Monitoring and growing customer champions to crush churn and drive acquisition
CEO and Founder
Today on the show we have Jamie Shanks, CEO and Founder of Pipeline Signals.
In this episode, Jamie shares how his experience building Sales for life rolled into Pipeline Signals.
We then discussed why social monitoring your accounts is critical in reducing churn and we wrapped up by discussing some key metrics identified through growing Pipeline Signals and why 3% of your CRM contacts become obsolete each month.
[00:01:24] Andrew Michael: Hey, Jamie. Welcome to the show. Thank you so much for the invite. It's great to have you for the listeners. Jamie is the CEO of pipeline signals, a relationship intelligence monitoring platform through LinkedIn.
Jamie is also the CEO of sales for life and is the best selling author of spear selling and social selling mastery. So my first question for you, Jamie, is what motivated you to start pipeline signals? It sounds like it has come out of a pain. You faced the sales for.
[00:01:50] Jamie Shanks: Yeah, absolutely. So for 10 years we've been training and enabling sellers on social selling.
As we invented and pioneered the category. But what sellers would do is [00:02:00] write us support tickets or ask us, Hey, you are teaching us to monitor our customers for people that up and leave and go into prospects. What if you just did this for us? And you know, for when you sell hammers, everything looks like a nail.
And so you're as you're a sales enabler. You would say, no, my job is to teach you, but as this continued for years, and then COVID hit, it gave us an opportunity to create a, do it for you business. And that was the catalyst to, to be able to battle test AB test that we could actually create an internal system to monitor for customers.
[00:02:39] Andrew Michael: Yeah. Uh, I mentioned to you this before the show, like this is one of those areas actually like. Before starting, actually the reason starting the podcast was I wanted to start a new business. I wasn't sure what I wanted to do yet. And I explored, uh, a lot of different things throughout my time before finding the company after today, a and one of them actually was something like this, uh, like pipeline signals [00:03:00] itself because it came actually out of one of our previous episodes, um, on the show where we were chatting about.
The one of the biggest reasons for churn being, um, your customer champion, leaving the organization. And I found that pretty fascinating as well. And then the more I started speaking to, uh, guests on the show, this became obviously evident like it's, I would say it's top three. Uh, reasons for churn is when your customer champion, uh, leaves.
So I, I started looking to the lots, like I also did pricing and packaging research. I saw that there was a good market for it. There was demand. I was focusing maybe more on the, um, retention side of it, but there's obviously the sales opportunity, uh, that comes about of it as well. Because if you have a customer champion that was happy with your product, and then they end up leaving, they're gonna go somewhere else.
They're gonna need software. Uh, so keeping in contact with them then, uh, so interested, like, how's it going? Like, uh, where you at? Uh, today?
[00:03:54] Jamie Shanks: Yeah, so, uh, we incorporated the business this time last year. So last summer. [00:04:00] We took on our first customer in the fall of 2021. We're growing at 20% compounded monthly and, uh, compounded monthly growth rate.
So we're scaling really quickly. We raised a half, a million dollars in preceded venture capital. Going out to the market to kind of top up that Pree slash seed round. And we've we're approaching what you would call product market fit. Um, it's very obvious that what we have created is sticky. We've only had one customer churn in that time.
And it's because from your perspective, if you have a CSM, a customer success representative or manager, they need to know, not only did somebody walk out the door, From their customer base, but then who replaced them? Is that a friend or a foe? And so we're also monitoring competitive intelligence. So the person that's coming into that business, are they from an existing customer?
So they have a, [00:05:00] you know, a relationship advantage or do they have a relationship disadvantage because that person comes interconnected to a competi. And then as well, just also looking at every other promotion within that customer base. Is there somebody that got promoted? That's now part of the buying committee as well.
[00:05:20] Andrew Michael: Interesting. Yeah. I think like one of the things that hesitated me and the reason for not going here with it, cause I definitely felt like there was a good opportunity here. Um, was the, the idea of just tracking people, uh, like UN not unexpectedly, but UN wantingly or I've con I lose the words now, but essentially you spying on people as they're like, how does that with you?
How does it make you feel as.
