General

A year has gone by, and it’s time for SaaS subscription renewal. Who reaches out to close the renewal, the Account Executive, CSM or Account Manager?

In two words, it depends. In five words, it depends and will change.

In order to ensure your company’s growth and reputation, you need a harmonious ecosystem of teams with proper compensation and incentives to fit the size and nature of your company. Upsells and renewals come as a natural result of successful adoption. Making sure your CSMs can perform optimally results in an easier job for whoever you chose to own the “commercial” aspects of the customer relationship.

During August’s Customer Success Meetup in San Francisco, Dave Blake, founder and CEO of ClientSuccess, Angeline Felix, Customer Success Manager at New Relic, and Sylvia Kuyel, Customer Success Strategic & International Lead at Cloudflare, discussed the different facets of three ownership models at their own organizations and from previous experience. Most SaaS companies will fall under one of three models: the account executive owning the renewal, the CSM owning the renewal, or an account manager owning the renewal, and all three have their perks and problems.

Model 1: The Account Executive/ Sales owns the expansion and renewal

The first model they discussed was the model where the account executive owns the renewal and all the “commercial” parts of the client relationship. Dave Blake, who has seen all three models, says that organizations where the renewal process is complex, or where you’re dealing with large accounts with labor and resource intense negotiations would do best under this model. The key to making this model work is fostering a strong, collaborative relationship between the AE and the CSM. He has seen teams fall into the trap of the AE treating the CSM like a secretary or administrator, which creates resentment and does not add any value for the organization’s customers.

A problem that can happen within this model is that AEs, in their sales mindsets, can start neglecting their current client base in order to pursue the next potential customer. At New Relic, Angeline Felix has a system where if a customer downgrades, a “spot-back” is on their record, meaning AEs “get dinged…it’s in their best interest to stay engaged, continuing the relationship through the entire customer life cycle, and through the adoption phase.”

In Sylvia Kuyel’s experience at Cloudflare, “in our early stages we were one bundled product, which means there’s not a lot of upsell. AEs will naturally be interested in large accounts because they see one business unit and then they want the ins to the additional ones.”

You can also run into the opposite problem, where AEs have an easier job expanding in their existing customer base, focus too much on them, and stop going after new logos, which is what happened at ClientSuccess. They fixed this by changing the comp plan for the AEs to push them to hunt new logos.

Model 2: The Customer Success Manager owns expansion and renewal

Discussion then led to the second model, where the CSM owns all of the relationship, including expansion and renewal. Dave Blake has been seeing this model across the industry more and more and this is the model that Cloudflare follows. Coming from a venture capitalist background, Sylvia knows that when valuing a company, people look at how risky their recurring revenue is and the heavy influence customer success has on this. She emphasized that the main reason this works for Cloudflare is that all their customers are on auto-renew contracts with a 60-day notice period.

“ The key to success here is fairly straightforward renewals that aren’t high maintenance, and the experience and maturity of your CS team. Some teams don’t have the negotiating experience or want that pressure.” Dave Blake, founder and CEO of ClientSuccess

Even though this is the majority of their customers, she says that when dealing with large accounts with long complex initial negotiations, it makes sense to bring in the AE because they have all the contacts, and they negotiate every day. They have a long standing relationship with the AE, even though renewal is truly a customer success number.

“As long as you’ve done a good job of driving the adoption along the way, the renewal itself is not a negotiation process.” Sylvia Kuyel, Customer Success Strategic & International Lead at Cloudflare

All three CSMs in the latest panel for the Customer Success Meetup felt strong ownership over expansion and renewal. According to Erica Pearson from Periscope Data, “ I own it all; it is my relationship with the client. I am their partner.” Their job is to get their clients value, with renewal being part of the CSM’s reward for doing the job right. Cloudflare recognizes the heavy workload that is involved when CSMs own everything. They set a global CS team goal that contributes to their comp but it is not individual. They do not want CSMs getting possessive over their accounts, and this encourages them to help each other out when one CSM has a particularly heavy day or week.

