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Women in Customer Success Podcast
Women in Customer Success Podcast is the first women-only podcast for Customer Success professionals, where remarkable ladies of Customer Success connect, inspire and champion each other. In each episode, podcast creator and host Marija Skobe-Pilley is bringing a conversation with a role model from across the industries to share her inspirational story and practical tools to help you succeed and make an impact. You’re going to hear from the ladies who are on their own journeys and want to share their learnings and strategies with us. You’re going to be inspired.
Women in Customer Success Podcast
[WiCS PowerUp Masterclass S2:E1] Revenue-Driven CS: Proving ROI & Driving Executive Alignment
Text us your questions and thoughts!
Struggling to prove the financial impact of your CS initiatives or translate retention metrics into revenue? Watch this exclusive masterclass to learn how to build compelling, finance-driven business cases, align CS initiatives with revenue targets, and confidently lead conversations that secure executive buy-in.
Don’t miss this chance to transform Customer Success into a powerful revenue driver!
Featuring:
Marilee Bear, CRO at Gainsight
Marija Skobe-Pilley, Founder of Women In CS
👉 Follow Marilee on LinkedIn: https://www.linkedin.com/in/marileeb/
👉 Learn more about Gainsight: https://www.gainsight.com/
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About Women in Customer Success Podcast:
Women in Customer Success Podcast is the first women-only podcast for Customer Success professionals, where remarkable ladies of Customer Success connect, inspire and champion each other.
Follow:
Women in Customer Success
- Website - womenincs.co/podcast
- LinkedIn - linkedin.com/company/womenincs
- Instagram: https://www.instagram.com/womenincs.co/
Host Marija Skobe-Pilley
- Website - https://www.marijaskobepilley.com/
- LinkedIn - https://www.linkedin.com/in/mspilley/
- Get a FREE '9 Habits of Successful CSMs' guide https://www.marijaskobepilley.com/9-habits-freebie
NEW - Women in Customer Success Courses:
- Thriving as a First-Time People Leader - https://womenincs.co/thriving-as-a-first-time-people-leader
- The Revenue CSM - https://womenincs.co/the-revenue-csm
Welcome to a Women in Customer Success limited edition episode, where we bring an exclusive power-up masterclass in partnership with our friends at Gainsight. Today we welcome Marilee Beer, chief Revenue Officer at Gainsight, to break down some crucial topics for us how to position customer success as a critical revenue driver, how to build compelling finance-driven business cases and how to speak the language that resonates with your C-suite. Giddy up, you're in for a treat. Let's tune in. Hello everybody, welcome to season two. It's season two of Power Up Masterclasses, a collaboration between Gainsight and Women in Customer Success.
Speaker 1:I'm Maria, the founder of Women in Customer Success, and it is so wonderful to welcome you all here today. I think that we had a very exciting last year, with a whole series of beautiful masterclassing exploring different topics that are very relevant for CS leaders and for women in our industry, and this season we can expect again wonderful topics, starting with this one today all about the finance, but topics around AI and customer success that everybody are waiting for as well. So I am sure that you will be looking forward to the following masterclasses, but today it's a special topic and I'm sure that many of you heard talks about customer success as a revenue driver in the past coming months. Revenue generating department or leaders need to speak a revenue language. Since last year I think that I haven't been part of some conversation when it wasn't all about CSMs becoming more revenue focused, more revenue minded, etc. And that's wonderful. It's great. It seems that we finally kind of moved a little bit from support and adoption function to a critical revenue driver. That's great, and lots of teams receive their quotas and targets.
Speaker 1:But still many CS teams are still struggling to effectively communicate their financial impact to executive leadership and we are still seeing some teams being laid off. So obviously there is still misalignment or disconnect, and I do believe it's not only a communication problem. It's not only a misperception of the role of CS. Sometimes maybe it is due to CS leaders not having the right skills or not knowing what CROs really care about today, and I believe that's exactly the reason why we are here today with Marilee. Today it's all about what CROs want, what they mostly care about, and how we can, from customer success, communicate the value of our teams. And what better person to teach us those skills today than Gainsight's own Chief Revenue Officer, marilee Baer? I'm very excited for this conversation, marilee. It's awesome to have you here, and I'm sure that everybody are dying to know a bit about you. And how did you get into CRO position? What was your journey?
Speaker 2:Thank, you so much for having me here today, maria. I'm really excited to be here and talk about this really important aspect in the overall evolution of customer success. And so just a real quick briefing on me. I've had about 25 years in the software and tech industry and the way I got to Gainsight and I joined this past September was really you know, was really the culmination of the last like seven or eight years of me being sort of in the orbit of Gainsight. So back when I was at Akamai, I spent 13 years there in a variety of roles, and my last role there was both leading a customer success function as well as sales, and I did that for a large book of business within the tech and commerce space.