[00:05:44] Jamie Shanks: Yeah. And the most important to think about is this is not just the tracking of those, uh, within a company, it's actually an account based sales development motion. What we're looking at is the entire buying committee, or what's known as the [00:06:00] ideal customer profiles that make up. Whether a priority is going into a business or going out of a business.
So we're tracking multiple job roles and functions to help you determine is there change, that's going to happen to my account. And is that change going to be positive or is that change potentially negative based on, is there a series of people walking out the door at scale or are there a series of people being hired?
So there's a new initiatives. Um, and again, where did these people come from and their experience levels? So we're not just pinpointing and tracking individual people. It's really looking at accounts for our
[00:06:43] Andrew Michael: customers. Yeah, no, I get that. Uh, and it is publicly available data and stuff. Just more like for myself coming from a previous startup as well, seeing the way the world was going with privacy, it got me a little bit nervous and also I didn't feel as comfortable, uh, to want to listing, but I definitely, like I said, there's, uh, doing [00:07:00] pricing and packaging research.
You could see that there was a very strong, willingness to pay and a, like you to buy for a product like this. Like. I did, uh, it was one of the ones that was like, hard to say, like, ah, should I do it? Shouldn't not do it. But yeah, it's very interesting. And actually it came from the episode as well from Julian Kaban I think at the time he was a drift and what they were doing actually, a drift was they were monitoring their accounts when people ended up churn.
What they would actually do was like they would follow that person to their new job. They would send them a gift. Like, I think you said at the time they were saying like Boze headsets. Uh, and just with a little note, like saying, Hey, congrats on the new role, uh, when you're ready to purchase new software as well, like I'm here.
Uh, let me know. And the interesting thing was like the ROI on those campaigns that they used to run was apparently something insane because even though you think maybe like a three, $400. Headset. Uh, but because they were really, really strong, warm leads, they were typically going into a [00:08:00] company. And we also talked about this a little bit, that like the typical, like shelf life of an employee, specifically, like Silicon valley is like, 18 to 24 months.
So people are moving around all the time and these opportunities are everywhere. Like, is this something you see in the data? Like how frequently, uh, are you seeing changes in tracking companies? Yeah, so the
[00:08:19] Jamie Shanks: average employee is staying under two years. Um, the average chief human resources officers, uh, 16 months, the average chief revenue officer 17, 18.
But let me actually tell you a story about the inverse or the opportunity cost of not monitoring this and as well, not formulating strong relationships within your customers. So we have a customer they're a global CRM company and they had us monitoring. Sea level executives that would leave their customer base and go into a prospect.
So major fortune 2000 customers going into major fortune [00:09:00] 2000 prospects, and this could only be a sea level to sea level change. And in the first two months there were 90 of these particular compelling events that happened. So you had the chief digital officer chief information officer up in. And go into prospects.
We believe these signals would've been incredible for the sales team, but what happened is a couple months later, the, the net new sales team said we've been calling in on these particular key stakeholders and they don't know who we are. We thought, well, how's that possible? This is the economic decision maker that most likely signed off on the deals.
But what was happening was the customer success team was single threaded. They were not formulating multi relationships within their customers. Those relationships were up and leaving without even them knowing who this role was, who the people were. They went to the new business and the net new team was like having a cold [00:10:00] conversation.
So the, the lesson learned for your audience is the efforts that your customer success team puts in today. not only protects the core customer because of being multi-threaded. If one person leaves, at least you have other legs to your stool, but when people leave and go to new businesses, One year from now or two years from now, you'll be fueling your net new pipeline growth based on your past customers.
So it's critical that you formulate multi relationship and you track where these customers go.
[00:10:37] Andrew Michael: Yeah, absolutely. And there's obviously like that very big opportunity when it comes to growth on the other end of having increasing your customer champion base within an organization, the number you have, and then that's obviously the number you can, uh, expect to see come back.
I think actually I'm like a good example of this as a customer champion, myself of a product called segment. So, uh, if you're familiar with segment analytics, I [00:11:00] previously used it as a startup of mine. I was like a huge champion of. I then joined Hotjar and, uh, we read our data analytics stack. We introduced segments.
