Managing Customer Success Through Health Scores
On this podcast with Dean Thompson, we discuss:
- Measuring Customer Success on their terms, not yours
- How Adoption, Pulse, CSAT and Product Stickiness metrics roll up to one Customer Health Score
- Ensuring your Customers’ Return On Investment through their Health Scores
- Customer Experience can be distilled – think through their KPIs to boil it down
Scarlett: Welcome to The Enabling Effective Sales and Customer Experiences Podcast. Each podcast is an open dialogue with leading experts across marketing, sales, and customer success. Each week, we discuss why from first contact to customer success, enablement, and experience matter. Now, here is your host for today's session.
Mike: Great. Thanks for that introduction, Scarlett. Well, we're here today with a good friend and colleague, Dean Thompson. Dean has a great variety of experience, and I'm just going to scratch the surface probably here, Dean, and that's experience in sales engineering, sales enablement and operations, professional services, customer success and onboarding, and even contracts and negotiations. With that, Dean, hopefully, I touched on most of those things, but I'll turn it over to you to provide a bit more of your background.
Dean Thompson: Thank you, Mike. I think you did a pretty good job of scratching the surface. I spent a lot of time in my career in originally running a professional services organization, then into managing a worldwide SE organization. As I grew over time, my current role evolved to taking on tech support, a customer success group, a renewals team, and professional services and tying all of that together into a customer experience group, so that we had the people that had the customer from cradle to grave all in one group and be more successful about how we managed them.
Mike: That is one thing that really made me think of you, Dean, as a great person to cover one of our podcasts, and that is because you covered that full journey, everywhere from the presales to the sales and contracts and, certainly, the sales with onboarding and support, so a good overall variety of that customer journey. Well great. Well, I know where you currently are in terms of customer success and being able to kind of quantify what that looks like where you currently are. I know a lot of businesses. They love speaking to customer success on their terms. You know, metrics like ARR and what kind of cross-sell and upsell metrics are we looking at on a quarter-by-quarter basis.
Mike: It seems, where you currently are you've flipped that a bit, and what I mean by that is you've flipped it so that in your business you look at it and put more focus on the customer rather than just all of those internal metrics. I wondered if you could kind of speak to some of those aspects?
Dean Thompson: Absolutely. As you said, a lot of companies fall into the trap of thinking about ARR or ACB and TCU retention, things like that, and as I spent a lot of time educating our exec teams on those are your health metrics. Or, like Centrify, those are Centrify health metrics how well we do with those kinds of things. That's not what the customer thinks about when they consider themselves healthy, right?
The customer's thinking about time to value with the software. How long does it take until I've got it up to where my organization's getting something back from it? Am I leveraging as much of the product as I can? Am I using all of the licenses that I have? Do I have a well-educated staff? Am I solving problems that I'm measured on? I'm not necessarily... Obviously, there's always return on investment, but it's the total cost value of having the product, and so We spent a lot of time talking to our customers, talking to our SEs, our sales organization, our professional services team, and our support organization about what would be a customer's health measurement. There's four different main areas that we put it into and we metricked all of this to roll up to a score that we call customer health. The first thing we looked at was, obviously, just adoption. If they've got a thousand licenses of your product, are they using all 1,000 licenses? Nobody likes paying for a product and not using it.
Dean Thompson: Then, today, we leverage a tool called ClientSuccess for our customer success, and ClientSuccess lets us do a thing called Pulse. Every time we have a customer touchpoint or interaction, Pulse lets us register a score as to how that interaction went with a customer. This lets you capture things like, they had a re-org, or if you lost a champion. Maybe they got back more budget, or your person got promoted. A security incident happened. Their company did better, worse, et cetera, but it's a way to capture those kinds of things when you have a touch with a customer and factor that in. Mike: That's right.
Dean Thompson: Then in our support organization, we measure customer satisfaction after every case, both in our satisfaction from the customer and how well our support group did, as well as their satisfaction in terms of our products themselves. We're able to measure both of those at the same time. Then, we also have a process if a customer ever gives us an unsatisfactory score, one of our support managers makes sure that they contact the customer directly and have a conversation with them to go ahead and dig into exactly what was the issue and why the customer felt that way. That gives us a nice value for customer satisfaction.