Speaker 2:For Akamai In 2017, we realized that we had a retention issue and we were looking for ways to help our CS team be more efficient, and so that led me to Gainsight and I attended my first Pulse conference back in 2017. I was really impressed with the company and the product and the community that Nick and his team had built and I thought a lot. I had a really positive impression leaving that Pulse conference. I went on to Zendesk and I spent three and a half years there leading enterprise sales and during that time period I was solely responsible for sales, for gross bookings. But my partner, teresa Anania, the CCO, and I we worked really well together to make sure that we retained the book and that we created the best possible experience for our enterprise customers. And that's where I really got to know Gainsight more as a user.
Speaker 2:In January of 2024, I decided it was time for me to take a career sabbatical and I took about eight months off of work to recharge and be with my family. Highly recommend that If anyone has that as a possibility in their life. It was a great way for me to gain some perspective on what was going to be next for me and that led me to Gainsight. I got a call from Nick Maeda. I was really into my break and wasn't quite ready to start thinking about work, but I thought, well, when Nick Maeda calls, you definitely answer. He's such an incredible person and leader. And so I really got behind the opportunity to be a part of Gainsight 2.0, which is, in this day and age, modernizing our products, our go-to-market approach. We've got some exciting stuff happening with AI, with our Staircase product. That really sort of was the final reason why I ended up joining, and it's been a great ride so far. I'm six months in and I'm really excited about what's to come.
Speaker 1:This is such an exciting journey being executive in customer success and then ending up in the embodiment of customer success industry. It's a full circle. I really love how you have such a good connection with the pulse, how that event really marked, in a way, your career, because I remember when I was on my first pulse the whole idea of Women in Customer Success was born just after it. I'm just saying the pulse is happening in May in Las Vegas.
Speaker 2:for anyone close, by May 27th through the 29th in Las Vegas. We would love to have you there, yes.
Speaker 1:Those are great memories and, marilee, thanks for sharing a wonderful journey. As you said, when Nick Mehta calls you, you pick up the phone and then you join GameStop, and then we are discussing metrics.
Speaker 2:So I think, it's time to dive into our topic today Metrics. As a CRO, what do you care about? What are those main metrics? Yeah, yeah, at the end of the day, the number one thing that we care about as CROs is overall growth of our customer base and growth of the business, and so when you really break that down, it comes down to three main KPIs or metrics that we are orienting to constantly. So number one is gross retention rate. So GRR I think everyone is probably familiar with that. It's a key measure of customer retention and ongoing value and really is the biggest needle mover when it comes to growth, especially for a book of business. As it grows, the magnitude and the importance of retaining that book is even more so. In Europe, I know, the average GRR is somewhere in the low 90s low to mid 90s Right now. One thing that we've seen with a lot of our B2B SaaS companies, especially in the US, is GRR continues on a downward trend, and so you know a lot of companies are looking at implementing new process like red account reviews, risk process, to really proactively manage customer health and retention and have a better eye on GRR.
Speaker 2:The second big metric that a CRO is orienting to and I know this is where I am constantly, as we've just started off, our current fiscal year is really around pipeline. So making sure that we have the sufficient pipeline coverage by product, by our segments, by geo, and really making sure that we have that so we can ensure that we make our bookings target by the end of the year. So what is pipeline about? That's about identifying the right cross-sell, up-sell and expansion opportunities, and this is where I think CS teams and CS leaders can really play a big part here. Here at Gainsight we have customer success, qualified leads we call them CSQLs. There are probably a lot of you who have these as well as a tie to CS efforts, to revenue, and the way we think about that is by our CS teams, who are really front and center with our clients daily. They are in a great position to be able to identify opportunity for expansion, either with new products in our portfolio, with the current products that they have in place, to be able to look for new upsell opportunities and new use cases. So our CSMs are an absolute important part of our pipeline approach when we look at pipeline by source, from our CS team, from our sales and account management teams, from marketing and events and from our SDR or sales development representatives. And from our SDR or sales development representatives, we look at it as a team sport and we actually have pipeline targets per seller or per territory, really on a weekly basis, to ensure steady growth. And that's something new for us this year. But we are orienting towards about 100K of ARR per territory per week and we're using that and we're looking at those metrics on a weekly basis to make sure that no one gets behind in their territory and that everyone has a shot at being successful this year.
Speaker 2:And then you know bookings. So the third metric, after GRR, after pipeline, is our top line bookings, and so revenue isn't just about landing new logos. I have a sales team that's focused on new business with customers who are not yet on Gainsight or prospects rather, but it's really about maximizing the existing accounts, and the reason this is important is there was a statistic I saw the other day that about 75% of SaaS bookings today are related to an existing account base. So 25% is coming from new business, 75% from expansion. That's why it's really, really important to maximize our expansion efforts.