I championed it for them there. And then leaving segments again, starting a new company and setting up segment again for the third time. So like, um, it's really, really interesting to see. And I think now with the organization, with the hot chart, like segment has a very similar philosophy where they try to expand the number of champions within an account, try to build relationships and contacts, uh, there, and I'm sure there are a.
I think there's a few that dislike it as well, but there's quite a lot of champions within the organization as well. Um, how do you see like your typical customer base in, are they using the product predominantly more as like a sales opportunity or in terms of like this customer champion monitoring or is it a bit of both.
[00:11:47] Jamie Shanks: Yeah. So if you look at our early base of customers, we're a business that's less than a year old. Uh, it's primarily technology companies and professional services companies. And the reason being [00:12:00] technology companies are early innovators. They've already done the analysis of understanding that their core sales plays.
If they look at their go to market, some of their best net new opportunities come from past customers and they also have a scaled. Group of, of total addressable market of customers and prospects. So that's cohort number one, cohort number two would be professional services firms. When you're in professional services, you are actually selling yourself first you're selling relationships as a service.
And so because of that tracking the migration of talent going in and out of businesses is a core function to business development. And that would answer your part two to your question. Primarily most customers to date are solving for their biggest problem that they think exists, which is I don't have enough pipeline, but I think that a lot of [00:13:00] companies haven't really awoken to the fact that net retention revenue is actually the new pipeline creation in a sense that if we actually reduce our churn rate, Our demand load needed on net.
New will diminish. We just don't need to sign as many new customers as we thought. But that hasn't been a core focus for a lot of customers. So they revert back to the problem that they know my pipeline coverage. Isn't big enough. I'm not talking to enough past customers. I'm not being objective with my account selection and prioritization.
So let's focus on net new first, but we very much for the scaled organizations that are, um, that have been using us for a while, they have all scaled this into customer success as well, because they've realized. I'm just monitoring who goes in up and out of every company.
[00:13:54] Andrew Michael: Yeah. And are you helping with new tracking when it comes to churn and retention itself, or [00:14:00] you just purely on the, uh, relationship side and, uh, giving those insights to companies?
So, and the reason I'm asking this is, or maybe just have a follow on, is that then, like, are you able then to see like what churn of retention looks like on accounts, depending on the number of champions, uh, number of connections within a, an account. Great
[00:14:19] Jamie Shanks: question. It's early days. So we're in the midst of collecting that sales intelligence on, uh, watching who's leaving, but here's the mathematics that's happening on the earliest leading indicators, the average customer of ours.
Their CRM is depleting or diminishing at 3% per month. So 3% of all the contacts, champions, influencers, decision makers in each one of your accounts, let's say your customers are up and leaving and moving to other businesses every month. Wow. So if you have a thousand accounts, That means that 30 key stakeholders [00:15:00] this month in June filmed in June of 2022 are up and leaving and have gone somewhere else.
And if your sales team, your customer success team has not been monitoring this, they have lost. Part of that mind committee and with that person leaving a priority or an initiative, a project just walked out the door as well. And you still don't know who's backfilled that role friend or foe. So that's the rate of change that you need to be cognizant of.
[00:15:31] Andrew Michael: Yeah. That's very interesting. Uh, and it's a pretty high number, like in, in consideration as well. If you think, um, when it comes to like churn retention and what those rates would look like at typical companies, and if, uh, 3% of all the user base or your CRM Ising every month per month. Yeah. Exactly.
That's a huge, uh, huge amount of customers like leaving or potentially leaving. They could be going to other places as well, I guess that are your customers already, [00:16:00] but maybe one customer to the next. Absolutely. But it's an interesting thing as well. Something that we chat about with Emco, like. Being able to understand when we talk about trying to reduce general attention is having a good grasp and understanding of what are the causes for it.
And, uh, then being able to understand what's within your control and what's outside of your control and only focusing then on what's that cause like an example of small businesses, somebody going out of business is outside of your control, but somebody leaving a company is within your control because you could have built those relationships and you could have then seen that as a sales opportunity.
