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Preventing churn by building out a product success team

Omid Razavi | Former Global Head of Product Success at ServiceNow

  • | Customer Success | Onboarding | Retention
  • September 2019
  • EP28

The key to your product success

Build out a product success team to kill churn

Today on Churn.fm we have Omid Razavi, Global Head of Product Success at ServiceNow.

In this episode, we discussed the main difference between “customer success” and “product success”, the 3 key aspects of the product success role, and how ServiceNow’s product success team handles and analyzes feedback to provide actionable insights for their product team.

We also discussed the importance of understanding your customer’s level of maturity, how to prevent churn when your champions goals are shifting, and why you need to expand the number of “champions” you have inside your customer’s companies.

 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 ServiceNow helps customers to achieve product success 00:04:01
The difference between “customer success” and “product success” 00:05:00
3 key aspects of product success roles and what it entail 00:05:12
How product success analyze feedback to provide actionable insights to the product team 00:10:00
How a product success team handles different feedback from various buyer personas 00:13:37
How ServiceNow thinks about onboarding in the customer lifecycle 00:15:00
Why understanding the customer’s level of maturity is important 00:16:19
How the role of customer success has evolved over the years 00:18:04
Things that ServiceNow has been doing really well in the context of customer support 00:20:07
What Omid will do to help a company turn their churn around. 00:24:01
How companies can expand their relationship with clients and create more “champions” 00:29:04
Who Omid thinks should own retention within a company 00:33:06

 

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Omid Razavi

Former Global Head of Product Success at ServiceNow

Omid’s recommended resources on churn
What Omid is reading right now

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
Omid. Welcome to the show.

Omid Razavi
Hi, Andrew, delighted to be here.

Andrew Michael
It’s pleasure having you for the listeners. Omid is currently the Global Head of product success at ServiceNow. Service now is one of the fastest growing enterprise cloud software companies in the world above $1 billion. They deliver digital workflows that create great experiences and unlock productivity to approximately 5400 enterprise customers worldwide, including almost 75% of the Fortune 500

Prior to ServiceNow, amid also lead customer success, retention and expansion if it’s a companies like SAP Cloud success factors and Saba. So, I mean, you’ve been tackling these problems almost from the inception. For you what has been one of your biggest learning over the years?

Omid Razavi
Yeah, thank you. Thank you very much for the introductions. Andrew. It’s a pleasure to be on your show. I’m a fan of turn FM, and I’ve been listening to it regularly. I want to say that probably what has been a constant here been the changing customer expectations. I do recall, you know, 1015 years ago, the customer expectations from their vendor, whether it was a product, their website, their interactions with sales, for sales, were at a different level than they are they had there today. And that’s something that’s been constantly evolving, and it’s something that the technology

providers need to be aware of so they will be responding and be even ahead of that in terms of proactively meeting their customer needs, in ways that were not possible in the years before.

Andrew Michael
Yeah, I think that’s very interesting, I think in the context is role of like, customer success, in itself is is not very old as a concept. So, like, as customers have become more sophisticated, I guess, like the needs and customer success teams need to be evolving and growing with it.

In the context of that, that maybe you want to let us know a little bit about service now and what the company does, how you help your customers.

Omid Razavi
Certainly, so ServiceNow is an enterprise cloud company. Our customers are typically enterprise

customers with 5000 plus employees, and they use our product for enabling digital workflows that make the work inside the office.

Where is it work or customer service work possible. And my group at ServiceNow runs the product success which is a

which is a function that focused on maximizing customer business value in their experience with or use of our product.

Andrew Michael
Yeah, I really found this fascinating you and you mentioned it last time because one of the first times I’d heard of the concept I think,

maybe you want to talk us about like product success, how this fits in with the context of the customer success team and in your eyes, like what are the different roles within the customer success team.

