Forecast or die | TDSU Ep. 25

...losing the fuzzy things of companies saying, "Hey, we want our customers to be happy and we want them to adopt and more." It's like, could you maybe get some more money? Maybe get some more money.

How about some money? Do they have money? We want some of that money.

Alright, we're already recording, so I'm just gonna jump right into it, and I can't stop playing with my breast pocket, guys. I'm gonna try to stop during this recording, but I, no promises. Sorry, Jeff, you're

Come on, let's go! What's up Lifers and welcome to The Daily Standup where we're giving you fresh new ideas in the customer success space every single day. I've got my man JP here. JP, do you want to say hi?

What's going on people?

We've got Rob here. Rob, do you want to say hi? What's up paisans?

We've got Jeff here. Jeff, do you want to say hi?

Hey, with a cool tagline too.

Love it. I love it. And I am your host. I am the bizarrely dressed super fan of customer success. My name is Dillon Young. Jeff, thank you so much for being here. Do you want to introduce yourself?

Yeah. So I've been working in customer success for a few years, live in Utah.

And by a few years, I mean, long enough that we did it before it was called customer success. So, and now I'm working at a couple of SaaS companies and enjoying it and lead our customer-- whole customer experience teams.

Right on. So Jeff, you know what we're about here. We want to hear the number one thing on your mind when it comes to customer success or the adjacent professions.

So why don't you tell us what that is.

Yeah, I think like everybody, we are running into, this recession, that's not a recession, this crisis, that's not a crisis, that's going to be a crisis. But I think, what's been interesting for me is seeing that it actually has resulted in...

In my opinion, the first good stress test for customer success, where we always said like, " Oh, they drive revenue.

Oh, they're really great. It's awesome. You know, we're never going to do it." But when times were good and VC (venture capital) money was easy and it flowed in, you said, "Oh yeah. Oh, churn, that's a great thing to do, whatever else." When the chips fall and it becomes a problem with... sales and whatever else, feels like it comes down

to a real make or break. And I think we're seeing that in customer success as people losing the fuzzy things of companies saying, "Hey, we want our customers to be happy and we want them to adopt and more." It's like, could you maybe get some more money? Maybe get some more money.

How about some money? Do they have money? We want some of that money.

Yeah. Literally just dollar signs-- the speech bubble above their head that's just dollar signs. It doesn't matter what's coming out of their mouth, dollar signs, dollar signs, dollar signs.

JP, you were giggling right there. What do you think about Jeff was saying?

Um, yeah, I love what you said, Jeff, about this being a real stress test.

And that fuzziness being gone.

To be honest, like you, I was never with the fuzz to begin with. You know what I mean? I was never with that. I always would hear like, "Oh, empathy and make your customers happy," like you said, and it's just like... you're running a business.

Customers, the emotions, those are fickle, right?

You're trying to build... What I always come back to with customer success is it's born out of the subscription model, which means that companies are, in general, in a vacuum, I guess, taking more risk upfront so that they can get more pay out in the long run and that-- it's still about the payout.

And I think that people are saying, "Okay, can we get our payout in two years instead of

three or four?"

It feels like the timeline has shortened. So there's a little bit more of that sense of urgency. And I think that customer success people used to pride themselves on saying, "We're not support, we're not sales or we're not this."

And now it's like the edges are getting a little bit sort of cut. And I think we're beginning to see things come into view from said stress test.

Rob, before I let you in here, I think what's interesting to me is it's certainly an inflection point. It feels like we're growing up.

I think we were talking to somebody the other day who called it customer success 2.0, or maybe it's 3.0, who knows at this point?

But it is this idea, "When you put this side by side with, this idea of durable growth that everybody's talking about, it makes a lot more sense. We don't get to just make our customers feel nice.

It should be that they feel nice because we're showing them the data about how we're making them successful. Oh, and by the way, throughout that process, they're like, "Well, what else can you help me with? What else can I buy from you? That's going to help me move up or down these other numbers that I'm responsible for."

Yeah, we're kind of taking those rose colored glasses off. I like that you're bringing this up, Jeff.

But Rob, what are your thoughts?

The question really is how does someone in customer success elevate to the level where they have not just a grasp of the dollars and cents that underpin their role, but mastery of them.

I've sort of been through the process myself where I had to learn... there was sort of a crawl walk run that I went through that started with like, "Okay, first of all, I'm in the weeds. I'm in the operation."

And then the second phase, when I thought I had it figured out, phase two was all about dashboarding and reporting. So I was like, "Okay, cool. I've got these dashboards, I've got these reports and now I can run the operation more scalably.

But phase three was really where I sort of earned much more of a seat at the executive table, which was around forecasting.

So I remember the first time I heard someone say like, "I have to leave this meeting. I have to work on this forecast for my CEO." And it was the first time I heard anyone talk about forecasting for churn and up sell. And I was like, "Oh, is that what I'm supposed to be doing? And so I sort of just put my neck out and I was like, oh yeah, I said to my manager, I was like, "Yeah, I'm working on this forecast."

And he's like, "Forecast?" I didn't know what I was signing myself up for, but I was like, "I'm just going to figure it out as I go." I think that's one of the most interesting ways where you can get the ear of the executive team.

So, Jeff, you referred to this as a "stress test." I think the way that you win this stress test, the way you pass the stress test, is by getting mastery over the forward looking financials of the CS org.

But I'd be curious to hear from your perspective, too, any other tips and best practices that you've seen work.

Yeah. So for me in my career, my stress test came when my company was 50 percent churn in the same year was the thing. It was a total fire sale.

It was a layoff. It was the whole thing. We wasted bajillions of dollars and found out that the CS org was built wrong and whatever else. And that was out of necessity. We said, "Hey, this company is not going to be viable if we can't figure out how to know right now, what's going to happen to our customers and how we can forecast them to do that."

And so we picked through the burned down ashes and said, "Hey, These are valuable things. If we can get them to do this, if we can get them to do that, if we can put them to this place, we can forecast out that your survivability is going to be better," right? And we started charting that out and part of that process.

And we got it to net negative in 18 months by doing that same thing.

But that's the stress test. I think we're finding now.

It gives me panic whenever I talk to customer success people that are like, "Oh yeah, we've moved away from all the revenue. We gave that all back to sales."

And I think, "Oh, cool. You're not going to work there long because when push..."

Yeah, when push comes to shove and you're not attached to revenue, you're going to--

you're going to have--

you're going to go find a job where they're going to say, "Cool, let's attach you to revenue and show what you can do."

So I think that's-- it's a crucial point to be able to tell the future, which is what literally the Fed is trying to do with this whole thing is figure out how to tell the future.

Right?

Yeah, and you gotta figure...

We brag about, "Well, we're responsible for..."

In a decently mature organization, 90, 95 percent of all revenue that the company will see that year, we're responsible for it. So if you don't have any idea what it's going to look like on January 1st and December 31st.

The delta between those two, either churn or growth, then you're not doing your job, right?

Sales is not the only one that needs to be able to predict how much money they're bringing in the door. We got to do the same thing.

I totally agree. I would have heart palpitations for anybody who's like, "Oh yeah, we're actually going to a straight satisfaction model. We're just gonna get bonused on our NPS scores."

I might also recommend you spruce up your resume. Sir, or madam.

Well that's our time, Jeff. I really appreciate it. This is a little bit different than the way we've heard it before. So I appreciate you bringing this perspective to it. For now we'll say goodbye.

Hey, thanks so much. Thanks for coming by, Jeff. Appreciate it.