Join Phil Nanus, VP of Research of Customer Success at the Technology Services Industry Association (TSIA) and Allison Pickens, VP of Customer Success and Business Operations at Gainsight, as they discuss scaling your Customer Success organization.
In this hourlong webinar, Phil and Allison will discuss:
Developing a business case for Customer Success
The 7 steps needed to scale your teams
The critical funding conversation between sales and Customer Success to ensure profitable Technology-as-a-Service growth
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âą Serves as Gainsightâs top customer officer
âą Professional trajectory: BCG, Bain Capital, Gainsight
âą Leads the entire post sales organization including CSM,
Services, Support, Operations and other teams.
âą Allisonâs weekly Customer Success blog on Gainsight.com is
considered required reading for customer success pros and
she was recently named one of the 50 people you should know
in sales and business development.
Allison Pickens
VP Customer Success &
Business Operations
apickens@gainsight.com
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âą Has held senior leadership positions in service sales, service
product management, and service operations
âą Professional trajectory: Accenture, Veritas, Symantec, Infor
âą Led teams of Customer Success Managers (CSMs) focused
on driving customer adoption and retention
âą Managed and monetized on-premise and cloud customer
success portfolios
Phil Nanus
VP Research,
Customer Success
phil.nanus@tsia.com
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TSIA is the worldâs
biggest vault ofâŠ
Technology services data
insight & best practices.
Everything you need to optimize your service organization in one place.
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Our Unbiased Independent Research Model
7
155
Operational
Best Practices
Audits
9.6K
Analyst
Inquiries
1,310
Benchmark
Analyses
1M
Benchmark
Data
Points
548K
Survey
Data
Points
8. www.tsia.com
âą Improving service margins
âą Increasing product & service revenue growth
âą Optimizing organizational structures
âą Improving customer adoption & value realization
âą Innovating service delivery and experience
âą Successfully transitioning to the cloud
âą Designing profitable XaaS offers
To solve these problemsâŠ
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
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TSIA Customer Engagement Model
Land: All of the activities required in selling an offer to the customer and the initial
implementation of that offer
Adopt: All of the activities involved in making sure the customer is actually adopting
the solution that was implemented
Expand: All the activities required in helping current customers expand their budget
spend with the company
Renew: All the activities required to ensure the customer renews their current
relationship with the company
Land Adopt Expand Renew
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Charter of Customer Success
What is your primary charter of customer success?
45% 45% 10%Adoption Renewal Expansion
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Source: TSIA Customer Success Baseline Survey
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Charter of Customer Success
What is your primary and secondary charters of
customer success?
35% 44% 22%Adoption Renewal Expansion
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Source: TSIA Customer Success Baseline Survey
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
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Funding Model for Customer Success
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Cost of Goods Sold These are the costs associated with making,
installing, and supporting the specific instance of the product
purchased by the customer.
Sales and Marketing These are the costs to acquire and retain
customers.
Research and Development These are the costs of developing
new product capabilities.
General and Administrative These are the costs left over
that donât fit neatly into one of the previous buckets.
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
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Segmentation for CSM Coverage
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Account Size Geography Customer Line of
Business
Growth Potential Product Touch Other
Source: 2016 TSIA Customer Success Baseline Survey
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CSM Activities
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Cross Sell/Upsell
Lead Generation
Oversight for initial Implementation
Customer Training
Value Visioning
Success Plans
Conduct Quarterly Business Reviews
Renewal
Provide Customer Best Practice Material
Monitoring Adoption
Onboarding
Execute Individual Get Well Plans
Source: TSIA Customer Success Baseline Survey
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
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What is the impact of Customer Expansion
and Retention Costs?
Customer
Acquisition Costs
These are sales and
marketing
costs associated
with acquiring new
XaaS customers.
Customer
Expansion Costs
These are the sales
and marketing
costs associated
with expanding
revenues with existing
customers.
Customer
Retention Costs
These are the sales
and marketing costs
associated with
renewing existing
customers.
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7 Steps to Scale Customer Success
Charter
Financial
Model
Practices Metrics
Skills Offers Technology
34
35. TSIA Emerging Offers Study
ADOPTION
PLANNING
CONSUMPTION
MONITORING
CONSUMPTION
OPTIMIZATION
PROCESS
CONSULTING
âą Vision & strategy alignment
âą Onboarding
âą Governance / Decision making authority
âą Adoption/usage monitoring
âą Adoption scoring
âą Adoption benchmarking vs. peers
âą Business KPI monitoring
âą Business KPI scoring
âą Business KPI benchmarking vs. peers
âą Industry-specific business metric dashboards
âą Customer success manager
âą Account reviews
âą Feature deployment
& utilization assistance
âą Industry-specific feature
utilization training
âą Assessment/audit of current
state/goals/gaps
âą Best practice playbooks
âą Success story webinars
âą Web-based workshops
âą Super user programs
âą User group meetings
âą Performance optimization based
on best practice insight
âą Capacity analysis & optimization
based on best practice insight
âą Business or workflow process improvement
âą Best practice consulting / advise
âą Co-develop new capabilities with customers
to deliver innovation to the market
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Gainsight Customer Success Platform
Support
Marketing
PSA
Web
Finance
DB API
Surveys
SFA
Strategic
Customer
Management
Proactive
Customer
Management
Scaled Customer
Management
Early Warning System
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Key Questions
âą What is the target financial model your company is attempting to achieve?
