you're looking and you're saying wow if we can execute on that we're at a 90 retention rate for the year um i can't share lakeside stats for this year but i was just telling christy before this call and dave um we are gonna since i've started here we're gonna improve by literally close to 15 of our renewal rate i'll tell you my easiest tactic was let's think about where we protect the money how do we get super ingrained where that is and by the way i've made the opposite mistake too like every customer is the same they're all important it's just by segment yes every customer is important but you also have to think about the end of the day we all have metrics we have to to hit and so me it's protect the money that's great um okay so edgar had one more question he said what's the recommended renewals team size so you also talked about having a renewals team that supported this that i believe uh you mentioned starts six months out yes so uh that's a great question this is one i will truthfully say i've always struggled with a bit and i'll tell you what why it's really the performance of the renewal rep um some of my renewal reps literally can handle uh this year i have three fantastic renewal reps uh they can i have more than that but the three of the one top ones they can handle about eight million in business a year in renewals and that it's a it's a lot of transactions actually um what i'd like to do with renewal reps over time is actually the same thing i just talked about with the cs reps is to think about and what we're moving towards next year is we're doubling almost tripling that team actually going into next year is i will be segmenting by that enterprise 100k and above and those renewal reps have a lot less customers but a lot more money to bring in and then you go to mid market small big kind of within that mid market they'll have again more logos but actually less dollars than the enterprise and then smb for me like for us it literally ends up being less than four percent of our business overall so i'll have one renewal rep take literally the majority of our loans yeah yeah those are majority of our logos ended up with one rep you actually think about where again where the dollars are that's how i think about setting up the renewals team is i can't lose this 80 percent of customers at all so i need our senior most principal renewal reps on there who are literally six months in advance and i'll tell you we had a short fall today a customer call today we're gonna renew them in q1 they told us today if you had come and talked to us earlier even earlier than today it's november they're q1 end of q1 renewal we probably could have budgeted to move to your cloud solution instead of your current solution and by the way for us that would have been a huge upside um so i was like ah we missed it by a month we needed to be there six months in advance so what's funny is i used to with with other teams depending on the complexity of the customer base i was serving we used to make sure that one of the metrics we had to we had to have a good handle on was when did they start their budget planning because that's when we'd actually start the renewal conversation and that could be very far from the renewal date because it was all about when they started the budget planning because we wanted to make sure that we were locking in as much revenue that we could and we so we used that as the barometer of when we started the process instead of the renewal date which actually changed how we managed the entire process and that was actually what made things a lot more lucrative exactly yeah you'd be surprised how many percentage of the renewal you'll get just by having a process around right it's crazy yes huge points all right very good so those were edgar's two questions so linda sharp also had a question she said how involved are sales reps or sales management in working with you who owns the buying committee execs relationship yeah sure so um for me and most my the orgs i've worked with including now rcsm's own post sales building the relationships with execs knowing the political map working with those organizations and so forth that is again to protect the money so they will go as high as they can to know that we've learned who the budget owner is they're seeing an roi on the product that we're doing those executive business reviews saying that we always bring our sales uh executives to those ebrs because they're working there to upsell and cross-sell figure out different business units to get into and so forth so it is a very tight collaboration it's really hard to build and truth be told um myself and our cro are very close together working and we've actually put mandates out there like every sales rep has to meet with all of their csm's on a call every two or four weeks here it's a mandate where they sit down and they with their csms go through their account list and we go through where are we who are the executives have we hit it whose owns what roles and responsibilities on the flip side csms have to do that every two weeks with their success engineers um and their renewal apps and so we kind of have two committees but they end up working together uh in a way so do you create a pod structure so is it a kind of like an equal pairing so this sales person and this csm and this sc they're all part of the same pod um we try to do that it's never a perfect math i've tried that for a long time um and what i ended up doing is just kind of aligning with sales on