A Pivotal Moment for Customer Success: AI, Efficiency, and Innovation
Chief Customer Officer
Today on the show, we have Kristi Faltorusso, the Chief Customer Officer at ClientSuccess.
In this episode, Kristi shares her journey from IntelliShift to her current role, revealing how her experiences have shaped her approach to customer success.
Kristi then discusses the transformative impact of AI on customer success strategies, emphasizing how these technologies are streamlining processes, enhancing efficiency, and unlocking new potential for both teams and customers.
We then explored the crucial role of content in building successful customer relationships, underscoring the evolving nature of customer success roles.
We wrapped up with Kristi addressing the challenges and opportunities presented by the current market conditions where she provided practical advice on optimizing customer success strategies and highlighted the importance of being agile and proactive in this ever-changing landscape.
As usual, we're excited to hear your thoughts on this episode, and if you have any feedback, we would love to hear from you. You can email me directly at Andrew@churn.fm. Don't forget to follow us on Twitter for more updates.
RecommendsThe Churn Doctor's Ultimate Guide to Customer ChurnCustomer Churn: 12 Ways to Stop Churn Immediately
Is ReadingHow Will You Measure Your Life?
[00:00:00] Kristi Faltorusso: I think that anybody who's not mentioning AI right now is probably not in the pulse of what's happening. I feel like this is going to be very transformative for customer success because I don't know that there is a platform out there that isn't trying to embrace AI to some extent, which means all of the tools that we have in our tech stack, I think are going to be more efficient. They're going to bring more value, more insights. They're going to be more powerful and helping us be more, I think, efficient, more thorough and execute a bit better than we had been before with a lot of them. I think AI as a whole is going to transform the way customer success teams work and how we work and the work that we actually focus on.
[00:00:39] VO: How do you build habit-forming product? Do you need to invest? And you saw these different… Don’t just gut for revenue in the door.
[00:00:45] Andrew Michael: This is Churn.fm, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.
[00:00:58] VO: How do you build a habit-forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.
[00:01:11] Andrew Michael: Strategies, tactics, and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.
[00:01:23] Andrew Michael: Hey, Christy. Welcome to the show.
[00:01:24] Kristi Faltorusso: Hey, how are you?
[00:01:26] Andrew Michael: I’m very good, thank you. For the listeners, Kristi is the Chief Customer Officer at ClientSuccess, a customer success platform that helps SaaS companies manage customers, reduce churn, and maximize revenue. Kristi previously joined us on the show when she was the VP of Customer Success at IntelliShift and is also the founder of Keeping CS Simple and a founding member of Gain, Grow, Retain and the CS and CS Angel. So my first question for you, Kristi, is what's new that you haven't spoken much about because it looks like you've been incredibly busy since we last spoke.
[00:01:58] Kristi Faltorusso: Since you and I last recorded, I feel like so much has changed. Obviously I have found myself at a new company. So previously last time we recorded, I was IntelliShift, which is a telematics product, both SaaS and hardware, found myself over at ClientSuccess. So now, as you mentioned, right, we're a company where I'm helping customer success teams manage their customer success organizations from new to renew. So this has been super exciting.
[00:02:21] Kristi Faltorusso: I'll tell you, like, being able to transition from a space and a product where I was not familiar, right, this was just not my territory, to coming back to a space where I was a subject matter expert has been fantastic. So I've been loving the work I get to do here. I also had some changes to some other work that I'm doing on the side. So you mentioned a brand I did have previously, Keeping CS Simple. That was kind of a holding place for all of my content, right? Like really thematic around the simplification of customer success.
[00:02:50] Kristi Faltorusso: Did some soul searching this past year and really analyzed the content that I was producing and what I really wanted to double down on and made some big shifts there. And so, did away with that brand and relaunched under just my name, Kristi Faltorusso, and decided that that is going to be my brand, right? Like why rebrand a brand that seems to be working for me?
[00:03:08] Andrew Michael: Yeah.
[00:03:09] Kristi Faltorusso: So relaunched all of my content under KristiFaltorusso.com and started to offer things like templates, consulting, boot camps, workshops, things like that. Just trying to figure out a way to centralize, one, all the content that I've been producing on the web, whether it's like podcasts like this one or others, but then also be able to create a place for tools and resources for the customer success community. So I spent a lot of time doing that and I launched a course. I actually partnered with a company called CourseCareers and launched a customer success course that really focuses on professionals wanting to break into tech and specifically customer success.
[00:03:45] Kristi Faltorusso: So these are not, it's not really designed for folks who have already been in CS, who know what they're doing and they're looking to enhance. This is really a 101 or a 100 level course to really explain what is customer success, what is SaaS, how do you do it. So I spent like 12 weeks producing a course. It's like 27 hours of recorded content and like exams and quizzes and all this stuff. So I had no life for most of 2023.
