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How Chargebee’s Customer Success team increases expansion revenue with data

Arundhati Balachandran | Director of Customer Success at Chargebee

  • | Activation | Customer Success | Engagement | Metrics | Onboarding | Retention | Sales
  • February 2020
  • EP47

Expand your revenue with data

How to use data and cross-team collaboration to support expansion revenue

Today on Churn.fm, we have Arundhati Balachandran, Director of Customer Sucess at Chargebee.

In today’s episode, we discussed about the role of Chargebee’s customer success team in enabling expansion revenue, the specialization within the team, and the importance of cross-team collaboration in fighting churn.

We also dived deep into how data plays a role in deciding customer touchpoints, the customer onboarding process within Chargebee, and Arundhati’s one piece of advice for any company battling with churn.

As usual, I’m excited to hear what you think of this episode, and if you have any feedback, I would love to hear from you. You can email me directly on Andrew@churn.fm. Don’t forget to follow us on Twitter.

Mentioned Resources

Highlights

Time

How does customer success play a role at Chargebee 00:03:32
How Arundhati decided which customers should be ‘high touch’ and ‘low touch.’ 00:05:12
Specializations between SMBs and Enterprises customer service reps 00:06:08
How Arundhati measures CS team’s success 00:08:53
How customer success helps expansion revenue 00:10:40
What is “customer success ops” in Chargebee? 00:15:03
The difference between early churn and late churn 00:20:51
Unique things Chargebee does in the customer onboarding 00:26:56
Arundhati’s advice on tackling churn 00:29:01
How the ops team works with the metrics they are not directly responsible for 00:32:02

 

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Arundhati Balachandran

Director of Customer Success at Chargebee

Arundhati’s’ recommended resources on churn
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About the podcast

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 the real world tackling churn and increasing retention is one of the hardest problems a subscription business faces.

In this podcast, you will hear from founders and subscription economy pros who are taking a systematic approach to increase retention and engagement within their organizations.

Transcription

Andrew Michael
Hey Arundhati, welcome to the show.

Arundhati Balachandran
Thank you Andrew. Glad to be here.

Andrew Michael
It’s really a pleasure having you today for the listeners are and that is the director of customer success. It charged me and they helped thousands of businesses to streamline their subscription billing operations. Prior to charge fee or in depth he served as head of business development for Kieran global and as the founder and CEO of urban trust. So my first question for you and dirty. What does customer success mean to you a charge me

Arundhati Balachandran
so customer success for me a charge be you know, basically three pillars that I track in terms of making it a successful function within charged me. One is engagement and customer experience, then retention and expansion. So these are three focus areas in customer success that we are truly focusing on and judgment.

Andrew Michael
Okay, and how long is the customer success team been going? What is it like main area focus at the moment?

Arundhati Balachandran
Great. So I took on customer success with in charge be in the beginning of 2019. And back then it was a few months old. So let’s be safe to say that good about two years old in an eight year old company.

Andrew Michael
Hello. Okay. And then So currently, Alexa, two years you’ve taken on now you’ve been running it for about a year like what has been some of the main things that you really wanted to get and implemented tragically when it came to customer success.

Arundhati Balachandran
Got it. So when I took on the team, right we had about a Four to five CSM handling enterprise customers. And, you know, it was a, it was just about 20% off all our customers. So one of the things that I wanted to immediately do was, you know, segment our customers in such a way that some of them got high touch engagement and others I at least had touched through automations, or some sort of a mid touch right in between. So that’s one thing that I did, initially. And the second was, john was quite misunderstood across the organization, because everybody freaked out right when there’s the john and then, but nobody really understood why and the trends around it. So one of the things we did was every time a customer churn, we started doing exit interviews, just as you were 20 employees in your organization, and trying to understand the reasons behind why they were leaving charge. And that was the start of building our data, fortune. So these are the two things that I did immediately as soon as I got in. And one other thing that we did was Bringing a customer success tool, we use john zero. And it’s been really, really helpful in terms of setting up, you know, automations, flagging high risk accounts and setting up health course. So our tool was absolutely necessary with a very good skill, because like I said, we were five, the beginning. And now in one year, we are 23.

Andrew Michael
Wow. So you’ve seen some rapid growth in the team as well. Absolutely. It’s interesting, though, you said you started off the customer success, just five reps focused on enterprise and then slowly now like you’re trying to introduce different segmentation. So you’re looking at you have a different combination, then a sort of high touch and low touch. How did you go about sort of deciding on like, what are the thresholds for this higher and low touch models? And then how do you segment and how does the team function between those different operations?

