Reinventing customer success | Erica Favorito | TDSU Ep. 45

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Churn monsters cards. You ever seen these? What is a churn monster? They're like little beasts that, sorry, go through like different types of churn. The one that feels abandoned, the one that feels ghosted, the one that's a poor fit.

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God, this is very nerdy. Wow. This is as nerdy as it gets.

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That's in your junk drawer? Where your wife can see them? That's a shame. All right, you guys ready? What's up, Lifers, and welcome to The Daily Standup with Lifetime Value, where we're giving you new ideas about customer success every single day. I've got my man, Rob, here.

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Rob, do you want to say hi? What's going on? I've got JP here. JP, do you want to say hi? Hello. In his stunner shades.

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And we've got Erica here. Erica, do you want to say hi? Hello, hello. And I am your host.

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My name is Dillon Young. Erica, thank you so much for being here. Would you like to introduce yourself? I would love to introduce myself.

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So I'm the founder and principal of Slice Advisory, which focuses on CX operations and enablement for B2B startups and scale-ups. I've been doing this for about 20 years now in the SaaS game. Holy mackerel.

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So you're an OG. You're older than me. When did you start? Were you like 15? Yeah, she was 12.

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I'm about a little bit of a beast, but I'm in my 40s. Very cool, Erica. Well, you know what we're doing here.

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We want to hear what is on your mind when it comes to customer success. So do you want to hit us with that? Yeah, sure. So I want to talk about why customer success has sort of become the junk drawer of the SaaS organization to steal Rob's phrase, which he has used before.

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And I wanted to address that today. Really quickly, can we all just... What is the most random thing you have in your junk drawer? So let's go around the horn. Oh, man.

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You don't want to know. I got some hand cream here, I guess, in my junk drawer. I don't know how hidden that is.

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I have no less than three sets of nail clippers in my junk drawer. I saw that the other day. I was like, this isn't even the right place for us to store these.

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Nobody's cutting their... Because our junk drawer is in the kitchen. Nobody's cutting their nails in the kitchen. I hope not.

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Here's a random one. This is not product placement. Oh, that's wrong.

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Churn Monsters cards. You ever seen these? The Churn Monsters? They're like little beasts that... Sorry, go through like different types of churn. The one that feels abandoned.

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The one that feels ghosted. One that's a poor fit. This is very nerdy.

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Wow. That's in your junk drawer? Where your wife can see them? That's a shame. That's a real shame.

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And she's still there. Fun times with these bad boys. So surprising.

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JP, what about you? I might as quick. I have a candle in my junk drawer from a company that we're not going to show because they're not paying us. I'm just going to say that this company who I'm not mentioning, this candle is not.

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Okay. It smells really good, but got a wooden wick. It's awful.

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Oh, so it crackles. It talks to you the whole time. Oh my gosh.

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Shut up. I hate those crackles. I can't stand it.

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Leave the crackles for the cereal. I should say their name for bad press, but I'm not going to. No, no.

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Let's get back on track here. Erica, we are the junk drawer of the post sales or go to market motion. And you'd like us to not be.

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Is that right? Did I get that right? Yeah. How do we do it? Well, how do we do it? So I think what CS has become in this junk drawer sort of situation is like a boundary list professional services team, right? And that's on top of all of the, I think, extra account management, commercial responsibilities that a lot of these teams are tasked with. And so if we think about like how we got here, Zerp era, there's a lot of bad products out there, quite frankly, in this arms race for market share.

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And so there's a big gap. There was a big gap between what sales and marketing was able to sell. And then the realities of what a product could do or deliver.

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And CSMs are really those gap fillers. And as that gap gets wider, right, there's more manual intervention that it requires. And so there's more manual intervention.

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And you have the rest of the organization continuing to set these white glove, which I hate that word, white glove nations, right? And then everyone's very concerned nowadays in post-Zerp era about the profitability of your company, of the different roles within your company. And the way to do that is to have boundaries on what the customer is, their expectations, and also what we promise to deliver them. And so I think that CSMs, I'm going to make a pronouncement.

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The CSM role either shouldn't exist in its current form anymore, or CS teams should be run more like professional services teams. You spoke to Dillon's heart right there. Oh, I did? Yeah.

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Oh, good. I'm glad. Well, so I often will flippantly say that I don't think CS is going to exist in 15, 20 years.

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But what I actually mean is that... Maybe five. Yeah. Well, I mean, very much what you're saying of like the Lemkin's Scarlet Letter, right? That article he wrote, I don't know, a year and a half ago of CSs, they're nothing but, you know, they're the catchall, basically.

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It was very derogatory, basically. But I kind of agree that so often they are designed in that way. And so I don't believe CS will exist.

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I think it will revert to calling it account management. And or the methodologies we use to retain customers and expand them will just be dispersed among a bunch of other teams. PS, maybe account management, maybe product.

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Because CS is not properly designed to execute on it. No. And the thing now that really... Oh, by the way, just go back to that Lemkin thing, right? He wrote that.

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And then every other month or so, he writes something about like how he's had a less than ideal customer success interaction. I don't know if I could swear on this podcast. I was about to, and then I had to think better of it.

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Yeah, no, no. Swear. Right? Swear.

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Oh, I can't? Yeah. You know, and then he complains about it. Well, maybe there's a reason for that.

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And I think it has to do a lot with the VC class. But I think like all of this focus, everyone's panicking around it and all this focus on the commercial aspects of it, which I understand why. But to me, that is treating the symptom and not the disease.

