The evolution of Customer Success and what CS teams are still getting wrong in 2021
Investor and Venture Partner
Crane Venture Partners
Today on the show we have Rav Dhaliwa, Investor and Venture Partner at Crane Venture Partners.
In this episode, we talked about Rav’s impressive career heading up CS at some of the top hyper-growth SaaS companies, how he’s seen the industry evolve over the past 15 years, and why CS leaders have two customers: the ones they serve externally and the teams they need to sell their value to internally.
Rav also shared tips on how to get started when setting up customer success and the one thing CS teams are getting wrong all around and how to improve it.
Is ReadingNever Split The Difference
Andrew Michael: hey, Rav, welcome to the show.
Rav Dhaliwal: [00:01:30] Hi Andrew. It's great to be here.
Andrew Michael: [00:01:31] It's a pleasure for the listeners, Rav and investor and venture partner at crane venture partners who are backing the next generation of ambitious, intelligent computing companies in Europe and working on close with enterprise deep tech founders to build the foundations for long-term revenue growth and customer value.
Uh, prior to becoming an investor, Rav had an unbelievable career heading up customer success at Slack, leading customer success at Zendesk, that director of customer success at Yammer, all within the EMEA region. He is also a [00:02:00] principal support manager at Salesforce and spend time at other companies like IBM, JP Morgan and Accenture.
Uh, so my first question for you arrive is like you have more brand names on your CV than I've ever seen anything on it too. So far. What's one piece of advice that you'd give to somebody looking to get a job at a hyper-growth company.
Rav Dhaliwal: [00:02:18] Oh, that's a great question. Thank you. How can you make me feel very old and tired now?
And you're just kinda going through that. Um, It's it's a really interesting question. So I'm going to actually answer that with, uh, my investor hat on, because I, when I first started working in venture, I was at an event and somebody asked me about my career and where I'd been working. And they said, Oh, you're a really good investor.
And I said, what do you mean? He goes, look at where you've chosen to invest your time. And I hadn't really ever thought about it in those terms. And it got me, yeah. Thinking about that. So the one bit of it, well, it's a broader bit of advice than one thing. Is I went back and they looked through, well, what was my.
Process of, you know, looking at these roles [00:03:00] and trying to get these roles first and foremost was the product or the products it's like, do I actually really believe in this thing? Even if other people don't does it spark in me some enthusiasm and passion, do I think it's great, right. That's the first thing.
Second thing is who are the founders and the leaders of the business. If it's an early stage startup, uh, you know, what's the. Track record. And I don't think it's any coincidence when I deconstructed it, they were all founders who had previously done other businesses. Some of them are not even successful.
So they had one or two failures before they sort of hit on something that was successful. And I think that's important because it's a certain level of maturity and knowledge on how to build a business that you would be walking into. Uh, I think that was, uh, you know, what do I bring to the table? So what is the kind of gap that I could with my experience and skills I could bring?
And fourth is what's the opportunity for me. And that's not so much opportunity in terms of title or revenue or money, although that is important, it was much more, what's the [00:04:00] opportunity for me to develop some muscles. No, I want to develop. So, you know, the case is under us, all those criteria filled, but the muscle that I wanted to build was I wanted to become a better people leader.
I wanted to really learn how to manage and lead a function. So, um, I think those are kind of the that's the advice I would give is start with the product, because if you don't really believe in the product or the product is not of good quality. It doesn't matter if you have the rest of your life's going to be pretty miserable.
Andrew Michael: [00:04:27] Yeah. I love the sort of the notion as well of, uh, putting the investor hat on that you mentioned, like you really are investing your time. And I think, uh, soften the knots, like people really undervalue, uh, themselves and sort of see, like, I think when you're coming from like the founder side and, uh, like seeing our difficulties to find really good people, uh, you're just as much of a commodity as like the job that's given to you and things.
So I think. Really trying to be thoughtful in how you spend your time. And, uh, I liked the process where, like you said, looking at the experience founders, seeing that they've got some [00:05:00] sort of track record that you love the product that you could see yourself using it or see potential in itself.
Rav Dhaliwal: [00:05:04] Yeah. And it's not just even a track record of success.
It's just a track record of them having to be entrepreneurs. Right. You know, most really, um, successful entrepreneurs have failed two, three, four times before they've kind of hit on a formula set.
Andrew Michael: [00:05:18] Yep. Absolutely. I've seen it every time I've done a startup. This is now number four. For me, every time I look back, I was like, geez, how little I knew back then?
And I know the same thing is going to happen, like in a few field a couple years from now with
Rav Dhaliwal: [00:05:31] experiential learning.
Andrew Michael: [00:05:33] Absolutely cool. So, I mean, I went through a long list. I think one of the common threads, obviously through that list a is definitely been your experience around customer success. And even as early back in the day as being at Salesforce, uh, where you were sort of as a principal support manager, but it sounded like the functions of a customer success to a certain degree for enterprise phones.