â COGS, COS, Sales and Marketing, R&D, G&A
âą What responsibility does Customer Success have?
â Traditional Support
â Adoption
â Renewing the customerâs subscription
â Cross Sell and Upsell or lead generation
âą What are the economic drivers per resource?
â ARR coverage for renewing and expansion of existing customers and new customers
â On Target Earnings
â Ratios
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Key Questions
âą What is the target financial model your company is attempting to achieve?
â COGS, COS, Sales and Marketing, R&D, G&A
âą What responsibility does Customer Success have?
â Traditional Support
â Adoption
â Renewing the customerâs subscription
â Cross Sell and Upsell or lead generation
âą What are the economic drivers per resource?
â ARR coverage for renewing and expansion of existing customers and new customers
â On Target Earnings
â Ratios
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Funding Customer Success
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Five Questions 2 3 4 5
Support Adoption
Own
Renewal
Expansion
Y Y Y Y
Subscription Revenue 100%
COGS 25%
Datacenter, Etc. 15%
Support 10% 10%
GROSS MARGIN 75%
Sales and Marketing 30%
CAC (65% of S&M) 19.5%
CEC (15% of S&M) 4.5% 4.5%
CRC (20% of S&M) 6.0% 3% 3%
R&D 15%
G&A 10%
OI 20%
20.5%
Total % of Revenue Allocated to
Customer Success
1
YOUR TARGET
FINANCIAL MODEL
Source: Framework for Funding Customer Success
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Sales and Marketing Effectiveness
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
Sales & Marketing as % of Rev Rev Growth
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Key Questions
âą What is the target financial model your company is attempting to achieve?
â COGS, COS, Sales and Marketing, R&D, G&A
âą What responsibility does Customer Success have?
â Traditional Support
â Adoption
â Renewing the customerâs subscription
â Cross Sell and Upsell or lead generation
âą What are the economic drivers per resource?
â ARR coverage for renewing and expansion of existing customers and new
customers
â On Target Earnings
â Ratios
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End Game Coverage
UNLIKELY TO EXPAND LIKELY TO EXPAND
LAND SALES
ACCOUNT
MANAGER
CUSTOMER
SUCCESS
MANAGER
LAND ADOPT EXPANDRENEW
RENEWAL
SPECIALIST
SMALL
EXPAND
SPECIALIST
LARGE EXPAND
SALES ACCOUNT
MANAGER
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Scenario
âą ARR Growth Is the Goal
âą Two Teams: Land Team and Growth Team
âą Services and Success Part of Growth Team
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Why We Think It Will Optimize Profitable ARR
âą Expand and Renewal will be maximized
âą Sales will focus more on Land
âą Revenues will be diversified
âą Processes can be more easily automated
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TSIAâs 1st Step Organization Structure â 3 âTeamsâ
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SUCCESS
SCIENCE
CUSTOMER
SUCCESS
FINANCE/
ADMIN
CEO
LEAD GEN
CUSTOMER
ANALYTICS
SERVICE
REVENUE
GENERATION
EDUCATION
SERVICES
SERVICE
DELIVERY
MARKETING
PORTFOLIO
MANAGER
CUSTOMER
GROWTH
OFFER
DEVELOPMENT
INFRASTRUCTURE
MEDIUM
RENEWAL
SPECIALISTS
LAND SALES
VERTICAL 2VERTICAL 1
SALES
RESOURCES
SALES
RESOURCES
LARGE
SUCCESS
MANAGERS
SMALL
SMALL EXPAND
SPECIALISTS
INDIRECT
SUPPORT
SERVICES
EfficiencyEffectiveness
Tight Alignment 1:
Land Team
Tight Alignment 2:
Customer Growth Team
Tight Alignment 3:
Infrastructure Team
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Two XaaS Playbook Assertions
ïŸ The act of selling will undergo radical change.
ïŸ Delivering and measuring customer success will become a defining
characteristic of market leaders.
71. Contact Information
Phil Nanus
VP Research & Advisory Services, Customer Success, TSIA
phil.nanus@tsia.com
+1 407 547 3150
@philnanus
73. www.tsia.com 73
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Here are examples of the companies we work with. Updated 10/2016
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TSIAâs Executive Director, Thomas Law, hosts the Technology & Services 50 webinar on a quarterly basis. It takes a look at public data of 50 of the top names in technology to help our members look at overall trends. In April the Q1 2016 version was launched and we shared the slide below around âSales Effectivenessâ. The data on this slide tells us that there is no correlation between the cost of Sales as a percentage of overall revenue (blue line) and topline revenue growth of the company (orange line). There are only a small number breaking 10% growth. It is fair to assume that shareholders, boards of directors, and executive teams will not allow the inefficiencies in the sales model to persist. Also, it wasnât just Q1 of this year, you can look back at this data in previous quarters and continue to see the non-correlation.
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