Dan Martell - August 03, 2020


Top 5 Activities of a Great SaaS Customer Success Manager


Episode Stats

Length

12 minutes

Words per Minute

175.45143

Word Count

2,238

Sentence Count

105


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
00:00:00.080 Hey there, Dan Martell here,
00:00:01.080 serial entrepreneur, investor, and creator of SaaScademy.
00:00:03.480 And in this video, I'm gonna share with you
00:00:05.120 the five things that a customer success manager,
00:00:08.440 also known as a CSM, should be doing for you
00:00:11.000 in your SaaS business.
00:00:12.880 Be sure to stay to the end
00:00:14.040 because I'm gonna share with you
00:00:15.280 how to get access to my EBR Flow Planner,
00:00:17.960 also known as the Executive Business Review.
00:00:20.360 Sometimes I call it the QBR, Quarterly Business Review.
00:00:24.440 Step-by-step process to have a meeting
00:00:26.800 that allows you to increase the engagement
00:00:29.000 and also revenue from your customer.
00:00:31.300 Let's get into it.
00:00:44.980 So here's the deal, maybe you're at like 10K
00:00:48.220 in MRR monthly reoccurring revenue and you're wondering,
00:00:51.060 I keep hearing about a customer success manager,
00:00:53.520 but how is that different than a support person
00:00:55.520 or what are they actually gonna work on
00:00:57.700 It's gonna make me money
00:00:58.740 because the last thing I wanna do
00:01:00.180 is hire somebody that just sits on their hands
00:01:02.560 and does nothing to actually increase the revenue.
00:01:05.680 So here's the deal.
00:01:06.380 When I first started off in SaaS,
00:01:08.340 this concept wasn't even a thing.
00:01:11.500 Salesforce in the early days
00:01:12.920 called it the revenue retention team
00:01:14.820 and it kind of had the same characteristics
00:01:17.560 of what you would find in a CSM.
00:01:19.540 But over the years,
00:01:20.820 companies like Gainsight and many others
00:01:22.760 have really not only created the category and the term,
00:01:26.080 but really set the precedence for what types of activities
00:01:30.220 and outcomes should your CSM be achieving
00:01:34.280 for your SaaS product.
00:01:35.560 And I had to learn this because I built my company, Sphere.
00:01:37.940 We had account managers that kind of acted
00:01:40.180 as a customer success manager.
00:01:42.020 And over the years, even with my coaching business,
00:01:44.340 I now have a dedicated CS, customer success team.
00:01:48.960 And they're really accountable for what it says,
00:01:52.320 making sure, I always thought that, you know,
00:01:54.760 So SaaS should be called success as a service.
00:01:57.700 And for me, customer success is making sure clients
00:02:00.640 achieve the desired outcomes that they get.
00:02:03.500 But you need to understand the five things
00:02:05.600 that they should be focused on achieving for you
00:02:08.040 that's actually gonna make the revenue needle move.
00:02:11.500 Here's what I got.
00:02:12.140 Number one, create a health score.
00:02:14.880 So what this means is you should have the ability
00:02:18.100 to outline kind of key activities or characteristics
00:02:21.580 or stages of a new account within your software
00:02:25.260 so that you can quantify kind of where they're at
00:02:28.820 in that process to make sure that they're,
00:02:31.120 they have a high activation or engagement score.
00:02:35.020 So every business is gonna have some changes
00:02:38.340 or different aspects of their score
00:02:40.260 that's gonna make it relevant for them.
00:02:41.960 The easiest one is just to make sure
00:02:44.000 that people are engaged in the product, right?
00:02:45.800 But I like to go even deeper.
00:02:47.280 I remember HubSpot, they talked about their chi,
00:02:49.780 their customer happiness index,
00:02:52.060 which is essentially different kind of utilization
00:02:55.220 of different aspects of the tool the customer may have bought.
00:02:57.460 So if they bought a module,
00:02:58.900 that's part of their chief for that account.
00:03:01.720 And that way they had a unified way