Um, so I'm interested, like [00:06:00] how have you seen the industry move and, uh, evolve over the last like 10 or so 10, 15 years? Like, what do you think. There has really moved forward in the right direction. And what do you think has maybe still not caught up yet to other, um, sectors and other teams within companies?
Rav Dhaliwal: [00:06:15] I think what's really moved forward is actually not a greater understanding that as we've changed the way we distribute and sell software, you know, we've moved from, you know, perpetual license on premise to cloud and subscription that there doesn't need to be. Uh, what, you know, A new way of thinking about how we work with customers and a focus on helping the customer to drive business value, business outcomes.
So I think that is, that is almost the norm. Now I think there's no one who sets up a SaaS company, especially somebody who sets up a SAS subscription company that isn't, even if they're unconsciously doing it, thinking about putting, putting resources in to make customers successful, whether they call it [00:07:00] something different is almost irrelevant.
So I think that's definitely what I've seen. The progression move forward. I think to the second part of your question, as in like what's maybe not working so well, I would say first and foremost, There is still a very, there is no standard industry definition of what we mean by customer success. Um, because of that, it's very difficult for entrepreneurs for, for, uh, even established founders and actually even for success practitioners, uh, to articulate what they do and why it's important.
And if you don't have that definition, that leads to a whole host of other. Challenges down the line specifically one which I've written about and talked about and described as this everything department phenomena. Where the CS team ends up becoming a department just owns everything that either doesn't fit or isn't wanted elsewhere in the organization.
So I think that's fundamentally [00:08:00] part of the core of what I'm trying to do now as an investor, especially as an early stage investor is to work with founders, to help them actually educate them and help them understand. What CS is why it's important, why you even need to invest in it at the very, very earliest stages.
Even if you call it something different, it doesn't matter. Uh, because this is the only way you're ever really going to have a shot at being a, a large successful business.
Andrew Michael: [00:08:25] Absolutely. Do you think maybe as well, This Claritin definition is not there yet because maybe they don't have the Glen granularity, like other roles too.
So if you think about sales, you have inbound and outbound that they clearly defined their functions, their roles. Yeah. I think when it comes to customer success, in my opinion, it varies quite a bit because it can vary drastically on the business model on the type of customer you're going after, what the average revenue per account is like, what functions you can deploy.
And. Perhaps maybe like there needs to be a lot more solid ground going into those definitions for then you to have a better understanding of the customer.
Rav Dhaliwal: [00:08:59] Yeah. [00:09:00] You hit the nail on the head there, which is it's contextual. So depending on the business, the product, the service, the customers. What it takes to make a customer successful varies from business to business.
But I think there's another part to that equation and I hope it doesn't sound too controversial. I think the other challenge would that lack of definition is actually CS leaders and practitioners themselves who don't go about defining the context. Uh, and this is one of the ironies of if you hire really good CS leaders and practitioners, they tend to be very.
Customer focused, very value focused. Um, and they were working incredibly hard, uh, to overcome shortcomings in your own product or service or in your own go to market motion to make the customer successful. And then that has the byproduct. Of them hiding structural problems in your business that will actually prevent you from being successful.
And they're not doing that intentionally. They're [00:10:00] just doing that well intentioned, but then what that can sometimes lead to, is that the team or the leadership feeling? Well, I've just got, I've just got to deal with the hand I've been given. Right. Whereas they don't realize that actually they are much more empowered than they think they are to effect change in the business.
But the first thing is they need to define. What they do in terms of the bottom line impact, it has to the business. So typically what you'll find, and I talk to a lot of CS leaders is you'll say, you know, what do you do? And they go well, and I'll tell you something very generic. We deliver outcomes, or we focus on value or anything.
Okay. Or they'll go the other level and just talk about granular activities. Or we do QPRs. We do reviews. We do onboarding. And what I'm trying to sort of help people think about is those are all the leavers that you are pulling, but what are you pulling them for? And the reason you're pulling is to drive net revenue retention.
You want to [00:11:00] retain every dollar that you have a crude from a customer, but you want to set yourself up and create the conditions to get more dollars from them, right? Yep. That at the core is what the function is doing and it's doing it. By adding skills and tools that the rate, the speed at which those customers see value, because we don't really need to help them really.
We could sell them the software, leave them to it, go here's the FAQ. And the reason we don't do that is because. If they do happen to put the effort in and figure it out themselves, it'll take them far longer to do that. Then if you help them. Right. So it's an acceleration function. It's accelerating the value customer C.
So you have a bigger window, uh, to potentially drive more revenue from them. So, uh, I, and I think that's, that's part of the, the challenge. Uh, it's first it's contextual. Uh, there, there is, therefore not a lack. There's not like a [00:12:00] standardized definition. And then you have a bunch of very well-intentioned, well-meaning hardworking people who are just throwing their hands up going.
