Customer Success Metrics That Matter

[Music] thanks for remaining for our panel today we're going to talk about customer success metrics that matter I am Helen Crowley and I'm VP of customer success at socialbakers which is a social media analytics company based in Prague we have about three hundred and forty people working at socialbakers over two thousand five hundred clients or customers I should say and I have a great panel here full of different types of businesses and slightly different customer success roles and one of the reasons that we wanted to talk about metrics is that as we've heard in in a number of the sessions today and churn is a real sticking point for SAS companies and it's even customer success is is certainly not a new concept but it's very new for SAS because it's all about the subscription economy it used to be that you would is a salesperson you would turn up to your client and they would give you a large amount of cash you'd hand over the product and say I'm out of here but now that customer is still standing in front of you every month every year and they have to decide to buy again and so that's why customer success really does matter and when you're in customer success it's all about the data and you need to know what to focus on and when and this is why we have this team here who have direct experience at that so if you could introduce yourselves tell us a bit about what your company does what you do there and kind of what stage you're at as a company because I know the customer success changes depending on the maturity of your company so dolly Thank You Helen I'm Zoli I'm the director of customer care at Prezi the zooming presentation tool I was the fourth employee to join in 2009 we started from Budapest and now we have an office in San Francisco as well we're 200 plus employee company now seventy-five million registered users and my team customer care includes support and learn internationalization and part of customer success as well so I can represent the customer care side of the business great David cool hi my name is David Apple I'm the director of customer success at typeform which is an online forum and survey solution that's beautiful we when I joined about two years ago there were only 15 of us and now there's about 140 of us so we've been growing by crazy we have over 1.5 million people have used typeform and about a year ago we raised our series a of 15 million dollars led by index and with participation from 0.9 and connect Ventures who I think might be here so I the way the customer success team is structured at site form is in five pillars so customer support customer experience education account management and sales and my team has grown from about four people when I joined to twenty five people now thank you my name is Grisham co-founder of charge B we had a subscription management and billing system that complements payment gateways like stripe Braintree and co-catalyst so we are now a 72 member team with presence in Chennai and in San Francisco we are backed by Accel Partners and Tiger global we serve customers in 48 countries about 2,000 success customers that's a stage Janet great thanks and David I know you have some sort of numbers that you can you can share with us so we were talking about this the subscription economy and how important there for customer success is but just how important sure so what we're looking at is retention and and studies show that it it costs from 7 to 10 times more to acquire new customers than to retain your existing customers so in most cases it's spending $1 on retention it's a better investment than spending a dollar on on acquisition also by expanding your or improving your retention rate you're increasing your lifetime value which means that each of your customers becomes more valuable and therefore you can invest more money in acquiring them so it has a dual benefit there and and finally your churn rate will determine your your company's growth rate so if you have like a fixed amount of new business coming in every month your churn rate can determine whether you grow exponentially linearly or completely fail and and Chris and I were talking about it so I know you have some news to share the anecdotal example is if you are acquiring hundred customers every month at the end of the second year right you would expect to have on board up to those and former customers but if you have a 5% churn rate by the end of the second year you are going to have only thousand four hundred our customers out of the 2,400 but if you have one person churn rate against a five percent then you have close to 2,000 150 customers by the end of the second year so that start difference of more than seven hundred customers leaving through your leaky bucket right so it's very important to understand all the different things that can do to hold them in your funnel right and that's what this is all about great thanks that is a stark difference and the way that I think about customer success is in three three different areas so I believe and I shouldn't take credit for this this is from Dan Steinman who is here today and actually wrote the book on customer success the way that they talk about it is it's a philosophy so it's it's a way of thinking about your about your customers it's it's an organization so I work in customer success these guys work in customer success but then also it's a discipline and it's really great today we have different roles here today so obviously we have Ukridge who's the CEO and co-founder you have a slightly different view on the importance of customer success and I guess you're sort of responsible for the philosophy of customer success is that what do you say that's right yeah yeah because most of us don't have a cook when do we know that you actually need customer success as a function right yeah doesn't start with that but it starts with things the small things that you do even starting with customer support right what do you measure from the beginning what as one of the most insightful things that we did from the beginning is classifying every ticket that would come in every request you would classify to this prospect and what kind of question