Arundhati Balachandran
Absolutely. So we have four roles within the org One of them is we have Customer Success managers for enterprise accounts. And then we have slightly more junior Customer Success managers for our SMEs. And the SMEs have more, you know, depending on their growth, so charge me is unique in the sense that we serve both SMEs and enterprise customers. So, you know, as the customer as we, the customer, enterprise customers require more, have more complex use cases, which means they need a more high touch engagement, and be automated for the rest of the other folks where, you know, they’re still growing. They want to automate their basics of billing, subscription billing, so that’s where it’s more automated and mid touch.

Andrew Michael
Okay. And out of the 23 in customer success Now, is there do you have specific areas of specialization over and above sort of the difference between enterprise and SMB?

Arundhati Balachandran
That’s right, that’s right. So we have, so we have anywhere in terms of experience we have CSM or anywhere between eight to 12 years of experience. Serving enterprise customers with the high touch engagement. And then we have CSM who are slightly more junior where they’re anywhere between three to eight years of experience taking care of our SMB customers. And we also have account managers who take care of our expansion, the ops team, which is one of my most important initiatives back in 2019, where we set up the ops team to make sure that everything they are responsible for processes, tools and reporting.

Andrew Michael
Okay, and that’s interesting as well. You mentioned terms of reporting, I think, for yourself coming across from sales when you have really hard targets and clear goals and expectations when it comes to metrics. I think customer success at least for me, and it’s always been sort of like a tough one to crack in terms of like, how do you measure success? What does success look like for you a charge B then within the customer success team, how you measuring that?

Arundhati Balachandran
Okay, that’s a great question because it is has been evolving, right Andrew? Because One of the things that we do in sales, I was in sales before success and sales ops was very, very important. And which is why I set up the ops team for customer success as soon as I got in. Having said that, I think one of the main metrics for us is, you know, the net retention rate, we want to make sure that we are expanding more than each other, right. And that’s where the one of the one of the key success metrics for customer success this and that we figured that out by the end of 2019. And the other metric that we look at is both, you know, churn rate how we doing because obviously, as the company keeps growing, the base, the revenue that you have is going to keep growing every year. So it makes when you compare john this year versus the previous year, you want to understand how that is in relation to the revenue that you’re guarding right now. So churn rate has been a better metric for us as against the absolute numbers. So I think net retention rate and churn rate have been important for us from a metric perspective for the customer success function inside charge be

Andrew Michael
interesting. And it’s interesting that you have like the net retention as a metric for customer success. So just to understand it a little bit within customer success, then you have Customer Success reps focusing on expansion with it, would this not be sort of like a sales type role? Or what would that look like in terms of like helping customers with expansion?

Arundhati Balachandran
Great question. So one of the things when we started off was CSM, were doing both engagement as well as expansion right with a trying to upsell a customer from a lower plan to a higher plan. And what we saw was that there was a conflict of interest in terms of what the primary focuses, is it engagement or is it selling right? So what we did was we brought in the account manager role, where the CSM continue to engage and be the trusted advisors for the customers. And the account managers are the ones that have revenue targets and quotas and work with the CSM. negotiate pricing and get the customer on the next plan

Andrew Michael
okay and then account managers there’s the sales team and then you have this cross function working between each other or they said no

Arundhati Balachandran
no no we have a we have a con managers with a in the subtle initiatives there are that is one way to go about it but we just don’t want any kind of you know, well it was an experiment and it worked out well so we thought why not have a mini sales team within it’s more like a farming demon inside success.

Andrew Michael
Make sense? Because that was gonna be one of my next questions and this one is like how do you manage sort of this cross collaboration and communication to ensure that the customer the customer success rep and the account manager are aligned in terms of the goals and expectations of your customers?

Arundhati Balachandran
Exactly. So what we do is CSM one of the things that was a great experiment that we did was, you know set up KPIs for CSM in terms of pipeline. So they are engaging with customers, they know which ones are growing and which one needs to be on the higher plan and They, we made them responsible to bring in the pipeline for the account managers. And then they worked with the account account manager gets to qualify that pipeline and sell to that particular customer. So this makes ensures that we have consistent pipeline month on month. And we can easily plan and predict our expansion for the year

Andrew Michael
this Yep. Okay, very nice. So, essentially, it’s then up to sort of the customer success manager to nurture and make sure that the customer is ready. And then when it is ready, they’re sort of feeding the pipeline for the account manager.

Andrew Michael
you mentioned them as well a little bit earlier about the customer success ops team. And I’m interested to hear a little bit more about that sort of, what are the primary functions like, how are they helping the team?