I just got to deal with what I've got because I'm too busy to actually affect any internal change.
Andrew Michael: [00:12:11] Yeah. I see that as well. And I think like, Uh, I've worked with quite a few good leaders in the past where the first thing they come into the organization is really about setting. Like, what is their team's focus?
What is their goal? What are they here to achieve? Like it's clear for everybody internally. And I can see that as well with their customer success and speaking to quite a lot of guests as well on the show that perhaps, maybe this is a missing step is actually first of all. Before you even start doing anything is really make sure internally there's a clear alignment and focus of what customer success purpose is
Rav Dhaliwal: [00:12:41] because you and you hit the key word this around you is alignment.
What you do, and the value that you add has to be aligned to what the com your company's trying to achieve. And you have to be able to show that, and the way that you show that is making sure you have the appropriate measures that are important to the company. So ultimately that at a [00:13:00] very early stage, Probably what's important to the company is product market fit, right?
Because if I don't have that, I might as well pack up and go home. Right? So you should probably have some targets that are product related later on. When you are beyond that stage in your cranking into building a commercial organization, you want to show how you're adding to the top of the funnel. Look at how many case studies references were driving, how much custom sentiment we're generating.
And then when you are a little bit more of a mature business and that's better understood. It's, this is the net revenue retention. We're returning 105 hundred and 10% back to the business. Every customer we work with grows at a certain percentage. And I think part of the challenge for CS practitioners is, and I hear this all the time and including very senior leaders, they'll say I'm not in sales.
I'm don't want to be in sales. And they say that like, sales is a bad thing. Sales is not a bad thing. And I would argue that if you are in any kind of SAS software company, everyone is in sales [00:14:00] where you're just pulling different leavers to drive revenue in different ways. Yes, exactly. And your focusing on the business value of the solution to drive a lever, you can be accountable for the revenue, but not be responsible.
For negotiating it and delivering it, that could be a commercial person. You can be accountable for putting the company in a position to have the right to go back and have that discussion with the customer.
Andrew Michael: [00:14:24] Absolutely. I think this is actually something we discussed, uh, on episode 98, uh, with David Sakamoto from, uh, get lab.
And it was interesting as well, because I think. A lot of times on the show, we do hear this like notion that it's difficult for customer success to have an impact, like a, especially civically on a number like retention itself. And how can they be accountable with this? So many inputs from across the organization.
What he made was the case that if anything it's really needs to be owned by somebody in the sense that. You can be in customer success, the orchestrators of their customer experience. So [00:15:00] you're not the ones closing the sales deal, but you can make sure working closely with sales to ensure that they're not selling the wrong deals.
Like you could go to marketing men, like feedback on what you're hearing from people from customer success side is like, are you overselling? Are you understanding you're not hitting them with the
Rav Dhaliwal: [00:15:13] wrong profile we're targeting and all that sort of stuff. Yeah. Yeah. So
Andrew Michael: [00:15:16] working really owning that experience, which ultimately then would own sort of that number that you would focus on.
But I think
Rav Dhaliwal: [00:15:22] that is absolutely right, but I think culturally in the CS profession, there's almost an aversion or a lack of understanding that you can do that. Yes. You know, you can actually put your hand up and go. In the interest of continuous improvement and the health of our company. This is a problem that needs to get solved right now.
That is hard, right? That is hard to do. It's actually harder to do if you're a successful company, ironically, because when things are going well, The impetus then is not to change anything. Right. Whereas because most of the business is working on a [00:16:00] quarterly cycle and at CS you're probably working on an annual or above cycle.
You have 10, you have the tendency to be slightly cursed with seeing problems further out that you know, are going to happen. Like there's a whole, we're going to fall into because we haven't done X, Y, Z, and trying to drive the urgency of that. And I think that's really incumbent on. CS lead is to not be afraid to go in, argued a case, have your data and keep being persistent about it because you are acting in the interest of the company that will be cowed by the VP sales, just because they're more aggressive than you are, come with your facts, be assertive, uh, and make the case because it is an internal.
Change the strategy. And I think this is just compounded by the point we talked about earlier, Andrew, which is if there's no definition of it, founders and executives and chief executives, they don't really have a mental model for why this is important. They will, if in the absence of a model, [00:17:00] they'll pick one guy it's kind of like a support function, isn't it?
Or it's kind of like, you know, because they don't, they're not hearing back regularly. This is how we're adding to the bottom line. Yeah. So David is absolutely right. I think with this pointless. Yeah.
Andrew Michael: [00:17:13] And it needs a lot of communication internally and really like, sort of, I think the other big thing is it's like sales is typically you see the ROI immediately, whereas customer success.