So. Super interesting. It also reminds me of another step around, um, Company like credit cards expiring. I think it's, uh, five on a it's like the average last spend is 24 months. So then it's like something like 5%, uh, of every credit card on file is expired every month. So that's another reason, like, so all of these little reasons, I think when you start to add them up, you start to get a, a clearer picture of like, what's really causing general attention, not just like the China exit survey that you see at the end of [00:17:00] it's like, we weren't happy with the features or, . So have there been any like particular surprising learning since you've been starting this company working with different organizations and companies specifically on the problem?
[00:17:13] Jamie Shanks: that the, one of the biggest learnings. Is how everything boomerangs back to sales enablement. So you're in the services space for 10 years, I invent social selling. We pioneer it. We scale social selling mastery to 600 global customers. And we certify at sales for life and certify a quarter million sellers.
And what I saw as a sales trainer is that. So many tools have what we'll call shelfware. You know, we saw customers spending three to 5 million a year in LinkedIn sales navigator, and you would have a Pareto's law of a small cohort of sellers that were actually using it same with any other tool in their business.
And so [00:18:00] our job as a sales training organization is to bring, set forth a set of principles, process strategy, all the way down to tactic. Well, then you launch your own managed service slash SaaS software company, and you realize very quickly how important you not only need to find the right sales intelligence, package it up, route it into their CRM so that the seller can make informed decisions.
But then at that moment, you have to spend a lot of time in enabling the seller. What is a signal? Why should you care? What do you do with the signal? What are messaging best practices? How do you follow up? So there's quite a bit of enablement that happens, or the best in class are focusing on the enablement of, okay, so you have sales intelligence.
How do you make informed decisions with it? And it's all kind of boomerang back to, to realize you can't get away from that problem, no matter what you [00:19:00] sell.
[00:19:01] Andrew Michael: Yeah. And I think that's also like comes to another, I said three, like top three, this was in number one. I said by far is always comes down to like sort of activation and onboarding experiences that like, if you really wanna make an impact, like there's what you hear time and time again is most of it comes down to then I think that's a lot of what you're talking to now, as well as, I guess you've gotta set up now, but like, how do you actually extract the value?
Because the value is not having. The signals, the value saving that customer or closing that deal. And how do you take advantage, uh, of that, um, question, ask every guest that joins the show. Let's imagine a hypothetical scenario. You join a new company churn. Attention's not doing great at this company. And the CEO comes to you and says, Hey, Jamie, we nearly to turn things around.
We have 90 days to do it. You're in charge. What do you do? The catch. You're not gonna tell me that I'm gonna go speak to customers or look at data, find the biggest pain point and start there. You're just going to use a tactic that you've seen work at a previous company and run with that blindly, [00:20:00] hoping it works and applies at this new place.
What would you do?
[00:20:04] Jamie Shanks: That's a great question. Um, we at sales for life and I'm trying to recall a very, I want to give your audience something juicy. So at sales for life, um, about year three in, I remember as the CEO, we would win a new customer and I would almost cringe thinking in the next couple weeks, I'm either going to get one of two emails.
They're having an incredible experience. Or they're having a poor experience. And I think if I thought through the root cause of why that was happening at sales for life is we were not contextualizing. Our solution enough to their world. There wasn't enough what we'll call white glove service. Um, we would win in a customer.
It was like we sold them a cookie box. We would give [00:21:00] them the cookie box and just say, you're going to learn our process this way. So with that learning, we spent a crazy amount of time, money and energy, making sure that the onboarding. A collection of their world and then reading it back to them and integrating their world into sales for life happened.
And since then it is near, it is so rare to ever hear somebody say, this is an incredible. Training solutions. So I know that was long winded. That's probably where I would start. I would start to recognize that we are probably selling round pegs into square holes and we're selling it over and over again to any willing buyer.
So, what I would do is an exercise, um, that somebody gave me called will. It stands for what does ideal look like? And what we did is we [00:22:00] created a graph and it started from the type of person and the people that were invited into the sales calls. How long were the sales calls? The number of meetings. What content they consumed before they got to purchase.
And then all these milestones, were they on time for launch 1, 2, 3? Did they bring other key signals? There was about 25 data points. We plugged in all of our customers into this spreadsheet. So I'm maybe breaking one of your rules around data, but we did was we found two or three things that had a great commonality.
