July 13, 2022 • 44 mins
In this episode, our host Anika Zubair chats with Pat Phelan, Chief Customer Officer at GoCardless about charging for customer success.
To charge for customer success or not to charge is the question many SaaS companies are currently asking themselves. It can be tricky to know whether or not it should be a part of the cost of goods sold or if it should be charged for as a premium service. So, how can companies start to charge for success? And what are some metrics CS leaders should track if they do?
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Episode Transcript
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Speaker 1 (00:04):
Hello everyone.
I'm your host, Anika zer.
And welcome back to the nextepisode of the customer success
channel podcast brought to youby plan hat, the modern customer
platform.
This podcast is created foranyone working in or interested
in the customer success field.
On this podcast, we will speakto leaders in the industry about
their experiences and theirdefinitions of customer success
(00:27):
and get their advice and bestpractices on how to run ACS
organization.
Today on the podcast, we will bespeaking to pat Fillon, who is
the chief customer officer at gocardless, where he is a
strategic leader of a veryrobust customer success team
ranging from onboarding tocustomer success managers, to
(00:50):
support prior to his time at gocardless.
He was chief customer officer atbrand watch and VP of customer
success at bizarre voice.
And he has decades of experiencein customer facing roles.
Today, we'll be chatting withpat all about charging for
customer success in hisexperience.
He has not only built and scaledCS teams globally, but he has
(01:12):
also added a monetary value to aCSM and added an additional
charge for customers to workwith customer success.
Sometimes it is tricky to knowif CS should be a part of cost
of good sold, or if we chargefor it as a premium service.
And if we do charge for it, howdo we justify this, this and
many other questions will beanswered when we speak to pat on
(01:35):
charging for customer success.
Welcome pat to the podcast.
I am so very excited to have youon with us today.
And I know the topic we aregonna talk about is probably a
bit controversial in thecustomer success world, but
before we actually get into thetopic today, can you please tell
our listeners a little bit moreabout yourself, your role at
GoCardless, how you've, uh,ended up where you are today?
Speaker 2 (01:57):
Yeah.
Hi, Annika.
Nice to, to see you again and,and thanks for having me on.
Yeah, so, I mean, in a nutshell,um, I'm chief customer officer
GoCardless, um, we're, uh, arecurring payments platform,
global recurring paymentsplatform.
We've got in excess of 75,000customers globally right now and
expanding, uh, prettyaggressively, um, in, in many
(02:17):
different markets.
Um, I've been at the companythree years really, um, next
week actually, and my world kindof encompasses, uh, customer
success management, professionalservices, customer experience,
uh, support and customer success, uh, operations, uh, you know,
it's, it's a team of about 140people globally right now and
(02:39):
again, growing quite quickly.
So yeah, I I've been in SASsince I keep using the term
since SAS, I guess, was a thing.
I mean, I, I, I started my, mycareer as an account manager in
a, in an on premise, you know,software capacity after doing,
uh, a little bit, uh, on my ownand, and not making a phenomenal
success way back in the daysbefore investment capital was a
(03:02):
thing.
And, and, and, uh, you know,when, when cloud was, was scary
for people because they worriedpeople would run away with their
data.
So it was, uh, it was aninteresting transition, um, and
really I've, I've progressedfrom CSM.
Um, I started as a CSM bizarrevoice, uh, and was very
fortunate to join the companyand progressed, uh, accordingly
and yeah, for better or worseended up where I am.
(03:23):
So that's, that's my, uh, mylife story in a pretty short
nutshell.
Speaker 1 (03:29):
I love it.
Thank you for sharing and alsolike awesome trajectory.
Awesome.
To hear how long you've been inthe industry.
And also that you're a chiefcustomer officer.
Cause I th I know that's veryaspiring to some of our
listeners, if you even thinkabout in the early days of SAS,
the title CCO wasn't regularlyaround in, in the SAS world,
it's, I'd say relatively new,but obviously in an amazing
(03:53):
position, sounds like the teamis, is brilliant at GoCardless,
but for, for our listeners, canyou maybe give a little bit of a
background of how you ended upin the position or if anybody
wants to be CCO,
Speaker 2 (04:05):
I'm always asked that.
And I, I honestly don't have agreat answer for it.
Um, you know, the, the, there'stwo things, there's two
variables.
I think that have really playedinto the position that I'm in at
the moment.
The first one is the rightcompany, and I was super lucky
to join bizarre voice.
Um, you know, it's a companythat will always hold a, a very,
very, uh, special place for mebecause it was an organization
(04:26):
that I, I, I acknowledged thatwell for me anyway, um, you
know, to be clear, I'm sureother people maybe had different
experiences, but for me it wasan organization that
acknowledged that excellence inexecution, um, merited, um, uh,
recognition.