Many are hesitant to have CSMs own expansion and renewal because they fear that CSMs will lose the “trusted adviser” role, but Dave, Angeline and Sylvia all disagree with this based on experience. Customers tend to prefer having the trusted adviser to talk to about the commercial aspects, rather than bringing in a sales rep. They want someone who knows their business and if the commercial interactions are done right, CSMs can actually gain more trust as an adviser.

Model 3: A separate sales team of Account Managers own expansion and renewal

This last model brings in a third party into the organization’s ecosystem, a dedicated team of Account Managers who specialize in expansion and renewal. There is an undeniable benefit of specialization that comes with this model, letting AEs focus on new logos and CSMs focus on adoption. However, none of the experts at August’s Meetup were keen on this model, even having seen other companies successfully use it.  Dave and Angeline found that customers are overwhelmed, having so many introductions and relationships to maintain. Sylvia suggested that if there is noticeable tension between the trusted adviser role and the commercial duties, then this is the model for you. It’s important to clearly delineate the duties among these three roles, with appropriate comp and incentives to drive the individuals in these roles.

Lana Pucket, a CSM at WalkMe gave insight into her experience with this model and relationship during the most recent Customer Success Meetup, saying that she executes the entire lead up to the renewal, but the AM comes in to handle the renewal contract. She noted that 20% of her salary is based on renewals, tying her salary to a number that she does not own according to the roles within her organization.

Having previously managed an AM team, Angeline says this model worked at that unnamed company, but you have to think about the type of person you are hiring for each role. The AM needs a balance between the CSM mindset of customer care and the AE mindset of making the sale. To learn more about the traits you should look for in a CSM, check out this article.

Tailoring it for you

Depending on the product you’re selling, the maturity of your organization, and the size of your customers, you may need to switch from one ownership model to another. Through this transition, remember to define the roles clearly to your customers, aligning to their needs. All of this will result in high expansion and successful renewals.

Effort. We’re taught to praise it, get really good at avoiding it, and really, would rather do without it. Effort is hard and uncomfortable. As human beings, we’ve designed incredible digital tools to reduce effort as much as possible. Today, “user-friendly” isn’t just a selling point anymore, it’s become a basic expectation among customers – to the point that if a task isn’t intuitively easy to complete, consumers will drop the product and go elsewhere.

Effort is a big deal.

So why are most companies not measuring customer effort, or only relegating it to a customer support metric?

What is Customer Effort Score (CES)?

Customer Effort Score (CES) is a newer metric originally developed for Customer Support. In that context, it measures customer service satisfaction by asking customers “How easy was it to get the help you wanted today?” That is valuable information for your Support department. But Customer Success and Product Development departments have been latching onto the idea for so much more.

The core CES question is: “How much effort did this task require to complete?” – typically on a scale of 1-7. And that question, followed by an open-ended “Care to tell us why?” question,  can be used in a number of ways to yield more relevant feedback from customers on numerous fronts.

Customer Success and Product Development teams in particular have been adding CES to their customer journey metrics to get feedback on onboarding and ease of feature use.

[ctt template=”3″ link=”1b54y” via=”no” nofollow=”yes”]”Anytime you have a workflow you want a customer to complete, #CES is a great question to ask.” – Jessica Pfeifer, Chief Customer Officer, Wootric[/ctt]

How Product teams use CES to improve UX & feature adoption

Customer Effort Score fits in seamlessly with Product goals because user experience (UX) and user interface (UI) depend largely on ease of use. Product teams are starting to use CES to get feedback on how well the UI supports new feature adoption and to identify moments where customers begin to feel frustrated and lost.

Frustration is an emotion that is closely linked not only to churn, but to a decreased rate of customer advocacy.

“The revenue impact from a 10% improvement in a company’s customer experience score can translate into more than $1 billion.” – Forrester

“Frustration metrics” like rage clicks, error clicks and form abandonment are also useful to track, and can alert dev teams to issues they may not have expected, but adding CES to the mix can shed more light into just how hard customers perceive tasks to be. And with an open-ended follow-up question, they can even tell you why. When 40 to 60 percent of software users open an app once – and never log in again – anything that reduces friction during those early critical stages will have major impact.

Canva, a design tool for non-designers with a freemium sales model, has one of the smoothest onboarding sequences, which begins with a 2-minute tutorial that shows users the value they’re about to get while giving hands-on instruction on using the tool. Instructions ask users to complete fun design exercises, like putting a hat on a monkey or selecting different layouts and backgrounds, which builds users’ confidence.