Yeah. Short-term but customer success really gives you that compounding longterm value as well. And. Uh, like CS leaders need to do a much better job of really like illustrating that. So I
Rav Dhaliwal: [00:17:31] love the points that you made leading and lagging indicators, I think is part of the problem. But then having said that there's nothing stopping you as a CS leader to say, I have decided that if our annual goal is net revenue retention, I want to give the team a quarterly goal on consumption of the service.
So I want to be driving my team and measuring my team and reporting that up to say, in order to set ourselves up at month 12, the current financial year. For a bigger net revenue retention, uplift. We're driving the team [00:18:00] on targets every quarter for certain, uh, growth of, uh, active users, for example. Yeah.
So there's other leavers you can pull to keep a shorter term window and keep that focus even the longer term outcome. Yeah. Um, and the other thing is also. It's uh, it's and this is again, more of a CS leadership question. It's an internal change management job. It's an extra part of your role. And what I will often coach leaders on is you have two customers, not one.
You have the customer you sell to, and you have a whole bunch of internal customers and you have to keep selling to them as well.
Andrew Michael: [00:18:35] Yeah, no, a hundred percent believe in. I think also the, a lot of the times people don't spend the time to put together these plans internally as well. And you'd be surprised how often, like people just say, yes, this is great.
Do it. Um, but they think of like taking the status quo as the norm and just going on with things, but really people want to be presented with. Problems and solutions. So like if you go to somebody within the org and you have a really sort of plan, like you said, you're coming with the [00:19:00] data you're showing with the impact you can have, uh, like you'd probably be very surprised of how much change you can make, but you need to put the work in to have that sort of document to have that plan in place, not just continuous.
Rav Dhaliwal: [00:19:11] This is a problem. Yeah. You have to continuously reinforce it. Right. And I think that's, and it is, it's a lot of extra work as you, uh, as you point out and sometimes, you know, it won't be a receptive audience. Right. And that's unfortunate. But you've got to try, right. Again, going back to this theme of the underlying problem is no definition.
If you don't have a definition of what the team is doing and why it's important, it then makes it almost impossible to divest yourself or push back on things that you shouldn't be doing. Because if somebody in the marketing organization says, yeah, you guys can do this. Cause this is a customer success thing, and you have no way to actually push them back on that because.
You haven't got a definition for what you do. Uh, you're gonna end up, it's getting again, this challenge is going to compound your team's going to end up owning [00:20:00] and doing stuff that it doesn't actually add any value to your part of the business or to the customer.
Andrew Michael: [00:20:06] And you're gonna have a very de-motivated team, like not giving them
Rav Dhaliwal: [00:20:09] focus on success on the front foot with customers on too busy reacting to all this stuff we just inherited.
Yeah, absolutely. Are you a, wants to go routine? Uh, where, uh, I just did a quick, you know, analysis of what everyone was doing and found that there was like a hundred plus projects in flight right now, a lot of those projects were because the team needed things that were missing. So they were trying to do them themselves.
So that's one problem to solve. Um, and that's, you know, my responsibility to help prioritize that and get those things done. The other was they're giving all these activities that I don't know why they're doing them right. And one of them was every time there was an NPS detractor. They were reaching out to that person personally and engaging with them.
And I was like, okay, why are we doing that? Right. Well, because we were asked to, [00:21:00] or it got sent to us, blah, blah, blah. But what happens with the results? Right? Well, what do you mean? Well, we, we talked to him, we have, and I had looked at some of these interactions went on for weeks, right. They were going back and forth and they're trying to get it in like.
What happens with the results of this? Well, nothing you don't report these to anywhere. They're not action to anywhere. So we should probably stop doing this. Right. And in the end, my job was to, I mean, there's value in doing that, but my job was to find that a home and that home ended up, um, being in the customer experience team.
And then they had a direct line to marketing and reporting on results. Right. So it's a very practical example of just inheriting things that, you know, whilst they may in of themselves. They're useful. They're not part of the core mission of the team.
Andrew Michael: [00:21:42] Absolutely. Cool. Um, you mentioned something earlier as well.
I want to draw that back into that too. Uh, looking at sort of like founders now wanting to get a CS practice set up within the organization. Um, What are some of the tips that you would give somebody now looking to get set up? Like [00:22:00] maybe just walk us through, when do you think is the right time to start thinking about customer success?
So you mentioned even like pre product market fit, uh, potentially having a CS role or function within the org. Like when do you typically suggest to teams to bring in and what is the type of person you're looking to bring in as, at first a person to help build out customer success for you?
Rav Dhaliwal: [00:22:18] Yeah, that's, there's a couple of really interesting things there.
So I think timing wise, um, From the very beginning because, but that person may not necessarily be a dedicated CS person. It can often be a product person who is wearing a half product, half customer hat, because what you're trying to do is. Uh, you know, you might have a handful of early customers or you still may be even pre-product.
What you're trying to do is find the quickest cycle to test your hypotheses about what you need to build and what you need to improve and what isn't adding value. So I think, you know, from the very moment, have someone who is engaging with customers that are meaningful [00:23:00] level to learn about. Those things you need to accelerate product market fit.