Omid Razavi
Certainly, I’d be happy to as a no Customer Success is by broadest definition is when customer achieves their business outcome through their interactions with your company, your brand, your website, your people sales support, your knowledge base, and I know of course, your product. Now product success is is a subset of customer success. And it’s focused on making sure that the customer achieves it again better business outcome to having great experiences with your product. So interactions and experiences that they have a product and and they can meet their that are meet that meet their needs. They can do it effortlessly, and hopefully an enjoyable and fun way.

Andrew Michael
And like what would some of the key aspects of the role entail? So how would you enable this product success for customers? What would the output look like for customers?

Omid Razavi
Certainly. So product success, in a short can be defined as in product customer success. If you look at, for example, the evolution of customer success, the very first motion was a direct tie. Where is a model that typically exerted by by sales actually reaching all the customers and asking them about how they’re doing and having executive business reviews, QB, ours and so forth. Yeah, second motion was a tech touch, which is typically practiced by marketing. And that is true, one too many campaigns would be the webinars, content that you make available emails, and so forth, you reach out to those customers. And the third, motion success motion is actually in product type, or exerted by product success, which is a sort of a hybrid of product management and customer success typically could sit into your product in product organization, but also could be a part of a customer success, organization. And so there are benefits. And you know, for each of the three approaches, Director tech touch any product.

Andrew Michael
All right. And in from the product success points of view would some of aspects being sort of things like working on onboarding or adoption activities in app, email sequences? Is that my understanding or something more for like product marketing?

Omid Razavi
No, absolutely. I think

one of the learnings has been, for me has been that it is needs to be thought through in the product design, in terms of insights that you can get from, from from the product usage in product analytics for data driven insights and decisions. Gaining visibility into customer in the user journey in building the product where the users struggle, when features are not utilized, or where inefficiencies exist. The second area is guidance, provide user guidance through walkthrough, and tool tips for user onboarding, as you mentioned. And we’ve also see that the sexual user onboarding is the first phase, but it’s an ongoing adoption of new features is another aspect. And the third one is user communication, which is providing feedback and surveys, capabilities, the customer so users actually can interact with you. So insights, guidance, and communications are elements of product success, in my opinion.

Andrew Michael
Cool. So there’s a couple of things I want to dive a little bit deeper into that you mentioned. And I think the one aspect was around sort of the feedback element is that you mentioned like, your team would then typically be responsible for collecting and consuming customer feedback that will be fed back with this feedback into into the product teams itself. So you would work closely with product managers potentially, to like, uncover and expose that voice of customer? Would that be right?

Omid Razavi
Absolutely, yes.

It was the feedback or so res had been around for a long time, you can actually use that for, you know, again, by having the contact list that you have even reaching out one on one with a customer getting their feedback. But typically, the return of the rate of those surveys is a low. Whereas when you’re doing product, and you do it again in the context, and and you also personalize it for for the that segment of user group, you have a better feedback. And then yes, the idea is that actually product success is to take customer feedback and make product.

Andrew Michael
Yeah. And in the mentioned, you mentioned as well, like sort of segmentation is key in the stack. What sort of role do you feel as well to make sure that, I think for the same, so quite a few times, but not all feedback is equal. And I’m a firm believer of this, I think second one of the things like early product teams tend to make potentially as they will take feedback and try immediately action, all of it. But in most cases, like not all of it is critically and not all it should be given equal weight, like what are some of the things that you do when you’re analyzing and you’re going through the segmentation of feedback that you help the product team to better understand what should be like the key insights I should be going after?

Omid Razavi
Yeah, good. Good question. I think there are typically

feedback on different categories. So one is actually to meet their needs. Typically, our users use the product to get a job done,

Omid Razavi
fulfill certain use case that they have in mind. And so to the extent that use case actually matches with our vision for the product use, we actually make sure that that product, that feedback is is played with the highest attention, there’s some use cases that users want to follow, that may not be what the product is designed for. So perhaps those are sort of nice to haves. Another category of feedback is actually effort that things that are make make the product use effortless and easy. BO, is that something that you always look for to you know, take the unnecessary clicks, and make the process of working with the with the app with the application as as seamless as possible and automated as possible. So those are the two categories and how that’s how you actually get back into prioritization. But

Andrew Michael
nice. And I think as well, what you saying is, it’s quite similar in terms of like the use cases is quite similar to the concept of the anti persona. So a lot of companies put together what they call like the ideal customer personas or the user personas. But sometimes what’s more fun, useful is having like the anti persona of like, who youYou’re not building for and you should not be paying attention to. So I like it as well that you mentioned sort of the jobs to be done in this concept as well and like focusing on the use cases, what they’re trying to achieve, because if people are asking for certain thing that the product is not really intended to do, or is not the main use case, it definitely should be like a good way to prioritize or D prioritize feedback. I like that.