SaaS guru Lincoln Murphy says, “The first in-app experience your customer has with your product sets the tone for your relationship, and if it’s confusing, overwhelming, or otherwise puts up barriers to achieving success (or at least recognizing the value potential of your product, you’re in trouble.”

Canva may hit this out of the park, but for businesses struggling with smoothing out their onboarding flow, CES surveys – especially those that can be deployed while the users are in the app – becomes tremendously valuable.

But it’s not just about reducing friction and frustration – retention really is about ease. A Customer Contact Council survey of more than 75,000 consumers found that the most important factor in customer loyalty was reducing effort – defined as “the work they must do to get their problem solved.”

How Customer Success teams use CES to reduce churn

Customer Success managers know that one of the most important purposes of onboarding is getting the customer to experience value from the product – as soon as possible. This has it’s own metric, called “time to first value,” and the shorter it is, the more likely the customer will be to continue using the product.

CES for onboarding

CES now helps Customer Success keep a pulse on the onboarding experience of each new customer. The customer onboarding experience in Enterprise SaaS can involve training and implementation advice delivered by Customer Success Managers, in addition to the elements like videos, documentation and walk-throughs in the product itself. Unfortunately, “the seeds of churn” are sown if that process is painful.

Sarang Bhatt, Customer Success Manager at Wootric uses Wootric’s own CES survey to assess the onboarding process. “I find it very useful. We may not get a 7 every single time, but when we do miss the mark, we can close the loop with the customer and improve our processes for the next cycle. This is all because we have proactively solicited honest feedback via CES. Customers see a CES survey before NPS, so it gives us a chance to learn whether we are on track and make adjustments.” 

CES for monitoring customer hand off from Sales to Success

Customer Success teams are also using CES even earlier in the customer journey to measure the ease of transition between Sales and CSMs.

One of the most common causes of frustration for customers is answering questions asked by Sales, only to have to repeat their answers once they’re handed to a Customer Success Manager. The interdepartmental communication ball tends to be dropped during the handoff because customer information is siloed by department instead of shared freely. Customer Effort Score serves as an alert when these types of communication failures affect UX

In fact, Customer Success can use CES to monitor many (if not every) success milestone to see how easily customers achieved them – from the customers’ perspectives. Mapping CES onto the customer’s journey by checking in at success milestones effectively transforms CES into part of the overall customer health score every CSM should be tracking.

Not familiar with customer success milestones? These are often a checklist of tasks your customers must complete to use your product successfully and get closer to achieving their ideal outcomes – what they really want from your product. You can chart them out visually in a customer journey map.

CES for Advocacy

Using CES in customer success has another benefit: advocacy. Users are more inclined to become brand advocates – sharing positive reviews publicly – after positive support experiences. So an in-app CES question that follows high ratings with a timely advocacy ask can help spread brand awareness.

How Customer Service & Support use CES

CES surveys are most often deployed via email after customer support interactions. A user has a question, contacts customer support, receives an answer, and is then asked to score the interaction based on ease.

Why ease? Because research shows that the most important attribute of satisfaction is ease, which makes it the most logical metric to use instead of, or in addition to, other satisfaction metrics like length of wait time or even resolution of the problem. The CES question gets straight to the heart of whether the customer service experience increased satisfaction.

Don’t throw CSAT away though – customer satisfaction metrics provide broader feedback that is still extremely useful.

What to do if CES is low

What if the rating isn’t high? Close the loop! Put a process in place, or use a software platform like Wootric, that takes less than ideal customer effort scores and allows you to close the loop with the customer by reaching out to them individually or triggering appropriate automated responses.  Take action — create a cross-functional team to review feedback and prioritize actions you can take that will ease the pain and create a better experience for your customers.

As you track CES over time, you’ll be able to see the results of your efforts in the score and in your customer retention numbers as well!

Why is Customer Experience becoming the primary way companies differentiate themselves in an increasingly crowded market? How does CX pave the way for growth? How do you measure it accurately (and actionably) – and how can you leverage customer feedback for happier customers, more referrals, and more sales?