it is is it about a feature is it about a comparison if it's a prospect if it is a customer what model are they asking for do we need to do anything to assist them things like that and then when you start measuring that as an aggregate data on a month on one basis you would know that these are areas that we need to improve on when it comes to onboarding these are areas we need to improve on when it comes to reading the customer so I would say it's not really about the tools or the numbers as well but that comes later but in the early stage it's more about how we are actually looking at making sure that the customers you are really paying close attention to the customer and you are enabling them to get the most out of your product ok so let's just stick on that one then after what would your if you had to choose one metric that you were to monitor when it comes to customer success what would that sort of northstar be when it comes to customer success as such right now is a chart which is the customer Cheung and mr cheung and then we break it down into the voluntary and involuntary churn in every one of these aspects right for a business that is in the payments part we make money only when the customer makes money which means that we focus a lot more on ensuring that we are not losing customers because they are not getting the most out of the product but if they are actually shutting down their business are the a pivoting and that kind of natural churn is totally okay so that's why we break it down into these aspects of customer churn versus a manager okay great David what's your Northstar are the key metric for customer success aside from is net M are our churn and to explain what that means to people who don't necessarily know you have customer churn which measures how many customers you're losing from the beginning of the months at the end of the month which is interesting but it doesn't tell you if you're losing your most valuable customers or your least valuable customers so then the next level of kind of sophistication that you'll be looking at would be M RR churn which tells you how much revenue you're losing from one month to the next which gives you more insight but it doesn't give you the full picture of how much value you're retaining from your existing user base from one month to the next because it doesn't take into account expand and contractions so cut someone jumping from one plant to another and spending either more or less money and reactivation so someone who cancelled and then a few months later joins again so net mr turn encompasses all of those behaviors and that's why it's our key metric okay it's only how about you I would join Krish for just one sentence before I would get I'll get to that so we believe that customer success and then to your point is also going to should be a company-wide philosophy so it's not only for the customer teams or the customer success team it should be product development it should be marketing it should be finance as well to has to write questions about how can I make my customers successful especially in today's world when the post purchase experience in customer success is so crucial for brand loyalty so we try to we try to incorporate that and kind of put the customer to the front about the key metrics our North Star is yearly net renewals so it's fairly simple it's like the number of customers renew versus the number of customers register the previous year and especially with our new business product which we launched this summer the targets the work group use case at businesses and and we also measure team expansion for the success team and for the customer teams and assess team on the North Star level sort of say so if we go a little deeper so the different pillars that you were talking about before how would you measure those different areas of customer success yeah I really like this metaphor it I think if you break it down from kind of the the lag indicator also as they say like from the North Star like your white goes to the to the lead indicators those things that you can actually measure as you go forward so so for for for renewals it's the the actual repeated feature usage that we are focusing on as well as a Vernis for team expansion so we we kind of try to optimize the time to value that customers are getting and it's also value is defined on the future level so we pretty much know that certain features and the more usage and the sooner the usage actually happens to those certain features the better renewal rates we get so as we as we roll up the teams that work against it we specify different metrics and goals for each team seeing if they can move the needle there and help our team users and our individual users to be successful okay how about you with your different pillars David sure so as I said we have five pillars customer support is focused on first response time customer satisfaction rating and now we're starting to look at cost to serve as well our customer experience team is involved in a lot of one-to-many campaigns and their key metric is mps and net EMA return but for their segment which is kind of our lower value customers then we have education which creates all of our content there the key metric there is mostly about ticket deflection but we also have some engagement metrics that we look at account management is also NPS and net EMA return but for higher value customers so the customers in their segment and sales is new business and an expansion okay you look at any other metrics base me I know you talked previously about the reasons for churn right so when it comes to so one of the interesting things that we learned by tracking customers who are actually leaving is that we introduced a drop-down where we would ask customers why are you leaving right by but not by asking - right but by giving specific options and collecting this information like ok I'm shutting down my service I'm pivoting are these features are lacking there are features that are lacking are I'm switching to another service so by giving these options we actually learned a lot of things about why customers are leaving and as long as we are actually keeping the involuntary churn as