Omid Razavi
Absolutely. I think there’s another element of product success is obviously you you want to be aware of the of the users and usage of product but also what is important is is is the is the buyer, typically, again, especially enterprise software,

the buyer may be different from that of the actual customer may be different than than other users, for example, they could be head of it, that’d be purchasing your solution for let’s say, 1000 employees in a in a call center. So for the buyer, what is important, obviously, the feedback that they get from the users how good the product is, and how well they can do their jobs. But also they want to know that they actually achieving their business outcomes. And that would be basically the business results that they will be getting as a result of use of the product. And to the extent you can actually call out and show those results in the application and make your executive buyer also a user of your solution you actually successful in in informing them as well as showing them how well the product is used and how well they’re achieving their business outcome.

Andrew Michael
And then, so in that as well, would you look at like different feedback against the buyer persona versus the user personas as well? And would you treat them in different ways?

Omid Razavi
Absolutely. Yes. So before the executive buyers, typically what we we take a direct touch approach. So for those accounts, especially the accounts that are high value, or potential value to we make sure that we actually connected with them. And we on a regular basis, we actually, you know, go through the results of the use of the application. And that way we can get feedback in terms of where they see in their in their journey, and what would be, what are the next things that they wish to accomplish with video product?

Andrew Michael
Yeah. Interesting. So another thing you mentioned as well on it was the concept of onboarding and sort of activating users to new features and keeping them informed. And I think one of the concepts as well when it comes to onboarding is, often people see it as like a binary sec, you’ve either been on boarded or you’re not. And it starts from the time you sign up. And it’s typically like a 15 day period, or whatever it is, where this onboarding process happens. But we’ve talked, we spoken previously, as well in previous episodes, with the CEO of chameleon, who buildsonboarding software and hit the concept there as well. And we probably we discussed about this last time we chatted was that onboarding itself doesn’t really stop after the first couple of weeks. And essentially this onboarding process you forever onboarding your customer, whether it be to educate them, how to start using your product, whether it’s be updating the new products and features and getting new adoption from that perspective. But what are some of the things that you do as a company and that you’ve learned through the years to be really successful, ensuring that you not just sort of set and forget, okay, I’ve given him this onboarding. It’s done and now just focused on the next sort of customers like how are you continuously thinking about on boarding in the context of the users lifecycle?

Omid Razavi
Yeah. And I think perhaps than onboarding would be not a term that we would be using for customer who’s actually been initially onboarding user, because as you mentioned, it’s a continuous journey and maybe it will be then ongoing adoption of your product features. features and functions. As you know, most of us actually the the applications that we roll out they they constantly get enhanced new capabilities are being introduced. And you want to move your users from the level that they are into the higher level of maturity in terms of use of your products.

Omid Razavi
So one thing that you do is actually create a maturity model for our for our accounts and and and keep track of the users that are different levels of maturity of user product. There are advanced areas of the product, for example, for example, predictive analytics and advanced bi that was like the customers to get to the point that you’re using those capabilities.

And to get there, it will require a number of you know, customer success approaches one is to in product by providing walkthrough, and tool tips. You know, checklists are I’ve seen that being used, as well as, you know, access to resources, like, you know, webinars and an email campaigns that make them aware of the new capabilities, release some information about the releases, new release capabilities, and so forth.