[00:04:11] Andrew Michael: Yeah, I can imagine. It's an insane amount of different activities as well. And I think, as you say, like some great content you've been putting out over the years, it's really cool to see the brand. I think actually that's why I mentioned the beginning of the show. I reached out to you, I saw that you launched the new site and I was like, okay, you've been busy. It's interesting to see. And so obviously that's like a big part of it. Is there anything that you're not talking much about, but is something new that you're, you got in the works yet or?
[00:04:39] Kristi Faltorusso: You know, this might be the first place that I'm going to say this publicly. I am working on a book that I am hoping to wrap up early 2024. So I think it'll be interesting. I've tried to do my research to make sure that there isn't anything like it available today. It'll have a fun spin on some things that we, I think are tried and true in customer success, but really anchoring on stories and from other professionals in this space and, bring it all together. So I won't, no spoiler alerts there. I'm not even going to give you the themes or the topics or the titles, but that is, I think my next big initiative, already started and hope to just stay true to my timeline of like early 2024.
[00:05:18] Andrew Michael: Nice. So definitely no laugh in 2023 then for you.
[00:05:23] Kristi Faltorusso: No. Well, I promised my husband, I gave him the summer back. So my husband and my daughter were like, after releasing the course and my website earlier this year, I promised them that I would give them like July, August, and part of September where I would like not work on any big projects for a little while so that we could just be a family and spend some time together. And then my husband is well aware that come early October, I'm going back into hibernation and got to start working on some projects again.
[00:05:51] Andrew Michael: No, it's good. And it's good that you also took a step back and take some time off as well. And to be able to do that, I think, is very powerful. I think not a lot of people can actually do that. I know myself, like when I get into something, it's almost impossible to get pulled out of it. But it's good to… that you have that good strike and balance. The… Today as well, like, as I mentioned last time you were VP of Customer Success at IntelliShift. You, now working in the space as the Chief Customer Officer. I'd first be interested in maybe just telling a little bit about the new role and the title itself, like this transition, has there been any fundamental changes in the way that you work with your team or where you operate? What has been the difference in these two different roles that you've moved into?
[00:06:36] Kristi Faltorusso: So I think the big difference for me and coming from IntelliShift, I had reported into the president and the head of GoToMarket. So really a more revenue focused leader who I was rolled up under, which made total sense for that business model and that company. Then stepping into ClientSuccess, the cool thing here was that obviously I was working very closely with, even when I started, I was VP of Customer Success and then got promoted into the CCO role almost two years ago now. So working very closely with our leadership team, but then also being able to just be more connected to the strategy of the business.
[00:07:09] Kristi Faltorusso: So I feel like in previous roles, I very much owned my team, I owned my functions, I owned my revenue. And I think the new role is giving me greater purview into the entire company as a whole and the direction that we're headed, more focus on the market, on customer success as an industry. And so I feel like that's been something I've been very excited about because it's allowing me to step out of the day-to-day a bit more and think bigger picture and longer term. So I'd say a lot of my time is still focused on running the business. But I get to say I'm in the business but I'm working on the business too. So it's a little bit different, which I've really appreciated that change.
[00:07:47] Andrew Michael: Yeah. I think it's super cool as well, like getting to work in a role and then work on a product that serves that role. So having spent your career in Customer Success and then now serving Customer Success professionals in this new role as well. I think it is a very challenging one. I think it's also, I've chatted in the past with others who have held similar roles to this where it may also be a little bit intimidating from the perspective is, like people perhaps expect a certain level of service and Customer Success and [into] how you're feeling that pressure and if it translates into anything that you do at work.
[00:08:21] Kristi Faltorusso: Yeah, no truer statement has ever been said. So I think I was super excited when I had this opportunity because I thought, wow, I get to do customer success for Customer Success. And this is like me living out my dreams and my passions. And I'm so excited. Fast forward. I will tell you, like, this is not for the faint of heart, because to your point, you're under a microscope. Every single person that you're working with is watching every single thing you and your team do, right? Because they have certain expectations around what Customer Success should look like based off of what they've designed and how they do it.
[00:08:54] Kristi Faltorusso: And they assume that because they do it a certain way that that is best and that is right and that's the way I should be doing it. So there's a lot of judgment. There's a lot of scrutiny, a lot of pressure to your point, which also forces, I think, interesting conversation and dialogues because, just because my customers do Customer Success a certain way, Customer Success is not a one size fits all model, right? It's got to look very different and unique because I'm in a different market. I have a different product serving different demographic at a different stage with different resources. So all the variables are different everywhere you go and you got to take that into consideration. So managing expectations with my customers is probably been the toughest thing I've had to do.
[00:09:39] Kristi Faltorusso: Also, like, listen, I take a lot of pride in the work that I do, and I take Customer Success very seriously. I love what I get to do. So it's really hard when somebody feels disappointed or let down or, you know, again, that miss, that expectations like, hey, I would expect you guys to be doing X, Y and Z. And it's like, I would love to do that if I had 30 people on my team. I don't. You know, I have a small organization. So I think that's been the biggest challenge here. And as I speak with other folks who work in similar roles supporting Customer Success. I think that that's pretty consistent against… across the space.