00:03:04.220 of identifying customers that were red, green, or yellow.
00:03:08.640 I teach my clients to implement a process
00:03:11.480 called the member at risk monitor,
00:03:13.800 or everybody calls it the MAR.
00:03:16.220 New people get confused because they're like,
00:03:17.760 what's a MAR?
00:03:18.600 Well, member at risk monitor is essentially a simple way
00:03:22.300 of quantifying customers into those three buckets
00:03:25.200 so that when you're talking to your CSM,
00:03:27.600 you can clearly ask them, who's red?
00:03:29.600 What's the strategy to execute the red playbook?
00:03:32.120 Who's yellow?
00:03:32.860 What are you gonna do to get them green?
00:03:34.360 And my favorite color is purple.
00:03:36.420 Purple is referenceable,
00:03:38.040 meaning that they are engaged and advocates for your product.
00:03:41.380 And that is the next level of health score.
00:03:44.600 Number two, outcome project focused.
00:03:47.660 So what this means for me is a CSM,
00:03:51.360 a customer success manager needs to be focused
00:03:53.540 on the outcome the client came into the product to achieve.
00:03:56.840 The mistake that a lot of CSM makes
00:03:59.040 is they think they know what was desired by the client
00:04:02.840 because hey, we have a product that does X, Y, and Z.
00:04:05.080 People bought it, that's what they want.
00:04:06.880 And if you treat every account,
00:04:08.740 especially if you're talking five figure deals,
00:04:11.780 annual contract values, kind of 10,000 plus,
00:04:15.080 you need to understand the specific desired outcome of each client
00:04:19.300 and manage their implementation or activation within your product like a project.
00:04:24.340 So great CSMs have a project management understanding or bent
00:04:29.680 in regards to needs analysis, timelines, expectations.
00:04:34.500 And for me, I teach my clients this framework called the EBR Flow Planner,
00:04:38.220 the Executive Business Review,
00:04:40.040 which is essentially a nine-box model
00:04:42.320 that you use to guide all of your interactions
00:04:45.860 with the customer because there's so much
00:04:47.580 that could happen to allow you
00:04:49.700 to not only activate a customer,
00:04:52.080 but more importantly, upsell and retain them
00:04:55.280 over the long term.
00:04:56.060 I'm gonna talk about that in a second,
00:04:57.260 but if you don't have somebody that is outcome focused,
00:05:01.040 that can manage projects, manage expectations,
00:05:04.380 move things forward, unblock friction points
00:05:07.280 for your customer in the customer journey,
00:05:09.740 then they're gonna fall backwards
00:05:11.260 and they're not gonna get you what you need in your SaaS.
00:05:13.960 So make sure that they're outcome and project focused.
00:05:17.220 Number three, engage the renewal and upsell.
00:05:20.740 For me, one of the most valuable opportunities of a CSM
00:05:25.140 is to make sure that you create
00:05:27.020 what's called a land and expand model,
00:05:29.300 meaning that somebody buys your product,
00:05:31.460 they invest, let's say, 5,000 or 10,000 annually
00:05:34.080 for your technology,
00:05:35.900 but that should just be the beginning.
00:05:38.320 You should definitely have a pricing structure,
00:05:40.540 product roadmap. I have videos on those on my YouTube channel. You can go check out where you
00:05:45.760 figure out how can I engage the customer to get more, extract more value from them and have them
00:05:52.360 get more value from our product. And that to me is really about the process, what we call a renewal
00:05:58.120 path. Do you have a structured and detailed process, ideally within the 90 days of a contract
00:06:05.140 renewal, that your CSM executes that playbook to encourage the renewal. But not only that,
00:06:10.960 throughout the lifetime of the customer, the life cycle of the customer, is there a touchpoint and
00:06:16.160 a process, in my world we call it the EBR flow planner, to make sure that we're maximizing what's
00:06:21.980 called expansion revenue. We're trying to figure out how can we grow an account. Because if you