Um, so that's the first thing.
And, and, you know, I'm, I'mactually, uh, talking a little
(04:47):
bit about this, I think nextweek around the path to CCO and,
you know, like choosing theright company is just super
critical, uh, and not just, notjust a customer centric, again,
that kind of nebulous term, butmore a company that suits you as
an individual that has, um, uh,a strong view on, on where the
customer lives within thatorganization.
(05:08):
That's really, really importantand really hard to do.
The second one is timing.
My timing was great, you know,throughout my career.
Um, I mean, I'd use the termtiming slash luck, um, you know,
luck and timing.
I don't think people understandhow huge, a part that plays in
your career trajectory.
And every time I speak tosomeone, I, I, I talk to a lot
(05:29):
of CS leaders on that path andpeople aspiring and, you know,
my, my, one of my main points islike, you, you can control what
you can control, but, you know,there's a lot of other variables
and, and timing and luck play ahuge part in that as well.
And then I think the last onehas just been really good at
what I did.
I never really looked at nextstage.
Like, I, I never looked attitles.
I never looked to the nextstage.
(05:50):
Now I understand that, you know,now, and depending on, you know,
background or depending onbeing, you know, let's sort of
call it out, like, depending ona certain amount of privilege
that I would've had as a, as amale and a tech environment,
sort of, you know, 10 years ago.
I, I understand that that was aprivilege to not have to worry
about stuff like that, but, butdefinitely from an underlying
(06:11):
perspective, I was just verygood at what I did.
And I understood what my, mycustomers needed.
I understood what my managersand my bosses needed, and I
acutely understood the power ofperception.
And I think, again, that'ssomething that I don't think a
lot of people spend enough timethinking about.
It's very much, when is it gonnahappen as opposed to why should
(06:34):
it happen?
And, and whenever I think aboutpeople in my team, you know, I,
I, I always think aboutpromotions in the context of, if
I'm to announce this promotionnow will 90% of the companies
say, well, of course, likethat's annoying, or will they
challenge me?
And if, if there's any risk ofchallenge, I tend to be a little
careful, a little more careful,probably.
(06:54):
And usually that just comes downto people that are leading
without the titles and leadingwithout the, without the, the
desire, I guess, for it to beacknowledged as that, and just
excellence in execution.
Like you cannot get away fromexcellence in execution, if you
are awesome at your job, thingswill happen.
They will happen.
That's kind of what my path was.
(07:15):
And, and it's a combination of,it's an amalgamation of all of
those things at different pointsin time that just, yeah.
Came, came to fruition and, youknow, so long, well, we'll see
how long it continues, but asyou get higher up it's food
jaded, it kind of gets tougherto be, you know, excellent than
what you do, because what you doexpands exponentially.
(07:36):
And, and, you know, really forme, it's now hiring, you know, I
just wanna hire great people andmake sure they're excellent at
what they do.
And internally make me lookcompetent, uh, every now and
again,
Speaker 1 (07:46):
Thank you so much for sharing all that background.
I know it's super aspirationalfor a lot of people to be in the
position you're in, but I dolove a lot of the pieces that
you just said about making suretiming is right, as well as, you
know, you are executing on whatyou're set out to do.
And coming back to that timingbit, you have been at some
organizations that have justreally exponentially grown as
(08:09):
well.
And the startup customersuccess, SAS experience that you
really have experienced inLondon, I think is a, a unique
one.
What do you find special aboutthe region or the industry and
sector of customer success thatyou're working in?
Speaker 2 (08:22):
It's definitely a lot higher profile in the last five
years, let's say than it hadbeen in, in, you know, the early
stage of my career.
Definitely.
And I think, I think from, froma, from a UK perspective, my
last two companies were UKheadquartered companies.
And that, again, wasn't a, anexplicit decision I made having
worked for us companies for 15years, but there was an element
of, I was interested to see whatit would be like working for a
(08:45):
company where I was in the HQ,because I've a long time I've
been a regional leader, which,which is a skill in its own.
Right.
And I've, I've definitelydeveloped.
And I remember back at, um, atthe tail end of my career at
bizarre voice, I, I, I, I kindof acknowledge that actually
being a regional leader leaderin a hub, sorry, in a spoke for
a us hub is a skill in itself.
Speaker 1 (09:07):
It is, it
Speaker 2 (09:08):
Is variables that goes on in terms of keeping the
teams together, unified,avoiding the them versus us kind
of stuff.
But, but when I came to, to abrand watch, you know, that was
my first experience of, of theUK CS culture, if you like.