So that is in effect customer success, but it may not be called out, you know, just maybe a product manager or head of product doing that work. Uh, I think once you start to get into, you know, 10, 15, 20 K MRR, you know, you should, you should be having people who were working with customers, right? Because what you want to understand from them is what's required ed from us to help you accelerate that value, what works and what doesn't work.
Um, and then I think as you were doing that in scaling up your, the rest of the commercial organization, and when I say commercial, most people mean sales and marketing to meet sales, marketing success. So, you know, that is the point where you probably want to be formalizing a group because it's not now just about net new sales, it's about growth from existing.
Uh, even though that may be lagging, the company could get very, very good at sales and marketing. But if it's net revenue [00:24:00] retention is below a hundred, uh, they're basically walking around with a very leaky bucket and that Link's only going to get bigger and eventually the business will fail also.
Andrew Michael: [00:24:10] So you need somebody working really closely with customers feeding back that loop and really trying to understand.
Rav Dhaliwal: [00:24:15] Yeah. So even from when you're still building the product, if you think about what a lot of early stage companies do, the product managers, even pre product. Oh, the heads of product they're out there talking to customers or potential customers to test their hypotheses, right? Yep. It's customer success activity.
If you asked me, I'm trying to learn from my customers what accelerates value, but with the context of this at the moment, the product, once the product is baked and built and you've got it, you've got it to a point where you can sell it to people. Then you do need a bunch of people to say, right? What force multiplied do we need to add?
Is it DevOps skills? Is it change management skills, you know, is it, uh, regulatory compliance skills that we bring to the table to get you up and running on this [00:25:00] as quickly as possible? And the reason you need that is because customers have a day job. And this is, this is something that is easy to forget in a SaaS software company, because you live and breathe your products.
That's your whole life. And it's not for them. You know, they're busy trying to solve their problems with not enough time, money or resource. So, uh, you need that engagement with them in that acceleration because they're already under the water. They're too busy. Yeah.
Andrew Michael: [00:25:30] Yeah, definitely. I see that. I think there's also, I think the concept of when it comes to churn as well, in terms of the amount of effort versus the amount of value that's delivered and really trying to understand, like on the scale, yours are other paying like in time where you're paying in money or, uh, you're paying in resources.
And then in terms of like the value that goes in, you really need to make sure that you get a good balance between the amount of time
Rav Dhaliwal: [00:25:54] you've got to be efficient, which is. Why it's not always a case of getting budget and adding people, [00:26:00] it could actually be an issue of. You need a specific side of skillset that you don't have, or there are specific types of engagements or there is specific things you should be doing in the sales cycle to get a faster start.
So it's not always, it doesn't always equate to people. Cool.
Andrew Michael: [00:26:17] Um, I see you have as well, like obviously you mentioned companies like Zendesk. Okay, Slack Yammer. I'm interested between maybe these three companies when it comes to like customer success. What's one thing that they all had in common. And then maybe what is one thing that was like different
Rav Dhaliwal: [00:26:34] with each?
Oh, interesting. So I think, um, in common, uh, I think they all really had this notion of that we're a value accelerator. Uh, and, but I think what was different is that the leavers that we pulled in terms of skill. Uh, or what was required to drive that value was, was very different. Uh, I would say Yammer and Slack were fairly close in so much as it was [00:27:00] collaborative technology and really the major skill set there that helps the customer is helping them with change management.
Right. Because we're asking them to work in a completely different way. Um, uh, the Slack obviously is the property, the product solution, obviously a lot more versed, a lot more sophisticated. Then Yama was when I was there. So, you know, that also then required more technical people on the CS side as well, to help people build on the platform and so on and so forth.
And I think on the Zendesk side, what was really valuable to accelerate, uh, value for the customer was having an understanding of how customer service teams work. So a lot of the teams just had a very good background and experience of either managing. Uh, customer service teams or being a customer service agent, et cetera, because the software itself, while it's very sophisticated, was reasonably intuitive to someone who had been in that background.
They kind of understood how best to build [00:28:00] the software. So, so I think the thing that was the same was it was very much viewed as this is a way to accelerate the value and therefore accelerate revenue for us. But the differences were the kind of skillsets, uh, needed, uh, to bring, I mean, there's a core set of skills.
I think probably six or seven competencies that all good CS people typically have. Um, that asked me to name them all. Cause I won't remember all seven, uh, seven or eight, but the trick is to figure out what is the uniqueness of our proposition in the context of our proposition and what is the skill skillset I need to be looking there.
So sometimes it's just regulatory, you know, you're selling financial services type solutions. And the solutions are, you know, maybe not that complex, there may be complex to deploy, but not complex to use, but if you don't understand the regulatory requirements, you can't help the customer very well.