Arundhati Balachandran
So, so one of the things, the initial initiatives that we took up as part of the ops team was, you know, the challenge report, which we publish every month. And here what we did was, you know, categorizing john as early john. Later. So one of the things that came across very clearly is early churn that is anything within three to six months from the customers gone live, they have joined either because of sales not bringing in the right ideal customer profile and qualification, or it was because of issues during onboarding and implementation. And the lead gen was usually service related product features. And, you know, engagement or lack of engagement. So we categorize that and then we started doing voluntary and involuntary, that’s something you don’t have control over, or someone leaving because they’re unhappy with charged me as a product went to one of our competitors. So this information was great. And this report gave us all the information and we were able to figure out, okay, you know, we had this percentage of customers joining which is unavoidable from a child perspective, and then this percentage of customers leaving us because, you know, they’re no longer a subscription business, they’re shutting down their businesses, and that’s something that we don’t have to we don’t we can’t really control, and give us a better focus on who are the kind of customers we should be focusing on from a retention perspective. So that’s one thing. And the other thing that the ops team does is also after that we set up an onboarding team within I know, in charge the and the track their success in terms of measuring onboarding time, how long does it take for a customer to onboard on charge be, and as well as what percentage of customers have on boarded every three months? So these are reports are something that the customer success ops team does and gives us insights on and we have been continuously tweaking our processes depending on these insights.

Andrew Michael
Interesting. And then so the obscene then is really responsible as well for making sure you have tracking in place and the metrics to be able to measure success as well set them correct. Exactly. Yeah. Yeah. And then you mentioned as well, a little bit earlier, in terms of like having a really robust and good data set up from sales ops, you wanted to have the same sort of operation up and running customer success. Is what are some of the cool things that you’re doing with data and customer success when it comes to tech in general attention?

Arundhati Balachandran
All right, this is my favorite part. I think with sales, you know, we did a lot of CRM, pipeline prediction and future prediction and sales cycle and the good stuff. And in success, it’s just that much more opportunity, right? Because we have sales, we have engagement, and then we have retention to track. So from a retention perspective, so one of the things we did was set up our customer success tool, chain zero, and and with that came a lot of automation. And the first thing we did was set up, you know, automated reminders to our CSM, when a customer looks like might be a high risk account. So we looked at a lot of attributes to come up with the churn scores. Also, where we track these customers are red, Amber green, figuring out the leading indicators for a high risk customer One of the things we saw that really work was login activity. So and charge visa subscription billing too, right? It’s not a nice to have, it’s a must have. So which means customer must be logging in every day, and just accounting for weekends. You know, we said if someone is not logging in the last five days, then definitely mark them as highest. Right. And then we also look at a lot of support tickets, the recent past and a dip in their revenue, because we have that information. So these are some of the attributes and leading indicators that works well for us to model John’s course within charge me.

Andrew Michael
Okay. You said charge p as a service that you need to go into every day.

Arundhati Balachandran
Yep, yep. Yeah, because you need to know you got paid because it’s a recurring billing tool, right. It’s a billing invoicing subscription management tool. So it’s a must have so it’s like the spinal cord for every SaaS business. So this is definitely we see our customers logging in every day to check their invoices and deal and paid.

Andrew Michael
Okay. And then also in terms of reporting You offer some functionality in terms of reporting as well in terms of revenue and those sorts of things. Yeah,

Arundhati Balachandran
exactly. We have an add on reporting a platform called revenue story that talks about all the SAS metrics that you need to know.

Andrew Michael
Yeah. And then in terms of Chen prediction, then, yeah, yeah. So the term prediction, you have specific variables that you’ve identified, what is the team then doing with that metric? And with that prediction,

Arundhati Balachandran
got it. So one of the other things that we did as part of our attention effort, Andrew was, you know, sign up with this tool called IntelliSense, which gives us real time news alerts on our customers. So say if someone is raised funds are if you know there is an organization change in their C level suite and or if the company was doing in the shutting down. So we get all these alerts that also feed into our, you know, leading indicators and two are john scores. So this john score is one of the main indicators of JOHN prediction and, and we have two three models running popularly to see which works out better. When there is a monthly john report published, we go back and see if our churn prediction was right to keep tweaking that model. Right. So that’s one of the main things that we do. The other thing that we do, which is qualitative is the sentiment, right? customer sentiment can only be captured by the CSM. And we asked them to on a weekly basis, we have meetings where they tell us who their customers who they think our customers might might not necessarily be very happy with us. And we give them more attention. But we also mark them as red amber green. So that along with our choice, john scores gives us a good idea as to who might actually be was and sometime so these are all the things that we’re doing to figure out, predict john and we can we have been able to get a little closer from our q4 of 2019 perspective.