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And it's like, do we really think like a better like internal contracting process is really going to solve most of this problem? Or is it really about creating and delivering better products and better outcomes for customers? And I don't think a lot of people really want to hear that because that points to like a fundamental misalignment versus like, oh, we need a better renewal process. Yeah. Well, sure.

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It's a cultural issue as compared to just pointing to the CS group and saying like, why aren't you getting it done? And it's like, well, because we actually need every group within this company to fall into line, so to speak, in order for us to do that thing. And yet we are only peers. Sometimes we're more junior, like I can't tell a VP of product necessarily what to do or how to make his decisions.

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And so if he doesn't believe in the idea of customer success and the fact that it is a company wide effort, well, then I'm **** there. There's an effort for each of us. Good.

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I'm glad. I'm glad we're going down that road. But that's the thing.

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I think for too long, even from a product perspective, it's all been about how do we increase our TAM? How do we get market share? How do you know what I mean? As opposed to like, oh, we have these customers in our pipeline. And by the way, if we don't renew them, in most cases, right, the cap payback period is at least, you know, it's definitely beyond a year for the vast majority of companies. Sometimes it's multiple years.

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So it's like, listen, if you're not renewing them, then you're losing money on all these folks anyway. So like, it's kind of insane to me that everyone is just sort of waking up now when it's this chronic or existential issue for a lot of these companies where it's like, hey, listen, if you I think one thing that customer success teams can do or post sales teams, however we want to call them or organize them, is having a really solid voice of the customer program, having really solid feedback loops that have both data and verbatims from customers that they can then put in front of those product teams. I think that is that could go a long way in hopefully solving some of those problems or at least bringing them to the level of attention within the organization that it needs to be at.

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Rob, what do you think? I like where you landed that, because it gives me the opportunity. I'm not going to play the devil's advocate, because I think you and I both know we agree on pretty much. You can play, it's fine.

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But I'm going to share. Yeah, I'm just going to share an example to the contrary. Well, not to the contrary, just more of a nuance to the conversation.

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So I have been notorious in companies that I work for, like pushing off junk that people are trying to put on my plate, whether it's a bad customer or responsibility that I don't want to take on. I've been notorious for that and respected for it at the same time. I mean, it's one of those tough things we have to do as CS leaders at times.

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An example to the contrary was where I actually saw that my product team was really bottlenecked, and it was frustrating me for months and months. And so what I ended up doing was saying, I've got an idea. I'm going to create my own mini product team within the customer success org.

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And we happen to be doing really well as a company at the time, so we were able to afford creating this role, this product liaison role, which was like a pseudo product manager in-house within the customer success team. So I was like, let me take the junk that you guys have. I will gladly take the junk because it solves my problem.

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It advances my career and my position within the company as well. And the trade-offs, basically the benefits outweigh the costs, right? So there are certain cases where I'm a pretty scrappy leader in general. I've said that.

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I try to be at least. And I try to say there's no job that I feel like I'm too good for. I try to live by that principle.

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There's got to be one you're too good for, right? I mean, I don't know. I've washed a lot of dishes in my life. I've washed more dishes in my life than I would wish upon my worst enemy, just from my restaurant days.

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But my point is to say, I think the question really boils down to what is the opportunity that could be hidden in the junk? And then all the other junk, yes, keep it as junk. Like, let's try to draw those boundaries, keep them off our plates. But I think there are more opportunities than we sometimes give ourselves credit for as CS orgs.

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Yeah, I mean, I think we're kind of saying a similar thing. Like you said, you weren't really playing devil's advocate. And I think it boils down to what is the commitment that the organization is willing to make to continuing to service existing customers, especially from a product perspective? You know, I've seen some companies break it down where it's like, okay, 80% or 70% of the product team or the engineering team's time is based on like new product development and 20% or 30% is based on, is geared towards exactly those issues that you were describing.

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And so that might be a good eval question for companies that, you know, if folks are looking at new roles or looking at new companies, that might be a good question to ask to figure out like, hey, have they even thought about this or they can continuing on this path, which I don't know what you guys think. But I feel like a lot of this profitability talk that's out there is a lot of lip service because I don't think we have that muscle built up to really do it for real. And that's where you got to start.

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That's where you got to start is, hey, we now understand that we can't just burn cash. But a lot of their structures are pre that revelation. JP, why don't you take us home? I'll just say from my view, I think the early mistake I made was coming in and thinking that CS was very easily definable.

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And so I've learned to just become an opportunity mercenary. Like from there, there's three different things. What's my role? What am I getting compensated? And how am I proving value? The proving value goes to speak to my career overall.

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So I want to have wins, things that are transferable, things that go with me. The compensation is, am I going to be happy where I am at the moment? You know, like, OK, you need me to do X, Y and Z. That's fine. But I'm perfectly fine being the Swiss Army knife, I guess I say.

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No, there's a junk drawer. And I'm the Swiss Army knife to find the value and opportunities wherever we are. Well, that's our time.

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Thank you so much for being here and for bringing this topic. I think the way you think about it is refreshing, in some ways painful, but it needs to be said. So really appreciate it.

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Until next time, we've got to say goodbye. Thanks, Erica. Thanks, guys.

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It was fun. You've been listening to The Daily Standup by Lifetime Value. Please note that the views expressed in these conversations are attributed only to those individuals on this recording and do not necessarily reflect the views and opinions of their respective employers.

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For all inquiries, please reach out via email to Dillon at LifetimeValueMedia.com. Find us on YouTube at Lifetime Value and find us on the socials at LifetimeValueMedia.com. Until next time.