Speaker 2:And then, lastly, around bookings, we have linearity goals per quarter, so you may hear this term from your CFO or your CRO and it's linearity. So what linearity means is sufficient bookings within a quarter in month one, month two and month three. A lot of times there's a tendency for all of the bookings to happen at the end of the quarter, at the end of the year, and that creates a bit of a crunch around how you look at revenue for the next year, and so we really want to focus on closing 25% of our bookings business in month one, be at 50% or more by month two, and then hit that 100% in month three Every week or day that we can move back in time and book sooner. That means that we can recognize revenue sooner as well and that makes a substantial financial impact in a positive way.
Speaker 1:Wow, I think this was a little crash course in metrics. It does seem like you have loads of your plate, loads of different metrics to track. We do have a poll and we would like you to complete it, so we asked you what revenue metrics are you responsible for as a customer success leader? Grr, gross revenue retention, nrr, net revenue retention or both? Marilee, do you see our responses? What's your take on it? How may be a split? Well, let me do this for Paul. Retention or both? Marilee, do you see our responses? What's your take on it?
Speaker 2:How? Maybe a split? Well, let me do this for Paul.
Speaker 1:I don't see the Paul. Oh, it will come out. So we have 14% of respondents are responsible for GRR and 47% for NRR, 39% for both, percent for NRR, 39 percent for both. I think this is really good for the CS industry. If we have mostly CS leaders and customer success professionals in the room 47 percent of them responsible for NRR. I think that's probably different than what we would have seen two years ago, for sure.
Speaker 2:Yeah, absolutely, and we definitely look at NRR as well. Our net retention rate we just orient a little bit more closely towards GRR. That's just a decision that our board has made and our CFO. Hopefully that's helpful.
Speaker 1:That's absolutely helpful. I think we have questions altogether. We will have time at the end to discuss questions, but maybe we can have a bit of more clarification of booking opportunities. I think there is one question around it. I mean, there's also a question around kind of clarification what is GRR, what is NRR, which I find interesting. Sometimes we forget that not everybody are always from customer success. Would you like to take us through your metrics, marilee?
Speaker 2:Yeah, absolutely. So I'll answer the question about booking opportunity. I would just look at this as any opportunity that would be in your CRM. So it could be for a new business opportunity and that's primarily where our sales team plays. But for the CS teams and for our account managers they're looking for cross-sell and up-sell opportunities. So that's current customers who have a product or a portfolio of products from us. An up-sell would be current product adding more, buying more seats, buying additional seats for a new use case with maybe a different team within the account, and then Cross-Sell is selling a new product to a customer. So those are both part of the expansion motion Cross-Sell and Up-Sell.
Speaker 1:Okay, so you are putting all as kind of new booking opportunities. We have a quick question also about how come you are more focused on GRRs and you mentioned it was a board's decision, but what's the thinking on that?
Speaker 2:Yeah, so GRR, just so everyone understands the definition of that that's the percentage of recurring revenue retained from the existing customer base over a specific period. It does not include any revenue gains from new customers or expansion. So we look at that part the revenue gains from new customers and expansion as a discrete, unique KPI, which is our bookings number, gross bookings. We put those together and those are primarily how my team is compensated and measured. Nrr is something we look at more at the board level, so it's not something that we're looking at daily or weekly, because it is a function of the gross revenue and the GRR and the bookings. Okay, hopefully that answers a couple of the questions in the chat there, but actually I did not tell you what net retention is. So net retention is measuring the percentage of revenue from existing customers over a period, just like GRR. But it includes both the gains so upgrades as well as the downgrades churns, attrition, losses so the defining feature there is this includes both the upsell and downsell.
Speaker 1:I think that was a very nice explanation of both. Very often we just think of it, as also GRR is. You know how much of the customers you're actually keeping and NRR, how much you're getting new items from those same customers. Exactly, I think that we have responded, matrix, unless there is any other question on metrics. Now I would like us to go into something very interesting. Marilee, we realized how many different metrics is there to track and we already see now how we have a combination of CS leaders that are tracking, let's say, grr and NRR, so already at least half of the metrics that you would typically measure. So how the disconnect happens. I would like to hear from you what are All of those mistakes that you have seen so far that CS leaders are making when they are quantifying and communicate the impact of their teams, like even amongst our attendees? Definitely, what they are responsible for are the metrics that CRO will be looking at and CRO will be interested in. So how come the disconnect happens and they are not able sometimes to provide this quantifiable value?