Andrew Michael
Okay, and then the two metrics that you chose or that can sort of turn right around and get more attention. How are you measuring your performance to get that? How are you setting goals and targets for the team?

Arundhati Balachandran
Got it. So one of the things we’ve seen is in the industry now we have seen the trends in the last two years, right? Because our function is still new. But what we have charged is also seen extreme growth in the last two years. So what we have done is we have looked at trends in the last two years where we also see seasonality. So one thing, one interesting thing was that every time you know, there’s great sales, there’s also chart, right. And that’s, I mean, it’s pretty logical. And also we see that seasonality, taking seasonality into account, we know that if this is this quarter is going to be a little bit lower churn than the next. So be prepared for retention activities and that quarter, you know, and some of those and also like nurturing the high risk customers a lot more and engaging with them increasing product adoption, but we’ve noticed is the more our customer users charge me, the less likely they are to john. So it’s more So beginning out that Northstar metric is very, very Important for every SaaS company to figure out, what is that one metric that you can find? that correlates with john.

Andrew Michael
All right. And then so then you specifically like four years daily active users that you’re focusing on, is that the main metric that you’re trying to drive and ensure that you work towards?

Arundhati Balachandran
So for us, it’s just using charged. So once they start processing on charge be, you know, I know that they’re gonna stick with us. So it’s basically and that’s, and it’s as simple as that, because we saw that a large majority of our customers have not used to charge me have not prioritized the implementation or onboarding are the ones that are leaving us, which means we need to give more focus, focus more on the early stages of a customer.

Andrew Michael
Yeah. And then in terms of onboarding itself, things seems it sounds like it’s very, very important for internationally as for most subscription businesses, what are some of the things you’re doing around onboarding that you think are unique or special?

Arundhati Balachandran
So one of the unique things about charge me is our onboarding team is not within the customer success team. If it’s outside, it’s part of our implementation team, right? And that our team, and this customer success team work together to onboard a customer. So one of the interesting things that we do here is, you know, asper, the size of the customer, and the integrations that they need along with CHARGE be, and the amount of information that they need to migrate into charge me, the onboarding time could be anything from, say, one month to six months, or even nine months if it’s a larger customer. So we’ve tried to figure out, come up with metrics in terms of what should be an average onboarding time depending on the kind of position and implementation and then project managing that whole thing. And I think that is really key and it’s evolving. And we’re hoping that I mean, it’s been a year of figuring these things out. So this year is going to be more about scaling that and making sure that we you know, are able to project manage onboarding really well.

Andrew Michael
Yeah, I can see in your case is awesome. civically that it is quite a big, big job to onboard a new subscription billing service, specifically, if you’re working with existing companies and having to deal with sort of legacy code bases and billing management systems. Exactly. So what are the typical onboarding like, plan look like? How many months is this so we talking together to build customer setup.

Arundhati Balachandran
So that’s the thing. So to be honest, majority of our customers can offer anywhere between one month to three months. It’s that easy, because charge is a plug and play solution. And pretty agile. Yeah, I would say live within one in three months from what majority of our customers.

Andrew Michael
Cool. So next question I want to ask you then is Alice’s to everyone on the show? And it’s, let’s imagine a scenario now where you’ve joined a new company, and churn and retention is not good at all. And you’ve been asked to turn things around and they asked and they’re looking for to get results in the First 90 days be some of the things that you are doing those first 90 days to show some results.

Arundhati Balachandran
Great. It’s not too different from what a situation I was in a year ago, the auction was not as bad as people thought it was. So I think the first thing I would like to understand is segment our customers is very segmentation of our customers is very important, either by revenue, you know, revenue to our company, or their revenue or you know, the group, right. And also the industry helps you need to figure out who your actual IC ideal customer profile is, and then figure out segmentation based on that as well. So keeping all this in mind, I would segment my customers and see where the churn is maximum. That’s very, very key. And once I do that, I will also talk to all the customers to see who are joining or have canceled to make them talk and tell me why they’ve left which is what we did to understand why someone is leaving. Is it a product issue? Is it a service issue? Or is it that there is just no product market fit for the customer, the company So these are, I think, the first few things that I would do in the first 90 days, and then get that feedback back to the leadership of the company, be it sales, product implementation and Customer Success and Support to ensure that we are right on track in terms of we can course correct as we go. So I think every month having that report and insights shared helps an organization really well,

Andrew Michael
for sure, you need to have really good solid understanding as well, where to focus, so you can drive and make change. Right. So is there anything else that comes to mind when you’re thinking about a startup wanting to sort of get started tech and churn and retention? What would be like something else that you would give as advice to startup Getting Started now looking at the problem?