long as we are actually keeping the warrant rich and really control I think we are doing a very good job and then we started paying attention to for the wall in return are they able to make money and are we enabling them to be able to do more of that became the focus so that we are not looking at everything in one bucket and trying to think either we are doing great or we are not doing great right instead by segmenting this data we are able to get a little bit more clarity on what is it that is missing that we need to address that's that's an interesting one because you you obviously focus on a segment which is smaller you know SMB type type businesses and therefore it's more likely that you have this kind of involuntary return it must be killing every every moment well it's not really in your control right getting them on board ensuring that they are successful is more important right and as long as you are actually able to bring the top of the funnel really you are able to populate the top of the funnel nicely then that's good you can only control the controllables right there are certain things where if they are actually really trying hard at their business and they are saying no subscriptions not for me and they're moving on to something else that's not something that we can control but what we try to focus on is how do we get them faster to the point where they are able to do transactions so that we are really measuring through activation how long does it take for them to get truly activated that is a controllable them saying I'm going to leave subscriptions is not something you can control right but at least if you are measuring it then you at least be focusing on the right things yeah just moving on now so so if we if you think about maybe there was some analysis that you did one time where you really you know you've got a true piece of insight where you thought oh that's why we really need to focus can you tell us a bit about you know what what that a-ha moment was what about usually I would probably mention to two of these things one one was when we started with onboarding we we did love user research and a lot of feedback processing when we kind of understood how the first week few weeks are so crucial in product adoption and we need to focus on onboarding our customers and provide the value to them as as quickly as possible and when we started we pretty much just started with an MVP and and reached out log to the results in a spreadsheet and kind of went from there and kind of identified those features which we needed needed to focus on and now we see that those users do customers who go through onboarding are creating a 10% plus more content and they are they're much more engaged as well this is this is new for us and it was kind of an aha moment another was another is content and how content and good knowledge base and good educational content and trainings are so crucial and probably it's different for every product but Prezi is a complex productivity tool so our customers love to to consume our content and help themselves with it and we know that for those customers who touch our knowledgebase they're more than 30 percent more likely to renew and you know there's always this chicken or the egg question right that we feel can have been meditate on like are they more successful because they're more motivated in the first place or are they more successful because we have that service available but since they are there and they use the service we not only kind of maintain the service but we also invest in and extend it but you did it you know a type form where the kind of the most meaningful metric that we found is from our turn survey so we have a mandatory churn survey when someone unsubscribes it pops up in a survey the first question is can you tell us how your experience was using type form Pro score from 0 to 10 and our average score is around 8 so that means that our customers even when they're turning are really happy with our product so then we ask the follow-up question then why are you turning and it turns out that about 70% of them are turning because they had a project and they were successfully finished it but then they don't have a follow-up project to do afterwards so they turn so that made us understand that our focus should not really be on making them more successful with their first project even though that could be valuable but that's not where the real opportunity is the opportunity is inspiring them with new use cases and and to do more with so then it was more about creating content marketing materials yeah well so we you an example of something we did was we have we detect we try to detect when someone's project is ending and then we send them an email kind of proactively saying hey what's your next typeform project going to be here's a few options some inspirational ideas and and with regard to that metric we also saw that there was a lot of other metrics that that kind of confirmed that this was the case when we look at a cohort analysis for churn we see that most of our customers who churned turn in the first couple months if they stick around and they're there for a while and and we also saw that the metric that was most correlated to retention was creating more type forms so all of those seem to indicate that people who have more use cases and you say from for more things tend to stick around do you have any any obvious I have a question for you yeah sure your renewal cycles are very different right what was that aha moment for you guys so I think the the most recent one has been looking at renewal rates of first-year customers the renewal rate for our first-year customers is very very different to later years which sounds kind of obvious when I say it now but the moment we saw this or the numbers it was very obvious where we needed to put our resource so we've now refocused a number of our teams on different things so for example we have our education team they're constantly looking not just at the overall health of our customer base but separating out those first-year clients we've put more of an emphasis on the onboarding period we also know that if a client is is in our kind of sick or in