Speaker 2:Yeah, I think the disconnect happens, just like within any relationship, whether it's personal or professional, with miscommunication and maybe not speaking the right language and not using the same sort of lexicon, and so what I've seen a lot of from CS teams is talking in, you know, very sort of vague language or unquantifiable language. Cros and CFOs love to hear actual hard numbers and data, and so when I hear CS teams saying, hey, let me tell you all the great things we've done this quarter. We had 20 QBRs. We saw, you know, 15 different customers in person, those things absolutely matter. But really what CROs and CFOs are looking for is to understand how those meetings and those QBRs helped convert to growth, retention and revenue. And so I think through like some actionable tips for how the folks here on this webinar today could up-level conversation with financial leaders is really talking directly about the KPIs that matter to the CFO and CRO, and so, first of all, understanding what those KPIs are is really important. Sometimes those are, you know, covered in all hands meetings. Sometimes it's worthy of a, you know, a more one-on-one discussion with your finance team. But really understanding how those motions affect the KPIs that your CFO and your CRO care about care about.
Speaker 2:Also, you know, failing to track churn reasons. So you know, a lot of times there's a manual effort that's necessary in CS. That's no longer only the case, because we have a lot of AI functionality today that will help our sentiment analysis and really show leading indicators of churn before it happens. Won't go into much detail here, but I will say we have an incredible product it's fairly new in the market called Staircase, that does exactly that and takes all of your communication with your customers and puts that into AI and allows you to see customer sentiment based upon what's actually happening with your customer base. And then really, you know, embracing AI and data analytics is super important because we need to do a better job of predicting customer behavior and do a better job of personalizing our engagement strategy so we can address those issues sooner and therefore really positively impact retention and revenue.
Speaker 1:Marilee. Speaking of which, if you can choose incredibly quickly between engagement metrics and churn forecasting, which one would you pick?
Speaker 2:If I had to choose one to make sure that I was successful this year, it would definitely be churn. Successful this year, it would definitely burn, yeah, yeah. Again, it comes down to the hard, vast numbers that really show us the story to tell around where our business has been and where our business is going.
Speaker 1:Absolutely. I love how you picked that one in particular. Anyway, you already mentioned how engagement metrics are so important, but they are not the most important. What they can do always is really recognize the churn risks early on and encourage and enable their team members to look for those signals, as you said. Now we have amazing tools that are available that can do the work for us, but I believe strongly that every CSM has and needs to have the responsibility of tracking those little signals, even in conversation, even if conversation goes into transcripts of what are potential risks, and they need to flag them on time.
Speaker 2:Like that's one of those fairly simple responsibilities that CSMs can do that can have a huge impact on the revenue down the lane Earlier is always better because that helps us, gives us the ability to you know, really think strategically about how to swarm an account and ensure that you know they renew and that they're happy and that they continue to buy more.
Speaker 1:So, marilee, you told us a bit about what not to do. So what metrics not to focus on that much, I wonder, in your career so far, can you show us some examples or tell us when have you seen CSMs or CS leaders really communicating it well and what's the best way for CS leaders to frame their financial strategy that C-levels can resonate with?
Speaker 2:Yeah, again, you know, I think one of the best cases and you asked for a specific example I remember Teresa Anania at Zendesk did an incredible job of as we would be in QBRs, for example, internal QBRs, with our CRO delivering, you know, a look back on the prior quarter and the look ahead. What I remember about her doing such an incredible job of this is really mapping and looking at retention as revenue insurance. So you know, every customer saved means that it was less pressure on me as a sales leader to deliver net new customers, pressure on me as a sales leader to deliver net new customers. And you know it is very hard to go out and get new customers for a lot of software companies and this is not for everyone, but in my experience net new business takes three to four times the amount of planning, time, effort, resources. And so every customer saved means less pressure on new acquisition and better efficiency.
Speaker 2:So you know the role of our success customer success teams is to extend the customer lifetime value and our customer acquisition cost is that becomes more efficient, that also improves the lifetime value of the customer. And then we know I think we all know at the end of the day that when our customers are happy, they tell their friends, they tell others in the community. They advocate for us. They might, you know, send us a prop on LinkedIn and that really helps that word of mouth. And referrals is a really efficient pipeline source because it doesn't cost us anything. Referrals is a really efficient pipeline source because it doesn't cost us anything and it's also a lot you know a lot stronger from an advocacy perspective.
Speaker 1:Oh, absolutely. Not only it doesn't cost anything, it just boosts your brand massively.
Speaker 2:Exactly.
Speaker 1:I really love this reframing how retention is a revenue insurance. I don't think I've heard it before. It's just a nice quote that we can use. I like how you said for every customer you save, you are reducing the pressure from your sales leader to book a new customer. I think we just have a question here Curious about how your account managers and CSMs work together, and I think this is probably very relevant at this point when we speak about how one almost negates the other and how one supports the other.