[00:10:11] Andrew Michael: Across the space. Yeah. I think it's definitely one of those things I remember, like similarly as well, building research tools for researchers at Avrio, like it's really demanding in design, I think probably I'd say design tools for designers would be the one I'd be the most scared to do where people are extremely critical, but I can see in your case, and I love the point that you made as well that there is really just many different ways and different setups and there's no single right way. It really depends on a mountain of variables, depending on your business, your stage, your resources, your customers, what is best set up for your business.
[00:10:45] Andrew Michael: And with that, I'm interested obviously, because you get to see a lot of companies now and you get to interact with a lot of CS teams and there's been some fundamental shifts in the markets in the way Customer Success teams are being operated or being, operations being ceasing to exist. And I'm keen to hear how you're seeing things in the market now from your perspective and your vantage points.
[00:11:12] Kristi Faltorusso: Yeah. I mean, I will say this year has been very interesting, at least from, you know, the 2000 feet view that I have, right, being able to watch the market from the seat that I sit in, you know, I think there's been a lot of focus on the install base, right? Like your customer base, because if, and I know, listen, there are a handful of companies that are thriving right now and doing really well. And I am happy to see that, I am thrilled for them. I hope they continue to grow. But the reality of it is I speak to more companies than I don't that are struggling this year. Sales are down. For some companies, sales really struggled this year. Like bringing in new logos was really challenging. Growing the revenue has been, I think, probably the hardest thing for a lot of companies.
[00:11:52] Kristi Faltorusso: So there's been a lot of focus on how do we grow our customer base and going back to the importance of NRR and like being able to find ways to expand and upsell and cross-sell and all of those things, which is interesting because while that has been the focus and that's what people are saying that they want to be doing, that they need to be doing because there's no sales, what we're actually seeing play out is very different. So what we're seeing play out is that Customer Success teams, they're being reduced. So we saw a ton of companies do rifts this year. So they’re reducing force, a lot of layoffs, Customer Success teams were part of that. We saw a lot of folks consolidating their tech stack.
[00:12:31] Kristi Faltorusso: Well, guess what? As a CSP, I can tell you, we were on the chopping block in a lot of companies. And I know for a fact, others were as well. I speak with a ton of folks. Customer Success platforms, they were on the chopping block regardless. You know what they were doing? They're moving back into their CRMs. So Salesforce, HubSpot, yeah, they're probably thriving right now as folks are consolidating because try to figure it out in a one-stop shop. Then you have lack of, again, different lack of resources, right? So specialty roles and all of this stuff.
[00:12:57] Kristi Faltorusso: So you had teams that for a while were really well built, developed and designed with the intention of let's help our customers drive value so we can strategically grow them over time. But now you've taken away people, you've taken away tools, you've taken away process and operations, and you've now increased the focus on growing these customers. How are you supposed to do that? And I cannot and will not sit by and listen to this like, we've got to do more with less. Like, I'm not a math person, but that doesn't add up. Right. How can I possibly do more with less people, with less resources, with less operations? It's really challenging.
[00:13:35] Kristi Faltorusso: So what I've had to say is you've got to watch folks do something different with what they have, not do more with less. So that's been my whole mental shift is how do we do something different? So what we're seeing customers in this space and Customer Success teams do is really start to change and redesign their model. Now, the hardest part of that is one managing the communication. So you've got customers who have expectations on what they should or could be getting and they're not because you're having to scale back. So redesigning and managing expectations and communications, you still got these really hefty targets with, I think, either it's lack of education or a lack of desire to really believe this, but we all know this, you cannot drive revenue from your customer base the way you can for net new sales, right?
[00:14:20] Kristi Faltorusso: You can go pump all the money you want into marketing and grow the pipeline and close more deals. It's kind of like an input-output model. Customer Success doesn't work that way. Just because you need more revenue today doesn't mean you can go knock on all your customers' doors and demand more money. If you're growing them strategically, it's based on are they getting value from what they've purchased today? Is there a business need for something else for more of the same? Do we have access to that? Can they secure budget? It plays out differently.
[00:14:52] Kristi Faltorusso: And so teams, we're seeing a little bit more of dismantlement because they've not been able to produce the revenue that the organization is expecting them to. So we're seeing more folks say, well, okay, well, if Customer Success can't do it, somebody else can. Should we be giving this focus back to sales? Should we be hiring different people? Should we move to account management instead of Customer Success? So I don't think this is the end of Customer Success, but I don't know. I've been pretty... It's been scary out there.
[00:15:21] Andrew Michael: Yeah. I think it's not, maybe not the end of Customer Success, but it is definitely a pivotal moment for Customer Success. And I think there's definitely from conversations I've been having a lot more aggressive approach to showing an ROI in Customer Success. And it's no longer just like the success side of things. And we want our customers to be successful, but it's really okay. Yes. That's the goal is for them to be successful, but the outcome that we're looking for is actually more revenue and increase in our, so I think there's definitely been, like from my viewpoint as well, speaking to a lot of people in the space as well, that there's a lot more demand now and actually being able to prove your ROI in the business.