Mike: That's great. I know that's just your third of four, but if you don't mind, for a little more color on the CSAT one, now, is that NPS? How are you capturing that from the customer?
Dean Thompson: It's very similar to NP&S, but it's more like a scale of zero to a hundred, right?
Dean Thompson: We find anything 90 and above... our goal is 93. That's like the target we set, which is a pretty good target for someone to hit, and even ironically during COVID last year, we actually were at 95 throughout the year, and-
Mike: That's great.
Dean Thompson: ... I found that was even better because I feel that last year was a year we actually got more time with a customer versus less because they weren't having to go into an office.
Dean Thompson: Our fourth one was probably the hardest to get, which is product stickiness. For each one of our products, we dug into the product and looked at all of the different capabilities, and figured out which ones gave value. We're in the security industry, a lot of customers need to use us for compliance, and a part of compliance, being able to report on stuff like, who has access to what and what can they do on those systems?
Being able to actually audit and show what they did do, those are some of the different examples, and so, again, very important to get feedback from sales, the customer, support, sales engineers, and professional services as to what those were because if you just ask the product manager, and we asked them as well, they give you a very feature function answer.
We needed to get to the value that was tied to the feature function, and so very key to a lot of our customers are use cases. I mentioned one around compliance. Compliance would be a use case. Separation of duties, stuff like that, but they have to solve a use case, which actually also maps to the same thing, that our SCs will talk to a customer about during evaluation of what use cases they're trying to solve, so the same kind of use cases. When you peel that onion back a layer below the use cases, that's where you get to the stickiness. By each product, we identified these different areas of value and then you put a score to that.
Dean Thompson: The other thing that you had to do is spend some time and actually put weighting on it because not everything gives the same amount of value for that, and so we did all of that and put them on a scale and weighted them. That's what gave us our product stickiness score, and so when you add the four of those things together, that's when you get what is actually the customer health score. That's the main thing. If you go and look at any one of our accounts in Salesforce, you will see your customer health score and you can drill down on which one of those areas that's driving it good, bad, or indifferent, these different groups.
I mentioned stickiness was the hardest to get. I think if you have a SaaS-only product, I really hope that you're building product telemetry into your product. Most people are, it's not hard to get because everything's running in the cloud. With us, even when we're running some of our cloud services, there's still a lot that's on-premise, and we still have the majority of our products run on-premise, so we have no access to the product itself. The way we do a licensing true-up every year, we have the ability to get usage that the customer goes out and runs a report and provides it with us.
We were able to leverage that to help capture some of this, and so we started with our consultants and our support people, and our SCs. Every time they talked to a customer, they would interview them on these stickiness values. Are they using stuff or not? Then, over time, I took our services teams' non-billable time and figured out ways that we could automatically measure whether someone's leveraging capability into product. We built a tool to measure those things. Now, when we’re doing our true-up, we’re also able to gather if they are actually leveraging all of the capabilities.
Mike: Another great thing, a byproduct of that product stickiness, is it sounds like it's forcing the dialogue between your field resources, your sales engineers as you mentioned, and professional services. Maybe even support as well, to force that dialogue with product management so that they start thinking back to our original point. They start thinking about what it means to the customer to utilize your solutions. Did you guys see that as a byproduct?
Dean Thompson: We saw that. We saw several great benefits from this. The product managers got more out of that, but then they also got this insight of, "Where should we be investing back into the product for our customers?"
Mike: Right, and that's great. Yeah.
Dean Thompson: Right, because even when we did the interviews, we would have somebody say, "Yeah, I'm leveraging it to do these six things." Then, when we would start to dig into it with them, maybe they were really only doing four, right?