region um for the most part so i know if i put rcsm adam in the us on these account segments he's probably going to be with two maybe three sales reps work in that region but it's never perfect and it shouldn't be because sales thinks of segments differently than cs my job is to protect the money sales is to find new money and expansion money so i might be working on literally a 5k deal and sales might be saying hey that's going to be a 500 000 account sue and that's where we really have to partner closely on those accounts yeah that makes a ton of sense all right very good we have a bunch more questions so we'll see how many we can get to in 11 minutes um so adnan asked how is the customer health score performing against renewal metrics and how do you measure and track customer health score sure i could say in my last organization we were very advanced and the reason we were is we were 100 cloud-based and we could see everything our customers were doing to be honest with you we had a super advantage over most companies we could literally see everything from licenses used to deploy to engagement into the product and all of those things uh to simplify it at lakeside we're getting there but we're not there today so we simply look at a few metrics are we doing executive business reviews is one engagement is another how engages the customer going back and forth with us how many of their license have actually been deployed and being utilized as another one and we have customer csat so we do csat across every tech support ticket so we take that average we take csat across we send those out after every kickoff call and every ebr so we take those and average them let me tell you the biggest correlation i've seen is not mps to renewal rate it's not anything else i just talked about other than believe it or not tech support csat has been my closest metric to customer health um i could tell you my last org if we were under a 4.6 out of 5 on tech support we had a 60 chance of losing that customer it was like to the point it was crazy um and by the way i'm seeing that here at lakeside super correlation to it so we have a number of different factors i found that um csat in general was 80 directionally correct and 20 percent not why because we have great happy customers who get acquired by somebody who's using our competitor and their csats through the roof and we don't find that out to five days before the renewal now we do use client success and we have the pulse score which is also a part of our csat today or a part of our success score today and so if a csm flip says say there's a competitor or they just got acquired um that drops us below a certain threshold will there end up red but again i like um really uh numbers and so it's hard for me to always rely on a csm who has 40 accounts to know they're on top of all of that so um i'd say to me 80 of the time it's right and there's still that 20 where it's probably not exactly where we thought it was going to be very good all right so we've got a couple more questions let's see how many more we can tackle um so kara had asked did you have any major pushback or resistance from existing customers when you were rolling this out um so i guess let's talk about how do you maybe customers when you're in the infancy stages of moving to a premium model how do you manage that communication right something that they were getting for free they're now being asked to pay for so how did you manage that transition because i think a lot of folks that would probably try to go this direction they'd have to manage that yeah um that was one of the hardest things to do but what we did for existing customers we did a lot of analysis um on what were we already delivering we actually built a deck for the csms to fill out four sales so when sales went to the customer they literally had a deck that said hey you know what we do for you today this kickoff this thing the status calls all this yeah that's no longer we're not we're not handing those out for free we can't we're scaling by the way customer really relates to when you say to them we're scaling and growing and while we did this before we kind of have to grow up as a company now and this isn't something we can just hand out you won't believe customers empathize with that like oh okay yeah i can't you know have robert for five hours a week for free anymore it's like no you can't i'm sorry um and by the way here's your justification robert built the great and by the way they have empathy for robert too because he works with them so they're really hard for them to push back and say man yeah no no that's not how i feel um they'll look at the deck usually it was two slides literally and it said here are the things we've delivered blah blah blah here's the package you need to keep this level of service and if you don't your option is there is a free service but we'll be talking to you about once a quarter um and we're not going to walk away but we'll be around once a quarter to check in on you nobody wants to talk to you once a quarter only i can guarantee you that if you're doing a good job um i'd say the flip of that is you have to be doing a good job um right like you have to have value in the in the line items right it can't just be a check box those things actually have to be proven value and your customers have to feel like they need those things right like they become dependent on those elements in order to have a successful partnership so i feel like before you can even go to charge