Andrew Michael
Yeah, so very interesting as well, like, you mentioned three aspects when it comes to how product success works within the product organization. And, as you mentioned, I think this ongoing adoption is critical. Feedback is super important. And I love the aspects in terms of the way that you segments, not only your feedback, but also looking at the product adoption and the maturity. Next thing I wanted to touch on a little bit, and we started talking about it in the beginning, but I think we can go a little bit deeper. And we can dive into this because I think you’ve had a career now like 1020 years in the software business. You around the early days, when SAS was being introduced, and businesses are slowly starting try move over to subscription based revenue throughout this process, like how has customer success and customer service and support stack evolved over the years? So you mentioned as well like customer demands being one aspect of it. What else have you noticed? That’s changed? Yeah, absolutely. I think that what has changed is actually there. And you know, we will talk about the new subscription economy obviously,

Omid Razavi
there are parallels to sales and marketing and how those have changed. Both customer success and customer support have undergone massive transformation as well, the especially customer support in in the on premise world, which was a sort of a capability that needed to be there to fulfill the fiduciary responsibility of the vendor now is becoming a center for proactive guidance for the customer. Typically, you know, to self service capabilities knowledge base community. And using omni channel capabilities to communicate with the with the with the customers and users. Customers support has become a sort of a, a, a channel itself has become very effective in in practically guiding the customers. And I can see that with customer success can actually be working more closely with support and infrastructure that’s there to inform the customers about the usage, adoption, various issues, the same way that they do with the you know, the problems that customer have about how to use a product and so forth. The domains are different, but the same delivery can be used for for international support. Yes,

Andrew Michael
I like is all that it’s another good perception as well as it like typically in the past supports is like, push. So I mean, sorry, it’s like a pull versus push. And it’s sort of like a center that’s typically seen as a cost center. So like, as you typically see, support is like a cost on the business. But when you take it from a different angle and different frame and you say, Okay, wait a second, there’s this concept now emerging of like support driven growth, where the support team is no longer just there to like wait for customers to reach out to to provide support, but also on the flip side, is that how can support be more productive? that’s actually going to encourage usage that’s going to get the customers using the product more and in the context of this sec, what if some of the things that you’re doing a service now from a support perspective that you think I’ve been done really well?

Omid Razavi
Yeah, I think ServiceNow with its foundation in IT Service Managementis looking at the end to end customer support. And, and looking at various ways that you could proactively resolve customer issues, even before the customers become aware of it. For example, if the data center is down or certain servers are not performing, you can you can identify the impacted customers and inform them about their the issue and expected resolution time. Those kind of things actually required sort of end to end automation, across your input, your infrastructure, your computing and network capabilities, as well as you know, all the way to the customer. So proactive customer service management is one that that I know service now and other companies are pushing towards because as as you mentioned, is no longer customer support is no longer viewed as a reactive and cost center.

Andrew Michael
Nice. Like is that as well, like you mentioning, like, proactively reaching out to customers, when you know there’s a problem before your customers know there’s a problem. And more often than not, this is like one of those big areas of frustration with somebody potentially doesn’t know that there’s a problem and they come to use your service, and then they get hit with this problem. But a time when they’re looking for a solution, I think it almost creates a wow moment for customers is if something has gone wrong, and you’re already proactively fixing that components within your products within your service, or maybe an error of their side, an omission of data or false entry and causing an error, like if your support team is, is really productive in that aspect. That’s a definite wild moment, I think for customers.

Omid Razavi
Yeah, absolutely. And that same level of practice is expected of customer success. So you can use the same channels of communication, perhaps a different target audience and issues around, you know, onboarding issues, adoption customer, even maturities make it make the executive sponsor aware of those issues or product progress that customer is making, and even provide the, you know, ultimately provide indication of business value to the customer how how much they’re saving, or how much direction incremental revenue they’re creating, and how much you’re helping their customers or their employees by using your product. So those proactive communications can come either from customer support or customer success, but typically the same. Use the same proactive notion that goes out to the customer.