[00:15:59] Andrew Michael: And I think quite frankly, it's probably a really good thing for the industry as well. And it's a good place to put yourself in the business. Like you never want to be in any business in any department, no matter where it is, where you can't actually tie yourself back to an ROI, where you're scratching it and say like, eh, well, what are we delivering to the business at the end of the day? So.
[00:16:17] Kristi Faltorusso: No, listen, and I think that's super valid, but I think the challenge that we're going to continue to face with is that all these things are lagging indicators, right? So growth, retention, all these things, they're lagging indicators. We have a lot of work to do before you can see the results. You need folks to be a little patient, right? I do think that there is a way to prove and justify the ROI, but just because I go and redesign my onboarding program today doesn't mean I'm going to see the impacts of that tomorrow.
[00:16:45] Andrew Michael: Yeah, for sure. And I think that's also why it comes in the level of sophistication of teams becoming, like, reactive versus proactive. And having that understanding at the start of like, okay, what are the inputs that I need to be pushing forward to get to the final output? But you mentioned something very interesting. I think I'd like to double click on that is, that we're in a stage now where a lot of companies and a lot of CS teams are having to sort of redesign their programs. And I think there comes two times when you redesign programs. One is like when things are going well, you're growing fast and you now need to figure out how to scale and serve new customers or the inverse.
[00:17:21] Andrew Michael: And I think both are interesting at 10 points, but I think it's probably a timely thing to discuss now because you are probably having these discussions with a lot of teams and how do you go about starting to think about a redesign? I think, like maybe give us like, what is the point in time where a company might decide, okay, we actually need to change things up, we need to redesign the organization, the flow, like. And then what are some of the couple of first steps that you see people taking commonly?
[00:17:47] Kristi Faltorusso: So I will say that the indicator for us has been, and I won't say that this is for everybody, but like when the current infrastructure breaks, right. Or you're starting to see cracks in that infrastructure. So for us, listen, we, we're in a similar position as everybody else in the market. We have not, you know, grown exponentially this year. You know, it's been slow and steady, but like not hitting record numbers and definitely not where we'd like to be.
[00:18:10] Andrew Michael: Yeah.
[00:18:10] Kristi Faltorusso: So I've had to rethink things because as I've watched my team evolve, right, we've had changes. I have less CSMs on my team. I have less folks on support, got less services people. So I've had to say, well, we can't sustain the same operating model we had when we had more people, right? Because expecting the same, it just doesn't work. So I didn't wait for the whole thing to fall apart and crumble for us to start to do or rethink things. But I definitely saw that there was processes and efficiencies that just weren't working anymore.
[00:18:43] Kristi Faltorusso: Sadly, the burnout of my team is what was the big indicator for me. They just didn't have the bandwidth to do what was expected any longer. And that was the pivotal shift for us to say, this is no longer sustainable. We're not driving the right outcomes for our customers. They're not having a great experience. My employees are not having a good experience. So something has got to change. So that was my red flag of like, okay, Kristi, you probably got to go do something here. So for us, the big thing was trying to figure out, well, what do we still need to do for customers?
[00:19:13] Kristi Faltorusso: So it was rethinking, again, with the objective of we still have to help our customers be successful so they can use the product independently to drive value from it, and hopefully we'll stay and grow over time. If that is my core objective, what do I actually need to do to get us there? And so instead of just thinking about it though from a people standpoint, my big pivotal shift here was like, how do we get there whether it's content, whether it's scaled initiatives, whether it's things like community, how do we rethink achieving the same objective in a completely different model?
[00:19:48] Kristi Faltorusso: And obviously when I say completely different model, we're introducing new elements to it and how we execute it, but obviously the fundamentals of what we do are similar, but what things did we do before that we just didn't need to do anymore? Like I've talked about this extensively. I think anyone who's watched my content over time, I'll never do an EBR or QBR. I won't force my team to do it. Guess what? Customers don't want to be there. Your team doesn't want to go do it. It feels very inefficient. Waste of time. Guess what? That is something that is stricken from my playbook of things I'm going to have my team waste time and resources on. It's not the way to achieve the objective, right?
[00:20:19] Kristi Faltorusso: The objective of an EBR QBR, build relationships and articulate value. I can do that a million different ways. So what we tried to do is figure out what were all the objectives of all the milestones and all the activities and just rethink how we do it. And so a lot of this was introducing automation. rebuilding all new content. Like I built, again, doing a lot with very little resources. I built an entire Google site for our onboarding process, which is an entire content hub and what we'll call like an experience, has everything our customers will need to go through onboarding with a flow. And it's just fantastic. I mean, honestly, I'm gonna say it. Our customers love it. I built it, it's my baby, but it helped transform how we're onboarding our customers and the work that was, like, required from our CSMs.