And we focused on not only finding those type of customers, but I I'm probably rambling here. What I would most likely do is focus in on, on the day we sign somebody, we need to better collect intelligence from them to make sure that what we just sold them. We can properly [00:23:00] integrate to get to the moment of aha, like fast, fast.
Get them something of value, uh, very, very quickly that that's, that's probably what I would do that, so that. Yeah, that I would, I
[00:23:17] Andrew Michael: would. So to summarize that a little bit like, um, you would really try to understand what the ideal customer file looks like. Try to collect as much data from them to understand what are they trying to achieve from your product or service so that you could then work to deliver that, to get them to that aha moment as fast as possible.
I would just try to
[00:23:33] Jamie Shanks: give them, or I of them were integrated white glove, white glove service. Um, even if it cost me more gross margin, uh, and cost a good sold or cost a. Yeah, I would put somebody in place, uh, as a human being to say, we're not perfect. You're not perfect. We're gonna spend time together to make sure that we integrate better together, uh, for [00:24:00] the longevity of the partnership and I've, and we're doing a lot of that with pipeline signals.
And I think that customers. say to themselves, like at least they're here to help. Like they'll do anything they can to help. Yeah.
[00:24:12] Andrew Michael: Awesome. What's one thing you know today about China retention that you wish you knew when you got started with your career.
[00:24:19] Jamie Shanks: Well, uh, this is the easiest sales for life is in the training space.
And the sales training space did not traditionally have, um, recurring revenue. It had reoccurring revenue. So customers that would go from project one to project two to project three, but it wasn't recurring. And when we started pipeline signals, this was from day one, an MRR recurring revenue. Product and that we were going to make it monthly at pipeline signals because annual contracts are not a great indicator to true [00:25:00] net retention and net high net promotion and going to stay over and over again.
So I would make my contract shorter. It would force us learning faster. We would have churn higher at first, but we would learn faster as to what really makes a customer wanna stay with you longer. And we would've iterated faster. So I would make my pricing counterintuitive. I would make it more month to month, um, and recurring right away.
And it would show in the data what I'm doing wrong and I'd be able to
[00:25:36] Andrew Michael: focus. I guess. Yeah, it's an interesting take. I think definitely like if you have the luxury and the revenue to support it, I think a lot of time you just want to, the early days you wanna grab as much money as you can you do, but
[00:25:47] Jamie Shanks: then you suffer years down the road because you, you didn't have enough iterative cycles to learn.
Like yeah. Why
[00:25:54] Andrew Michael: I can see it being like, uh, it has its pros and cons for sure. So one is like the real learning. The other [00:26:00] side is like in the early days, you really just need those like fuel to pour on the fire and, uh, you can end up burning through. Some bad customers and bad takes. But yeah, I like the aspect of just like seeing it as a learning opportunity, learning cost, uh, if you wanna put it that way.
Cool. Um, well, Jimmy, is there any sort of final thoughts or anything you wanna leave the listeners with anything they should be aware of before we wrap up today?
[00:26:24] Jamie Shanks: No. I think that the, the, what I would leave your listeners with is recognize that people make decisions in businesses. Companies don't make the decision it's people.
And so if you track the human capital and the people you'll get a very good sense to whether a priority. Is about to change in your customer, thus a leading indicator to, to churn or, um, if in fact it's quite stable based on human capital, and that will allow you to better plan 90 days out to what could be happening in your business.
[00:26:59] Andrew Michael: Okay. [00:27:00] Yeah, absolutely. Very interesting. And definitely for the listeners, we'll make sure to leave any links, uh, from what you mentioned today in the show notes, you can check that out. Uh, as I mentioned as well, like this is definitely a top three, uh, pain points and problem, when it comes to churn retention is your customer champion.
So, uh, anything we can do to sort of figure that out and stand a bit better, fascinated that over 3% of like the CRMs are diminishing on a monthly basis as well. So thanks very much for joining Jamie. It's been a pleasure hosting you today, and I wish your best of luck. Now, as you grow the company, Thank you so much.
[00:27:29] Jamie Shanks: take care.
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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.