And I think, you know, what Ienjoy about it now is there's a
little keenness about the U theUK that I obviously I, I
(09:30):
resonate with because, you know,it's part of my own DNA coming
from Ireland.
We're not, we're not great as,you know, flagging or shouting
about what we do oracknowledging a regular business
.
And I, I, I do like that to someextent, but I do think it's,
it's what I, what I try to bringfrom my us experience, because
there's a lot of value in thatkind of, um, excitement around
(09:53):
things and that kind of, youknow, uh, external celebration
of success and acknowledgingthat we're doing a, a sort of a
really good job.
Um, and I think the second oneis how early stage it is, or it
was here, you know, the abilityto shape something, um, pretty
significant, um, the ability,particularly in the world of
(10:15):
startup to be able to embed itearly on and in the seat that
I'm in to be in a position to bethe, the voice in the room that
says, you know, this sounds, youknow, great from an efficiency
perspective, but have we reallythought about what the impact is
gonna be?
So I think it's probably accessand exposure is, is kinda a
difference when you're, whenyou're in startup world,
(10:36):
certainly in the UK, butculturally, I think that's the
difference I've seen between theUK and the us, where you need to
build that muscle of like justMo you know, I use the word
excitement very explicitly, butjust, just, you know, being out
there and celebrating what we doand, you know, acknowledging
that what we do is hard and whenwe win, we wanna make a big deal
about it.
(10:56):
But at the, on the flip side, Ithink the UK is I, I, I use the
term quietly brilliant in my, inmy team a lot.
And, uh, there's a lot of quietbrilliance in side because it is
very much like, let's get itdone, get it done well, and
then, you know, assume thatwe're going to get credit for
it.
Speaker 1 (11:14):
You bring up so many good points about the
differences.
And I really like how you sharedthe regional leader and then
making a conscious decision tobe a leader for a UK company,
because I also feel that thatstruggle, pain, whatever you
wanna call it is, uh, sometimesyou just feel us versus them and
also disconnect, no matter howmuch we're in a global world, on
(11:34):
zoom meetings, there is still alevel of, of difficulty when
you're executive team is allover or in different locations
and, you know, making thosemindful decisions like you said,
in your career of, Hey, this isthe bet I'm gonna take.
And this is where I wanna seemyself.
And because of a mix of timingexperience and the bet you're
taking it, it's landed you whereyou are.
(11:56):
So thank you, uh, for sharingall those pieces.
You already mentioned a littlebit about the team you run at go
cardless and customer successmeans very different things at
different organizations, as weall know, but I think you
mentioned service CSM support.
Is that roughly give us a littlebit better understanding of what
the org looks
Speaker 2 (12:13):
Like.
Yeah.
Customer success management,professional services, which is
effectively onboarding and whatyou would classify as maybe
implementation services, as wellas, um, you know, in all school,
I guess, professional services,kind of the, you know, high
value interactions, uh, globalcustomer support.
Um, we have operations andprograms, um, within our team as
(12:34):
well.
So we have a team that looksafter kind of the big rocks
across the CS, the customersuccess group.
Um, and then probably thebiggest difference that I, that
I experienced here comparable toin my, in my previous roles is
we have a very, very, uh, Imean, you, you met Hamish, we
have a very strong customerexperience and advocacy team
within the customer successgroup.
(12:55):
That's a, that was aninteresting one because
traditionally that wouldprobably live in marketing in
more SaaS companies.
Speaker 1 (13:00):
Yeah.
I know when you first told meabout it, it's not something I
would think in customer teamright off the bat, but I love
that it is.
Speaker 2 (13:07):
Yeah.
But we took, we, we, we put ourhands up and, you know, we said
two years ago, maybe, um, youknow, look, this is not gonna
work if it's not focused on ahundred percent.
And, um, I, I tookaccountability for that and, and
Hamish leads the team and, youknow, we've seen the results are
just spectacular.
Um, when you've actually got the, uh, the advocacy and
(13:29):
experience team kind of on thehook with the CS leaders,
because they're, you know, Ibasically have the capability of
, of locking everyone in a roomand saying, we're not leaving
until it's figured out.
Like, and I think that's, that'sthe, this simplistic view I have
on, you know, you spoke to me,you know, can I, can I basically
put the fear of God of thepeople, uh, and, uh, and have
(13:52):
them listen to me.
And, and in that case, that wasdefinitely one of the functions
we felt was needed.
And we've got a superb, youknow, NPS process flow here.
I mean, hing again, does afantastic job with our NPS
insights into the business.
So, so that's kind of, you know,my world, um, the interesting
kind of very explicit decision Imade with my chief revenue
(14:13):
officer is we don't, we don'thave, uh, uh, an actual upsell
commercial target within the CSMteam.