Andrew Michael: [00:28:48] Yeah.
That makes sense. And I've seen working with different tools before. That I, I think even just a second to jump of a cookie, um, consent model and working with like a named company, it was almost [00:29:00] impossible to try and understand like if their solution served us within our EU requirements that we had. Um, but yeah, having like somebody on customer success, they just want a really good understanding would have been a game changer and like,
Rav Dhaliwal: [00:29:13] Yeah. So the easiest question for founders to ask. And for potential interviewees to ask, uh, founders is how much domain experience or knowledge is required here to make the customer successful. Yeah, that's a really easy question to ask. I, um, been working with a founder in, um, shipping logistics and my natural assumption was, wow, we're going to have to help you find people who understand the shipping business.
And I couldn't have been more wrong. She goes now it's actually pretty straightforward. You can learn that on the job in about a week or two, whereas. You know, talking to someone around, you know, asset compliance is like, yeah, they really need to actually understand all the management systems and the regulatory framework around holding different asset [00:30:00] classes and stuff.
So, you know, it's a different concept.
Andrew Michael: [00:30:03] Absolutely. And I, as we were talking now, Like about the, your investment in time? Uh, because this last week we were setting up for ourselves, we were sending up Zendesk, uh, and we are actually using Slack as an example for, uh, the support function and how they've set up their, uh, docs and everything.
It's, it's quite impressive to see, like the two tools that you've picked are like two of the two tools that we've used as reference now as a backbone to get stuck.
Rav Dhaliwal: [00:30:25] Yeah. It's uh, you know, and I think they both have very similar philosophies, which is very. User centric philosophy. We want to make this software because we're making it for human beings.
Uh, and we want to empathize with people who have those busy day jobs, but also the extensibility of both, you know, the fact that there are platforms, you can build your own integrations. There's a whole stock of other integrations where you can create workflows, you know? So I think there's, there's quite a lot of commonality in terms of the quality of the user experience and the extensibility.
So, uh, and again, but that goes back, you know, we talked earlier. [00:31:00] I didn't realize I was doing it at the time, but I had this mental model of am I really excited about the products, you know, and I clearly that some of those commonalities appealed to me. So, absolutely.
Andrew Michael: [00:31:11] So, uh, what's one thing you believe today that CS teams are just getting wrong all around, um, and you wish they would start improving.
Rav Dhaliwal: [00:31:23] Yeah. Well, I mean, we talked a little, yeah, I heard about it. And I think the one thing is maybe, and this is not the case for everybody, but the one thing is not either realizing or accepting that you are here to add revenue to the company. That's why you're here. I have, I. Have met some CS leaders, one in particular that Springs to mind is its purpose over profit.
And I was just like, Oh my goodness. You know, that may sound very lofty and tied to the vision, but this is a commercial organization. And if you are not. Yeah, you are not adding any [00:32:00] material value. You're ultimately going to get bitten by that. And that's exactly what happened that entire team got, let go, because they couldn't actually show the value that we're adding.
So I think that's probably the key one, all these other things around not, not having a contextual definition, not doing the internal change. I think those are all STEM from. Fundamentally, not either understanding, realizing, or wanting to accept that you are here to drive revenue. Yeah, I think I sound like a terrible venture capitalist, but it is what
Andrew Michael: [00:32:31] it is the game.
Right? So you're building a company and ultimately you make decisions on what does going to drive the most value to the company. So you're not able
Rav Dhaliwal: [00:32:41] to prove an issue exclusive. You can be super customer focused and focused on driving value and drive value too. Your own bottom line. In fact, if you do focus on the driving customer value, you will add value to your bottom line, right?
It's not either or,
Andrew Michael: [00:32:56] well, just, I think the way you position it and then the way you measure it to that's the [00:33:00] difference? I think so, but having that realization like really providing value is the name of the game. Because if you're doing that, nobody's going to leave. People are gonna stick around. You're gonna increase accounts, but figuring out how you can actually.
Uh, measure and drive that usage like you're saying,
Rav Dhaliwal: [00:33:13] and to be proud of that fact, it'd be proud of the fact that we cannot become a hundred million dollar revenue company, unless the CS team is doing its job properly. Like you just can't make conduit, official, run out people to sell to all your run out and companies to acquire, to sell them to.
Or eventually if enough people churn off, they'll never buy anything from you again.
Andrew Michael: [00:33:33] Absolutely. All right. So with that in mind, talking about churn, uh, let's uh, ask one question. I'll ask him to guests that joins the show. It's a hypothetical scenario. Now you joined a new company. You arrived general.
Attention's not doing great at all this year, turns around and says, I like we really need to mix things up really to make an impact. We have 90 days to try and put a dent on churn. What would you want to be doing with your time?
Rav Dhaliwal: [00:33:59] Oh, wow. [00:34:00] Well, I mean, this is assuming, of course that through the process of deciding to come on board, we've determined churn isn't because the product is fundamentally not a good fit.