Speaker 2:Yeah, yeah, so we actually just revamped this. We just released a new RACI to help our teams understand. We just released a new RACI to help our teams understand and, if anybody that our customer account management or our AM team plays, has been a big game changer for us in the last few months. As we started the new fiscal year on February 1st, we rolled this out to our teams at our revenue kickoff event and the teams were really happy to see that we had a clearly defined swim lane plan, because it got a little cloudy in the past and a lot of that was really because it depended upon the relationship, the personalized relationship that the CS team or the CSM, the CAM, had with the customer.
Speaker 2:We have a very tenured workforce here at Gainsight. I think it speaks to a lot of how incredible this company is and how people love being here and, at the same time, a lot of our CSMs have built long-standing relationships with our customers to where it made more sense for a CS person to go out and, you know, work on a renewal. Well, we've made the decision this year that our CAMs own the renewal. They own the overall outcome of that renewal and that's actually a compensation metric for them and our CS team owns the verified outcomes that help drive adoption, and also they own our CSQLs, which is that pipeline contribution that we expect from our CS team.
Speaker 1:And Marley, you mentioned CAM, so that stands for Customer Account Managers, Correct?
Speaker 2:yeah, Federal Account Management Team.
Speaker 1:Yes, it's great to see how you implemented the RACI model. Although you said you know people are pretty tenured, they they have established great relationships with their customers. I have personally seen in very new companies sometimes, when account managers or CSMs don't even have established relationships with customers, how it can be really, you know muddy lanes between who does what, and just having a process as yours RACI or RACI model, how people call it can help a lot, because that's typically the biggest confusion and people don't want to step on each other's toes or they are not sure what to do or no one does something in terms of next steps if they are not sure who is responsible for it. I wonder there was a question here. I'm just picking up because we are on the topic Could you elaborate on your RACI systems between A's and CSS? Yeah, you're probably seeing me looking up here.
Speaker 2:I have a giant bulletin board and I actually have our RACI up on this board, but I would have to pull it down. It's all color-coded. It's very clear. It starts with the handoff, as we're leaving the pre-sales journey and into the post-sales journey. It's when the CSM comes in to meet the customer for the first time, how they have a part in onboarding, where the cam has a part in overall, like later in the cycle when it's renewal time. All of that is clearly defined. I'd be happy to share it with whomever, if you like. We spent a lot of time on this with our teams and really debating like what's the right model for our customers and what's the right model, balancing it with the compensation metrics as well?
Speaker 1:That's wonderful. Oh, there is so many comments.
Speaker 2:Yes, please.
Speaker 1:Okay, I am absolutely convinced that we can share something like that in the follow-up email. There are also a few interesting questions. However, I will be a little bit selfish and take time for another one or two questions for Marilee and then we will take the audience questions. We already started going into direction, how we collaborate with other teams, especially with sales, and the AC model is a great example of how to make it really structured and proper. What would you say, or do you have any advice of how to collaborate with finance team and other teams within the company that all are working towards the revenue growth?
Speaker 2:Yeah, absolutely. I think a really easy tactical piece of advice I have is to, if you're not already on your company's forecast call to invite yourself and ask hey, could I be a part of this? Because I really care about driving revenue for our organization and I want to understand how customer success can play a part. Do you mind if I listen in and you know and be a part and have a seat at the table? I think that that is a really powerful signal to your CRO and your CFO that you're excited to be a part of the revenue part of the organization and to see what your team can do or you can do to have a part in that.
Speaker 1:I think that is a wonderful and incredibly important topic having a seat at the table and being part of those forecasting calls. I would like to know from our audience I think we can put a little poll Are you currently part of forecasting calls?
Speaker 2:Oh, I can't wait to see the answers to this.
Speaker 1:It's coming, it's coming.
Speaker 2:Coming Okay. So Michael says yes and planning as well, okay, great, beautiful.
Speaker 1:Here is the poll. Oh, the answers are coming in so quickly.
Speaker 2:I love watching a live poll.
Speaker 1:Oh no, I'm a little bit scared. We are leaning towards the no 60-40 roughly.
Speaker 2:Oh wow, Okay. So what are the first impressions? Yeah, and if you're like us, we have our forecast calls on Friday, which is tomorrow, so maybe there's an opportunity.
