In our recent cornerstone event, the Champions of Change summit, we had the honor of catching up with some of the best minds in the field of subscriptions. One such was Allison Pickens. As the former COO at Gainsight, Allison Pickens scaled the company from infancy to a multi-product platform, creating the category of customer success software. She is known for her famous podcast, ‘The Customer Success Podcast,’ and is a thought leader on go-to-market strategy for SaaS companies.
She has coached thousands of CEOs and executives at both Fortune 500 companies and born-in-the-cloud SaaS ventures. At the Champions of Change summit, she parted with us words of wisdom as well as tips and tricks on how customer success can be used as a tool to bring organizational success.
But if you’re someone who would like a short brief of Allison’s session or someone who loves reading, then keep reading. In this article, we will dive into the key points Allison spoke about at the summit.
Allison Pickens can very well be named as someone who pioneered the customer success movement. She says it all starts at the beginning – the mother of all tips, that is,
(1) Creating the category for customer success
“Category creation is kind of a funny term in the sense that as a software company, you would hope not to have to create a category, or create a wave, but rather to see a wave coming and kind of ride it and maybe facilitate it a little bit along the way.”
When she joined Gainsight in 2014, customer success, unlike marketing or sales, was a relatively new concept. But when asked about her struggle in introducing a new category for customer success, she says, “Category creation is kind of a funny term in the sense that as a software company, you would hope not to have to create a category, or create a wave, but rather to see a wave coming and kind of ride it and maybe facilitate it a little bit along the way.”
So, when we talk about category creation, it simply means acknowledging customer success as an essential department for the overall success of an organization. Customer success grew to fill the void left by the discrepancy between reality and perception.
(2) Why isn’t support enough?
Many organizations understand the importance of their customer welfare, but it is limited to a customer support department in many cases. If you don’t know if you fall under this category,
You need to ask one question,
“Is this department reactive in its nature and doesn’t come into the picture unless a red flag is raised?”
If your answer is yes, you are looking at customer support which is very different from customer success.
Allison says that during her stint at Gainsight, it was relatively common knowledge that customer success was different from support and that support would be reactive. For example, inbound customer concerns would go to the customer support team, and they would tackle these issues in a queue; that would be their workflow. Customer success, on the other hand, would focus on more proactive measures.
But Allison also notes a new trend was cropping about these days.
That is the blending of customer success and support. She says that the main reason for this is the rise of product-led growth, where often you have a long tail of SMB customers or solo individuals within organizations who pay with their credit cards. This blending between reactive and proactive opens up an opportunity to redefine what customer success means in a product-led growth environment.
(3) The holy grail formula
Along with Nick Mehta, Allison Pickens penned a book titled “The Customer Success Economic: Why Every Aspect of Your Business Model Needs A Paradigm Shift,” where she touches upon a simple formula that would unravel the complexities in customer success.
Customer outcome + customer experience = customer success.
At the summit, we asked her to break this down to understand why these components are essential to the successful execution of customer success, and here’s what she said,
With regards to customer outcome:
“Customer outcomes refer to the ROI that you’re generating for your customers. You’re solving for the goals that your customers have when they purchase your software”.
Customer outcomes, in many cases, could be traced back to the product. Especially in product-led growth, there could be dashboards that users see when they log in that show the exact value that they’ve gotten from the product.
She further pulls an example from Gainsight, where they tried to help clients improve their net promoter score, net retention rates, and advocacy rates. They used a metric called verified outcomes, where through an email, they would ask an executive, at the client who would be the sponsor of the relationship, to say, “Is there a metric that improved that you can attribute back to Gainsight?” And if they responded with a positive testimonial, it would be named as a verified customer outcome.
With regards to Customer experience:
The second aspect of the equation is customer experiences, and it is all about how customers feel when interacting with you. “They could be achieving outcomes with your product, but they might not feel good when they’re engaging with you. This could be because there’s friction to getting value, or maybe your people aren’t as nice as they could be.”
An interesting point to understand here is that when customer success started as a function, many companies were naming this function to indicate that they value the customer experience of their users. For example, companies would have a customer delight manager, customer happiness manager, customer engagement manager. Those things are valuable. But Allison stresses the fact that this is only a part of the equation.
Why do we need both?