So we let's say let's make the assumption that believe in the product and the product is actually good. Yeah. I think the first and foremost thing that I would be doing is. Engaging with and talking to as many customers and prospects as possible. So I would be wanting to, uh, sit in sales calls even, you know, just passively.
Sales pitch meetings and sales meetings at different stages. I'd want to talk to almost every existing customer, if possible, especially the material ones. And I would want to stew a stint on the service desk and actually maybe sit in front of a Zen desk and analysis some tickets, because I have found that that is actually one of the best ways to learn about a company, how it operates and its customers.
So it would really all be entirely just immersing myself. As much as possible into how we sell to customers, [00:35:00] who we sell to, why they buy, how they use or don't use, um, and how they engage with us, you know, from a support this, or if they engage with us from a support perspective. Um, I, um, just going back to the Slack example, when I joined Slack, I joined in November, uh, and I was the only person in the UK bearing in mind.
So I flew back. It was obviously the holiday period or coming into the holiday period. A lot of the team were on vacation. I didn't have an office. I worked in my, my old front dining room table and I go, well, I know how Zandesk works and I have a license. So I logged into Zendesk and I just did two weeks tickets and it was scary, but I learned a lot, like I learned an awful lot and it helped me as I started to.
Build out the CS function to understand, Oh, I got a really good sense of what people are struggling with both in terms of knowledge, ability, and we're driving usage. Uh, and so it gave us just more things to think about rather than what we have [00:36:00] some guesses of what might be useful. Let's go try out those guesses.
Andrew Michael: [00:36:03] Yeah, I like that. The two points that you mentioned as well, doesn't get mentioned often those like speaking when they're looking at support. So definitely like I see a huge, huge value in that you really see where people are struggling, where they're failing. It's not past the point of failure so that people are still motivated enough to like, want to try and fix it.
Yeah. And on the flip side then as well, like from the sales perspective is really looking at case, like, what are people saying during these calls? What are some of the value that they're looking for? Maybe we, where are we missing that to where we're not driving that efficiency. Right. Yeah.
Rav Dhaliwal: [00:36:32] Um, and I think one of the biggest learnings I've had from doing that is understanding how big is the gap between the person who bought the product and the person, the CS team is getting to work with.
Yeah. As something that I refer to as the buyer deployer gap, if you can understand that and work on ways to shorten that gap, uh, by the time the customer gets to you, you're in a lot better state because. The companies, especially large ones, the larger [00:37:00] they are, the more that gap is bigger. The more dysfunctional the communication tends to be.
So somebody up here has bought your solution and they're a C-suite or VP level budget, holder, and decider. And they've pushed you down to a junior business analyst to get the thing deployed. Well, there's a giant Gulf between what the business is trying to achieve and what that person does on a day-to-day basis and what their priorities are.
Yeah. And if you, as a CS team have no route back to the buyer, because you have no relationship with that person, you have no way to escalate when, if things aren't moving. So, you know, I think that's been one of the biggest advantages for me of immersing myself in that sales cycle. Even though I'm working with customers who have been sold to, because I need to understand that buyer deploy gap
Andrew Michael: [00:37:45] and see where you need to be speaking, who you need to be speaking to and what's time and the value chain.
Very cool. Um, Another question that I ask as well is what's one thing that you know today about training and retention that you wish you knew when you got started with [00:38:00] your career.
Rav Dhaliwal: [00:38:01] Oh, Oh, that's a really good question. The one thing that I've learned is that the customers who are on the surface, when you look at the usage data are doing really well, but never speak to you and never engage with you and never respond to you.
They're the ones to worry about. That's all I've learned, right? So you've got that highly engaged ones that engage with you either regularly or sporadically. Now they may be paying you a lot of money, but you kind of have a window into engaging with them. Then there's the people who may pay you a lot of money or not much money.
And you, but you do hear from them and you, or you do engage with them. I mean, they may be trending downwards, but you've got people to talk to you to work with. It's the ones in the middle where everything seems to be going okay, or going well. And they don't engage with you at all. Those are the ones that are worrying about the most, because, well, for one thing, you have no idea about the dynamics in the organization.
Is it just [00:39:00] being driven by one person and that one person might leave or change role? So we're, we're not we're zero threaded. No, it's not even the case of being single-threaded this, um, Introduce this for me, a giant risk of retention or potential retention, but a giant risk of never being able to grow that customer.
And the reason it introduces a risk of retention is the longer the customer is left to their own devices. The greater the chances they're not using the solution in the most sophisticated way. And so when you do come to a, maybe a second third renewal event with a new stakeholder, they'll be like, I don't want to pay for this, this, this just seems like a very basic tool and that's because.
They haven't had anyone work with them to show them the true power of it.