Speaker 1:I actually thought that we would have more people who are part of forecasting calls. I don't know what is the reason why some people are not part of forecasting calls. If that's any of you listening, you can maybe put in the chat. Even if it's anonymous, it's absolutely fine. I would simply like to understand more the reasons why you are not part of forecasting calls Because, as Marilee said, then get yourself on that call so you have the seat at the table. Okay, that's wonderful, marilee, let's go on the forecasting calls. What are other advices of what are good things to do to be part of the revenue conversation and not miss out of it?
Speaker 2:share what's happening with customer health, and so you know the sales team sometimes is running one parallel track. The CS team in an account may have another. It's really important to communicate, and so having those weekly account team calls where you're getting together and sharing what's happening, what you're seeing, those health signals, are really important because they can impact, of course, health and our pipeline and bookings. And so having bi-directional communication with the sales team I think is really really important. Ceo has a big section of that and he always does. Now we're a very CS-centric company, but I think that there's opportunity for other companies to give their CS team some of the spotlight during a board meeting to really showcase how CS is evolving and being a bigger part of the overall revenue growth story. So quarterly business reviews, board discussions any time that there's a team or executive team in the room to show up with the right story around growth, to continue showing CS as an integral part of the overall customer journey.
Speaker 1:And Marley, I think this is crucial. You mentioned like if they're part of the board or you know other types of meeting. I would say, if you are not part of it yet, don't wait for the invitation, right? Because at case at case, as you said, it's very customer centric organization. You are there already, but some other organization may not be like that and CS could be, you know, not among the highest priorities for the board. Let's be honest. So if you are a customer success leader, make sure that you are advocating for yourself to have sometimes five minutes with the board or to have a seat at those meetings. It's incredibly important and you can have influence to your boss and to your C-suite by just requesting it.
Speaker 2:Exactly, and I think, if you're an individual contributor, going to your CS leader and talking through, hey, I've got some ideas. I think we could up-level our organization. How do we think about CS driving revenue? Is that something that I could work with you on so we could really continue to evolve our story here and that goes a long way with your manager as well.
Speaker 1:I really like that advice because, especially for customer success managers who are, you know, interested in progressing their career If any of you are here on this webinar, you probably know how conversation about revenue and your own metrics and how you're doing with your book of business and how you're progressing from previous quarters, how that is incredibly important. So when you are coming to your managers with the story of your book of business, of your metrics, when you know it, when you ask how else can we contribute in, you know, positioning our team as a revenue driven team or revenue generating team, I'm sure that that will get you lots of like promotion points and you can really be seen as a promotion material in the eyes of your managers. And if you're looking to advance your career, knowing the numbers and the metrics is incredibly important.
Speaker 2:Yeah, I couldn't agree more, Maria. So I would just say bottom line. You know, CS it's not just retention anymore, it's revenue, and so you really want to be able to step in with data, show impact, show a clear business case, and that will help earn the seat at the table, if you don't already have that.
Speaker 1:Marilee and I have one more question only for you, and then we will jump into all of those beautiful questions from the audience. What would be your main advice for customer success leaders looking to start creating the narrative about revenue-driven teams today? So, especially if they don't have the seat at the table yet or they are not sure even where to start, what is something that they can start doing today, straight away after this webinar?
Speaker 2:Yeah, I mean, in addition to joining a forecast call and having a conversation with your CS leader about how to evolve your team to be more revenue focused, I think definitely defining KPIs and making sure that those are agreed upon amongst all of the leadership within your organization and your CS leadership, that's really, really important. Again. That's how we start talking the same language, as I said in the beginning, which is important for communication and overall moving forward and growth. And then it's not just enough to have those KPIs at like a leadership level. We really want to be able to transparently cascade those to the rest of the team and help our teams understand the part they play in driving revenue.
Speaker 2:I think most of our you know most of our CS professionals and I'll speak for myself and most that I know is we want to make an impact.
Speaker 2:We want to see that the work we've done impacts both the customer and their satisfaction, but also impacts the business and helps your company grow, and so really understanding those and being able to communicate those down to everyone who has a part in customer success is critical. I think one other thing is, you know, if I'm a leader, I'm thinking about how to enable my team, my CS team this year, and there are all different types of training programs, whether they're from an outside firm, whether they're video-based training and enablement. But really incorporating sales skills into the enablement plan for CS is an important part of helping the CS teams along this journey, as going from a retention and adoption play to more of a revenue driving play or a growth play, and so what that takes is a little bit of time and teaching our teams how to identify signals, negotiation skills, value-based selling and, at the end of the day, we want our CS teams to feel confident talking about these terms and, you know, to be able to identify opportunity so they feel enabled, empowered and confident.
Speaker 1:Marley. This is such a crucial point. When I speak with CS leaders, or even individuals, that is the theme that I'm always hearing oh, we just started getting targets, but we didn't get a training.