Arundhati Balachandran
Right, so one of the things I would say is, you know, whether you’re enterprise focus or SMB focus or you’re a hybrid like charge be right. One of the things is definitely middly primary focus for any customer success function should be retention, right? You know, sometimes one of the conflicts we have is we are also revenue og in the company and you know as much as you want to, you want your customers to grow, they’re not going to grow unless they’re happy with you. So I think engagement is segmentation and engagement, figuring out who needs more high touch and hand holding. And because if you’ve never nurtured a customer and then when they’re, when you’re trying to retain them is going to be much harder than if you actually did spend time getting them to use your product and nurturing them and keeping sure that they’re happy. nps scores are great way to figure out how customers happy or not, and we’ve been able to get some sentiment capture that sentiment through NPS scores. So and and passing it on to product if it’s a product related issue for NPS. So these are all things that I would mostly focus on engagement and nurturing as a first step as a primary focus and then in order to becomes a lot more easier. And definitely invest in a ops team is the success because these guys just do their magic in terms of reporting and insights. And it gives you so much more help in terms of strategizing what you want to do and course correct for the next quarter, and not having to wait for until the end of the year. So yeah, those are the things that I would, you know, do I would ask any startup to do initially.

Andrew Michael
Nice. And maybe just the last question then for the day is you mentioned as well about this ops team now quite a bit and to have a good operations in place for metrics and tracking. How does your team deal with sort of the focus on if the two metrics you’re looking at is churn and it tomorrow attention, the influences other teams in the company have on those metrics too? So obviously, it’s an output metric, and it’s made up of multiple different inputs, a lot of which is probably outside of your control and customer success. How do you go about sort of dealing with that And the team’s focus and goals that you said.

Arundhati Balachandran
Great question. So one of the things Andrew is see for our net retention rate, for example, it’s it’s shown an expansion, right, its net net of that. So what we do is from a from a customer success teams perspective, we have KPIs around revenue impact, which is retention and expansion, right? If it CSM is a pipeline and retention, if it’s the account manager since the quarter, were spending more than join every week, we have a weekly meeting with the team to see where we are in terms of john for that month, and where we are in terms of expansion for the month. And we want to make sure that we are expanding at a faster rate than Johnny. So let us from within the internal internally within the success team. But when you asked me from an organization perspective, I think it’s very important to educate all the GTM teams first and even product for that matter, in terms of what net retention rate is, and it has to be driven top down, right. You need the founders need to buy into that and investors need to definitely Look at it. So I think we need to educate the entire organization in terms of why that metric is so important, because that’s the health of the organization. Most of the customer success metrics are all global metrics. And I think it’s important for everyone to understand these two key metrics that we are tracking.

Andrew Michael
Absolutely. I mean, at the end of the day, it is a subscription business. And if you are subscribers, and you don’t have a business, it’s definitely very, very critical that everybody buys into it from top down. And there’s a good understanding and education around it within the organization. Cool. Well, I know that it’s been a pleasure having you today. Really, really appreciate your time is anything you want to leave the listeners with, how can they keep up to date with the work that you’re doing?

Arundhati Balachandran
Thank you so much, and was a pleasure for me as well. So one thing I would say is, you know, I’ve been in sales in SAS and customer success, this has given me more if I can say that in terms of the dynamic and the dynamic nature of the function, because the No, we are response we have a revenue we are revenue are responsible to bring an expansion, and yet the gatekeepers of john so we play different roles Don different types. And it’s very, very important to know when to play which role and prioritize our customers. So I think customer centricity should be their top goal. And everything follows that. So that’s what I would leave the listeners with. Awesome.

Andrew Michael
Well, that’s it then for today. It’s been a pleasure having you like I said, and wish you best of luck now going forward into 2020. Looking forward to hearing some great results from you this year.

Arundhati Balachandran
Thank you so much. I’m really excited about this year.

Andrew Michael
And that’s a wrap for the show today with me, Andrew, Michael. I really hope you enjoyed it and you able to pull out something valuable for your business. To keep up to date with turned on FM, and be notified about new episodes, blog posts and more, subscribe to our mailing list. by visiting chern.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@chern.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.