[00:21:05] Kristi Faltorusso: So it drove more efficiency. It sped up the process. It helped enable our customers to be more efficient and independently move along through it as well, and ensured greater results from the output of it. So creating new content and things like that. We launched our Customer Success community, CS Connect in partnership with Higher Logic Vanilla Forums. That's been helpful as another way and another resource for our customers to come together, share ideas, ask questions, network, brainstorm, all of those things. So we're starting to see more organizations think that way, right? Not, let's do more of what we've always done because this is Customer Success. We're gonna see an evolution of Customer Success 2.0.
[00:21:45] Kristi Faltorusso: And it's sad to say that this was the forcing mechanism for this to actually happen. We should have been thinking about this a long time ago. We have been doing the same things in Customer Success for far too long, just because they are the things we've always done. And to be very honest with you, we've never had to justify ROI the way that we have to do today. So we don't even know if the things that we had been doing were really the value drivers. So now I think we're in a position where we're being challenged to justify ROI. We've got less resources. We've got less people. We have to do the same things more efficiently, more strategically. You're going to see a lot of change in how that's being executed.
[00:22:21] Andrew Michael: Yeah, I love that. And it was also, I found interesting, sort of the notes on QBRs and EBRs. Like nobody wants to sit through that. The point that you made is all like there's a million other ways for you to build relationships with your customers and to show value and just sticking to sort of the status quo that's been done for years because somebody maybe at Salesforce decided this was a good idea back in the day and then every company after them just sort of followed suit.
[00:22:45] Kristi Faltorusso: You know where this originated though? This didn't even come from Customer Success. This originated from consulting, which it makes sense when you're spending the money that you're spending on true traditional consulting, right? If we're thinking about, like the McKinsey's and Deloitte's of the world. Sure. Yes. QBR, EBR all day long, fine, might make sense for them, but how it works in this SaaS environment specifically and in Customer Success, we don't need to be doing that.
[00:23:10] Andrew Michael: And so you said most of the time, nobody wants to be doing that and you end up spending a lot of time and energy trying to bring people together–
[00:23:17] Kristi Faltorusso: So much time.
[00:23:17] Andrew Michael: Book these meetings, get people excited about them that nobody wants to be there.
[00:23:22] Kristi Faltorusso: No one wants to be there, nobody shows, you've spent all this time putting together resources and content and pulling all this stuff. It's I don't know. I don't see the ROI there. So if I'm cutting back on things that don't generate results or revenue or tied to value, that's going to be first on my shopping block.
[00:23:39] Andrew Michael: Yeah. And I think it is definitely like at this moment in time, like it's not a great that this is the forcing function, but really it is a time where I think we'll start to see a lot of innovation in the space now and in CS in general. I'm keen to hear, like is there anything that you're particularly excited about that you're seeing change in the space and you think could be something for the future?
[00:24:04] Kristi Faltorusso: Well, listen, I think that anybody who's not mentioning AI right now is probably not in the pulse of what's happening. I feel like this is going to be very transformative for Customer Success because I don't know that there is a platform out there that isn't trying to embrace AI to some extent, which means all of the tools that we have in our tech stack, I think are going to be more efficient. They're going to bring more value, more insights. Like they're going to be more powerful and helping us be more, I think, efficient, more thorough and execute a bit better than we had been before with a lot of them.
[00:24:33] Kristi Faltorusso: Plus, listen, I think if you don't use anything, ChatGPT is a free version. It's a no-brainer. Like if you understand how to ask really smart questions and get your prompts really dialed in, it is a powerhouse for time saving and efficiency. So I think AI as a whole is going to transform the way Customer Success teams work and how we work and the work that we actually focus on.
[00:24:57] Andrew Michael: Yeah, absolutely. I think, I mean, I've seen fundamental shifts in the way I'm working now. It's almost weird. Like I'm taking things for granted. Like it's always the way like I'll type a question in ChatGPT, I get an answer and then it's just like, I completely think it's normal now. Like I've normalized it, which is bad.
[00:25:12] Kristi Faltorusso: I got it on my phone too. Like, I mean, I'm not even just sitting here using it for work. It's like, embedded in my life. I was helping my daughter with homework before the end of last year. So what are we talking about? We'll say like April of this year. And I'm using the app, like April, May, June. We're using the mobile app because we're working on this project. And I'm like, oh, I actually don't know how to like, we're writing an English paper for her. And I'm like, I don't actually know, like what a good intro would look like. So we're like giving it the prompts of, like what we want it to include. And it wrote like an awesome, well-structured opening to my daughter's essay, which like otherwise would have taken the two of us like two hours of wasted time trying to edit and like finesse this opening.
[00:25:50] Andrew Michael: Yeah.
[00:25:50] Kristi Faltorusso: I'm like, she was able to jump right in and like got the paper done because sometimes you just need help getting started. So I don't know, for me and I think anybody that I talk to that has been like super, super powerful.
[00:26:02] Andrew Michael: Oh yeah, it's funny. I was actually talking to a friend today who's built a product just like this. So he's working where kids can write books and it educates them along the way of, like, how to do grammar and how to write intros and he was super excited today chatting to him because he just launched it and he's seeing like the response already is, like unbelievable. And yeah.