Speaker 1:We didn't get training the sales is having the training, but we are not having sales training. There is no budget for it or any other sorts of reasons. So I know that you have advice for CS leaders how to tackle it, but I would also say to everybody if you're managing a team, it is your responsibility to go and fight for those trainings. Even to put your team into sales training. That will be incredibly valuable for them. Like you can do it, you can really advocate for it. You don't have to wait for somebody else to assign training material for your team.
Speaker 2:Right, right, I mean there are so many trainings available for free these days. I mean there's a lot you can leverage with AI tools to learn. But outside of that, you know, if it is a priority then I always give this piece of advice is to understand your company's planning and budget cycle. So when it comes time to think about budget allocation for a training program or an enablement program, you're working far enough in advance so you can get that budget earmarked for training in advance.
Speaker 2:I see a lot of people come to me and they don't understand what the budget process is internally and they ask me for a raise, they ask me for resources to spend budget on. You know different things that we want to do and I have to say we got done with our annual operating plan back in January and we set that and it's set for the year. I don't have any more funds to give, so we'll have to start this process again next year or we would have to make a significant trade-off with the current budget we have. So really understanding those internal cycles so you can make sure that you're prioritizing well in advance.
Speaker 1:That's a wonderful point, marilee. Thank you for sharing so many of those awesome advice. Marilee, thank you for sharing so many of those awesome advice. I do think that we can go into the questions from our audience, because there are many and let's start tackling some. I am on Q&A section. Okay, this is going a little bit towards the beginning of the conversation. Interesting stats Can you share the sources for the GRR differences between Europe and America and a 25% new business versus 75% expansion ARR?
Speaker 2:Yeah, you know I don't have it off the top of my head, but we can definitely get that. What I told you about the United States is anecdotal. I'm talking to, you know, hundreds of SaaS companies. The GRR statistic for Europe was one that came from our team, so I'd have to look and see what the source of that is.
Speaker 1:Thank you for that. And next question CS sometimes can be treated as training. Because we are involved in onboarding Sounds like the CS team from your side is treated or empowered as consultant. What are the points to make this transition successful?
Speaker 2:Yeah, that's a really great question, I think, if the enablement and education for customers falls solely on the CS team, for them to deliver in-person trainings or virtual trainings. I think there's maybe you're probably missing out you know there's a lot that can be done with education and enablement over video, over. You know, more on-demand options, and so I would think about how to create a structure. So it's a little bit of both. So can you enable your team, your customers, with on-demand training for certain elements of the process and the customer journey? And where are those parts where it makes more sense to have a human being deliver training or enablement to a customer? And I think it all depends on the company. So you have to strike that right balance.
Speaker 1:I also think when, if individual contributors, csms are thinking about how to bridge that gap, how to feel more empowered again. From one hand, you may be relying on the company and the process of the managers to change the process or enablement, but on another hand, as Juma really mentioned previously, there are currently tons of trainings available. So, even if you are delivering only education and onboarding for your customers, you can start developing skills that are more consultative and starting to know how to ask right questions. All of that is incredibly important, even in the onboarding stages. So, in a way, you can, as an individual contributor, also take part in developing skills that will help you do the transition and you can be that leader that brings the whole team forward. Let's go to the next question. What would you say the differences are between account managers and CSMs in terms of looking after existing clients?
Speaker 2:Yeah, well, it means something different to every company. As I mentioned, I have conversations almost daily with other CCOs and CROs and it's interesting to me that every company you know their definition of an account manager or a technical account manager, a CSM. It's all different depending upon the company. What it means to us here at Gainsight and this is by no means the only way, but this is what's working for us at this moment in time Our customer account managers are responsible for the overall renewal. So, whether or not the customer renews, at what degree do they renew? Do they renew at 100% of their current spend with us? Is it less than that? That affects GRR? Are they buying something else and increasing their wallet share with us?
Speaker 2:So that is the role of the CAM and they are really the front and center point of contact and ultimately accountable for the overall success of the customer. And that's measured again in renewals and upsell, cross-sell. The CS team here at Gainsight for this point in time, we are taking a structure this year where it's about making sure that the customer is fully adopted, that they are happy, that we are really just making sure that the basics are in place, but we also added CSQLs because we really want our CS team focused on also all of the basics, but also on starting to move in the direction of being a growth engine for the overall organization and where I see that going for next year, as we continue this evolution, there will be more focus on our team, with harder metrics around what we expect for leads and CSQLs.
Speaker 1:That's wonderful and thanks for reminding us all that, as you're speaking, you really clearly said it is at this point of time and in your company, and very often you all will see how customer success is so context related that in every company almost it will be different. That's why I think that we are going to provide that RASI model, because at least that can help to clarify the roles, because very often it can be even up to 50% or so of the roles that are overlapping in the activities, and that's very often the case. Okay, we have just a few more minutes for a few more questions. This is a quick one. What's the most effective way to communicate CS impact to non-CS executives? What's the most effective way to?