Andrew Michael: [00:39:49] What
Rav Dhaliwal: [00:39:49] else can be unlocked? There sounds counter-intuitive right. You would probably look at your dashboard and go, Hey, wow. These guys are doing great. I don't have to worry about those, but it's like, Oh, these guys are doing great and they've never interacted with this.
We don't know who [00:40:00] the stakeholders are. We've never heard of them. Uh, that worries me. That is a particular phenomena in a freemium or bottom up style model that happens. A lot. And, uh, when I worked with an especially early stage founders, now, when they're looking at distribution models, I'm a big proponent of free trial over freemium, because you want to put a little bit of friction in there where they have to talk to you, you know, because then you have a much better shot at being able to engage with someone.
Andrew Michael: [00:40:30] Very interesting. Yeah. I think as well, like a definitely. It's one of those things where just looking at numbers alone can, uh, lead you down the false track and false belief. And it's, we talked about this on the show as well, previously, but interesting to hear from your perspective, coming from so many different companies and seeing this play out over and over that you can see a customer that looks amazing on the numbers, but then without having that full context of what's happening on the scene without having that qualitative aspects and like gauging where they're at, you just don't know.
[00:41:00] Rav Dhaliwal: [00:41:01] What are they using it for? You know, what value is it adding you for any who's driving that, you know, that all of those things, and this is why, you know, you often hear conversations about health scoring. And I always say, look, You want a qualitative and quantitative quantitative school? You want both? So the quantitative one is the usage, the metrics or the feature consumption, but the qualitative one is the, what's the strength of our relationship.
What's the frequency of engagement. What level are we engaged at? What's the political dynamic. You know, that's a bit, that's a bit more subjective. You need both because I sort of tend to say to people, think of it as a blood pressure, reading one number over another. If your systolic or diastolic is off the charts, that's still not good.
Even if the combined number might be okay.
Andrew Michael: [00:41:47] Absolutely. I think this is one thing. We get a wrong across the organization entirely when it comes to qualitative and quantitative insights and not just in customer success, but like very often than not, you have like a business intelligence or data analytics team on [00:42:00] one side, and then you have a UX and UX user research practice and other, but really, I think you need to have both together, both working with one another to be able to
Rav Dhaliwal: [00:42:07] compete.
Um, , you know, there are so many people buy from people as fundamentally what it is, that's fundamentally what it is. And if you don't understand the people that you're hampered, uh, you know, you're just hampered for, you know, maybe you'll retain the revenue, but you might. I probably won't grow it very much.
Andrew Michael: [00:42:28] Absolutely. It's one of the things I advocate as on leading business intelligence at Hotjar was, uh, to push like the data on this to actually get on customer interviews and to, uh, get like, speak to customers themselves. Because like, as analysts, you'll just be looking at numbers, but without having the empathy to understand maybe like what the problems were, you might spot something in the data that looks odd, but you won't have a clue, but yeah.
If you've jumped on their customer call, if you've had some insights into like, what are some of their pain points? What are some of the things they mentioning that can give you and fuel you further thoughts in ways that you can actually analyze and
Rav Dhaliwal: [00:42:57] into challenges? I think it's the difference [00:43:00] between data-driven decisions and data informed decisions.
I'm a fan of the latter. So the data should inform your decision making, but there are. Definitely other variables that aren't in the data that you want to try and get your head around before, before making a decision, if you can. Absolutely.
Andrew Michael: [00:43:17] Well, it's been a pleasure having you on the show today. I've really, really enjoyed our chat and discussion.
Is there any final thoughts you want to leave the listeners with? Like anything they should be aware of? What the speed with? Oh,
Rav Dhaliwal: [00:43:27] look, you know, I think if, um, any of these, you know, if anybody has any questions about any of this, or if anyone wants to dig in further. You know, I'm very easy to get hold of, uh, try, try my best to be responsive.
Um, feel free to follow me on medium. I've written about a lot of these topics we've talked to today in a little bit more detail. And finally, just thank you for invite me in the show and congratulations on hitting that a hundred show barrier. Uh, that's a, that's a hell of an achievement and having listened to a lot of the back catalog.
Uh, this is incredibly. Incredibly [00:44:00] useful podcast. So I'd encourage everybody to subscribe and follow, follow you and your guests.
Andrew Michael: [00:44:06] Awesome. Thanks so much. And we'll definitely make sure to leave those in the show notes as well, the links to medium. Um, and if anything else you have as well, we'll include that too, but thanks again for joining and, uh, wish you best of luck now going into 2021.
Rav Dhaliwal: [00:44:19] Yeah. Thank you, Andrew. And stay safe
A new episode every week
We’ll send you one episode every Wednesday from a subscription economy pro with insights to help you grow.
My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.
In this podcast, you will hear from founders and subscription economy pros working in product, marketing, customer success, support, and operations roles across different stages of company growth, who are taking a systematic approach to increase retention and engagement within their organizations.