When customers get the desired output but are not happy:
Customers that are achieving outcomes with our product but don’t have good customer experiences suffer. Companies stuck at this side of the spectrum will get their product renewed because their customer can justify continuing the procurement by highlighting the value they bring. Still, they may not be able to expand their contract with the user because advocacy is limited.
When customers are happy but don’t get the desired output:
On the other hand, if you have created intense customer experiences, but your customers aren’t getting solid outcomes, they may not renew with you at all. She says, “You think that the renewal’s coming in because you have such a cordial, friendly relationship. And then you know that your sponsor says, “Oh, we love working with you guys. You’re so nice. But we can’t renew our contract with you.” And that’s like a gut-wrenching conversation for a customer success person because you’ve invested so much in this relationship. You thought it was fine. And then it turns out they’d had a different impression of what was going on.”
This is why both sides of the equation are should be given equal weightage.
(4) How to quantify experience and why NPS (Net Promoter Score) might not work
Net Promoter Score (NPS) is traditionally a consensus metric for customer experience, but it is an antiquated metric in many ways.
Considering you survey your customers only twice a year for fear of being too annoying while giving the review, the customers are looking backward at their experience and think, “Well, this thing that happened nine months ago didn’t make me happy. And so I’m going to give you a four NPS rating.”
Generally, the response rates to NPS surveys are pretty low, and most people in customer success have noticed this – even if you’ve got in-app tools and other fancy contraptions for getting people to reply. Also, there is a massive chance of sample bias among the people who respond. The uncertainty of NPS can be blamed on the unequal amounts of people who are advocates of your product and the angry people who want to voice their frustration. So, it’s not always an accurate metric as well.
Allison recommends tracking other metrics, especially adoption-related ones, that help you ascertain whether there’s a frictionless customer experience.
(5) Why higher usage doesn’t mean good things for your product
Allison busts a myth while she says usage might not necessarily mean an excellent product experience. Interestingly higher usage might be an indicator of higher friction. The more you click on the product, the longer it takes to get what you were looking for. One would rather not have to engage too much to get the value they need. Minimizing the effort from the user can be a sure shot way to improve the user experience.
(6) The only perspective you need to win at customer success
The customer journey has always been viewed as a top-down model where the customer gets passed on from one department to another. This ‘qualify and close process’ ends at customer success bearing the brunt of many cracks in the system.
For example, in the handoff from onboarding to customer success, the latter assumes that the customer is fully onboarded. They’ve checked all the boxes, and they’ve gone through the steps, but in reality, there would be something missing, and the customer would not realize the value.
These assembly-line models are dangerous, and the tensions in the handoffs cause friction internally and for the customers.
Allison recommends the leadership style where the work chart is flipped by 90 degrees – where it’s not that the functions are handing off customers to each other but where all parts work together across the customer journey, only varying on the activities they specialize in.
Allison often refers to this as a symphony orchestra. The sense here is that every function is playing a different instrument, but all are playing according to the same sheet music. So it’s about the creation of harmony across these functions, as opposed to a linear assembly line.
(7) The only way to sell
Four years ago, one of Allison’s LinkedIn posts went viral. It was about customer-led selling, and one of the reasons for that is that no one had thought about applying that concept back then, and it stays relevant to this date. Digging deeper into why customers should be part of our sales teams, Allison says,
- Customers shouldn’t just be talked at. They can bring a lot more to the table, and organizations should indulge in a consultative process with them.
- Companies need to invest in proactive viral orchestrations. In general, people buy when they hear about other success stories with a product. This is a huge untapped opportunity to reach potential customers.
- Companies don’t track virality in B2B companies. In the B2B world, we know that word of mouth is hugely impactful, but we don’t track it. And because we don’t track it, we tend not to orchestrate motions around it.
Customer-led selling is gaining traction, but it needs to be considered as a new movement, a new way of approaching customers.
If you’d like to take one piece of advice from Allison, it should be her final tip on active listening.
In today’s world, there is a need to be out there to stay relevant. But another way to remain relevant would be to listen accurately to what your customers want and present it to them when they need it the most. This skill would not make you an empathetic leader but also a good human being.
If you’d like to listen to more champions of change, not just in the field of customer success, head to the Champions of Change podcast where Vikram Bhaskaran, the senior director of marketing at Chargebee, sits down with various leaders who have been ring bearers of change to unearth their best-kept secrets for using change as an opportunity for growth.