Speaker 2:communicate CS impact to non-CS executives. Well, I think that that's just kind of what we've been talking about, which is, if it's a non-CS executive and we're assuming that it's an executive who's in a different area, and it could be anybody, it could be a chief people officer is really talking in those business metrics that the ELT or executive leadership team and the board orient towards, and that's why it's important to understand and just ask the simple question what are the business metrics that are important to our company this year? How are we thinking about success of the organization in terms of growth and really understanding what that is? So you can speak that language.
Speaker 1:Perfect. We have an interesting question about churn. Could you please talk a bit about unavoidable churn? Do you have definitions for this? And if churn is unavoidable, how do you report on this and adjust? Commission.
Speaker 2:Yeah, olivia, it's a really good question. So I actually my definition of unavoidable churn is very, very narrow. And so what that means is if there's been a customer consolidation meaning we have two customers, one customer bought the other, they're now moving into a singular contract or canceling this contract because they're doing everything from the acquiring company's contractual vehicle then that would be unavoidable. We would allow that to happen at the expiration of the current term on both agreements. We would have both of those kind of write out until the last one and then we would allow for the acquisition or consolidation. Rather, I think the other one is if a company goes out of business. So we've seen this.
Speaker 2:We had a couple of companies unfortunately shut doors last year and so that was unavoidable churn to us. Now I know that the term unavoidable is not clearly defined for everyone. You know, sometimes people could say, well, this was unavoidable because we got a new executive sponsor who doesn't like our company. And that's actually not unavoidable, because if you are multi-threaded and you have multiple, you know connections in the account, if you're staying on top of when your customer or your economic buyer or champion, however you define your customer if they have left or they've gone on to a new company. That is going to happen, that will always happen, that people will move around, and so that's why it's really important to do the right preparation and have the right strategy in the account and the right relationships, which typically means more than one relationship. So that way we don't call that, we don't. You know, we don't look at that as possible unavoidable term, because that is actually avoidable.
Speaker 1:There was a second part of that question Do you adjust commissions based on avoid?
Speaker 2:work. It really does depend. You know there's not a one-size-fits-all approach. I mean here at Gainsight we tend to be a little bit more empathetic to our sellers. Not every organization is like that. But I know from a CS perspective we would not adjust for the. If there was a CSQL that led to the growth and there was a clawback, we wouldn't claw that back. We would probably just look at like the commercial owner, which would be the cam or the seller.
Speaker 1:Perfect. I do believe we are coming very closely to the end. We may have time for only one question. I think this is a longer question, but we can provide maybe shorter answer. Let's see. I think this is a longer question, but we can provide maybe a shorter answer. Let's see. What examples do you have of KPIs or metrics between sales and CSMs for multi-year contracts, renewals happening every five to 10 years? Lucky you if you have that.
Speaker 2:I know wow Best practices.
Speaker 1:What are the best practices in retention roles or KPIs between the two roles?
Speaker 2:Yeah, that's a great question. Well, first of all, I'm a bit envious of anyone who has those five to 10 years, because the trend that we've seen is, you know, we're orienting towards a three-year agreement. I'd say that happens about 30% of the time and most of the time it's either a one or two-year agreement, with a lot of emphasis from CFOs these days at least our customer CFOs really wanting shorter term agreements so they have less risk on the books and it's our job to convince otherwise that a longer-term relationship is more symbiotic for both companies. But best practices and retention and roles, I think you know if you're looking at a longer horizon than maybe what I just described in my own experience, then you know that would definitely define if there's a longer onboarding process, if there's a longer adoption process. You know you would have to look at that and I think the same sort of retention practices apply. It just may be at a different milestones and a different time period would be my guess.
Speaker 2:But I think I'm just going to go back to the following. And if there's one thing to leave you with around this is really defining the right. I'm just going to call them swim lanes, because if you think about swim lanes in an Olympic-sized pool. Everybody has their place and where they go and they know exactly where to go and there's no question of handoff or who has this, what, who? If a customer has an issue, who takes it? You know, like there's just no question and it's clearly defined. It creates efficiency, it creates better outcomes for our customers. Our teammates have less burnout because there's less like confusion and thrash. So I think that that's a really important part and I'm happy to share that one with you as well my RACI.
Speaker 1:And who would have thought that the RACI would be the most sought after takeaway from today's webinar. Yes, thank you, marilee. It was amazing to have this conversation with you. See everybody on our next webinar on 29th of April and you will see the recording. Have a great day, awesome, thank you. Have a good one.