[00:26:20] Kristi Faltorusso: You're going to have to share with me what product it is because I will tell you, having a kid in high school right now where we were, like gearing up for like college essays and all this stuff. I mean, writing is, she's a math girl. So writing is not our strong suit.
[00:26:31] Andrew Michael: Yeah. No, it's crazy. I think one of the things I love the most, well, like the prompt is like, explain it to me like I'm five, like I'll take a concept and then I love that. It’s like with my son ‘cause he’s four years old. So maybe I should say four. But it's like, I think the concept of how well it does in explaining complicated topics like, extremely simple. For me, it's been a lot of joy as well, like just being able to have those conversations that before might've been a little bit more confusing or tricky to explain.
[00:26:58] Kristi Faltorusso: That's so funny. I have, my daughter is 15. So I don't even think about that as a use case. But now that I think about it, my mother, she's obviously not four. She's 66, 67, 66. So for me, being able to explain certain things to her, it might as well be explaining it to a four-year-old. I had never thought about using ChatGPT to like, simplify complex things, so I can articulate it to, oh my gosh, now how I communicate with her is gonna look very different.
[00:27:27] Andrew Michael: That's great. Yeah, so I definitely think AI is gonna have a big fundamental shift in the way that we work in the workspace and in Customer Success specifically, what are you seeing as some of the interesting use cases?
[00:27:40] Kristi Faltorusso: So we've seen everything from, obviously, like we'll start with basics, right? Communication, creating email templates for folks that, listen, that are being powered through automation that are used for like one-to-many communication. You could start with something as basic as that, like design me really clean, easy to use email templates, or how do I respond to this? That is like 101 stuff, but we're also seeing really cool things around account plans, using different formulas and different structures of things like account plans, success plans. If you are analyzing presentations and data, how to simplify things, how to structure it well, I've seen folks build out presentations using this.
[00:28:19] Kristi Faltorusso: So if they've got concepts that they're speaking at an event on, how to simplify this for different slides and how do I articulate this through a 45 minute presentation? I mean, it has been really interesting. And again, I'm only scratching the surface on what is possible and what I'm seeing even at a high level. But I think folks just using, it in their day to day and integrating it. I think the big thing is understanding what to ask it though. Like a lot of folks I think aren't getting the power out of it because they don't understand how to structure the prompts and like that next level, right? Almost like if you follow the concept of like the five whys, but like what ChatGPT might give you for the first pass, that's fine. But now ask it another question, like help it get smarter so you can go a little bit deeper and how you finesse that and structure that, that kind of flow with it.
[00:29:06] Andrew Michael: Yeah, absolutely.
[00:29:07] Kristi Faltorusso: The outputs are phenomenal.
[00:29:09] Andrew Michael: I've thought about this point quite a bit as well, because I think it's one of those things as well where like people say, oh, it's the end of programming. Like we're not going to need engineers anymore. And I think there's different areas and suits. And, but I think… I still think, like to get value out of it, you need to have a certain way of thinking and to be able to ask questions and you need to have knowledge in certain areas. So I was chatting to an analyst today and he started using ChatGPT in his workflow and, but he still required like to have some form of knowledge, even though he couldn't use part, like he wasn't a part an engineer, he still needed to understand the basic concepts to be able to even prompt ChatGPT.
[00:29:47] Andrew Michael: So I think it's still interesting, but I wonder when the time will shift and the point in time will shift where you don't need to have that knowledge or understanding, and it just totally gets what you're looking for and enables, cause you still need to prompt it in a specific way and thing, but it feels like that's probably also going to be at some point something of the past.
[00:30:09] Kristi Faltorusso: Well, think about it. You've got folks like even if you just take the two of us on this call, so a hundred percent of the people right now on this podcast, using it all day every day. I mean, this thing is about to get super smart, right? It's watching how people are using it and what people are digging into. And I'm just, I don't think it'll be very long before it is a lot smarter than it is today.
[00:30:29] Andrew Michael: Yes. Yeah, definitely. Nice. And so for your team as well, you sort of noticed that point in time you had to let some of the team go. So obviously you had less resources, you needed to do things differently to be able to serve your customers. And you started making a few different changes. I'm also interested then is like how were these changes managed internally with the team? Because you work in a specific way for so long, like how did you manage that transition now with the team going into it and saying, okay, hey team, like, there's going to be a new change. There's a new strategy. Like, this is how things are moving forward. How did you smooth that over? So things went, or maybe you can tell me they didn't go so smoothly as well. That's also good, but what did that look like?
[00:31:15] Kristi Faltorusso: I think it's two-part, right? I think it's how you're managing the communication around it. For me, and this is like any change management, right? It starts with, like, explaining, people why you're doing what you're about to do. I think for us, it was evident. We had less people on the team. We're still having to meet certain expectations and deliver for our customers and help achieve what we have to. But I'm a big advocate of having change happen with people, not to people. So what do I mean by this? Obviously, it's my directive and my strategy because in the role that I sit, I'm getting to paint this picture for my team. But my team is on the front line. They're the ones who are having to execute my strategy, my vision, whatever it is that we're coming up with.