Andrew Michael
Yeah. And ultimately, like really the focus on what value are you delivering? So your customers are constantly informed and reminded like how valuable your services because I think like, obviously, at the core of it really like that’s where churn and retention happens is when your customers feel that they’re not receiving value. So on the topic of churn and retention, I would ask you a hypothetical question now scenarios, let’s pretend you’ve just joined a new company, you’re in a new role now. And you’ve been asked to take a look at churn and retention, it’s not doing so great at the company. And they said to you, okay, you’re in charge. Now, we want you to try and sort this out for us and turn things around. What would be some of the key things that you would want to do in the first two to three months? After joining? Yeah,

Omid Razavi
yeah, certainly, obviously, you go to a new company, you want to familiarize yourself with the product with the space during the relationship that typically they would have with their customers. Now, in Germany, when you actually double click on churn, there are a few things, there was a number of customers the dollar value of customers. So the progression that customer went through prior all the way to the churn point is important. So to the extent that they have data available, you want to actually peruse through the data you want to really understand and and then also ask questions like why we know that this happened, but the typically, when you talk to sales, customer success, they have their own viewpoint. I would also try to augment that with the actually has customer has said about why they they turned. So you try to put that that feedback together with the data that you have to create as complete the picture about the underlying reasons for churn. churn cannot be prevented all the time. But you can actually point out the early indications of churn and as risk factors address them. So for that, you will be both data and customer feedback.

Andrew Michael
Yeah. And in terms of like, so those early indicators, what are some of the examples that you’ve seen an impulsive, an early indicator that account is at risk could be turning?

Omid Razavi
Yeah. There are quite a few i what i like Actually, I like David’s Cox, the top two reasons. The only thing I would add is that I double click on those that the first one I think was failure to successfully onboard users. That is definitely true, I will expand it to say that product usage pattern also is a important you onboard and the ongoing adoption, because you may actually have a successful onboarding, but the trend is as important as your initial success. So how is it is your data is trending? Is? Is usage trending downward? Then? The those are, that could be an early indication. Also customer interaction level is important. So are they interacting with you as if they care? If they’re running into issues? Are there reporting them? And if you’re informing them about the business results, again, how are they responding? So that’s the sort of qualitative feedback that you get. The second reason that the Dave Scott products loss of champion, definitely, if your champion has moved to the role, or with the company, that’s, that’s important. But also, what I’ve learned is that actually a champion opinion may be changing. So it is important, they may have bought the product for certain reasons, but now that they have, they have the product, they have different goals. So it is important that that you will keep in touch and get to know about champion because their opinions may be changing, as well. And then there are factors that are outside of your control. This happens in enterprise, but probably in the SMB and mid market even more, where there is no dramatic industry shift or trend, or some economic model changes within account, the business model changes. And that as a result of those are, those are the you’ll have control over but actually you can you can attribute to those factors that as well.

Andrew Michael
Yeah, I like that point that you made as well of the customer champions opinion changing over time. And it makes total sense in the sense that like in the beginning, you still looking for a solution to your problem. But you don’t really understand that problem well enough yet a lot of the time. So you come in, and you tend to pick the best solution you deem to be the right fits in the market. But I’ve seen it in my case, more often than not as well as you start to dive into it and you, you learn the problem a little bit better, you figure the solution out that you have a little bit better, you start to see those goalpost shifting and your needs and your ones from a tool become more demanding as you become more sophisticated as user. So I really like that you mentioned that sort of keeping tabs on the opinions and the needs of the customer as they evolve as well.

Omid Razavi
Yeah, champion might also be changing. For example, when

Omid Razavi
your champion initially could be the person actually, who introduces you to the company, and may come from even it function, not necessarily from line of business was recommending for the business. But now that their system actually is operational, you need to look into having champions that are coming to come from line of business the beneficiaries is the VP of customer support is the VP of sales or marketing is that person now a champion, typically they don’t get involved in the early stages. But then as they be the users, the staff use the product, they become more and more interested. The champions could also be coming from different ranks, for example, somebody who was actually administrating system, or some of your power users who could be your champions, and ultimate the turn into your advocates. So I wouldn’t, I would say that that’s something that requires, you know, cultivation with the account, not that they become their customer, you look for having great number of champions for different roles that they play in your software,

Andrew Michael
and you have expand those relationships. Yeah, what would be some ways typically, like companies could do this and, like expand those relationships, because like, more often than not as well, like Customer Success teams will have an initial point of contact from company. But then like to get into the rest of the company, and to start building up relationships with others could be a challenge, like, what are some of the things that companies can do to cultivate and build those relationships?