This, you can't argue the data with this, and so this has been very key for driving investment in the product. Then, it actually turned around and drove our investment with our customer success engineers. We've figured out with a more technical product the traditional customer success manager model didn't work as well for us and many people with more of a technical background, so we rebuilt the team as customer success engineers. I will talk about those use cases again. You can really even look at a lot of those use cases and a lot of those are driven by the vertical you’re in. Compliance is very important in finance-
Dean Thompson: ... healthcare, to name a couple of them, and so spending time with someone and saying, "Hey, I see that you're a bank. One of our other large customers is this," I'll give the customer name, "One of these banks. One of the things they get a lot of value from is the reporting in our product because that's how they prove compliance."
Mike: Yeah, so now you're bringing insights and subject-matter expertise to your customers. Yeah, that's great.
Dean Thompson: Well, and exactly. You're sharing value other customers are getting, and a customer has the fear of missing out as well-
Mike: Yep, yep.
Dean Thompson: ... so you get the FOMO going on for you, but that lets us have that dialogue with them, "You're a bank. Don't you have compliance? Would this be useful for you?" Like, "Yes," and since we've got someone technical talking to them, it's an opportunity to strike while the iron's hot and say, "Well, I can help you get the reporting services set up right now. What kind of reports will you need?" The engineer-
Mike: That's great.
Dean Thompson: ... drives them to solve that use case, and when you look at every use case, they map back to one, two, three, four different product stickiness areas. Capability in the product ... you have to be leveraging to solve the use case, and so that drives their health back up. Ultimately, we talked about how people look at ARR and retention and stuff like that. This is really what drives your health, too, because the more that a customer has a higher health score, you can even go back and look at certain values and go, "Okay, customers in this range, I know they will renew for sure."
Mike: You have applied that now, and that's what I was going to say is... I know we just have a couple of minutes left here, but the overall customer health score, how are you making it actionable? It sounds like what you're getting into right now.
Dean Thompson: Yeah.
Mike: You're making it actionable based on history and trends of what you've seen in the past?
Dean Thompson: Yeah, so several ways.
Dean Thompson: First, we will leverage that as a forecast applier, right?
Mike: Oh, nice,
Dean Thompson: Somebody at a certain level, we know that should be in the forecast, so it helps inspect our forecast. We've also been able to take this and figure out where we do have losses and decreases. Those directly drive plays or playbooks, if you will, on things on where we should better educate a customer. In an area where we find someone, especially during COVID, who may not leverage a product and try to use a free solution, we know that we've had customers that have gone down this path and it actually cost more money to run the free product than it did ours. We can run the play where we educate them and show them experience. Other customers have had to prevent them from doing the churn in the first place, which helps drive their retention.
Then, you can also see higher values where, "Okay, customers at this health area are great prospects to go sell additional products in." Then, your lead generation becomes more qualified because you're giving your Salesforce a better-qualified customer who's receptive to buy other product from you.
Mike: That's great and, again, back to some of the tactics, all of those four metrics and the overall customer health score you have mentioned is in your CRM, in this case, Salesforce, so it's just right there up against the account, the customer there in Salesforce?
Dean Thompson: Yeah, exactly, between Salesforce and ClientSuccess, which runs on top of Salesforce there. That's how we manage all of this, but the customer health score gets pushed right back to the account in Salesforce.
Mike: Perfect. That's great. Well, I know that was a lot, those four key metrics. Again, adoption and the pulses you mentioned, the customer sat, and the product stickiness rolling up to one customer health score. That's just a fantastic approach, and it sounds like it's really helping drive the business and your customer experiences.
I'm not sure if you want to close with any last comments. Again, if we didn't have enough time to get into some of the details, of course, later in the year, Dean, we would love to have you back. You kind of know the format, right? We're trying to keep them to about 15 or so minutes and having folks come back to tell us how things went later in the year. Anything you'd like to close on?
Dean Thompson: Yeah. I just reinforce the fact of making sure you're looking at values that actually are important to the customer. If you just do those and focus on those, you can always tie those back to how it will actually solve your problems as well.
Mike: That's right. That's great. That's a great closing right there. All right. Well, great. Thanks again, Dean, and we'll talk to you again soon.
Dean Thompson: Great. Thank you, Mike. Cheers.