[00:32:01] Kristi Faltorusso: Instead of just doing it myself and rolling it out, I pulled them into the process and I said, hey guys, listen, here's where we're at. Here is my objective. Here's what I'm thinking in the direction I'd like to see us go, but help me design something that is going to work best for you with this as the objective. And I think my team really leaned into that because they all took a role and shared a voice around what we needed to be doing and how to do it differently. We challenged each others’ and like, we really just came up with new ways of doing what we had been doing that worked for everyone. Because sometimes I design things and I think, wow, okay, this can't be, this can't be better. This is awesome. Look what I've just created.
[00:32:45] Kristi Faltorusso: But the execution of it and the day to day living with that feels different. So instead of having to go through those hurdles where it makes it more challenging, I think being able to involve your team and not every rollout, not everything, every design is going to be a democracy that can't pull everybody into everything. But this is where I'm like, even if you are a much larger organization and we just aren't, we're small. So including everyone was fine for us. But even when I had larger organizations, what I do is I find people who I know will lean into this really well and want to be a part of designing and creating something better, more efficient, or differently, and pull them into the process. And I feel like having your team understand that, listen, it is not a top-down thing. We're actually designing this with your peers in collaboration. So we're designing this together for you to achieve our goal, to help you guys be successful. That changes the dynamic.
[00:33:42] Kristi Faltorusso: And so that's where we've been most successful in kind of rolling out these new programs and the change in the directive. So I feel like for me, the difficult part, not internal management and buy-in, external communication and resetting expectations with customers. That was where it was a little tricky.
[00:33:59] Andrew Michael: Yeah, no, I think it's super important as well to be able to bring people along with you on the journey and no better way than keeping them involved in the process. And ultimately it's going to be what they're going to be working on and their roles. So having that influence, but you mentioned the problem was in communicating to customers and keen to hear how you went about doing that. Obviously, they've either had some former experience with you and they have expectations being set or new customers expecting a certain level and maybe not now able to deliver anymore. How did you manage those expectations and that communication with customers?
[00:34:36] Kristi Faltorusso: So net new customers, easy peasy. Day one, they don't know any different. So we just made sure that when we structure our partnership pickoff, which is the first formal meeting that we have with our customers, once they become customers, it establishes goals and the partnership, it sets expectations. We're just very clear with new customers coming in, in helping frame up what they can expect from us, what this will look like, what their role in the partnership needs to be, and what role we will play. So net new customers, not a problem, super easy, use that framework.
[00:35:08] Kristi Faltorusso: What we found is that for certain segments of our customers, this was easier than others. And so if I'm thinking about our top tier of customers, we really didn't make a ton of changes for them, right? Like if those are our bread and butter customers, and again, it's the 80/20 rule, like 20% of your customers make up 80% of your revenue. Taking that into consideration, we didn't want the experience to be changed for those customers. So we really did our best to hold on delivering for them the experience that they have known with us and that they need to be successful. So we didn't make a ton of changes there. A few modifications and, like things that we now automate that we didn't before, like some communication and steps in the process, but otherwise they have their dedicated or designated people and they're still getting that same level of attention and time from us.
[00:35:56] Kristi Faltorusso: Now, as we move down further, the interesting dynamic in our customer base is that our smaller customers need more from us than our larger customers. Our larger customers, they've got resources, they've got experience, they've got expertise. They know what they're doing. Our smaller customers, for some of them, they are first-time Customer Success leaders. They are deploying Customer Success software for the very first time. For some of our leaders, this is the first software they're deploying ever in their careers. It's the first purchase maybe they're making and trying to roll out change management. They depend on us to help them design strategy, best practices in the platform, how to use it, like, use us as like the driving mechanism for doing the work, like using our sessions as workshop sessions and doing it together. We couldn't offer that any longer. It just didn't scale the same way. I can't be delivering weekly-hour long meetings with all customers at all levels.
[00:36:54] Kristi Faltorusso: So I think the harder thing for us was like resetting expectations starting from our lower tiered segment, and then kind of moving back up on what that augmented experience would look like. But we couldn't do a blanket rollout as best as I would have loved to is, just send out mass email and be like, hey guys, this is different for you. We really did, we went customer by customer and considered which customers needed what based on where they were today. So who could be successful if we scaled back and who absolutely could not be if we scaled back. And we had to bifurcate the book and be a bit more strategic. So we spent a lot of time thinking about how we would deploy this and we couldn't just rip the bandaid. So it's a slow roll for us. And I think eventually we'll get there, but we had to be thoughtful about what our customers needed today, because at the end of the day, we couldn't afford churn. So we had to be thoughtful.
[00:37:48] Andrew Michael: With the benefit of hindsight, would there be anything different you would have done?