We asked all of these questions and more of CX experts at the top of their field – and their answers will inspire you.

Customer Experience Experts on Growth

Customer Experience is inextricably linked to growth – when you give the customers not only what they want, but also what they need in a way that leaves a positive impression, you’re making an investment sure to pay dividends.

“Customer experience drives growth. Data supports this fact. Forrester showed that CX leaders, on average, grow more than 5x faster than CX laggards. The companies that have made CX a priority focus on understanding the customer’s needs and wants and spend a lot of time understanding the journey a customer takes. They ensure the customer voice is heard (either through direct interviews or other opportunities to provide feedback) at each touch point of the customer journey, make sure actionable insights from feedback gets back into processes and close the loop with customers to advise them of the actions they took. They do this because they understand the post-purchase phase of the customer lifecycle is where growth occurs.” – Sue Duris, Director of Marketing and Customer Experience, M4 Communications, Inc.

Customer Experience Experts on Tracking CX Metrics

What’s the best way to improve the experiences your customers are having? Opinions differ, even among experts, but everyone agrees that what gets measured gets done.

“An organization should have many tools available to them and not lean on any one of them too heavily. They should look at a combination of CES, NPS, CSAT, loyalty, and emotions metrics. In addition, measurement shouldn’t be taken in a vacuum. Testing and analysis should occur regularly and consistently so you can view trends and then take deep dives to determine the reasons the trends are what they are. This will help you improve your CX performance.” –Sue Duris, Director of Marketing and Customer Experience, M4 Communications, Inc.

“If you want to get started with measuring and improving customer experience, I recommend you begin by tracking Net Promoter Score. You’ll get a metric that everyone in the company can rally around improving, and the rich feedback you get from customers will give you guidance on how to do it.  Over time you can build a sophisticated customer feedback strategy that incorporates a number of CX metrics, but I advise that you get the ball rolling as soon as possible. There are a number of low cost/no-cost SaaS platforms out there, including Wootric, that can get you started quickly.”  –Jessica Pfeifer, Cofounder and Chief Customer Officer, Wootric.

“The Net Promoter System is the most effective way to gauge customer experience at scale. The better your customer experience, the more likely your customers will be brand enthusiasts or promoters. And the more promoters you have, the higher your Net Promoter Score will be.” – Jes Kirkwood, Content & Community Marketer at Autopilot

“The social media sites that have perfected the art of public reviews are the best customer experience gauges available.  Yelp is a great example for the service industry, Capterra is a grand example for the software industry.  Monitoring those channels is a passive way to manage these gauges.  If you want quality, meaningful results, you will have to intentionally drive customer traffic to those platforms. Be brave. Invite them to be honest.” – Joe McCollum, Configio Support/SaaS Consultant

Customer Experience Experts on Retention

Sure, you can keep customers even if you provide a lackluster experience – if you’re the only game in town. But with competitors coming out of the woodwork, nobody has any market cornered for long. Offering superior CX is the only way to win the kind of loyalty that becomes the mortar paving the road to retention.

“I spend a lot of time with SaaS startup clients whose number-one goal is to improve recurring revenue. What I’m really excited about is a lot of my early stage startup clients are eager to put CX in place now so they are ready for when they scale. They know how vital CX is to corporate growth.” – Sue Duris, Director of Marketing and Customer Experience, M4 Communications, Inc.

“Customer experience is one of the two core pillars of customer retention — the thing is, you can’t grow if your customers don’t stick around. Keeping customers around is harder than ever—and delivering an unparalleled customer experience is the only way to win. Today, companies must curate a timely, relevant, and personalized customer journey, nail customer support, and take advantage of every opportunity to surprise and delight.” – Jes Kirkwood, Former Content & Community Marketer at Autopilot

“Efforts toward retention should start early in the customer relationship. At Wootric, we ask our customers the Customer Effort Score question to get feedback on our onboarding process. When we don’t get top marks, we get an opportunity to make things right with the customer immediately and get back on track. All because we reached out and proactively asked for feedback early on.” –Jessica Pfeifer, Cofounder and Chief Customer Officer, Wootric.

Customer Experience Experts on Leveraging Emotion

Emotion is a vital, yet often underappreciated, component of decision-making – but CX experts know that winning minds isn’t enough. Customer Experience is a game of winning hearts.