00:06:27.280 spend a dollar on a CSM, my rule is you should be getting a five times ROI on that dollar
00:06:33.780 expenditure. It's just like in sales. If I spend a dollar on sales, I want 10 times that dollar
00:06:40.420 in total contract value. I think the revenue opportunity, if managed properly of a CSM,
00:06:47.460 is a five to one investment. And if you've looked at any SaaS businesses, the reason why
00:06:53.060 they peter out and they can't grow anymore is because they hit the growth ceiling,
00:06:57.220 primarily driven by their lack of ability to retain and grow customers. I have a whole video,
00:07:03.240 You can search Growth Ceiling, again, on my YouTube channel to dive into that.
00:07:07.040 But for me, if you don't have somebody that knows how to really build out the renewal path and the upsell opportunities,
00:07:13.700 then they're not going to get you the revenue expansion or the expansion revenue that you need to justify that investment.
00:07:20.640 Number four, escalate value.
00:07:23.280 So the way I think about it is getting somebody to become a customer, that's step one out of like several steps
00:07:29.680 because that captures the value
00:07:31.620 in regards to their investment in your technology
00:07:33.780 to get results or success.
00:07:35.660 But there's so much more, right?
00:07:37.080 When I talk about taking a customer,
00:07:39.300 you know, when they start, maybe they're red
00:07:40.540 because they haven't deployed the software.
00:07:41.840 So red, yellow, they're getting better.
00:07:43.860 Green, they've got activated.
00:07:45.860 They've got success.
00:07:47.120 The next color is purple.
00:07:48.920 Purple means that they are a referenceable account,
00:07:51.800 meaning that if you have somebody in a sales process
00:07:54.260 and they ask for references,
00:07:55.400 you're able to actually introduce them.
00:07:57.580 and they're so excited about your technology
00:08:00.420 that they ask you, hey, if anybody needs to talk
00:08:03.060 to a customer, I'm such a big fan of what you guys are doing,
00:08:06.080 just send them my way, I'll make sure I can kind of,
00:08:08.300 you know, elaborate on how we're using your technology
00:08:10.500 and maybe get you some more customers, that's purple.
00:08:12.460 So, how does a CSM escalate that path and really value?
00:08:16.960 Well, a few things, number one,
00:08:18.500 they can ask for a testimonial, right?
00:08:20.260 Somebody has a great experience,
00:08:21.780 best time to ask for a testimonial.
00:08:23.340 Number two, they can ask for a referral.
00:08:26.100 My rule for growth, especially in SaaS,
00:08:29.100 is a very simple formula.
00:08:31.060 The number of referrals, so track your lead sources.
00:08:34.220 If you can increase the number of referrals
00:08:36.620 on a monthly basis to overcome
00:08:38.520 the number of canceled accounts on LogoChurn,
00:08:41.700 that's what canceled accounts is,
00:08:43.600 if you just got that to zero,
00:08:45.340 meaning that your customer base is referring
00:08:47.500 the same amount of customers that are churning,
00:08:50.220 that means that that covers your bases
00:08:53.660 and then every new marketing or sales initiative
00:08:56.800 that adds new customers hits the bottom line.
00:08:59.700 And that is a powerful place to be.
00:09:02.620 For me, referrals needs to be a strategy and a process.
00:09:06.020 I have a whole referral page system
00:09:07.820 I've talked about that I teach my clients.
00:09:10.640 It's gonna allow you to make sure that equation works out.
00:09:13.660 The other thing is you can do case studies.
00:09:15.660 If somebody's purple, asking them,
00:09:17.300 the customer success manager should engage,
00:09:19.060 identify, produce maybe one case study a month
00:09:22.020 that helps increase the sales motion.
00:09:25.420 If you have a sales team out there talking to clients,
00:09:27.660 they're always gonna be asking,
00:09:28.940 who's a company like me that's using your product?
00:09:31.440 You wanna make sure that your CSM
00:09:33.700 is always creating these case studies.