[00:37:53] Kristi Faltorusso: Oof. I would have started making changes sooner. Like I wouldn't have waited as long to make the changes that we've started to make this year. These are things that, like, I think, again, hindsight 2020, we should have just been doing this stuff, right? Like, we should always be thinking about ways to make ourselves more efficient and more effective and stop wasting time. And I don't know why I hadn't put as much time and attention against that, I guess, because it was kind of like, well, if it's working, you know, it's that whole saying, if it ain't broke, don't fix it. Well, it wasn't broken. So I didn't feel like there was much we could or should do, but it really wasn't optimized. So I would have started sooner.
[00:38:31] Kristi Faltorusso: All of the new customers that would have started at that point with me would have been easier to manage those communications and expectations. So we'd be a little less in the hole than we are right now, but listen, it's a slow process. We'll get there and I know that our customers will continue to be successful. Also, if I could say, I'd probably staff a ton more resources against product and probably fight less for resources and Customer Success. Because if you have an awesome product that is just easy to use and intuitive and is innovating in a way your customers need, there is a lot less work for Customer Success.
[00:39:05] Andrew Michael: Yeah, absolutely. Nice, yeah, with the benefit of hindsight, I think it's always easy to look back and see if things are different. But also keen now to, as we look to wrap up as of today, get your thoughts on where you see things going now in the new year and moving on from 2023. Like what changes do you see coming?
[00:39:25] Kristi Faltorusso: So I definitely think that we're going to see the first more specialized roles. So I don't think that you're going to have this Customer Success generalist for very long. More folks are going to be moving into roles like content managers, right? Like, cause again, content at scale helps your customers, right? You don't need one to one for every single thing that you're doing, right? Trainings, office hours, webinars, all of those things help your customer base at scale. You're going to see more focus towards content design development and what that will look like. So even having that roll up under customer marketing, but living in the Customer Success org. You're going to see a reduction in activities that don't tie to ROI. So this, busy work.
[00:40:09] Kristi Faltorusso: There's going to be more scrutiny around what Customer Success teams are responsible for and what they're doing. I think a greater elimination of the work that just really isn't required to help make Customer Success teams operate the way they need to to drive those outcomes to their customers. Scary to think, and I hope that we don't go this direction. I'm getting an inkling that we might. I don't want to see revenue responsibilities move away from Customer Success teams, but if you cannot produce for the business, they're going to find teams that will. And so my fear there is if Customer Success teams don't really start again, producing on that NRR target, whether it's through upsell, cross sell, any other growth strategy, that might start to revert back to either new sales teams being able to own that again, account management teams, renewal specialists as a core function, that will all roll up under revenue.
[00:40:59] Kristi Faltorusso: And so I think we might see a bit of that. I would say those are my top three things that Customer Success teams, as you're thinking about the future, get ahead of some of those.
[00:41:08] Andrew Michael: Yeah. I can see all of those and I see, as all the education and the content. It's a very interesting concept as well, because then it starts to blur the lines as well between marketing and Customer Success. But I think more and more as you start to think about, like different ways to be able to serve customers, like content starts to play a much, much bigger role. And I think there's different types of content as well when it comes to what's being produced and obviously the use cases where the ones serve for acquisition, the other ones for retention, and then it becomes more on retention. Do you want to call it content marketing? I don't know. But–
[00:41:41] Kristi Faltorusso: Well, it'll be interesting, right? Cause I think Customer Success teams will be the one producing more content as opposed to marketing teams to your point, who have been focused on demand gen for forever long.
[00:41:51] Andrew Michael: Exactly. Very nice. Kristi, well, it's been, absolute pleasure chatting to you today. Is there any final thoughts you want to leave the listeners with or anything they should be aware of before we wrap up?
[00:42:01] Kristi Faltorusso: I would just say again, I'm going to just encourage everybody. If you have not gone through and re-optimized your Customer Success strategy, I highly encourage you to go do that at this point. We're going into a new year. It's a new dawn. There's new expectations. It's also a new opportunity. So spend the time to do that if you haven't. I think other than that, no, I think that's my big message to everybody out there is just like, let's start, let's not make the same mistake I did. And if you have to, get ahead of things.
[00:42:28] Andrew Michael: Amazing. Thanks so much. I really, really appreciate the transparency today. It was great and refreshing to hear. As always, it's a pleasure hosting you this show and I wish you best of luck now going into the new year.
[00:42:37] Kristi Faltorusso: Thanks so much, Andrew. Thank you.
[00:42:38] Andrew Michael: Cheers.
[00:42:45] Andrew Michael: And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with Churn.fm and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting Churn.fm. Also don't forget to subscribe to our show on iTunes, Google Play or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@churn.fm. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.
A new episode every week
We’ll send you one episode every Wednesday from a subscription economy pro with insights to help you grow.
My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.
In this podcast, you will hear from founders and subscription economy pros working in product, marketing, customer success, support, and operations roles across different stages of company growth, who are taking a systematic approach to increase retention and engagement within their organizations.