for it you've got to be doing all those things consistently well exactly yeah and um truth be told everyone makes fun of facebook and you know it's old school and people say oh facebook charge i'd never pay for it that's a bunch of bs if facebook charge you'd hit that subscription button in 30 seconds and sign up so i mean that's just how i think about it is if you're showing enough value where people can't put the phone down it's going to be hard for them not to do it especially if you pop up with facebook say oh don't forget you look at this every day eight times a day it's like ah i do it's true yeah all right very good let's see we'll probably get to one more question so um stewart had asked also how important do you think this switch of measuring renewal rate by volume versus vol by value versus volume is i moved my department to this three months ago and wow huge impact um so he moved to so he asked how important do you think the switch of measuring renewal rate by value versus volume is huge um huge good luck getting in front of your board let me tell you i've told my board before i lost 50 customers this quarter but i popped up a 95 renewal rate non-conversation great awesome job too bad we lost those customers or is there average spend 18k oh okay try to have that of the conversation when you get to the board and say i lost two half a million dollar accounts this quarter they don't even ask you what your local retention rate was that's all they focus on is why did you lose those two customers deep dive let's spend the next eight months doing a root canal right and so i i really i get logo retention rate i get it it's important it helps with expansion and growth but to me like protect the money like that is your number one success rate here okay let's see we could probably do one more uh okay so we'll do this one so the account execs are selling these packages right i think that's the way you talked about it right they're selling them um if so how do you implement this in this for organizations that are thinking about starting to charge for cs services for the first time to existing customers do you have like if it's a net new logo team let's just assume right and so maybe cs is managing everything in that post initial sales process if it's divided that way how do you start to to broker the conversation with charging for services yeah i'll tell you the best thing i ever did i took one cs member and put them in pre-sales reporting to me um literally he was a machine he would get on every sales call that was his only job and say hey i'm a csm i work pre-sales this is what your customer journey will look like and if you go with one of these packages and sales will talk to you about your options let me tell you what this is going to look like we did that for our incubator for our first 20 customers just to see how it went because truth be told i don't really trust sales doing the pitch on their own um we we won like every one of those instantly because he had so much credibility on the pre-sales street where he wasn't an se pre-sales or an ae pre-sales and it was low cost to move him over and by the way he actually kept a couple of accounts on the csm side too so he still had that street cred to say oh by the way i still work with these two customers i would say take one of your folks if you have the resources ask them if they want to kind of be the cs pitch person let me tell you it goes a long way and then guess what once they do that for about six months with sales sales starts to take the calls of themselves oh i don't i don't need that guy anymore i actually heard him say four times now i have his deck i'll do it myself uh so train the trainer kind of thing awesome all right we do have a couple more questions but we are just about at times we're gonna we're gonna hold there but very engaged dialogue here um folks i will encourage you reach out to page on linkedin if you've got more questions he clearly knows what he's talking about um go tap into his brain his wealth of information and um see if we can all get to a place where we're creating profit centers at a customer success i mean i could tell you myself i took tons of pages of notes here even though i have your deck and i already know what you do uh super super interesting stuff here and i really just want to thank you on behalf of myself and client success for joining us today really insightful conversation page so thank you so much thanks everybody i appreciate the opportunity and again if you need any help just hit me up on linkedin happy to talk and we can take it from there thanks everyone for the off wonderful thanks everyone and so um just a friendly reminder for folks um next tuesday we are not going to have our standard webinar series um we have our leadership off site and so we will be traveling so we are we have a bye week next week think about football analogies right so we will not be having our webinar next tuesday but we will uh resume back the following week so please stay tuned we've got really great speakers lined up for the rest of november and december so please continue to join us and block off your tuesdays from 1 to 2 eastern or 10 to 11 pacific uh continue to join us look for our topics but really appreciate everyone's contributions collaboration the discussion in our chat and just the commitment to customer success overall so thank you page for joining us thank you everybody else and uh we'll see you again in a couple weeks thanks everyone talk to you take care