“In my experience working in varying industries, customer trust is a byproduct of an amazing customer experience. Whether it’s helping them with a purchase or teaching them how to use software; the make or break is how they feel when they walk away from you. If they walk away with complete trust, that type of experience translates to growth.” – Joe McCollum, Configio Support/SaaS Consultant

“We’ve found that it’s often the accumulation of small annoyances that does the most damage to a customer’s perception of a brand and their loyalty as a purchaser. Frustration metrics (things like rage clicks, error clicks and form abandonment) are a great way to quickly spot and fix major things that are actively blocking customers from achieving their goals and/or contributing to an overall negative experience.” – Amy Ellis, Marketing & PR at FullStory

“As a Product Designer, I understand that even more than having a great graphic design and program, the product needs to generate an experience that connects customers emotionally with your brand/service/product. Meaningful relationships are created by strong experiences. It’s how customers become allies for the marketing team for both referrals and acquisition.” – Diego Dotta, Developer & CXO at Youper

Customer Experience Experts on The Future

CX is a quickly-evolving field as new technologies make it easier to create better experiences, track those experiences, and leverage those experiences into engines for retention and growth. What does the near future hold – and what do you need to do to stay on top of the wave?

“I believe that CX will only become more important as it gets easier for newer, more nimble companies to disrupt larger slower companies. Technology will continue to get better at helping companies quickly and easily see where they’re letting down their customers – like causing them frustration and anger, complicating their progress toward their own goals, and missing opportunities to surprise and delight.”  – Amy Ellis, Marketing & PR at FullStory

“Right now brands are inundated with CX feedback–social, surveys, support tickets–and it’s all over the place. Companies that take a systematic approach to aggregating and analyzing all of that Voice of the Customer data in one place will have a competitive advantage.  AI–in this case a combination of machine learning and natural language processing–is making it possible to glean insights from those thousands of qualitative comments.” – Jessica Pfeifer, Cofounder and Chief Customer Officer, Wootric.

“Companies will need to focus on two areas:

1. Creating consistent omnichannel experiences that cover digital. CX tends to be fragmented which hurts customers and companies. A better approach is to create a consistent experience across channels, and companies miss the boat on digital because they have gaps in their technology. Companies should focus on setting up a strong technological foundation which encompasses the entire customer journey
2. Investing in AI. While current AI applications include chatbots for many tasks (Facebook Messenger currently has over 100,000 chatbots), a common application is to use AI for lower level customer service tasks. At more advanced stages, AI will be invaluable to CX in predicting sales and service behaviors and in augmenting engagement, to name a few.”

      – Sue Duris, Director of Marketing and Customer Experience, M4 Communications, Inc.

“As technology continues to evolve, customer expectations will continue to rise. Delivering a hyper-targeted, personalized customer journey will become standard practice—customers won’t accept anything less. Creative marketers will find unique ways to surprise and delight, setting the bar even higher. Any companies that are already falling behind will struggle to keep up.” – Jes Kirkwood, Content & Community Marketer at Autopilot

“The challenge I have here, in a behavioral health company, is to discover and solve customer issues before they realize it themselves. I also see a need for increased availability – even offline – for when customers need emotional support, which we can do by being proactive using AI and passive data.” – Diego Dotta, Developer & CXO at Youper

“A lot of companies are turning toward value-added membership campaigns. I personally feel these first round of loyalty driven offerings are based too much on the fear of losing market share, less on value added that builds and increases the trust of the consumer. The evolution of CX will force many companies that want to be successful to bite the bullet and put their money where their mouth is. The good news is, the future is bright for the consumer.” – Joe McCollum, Configio Support  / SaaS Consultant

Experts Agree: The Future is About Using Technology to Serve Customers Better

From customer success goals to metrics that measure emotion, to carefully planned and tracked customer journeys, Customer Experience reaches into every aspect of how companies relate to their customers. You can look at CX as the end result of how business decisions ultimately affect customers, or you can look at CX as the guiding light that becomes a company-wide compass for customer-facing decisions. Either way, it’s clear: To survive and grow, today’s businesses have align behind the customer experience.