an endanger category three or four months before the renewal they're far less likely to to renew so just kind of tweaking where you put your resource and where you put your focus and slightly breaking out the analysis has been really important there and of course retention is a lag metric so who knows where they've made a difference but that's something that was very very obvious to us just just a few months again have you got one that's right for us it's the time it takes for it to enable them to do set up the payment gateway and the transaction right and once they start invoicing their first customer we know that they are on the road so getting to that point and making sure that they are completely in able to get to that point that realization that that is true activation took a long time for us right to when they put a card in and then they are activated you tend to think the customers are too waited but they are really not right so when what is critical point they get real value of your product at getting to that point and hand-holding them through that has been very important right that was the aha moment for us so Krish as the CEO and co-founder of your company you must have customer success people come to you and say we want to invest more in customer success how do you judge the ROI of the customer success team okay so if somebody asks that that's a good problem to have for us right hey I want more people so the interesting thing is it's about capacity planning the way I look at it right so when there are so thirty to forty percent of the requests that are coming into customer support they are from prospects right which is the case for us we know that it automatically qualifies themselves the the prospects qualify themselves and helps the sales for sales funnel the same way we are able to the number of chart requests that are coming in inbound and if there is nobody to attend to it at that point then is a capacity problem so pretty much all these customer touch points if we are able to have a way to measure and then figure out now how do we enable this to be done either smarter with tools or by adding people to it I think that kind of is an indicator for our Y in our case so we just look at some of these metrics to say okay so should we be adding more people to this function and that is how we look at it yeah is it same for you David how do you convince your your boss yeah that's it's a tough job because our our retention or our metric is net Mr churn which as you mentioned earlier is a lagging metric so that means that when we when we take actions to improve net Mr churn we can only see the impact you know several months down the road and the problem is that your action is not the only thing that happened there's also product changes is also marketing might have changed something there might have been a big bug and all of those things also impact churn so it's hard to to show causation between an impact and an action that you took and actually changing the metric and NMO turn so what we've done is we've analyzed what sub metrics we know impact net Mr churn so in our case it's creating another type form so that campaign that I mentioned earlier and it increased people who saw that campaign we're 18% more likely to create a new type form than the people who didn't see it we tested it so we can show that our actions are having an impact but then showing my calculating the actual ROI is not possible and they're difficult at least yeah but usually so for us it also varies for different teams on the customers side and there are some teams who actually like even make money like we have the billing phone team and for example who will help customers to pay and and go through the registration process and they actually are paying for themselves but when it comes to the majority of the teams it goes goes back in our case to to to leveraging usage and for example for the content team as I said before it we we set up the entire self-help system in a way that we try to measure everything they do when they when they touch that content so we measure the search we measure time they spent in the articles we measure what they do after they read an article how much time they spent their retention to the videos and screencasts we have and if they go back to the editor and finish their presentation after day they they read an article or engaged with our with our knowledge base if it comes to support and it's also about like can we actually have them getting back and then creating more in adding more content use the features and for success it's more like the kind of the raising the awareness team expansion and and retaining those teams mmm something that we've we've all talked about I mean when we talk about metrics is all about data but there's a lot of analysis that's going on here there's a lot of number crunching and in your teams do you have dedicated resource for that number crunching or you using kind of a central pool of people we have we have a dedicated business intelligence analyst or our customer intelligence analyst and he is my right hand so he's like into the numbers and provides the insights not only for for for support and customer success but also for sales and kind of the entire customer side so yeah we do yeah deal well for me up until recently I kind of took it upon myself to really understand the metrics because I think as this topic of this talk is about is the metrics drive everything like we need in order to solve a problem we have to understand the problem first and to understand the problem we need to understand the metrics so I spent a lot of time learning you know Mixpanel and amplitude and behavioral cohorts and all these things to really understand what's going on but now I have the luxury that I hired a business insight analyst to take a lot of that work away from me yeah yeah great well all that remains for me to say is thank you very much to the panelists and I hope you've enjoyed the session [Applause]

Channel: SaaStock

Views: 11,892

Keywords: SaaStock, SaaS, Cloud, Metrics, Customer Success, Enterprise, B2B, Software as a service

Id: 9QAUDwlwH8k

Length: 25min 12sec (1512 seconds)

Published: Thu Dec 07 2017