Omid Razavi
Very good, I think the selling actually never stops. And, and the idea of selling is actually to helping those who are actually benefiting the the solution, be able to, you know, to give them an opportunity to express themselves in terms of the value that getting sometimes the required coaching. That is can be done also by sales or customer success. I think that whole area of turning champions into your advocates, and I call champions different from a from advocate champions are people actually who are champion within the company advocates are those who actually promote you to the broader audience to other companies, and they’re willing to speak at the conferences and, and the webinars and videos and so forth, we always look for in our interactions with the with the with the customer, we look for indications of, of success, expressions of satisfaction over the results, the value that they’re receiving. And if they do, we asked them actually, if they’re willing to, you know, to share that to the broader audience, we’re willing to speak at our, at the, at the conference or, and, and, surprisingly, not, many people actually are interested, when they see the best they’d like to see themselves an extension of your company. And they liked the story to be told. So one of the methods that we also use is product Advisory Council, a customer advisory board. And those are the more senior people in the company that can give you feedback, you may have actually different levels, you have a to user advisory board as well. And then not only give you feedback, but they’re also willing to be your champion or advocates.

Andrew Michael
Yeah, I like is all that you mention of the different levels. So you have the cab, like a customer advisory board, the US advisory board, just looking at a different levels as well, like in terms of like the buyer persona again. So it definitely sounds like throughout your career and through the different roles, like you have the heavy focus and making sure that you’re speaking to the right people and listening to the right feedback. I love it. Cool. So maybe last question, and we can wrap up for today. And this is a question. I think it’s always an interesting debate. But in your opinion, like who should own retention within a company?

Omid Razavi
That’s a good question. I think initially, it doesn’t matter, but as you scale who should who should own it. And I would think that, when it comes to again, I can speak to the enterprise space. When it comes to the renewal and upsell, it is important that you have actually dedicated team who are who are expert at pulling through the renewal and, and the upsell. And the reason I say that is that because there’s a lot of administrative work that has to go through with it is not just selling, it’s not just about proof of success. So I would think that you need renewal managers who are specialized in this will be helping sales or customer success, if they’re they own, they own it.

Andrew Michael
So you would say as well from that aspect, like customer success has two components. So obviously, when we were talking about it quite a bit is like the onboarding is the constant, like product success angle as well. And then you would have this really specialized team focused on renewals, and like making sure that people are still around a year from now. Yeah,

Omid Razavi
that’s great. I can say it from the enter for the enterprise customer standpoint, because renewals are typically done by the procurement department managed by them and requires specialized skill to deal with them. Now in terms of proof of the value, customer success can make you make sure that the the champion, the business champion is on board with with the renewal and the upsell that you’re that that is being worked on. But in terms of the actual renewal management, I would think that would be a specialized.

Andrew Michael
Yeah. So I mean, essentially, what you’re saying is all it is it’s a bit of a team effort. But if it comes down to it, like the the renewal team would be the team who would be the ones responsible at the end of the day for closing those deals and making sure people stick around.

Omid Razavi
Exactly, especially as you know, I do Newell numbers even become larger than yourself number in every every given quarter. It is important that you have even a dedicated team motion, focus on that.

Andrew Michael
Yeah, absolutely. So, I mean, it’s been a pleasure having you today like some really, really interesting insights. Very interesting as well, listening from somebody who’s been around from almost the beginning and pretty much seen it all love hearing as well a little bit about the product success component and how this is going to be definitely an interesting area to watch within customer success and within product itself. So thanks very much for joining the show. And I wish you best of luck now going forward and your new difference. Absolutely. Thank you very much for having me. Just to explain.

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 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 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.