00:09:36.180 And one of my favorite opportunities
00:09:38.040 for you to do is customer marketing,
00:09:40.580 which is inviting your customers to podcast,
00:09:43.180 to speak maybe at your annual customer conference,
00:09:46.180 to speak at other industry conferences,
00:09:49.160 talking about implementation of your technology.
00:09:51.380 really engaging your top customers
00:09:53.880 because there's so much,
00:09:55.200 and that's why I call it escalate value
00:09:57.380 that your CSM could be doing
00:09:59.560 that's more than just upsells and renewals.
00:10:02.180 Number five, voice of the customer.
00:10:05.000 This is the probably, obviously,
00:10:07.880 I always say it's the most important,
00:10:09.200 but the truth is if you have somebody
00:10:11.340 talking to your customers,
00:10:12.760 understanding the friction points in your softwares,
00:10:14.820 monitoring their deployments
00:10:16.820 and how they're using your software,
00:10:19.040 having that person be the voice of the customer
00:10:21.980 to your product development process.
00:10:24.120 So you should have somebody accountable,
00:10:25.640 product manager, maybe it's you
00:10:27.340 if you're a small SaaS CEO.
00:10:29.880 Having that person represent the customer's voice
00:10:33.320 in product meetings is invaluable.
00:10:35.700 At minimum, understanding where customers
00:10:38.900 are getting tripped up through their perspective
00:10:40.880 to feed that to the product team.
00:10:43.740 This is to me, you know,
00:10:45.220 I always think about feedback cycles.
00:10:47.160 And if you have a team and you're not getting feedback,
00:10:50.800 critical feedback from your team,
00:10:52.760 it doesn't mean that it doesn't exist.
00:10:54.520 It just means that you haven't created a process
00:10:56.260 to escalate and elevate and open up those conversations.
00:11:00.200 It's in that critical feedback
00:11:01.960 that the real growth opportunities lie.
00:11:04.680 So that's why for me,
00:11:06.160 making sure that my CSM is part of that feedback loop
00:11:10.860 and really fighting for the customer
00:11:12.660 and having that customer empathy
00:11:13.860 is so critical in regards to how they add value
00:11:17.960 to the organization, your SaaS business.
00:11:20.600 So quick recap on the five key areas
00:11:23.900 that your customer success manager should be focused on.
00:11:26.840 Number one, creating health score.
00:11:28.560 Number two, outcome project focus.
00:11:31.660 Number three, engage the renewal and upsell.
00:11:34.320 Number four, escalate value.
00:11:37.100 And number five, voice of the customer.
00:11:40.200 As I mentioned at the beginning of this episode,
00:11:42.380 I wanna share with you an exclusive resource
00:11:44.600 called the EBR Flow Planner.
00:11:47.520 Stands for the Executive Business Review.
00:11:49.800 It is my nine box, nine specific steps
00:11:52.600 that you should be going over
00:11:54.040 when you meet with an account with a customer
00:11:56.380 to ensure that you get an understanding
00:11:58.340 of what they wanna achieve,
00:11:59.920 the progress they've made so far,
00:12:01.620 the friction points that they might be having,
00:12:03.700 and the opportunity, the best part,
00:12:06.280 to maybe identify things
00:12:08.460 that you can essentially upsell or cross-sell.
00:12:11.340 that's called Land and Expand.
00:12:13.440 You need a repeatable playbook.
00:12:15.660 Use the EBR Flow Planner.
00:12:17.140 You can click the link below to download your copy.
00:12:19.380 It's all there for you to give to your CSM
00:12:21.960 or implement yourself to start growing your account revenues.
00:12:26.720 And with that, if you like this video,
00:12:28.040 be sure to smash the like button, subscribe if you're not,
00:12:30.660 and click the notification bell
00:12:32.040 so you get notified when new videos get uploaded.
00:12:35.100 And as per usual, I want to challenge you
00:12:37.420 to live a bigger life and a bigger business,
00:12:39.620 and I'll see you next Monday.
00:12:41.340 Do we still do outtakes at the end or no?
00:12:43.340 Yeah.
00:12:44.340 Okay.