Yeah.
I was very explicit about that.
I've, I've worked in every oneof every environment imaginable
when it comes to upsell.
I mean, literally I've gonefrom, you know, fully upsell to
zero upsell to some kind ofweird hybrid in the middle.
(14:36):
And I, I'm a huge advocate indivision of labor first and
foremost now how that divisionpans out is up for discussion,
but what I, what I really wantto avoid where I can, when I can
help it at all, is havingmultiple focus, uh, for team
(14:57):
members.
Like they need to be accountablefor something that's very
tangible that they can influencedirectly and that we can track
without being, um, what I wouldcall, uh, punitive.
So, you know, when I look at alot of the, you know, CS
platforms, for example, you know, uh, that space is evolving now
pretty dramatically, which isgood because it, it kind of
(15:20):
initiated very much, um, fromwhat I could see from a, from a,
a leader's lens in terms ofcontrol, rather than actually
making it easier for you to doyour job as a CSM.
I think for me, the same applieswith, with responsibility.
So I've had CSMs, who've been asresponsible for upsell
responsible for retention,responsible for NPS.
(15:42):
Like no one can do the job ifthey're the four or five metrics
that, like, what do you do?
Where do you focus?
Like if I super MPS score and Ibomb out on upsell, like, do I
get fired?
Do I get promoted?
I don't know.
Like, so, so from myperspective, we made a conscious
decision on that.
And the flip side to that wasthat with my chief revenue
officer, um, we're very, veryexplicit in terms of the
(16:04):
workflows.
Speaker 1 (16:05):
Yeah.
And also keeping them veryfocused by the sounds of it
Speaker 2 (16:08):
That said we have pipeline generation targets.
So we have CS QLS, if you wantto call
Speaker 1 (16:15):
'em that.
Yeah.
That's something that I've heardmore commonly in SAS now.
Speaker 2 (16:18):
Yeah.
So, so my team part of theirvariable comp will be, and has
been in the past, um, attainmenton a, on a team level of amount
of, of QLS.
And then that's very, verytightly aligned with how they
engage with the, with the EE.
So it's not perfect by anystretch, but then again, no
model is right.
(16:38):
And, and I'm just playing forthe model that I think works
best for us, because I want myteams to focus like a hundred
percent on expansion of volumeand adoption.
Speaker 1 (16:47):
I think that you're already leading into our topic.
Great, great segue, pat, but weare talking a lot about revenue
and customer success.
You already mentioned how withyour CRO, that's a big part of,
you know, your focus here at gocardless.
But I think in your overallexperience as a CS leader,
you've had a very controversialstance on charging for customer
success.
(17:08):
And I know some businessesreally don't do that, but before
we kind of dive into to all thedetails, like, what is your
stance on, on charging forcustomer success?
Speaker 2 (17:18):
I, I, I'm not, I'm not sure I'd be necessarily
controversial or necessarilythat it's a stance as such.
I, I just, I guess over theyears, I just don't necessarily
default ever to, uh, aninability to add a cost to
something that's of value.
Right.
And I think that's where, youknow, we've talked about this
(17:40):
before.
I think the question is not somuch, should you charge for what
we do?
The question is, is there avalue to it and is that value
acknowledgeable through a fee ofsome sort be that recurring or
one off like charging forservices has been around since
it's, it's always there, like,if you talk about professional
(18:00):
services, people wouldn't bat aneyelid, literally wouldn't bat
an eyelid.
Um, and I think the, thechallenge that I've seen is that
we've morphed from this world ofaccount management into customer
success management over the last15 years.
And account management was neverperceived to be a chargeable
resource because there wasupsell attached.
Yeah.
Speaker 1 (18:19):
There was a target that you had to hit to, to earn
your seat.
Speaker 2 (18:22):
The revenue generation is there.
It was just, it's just in adifferent guys.
But the challenge is because itkind of morphed from an am with
a target to a CSM, with a targetto a CSM without a target.
Then the, the, the kind of therevenue line just got further
and further away until we wereleft with a point where in many
cases we were in a scenariowhere it's like, well, we've
(18:44):
never done it.
So how can we start doing it?
Now, my, my belief firmly isthat I think where, where
customers perceive value andwhere customers perceive that
the addition of a resource isgoing to get them kind of, you
know, what they want faster thanI don't think charging or
(19:04):
attributing a cost to that valueis something that we should be
shying away from.
I think, I think it's where weget sloppy and actually
literally take a service thatwe're providing now stick a cost
to it, and then assume it's justgoing to be all of a sudden a
cost service.
That's where that's where weI've seen a lot of this go
(19:25):
wrong.
You have to fundamentally changehow you engage.
You have to fundamentallyredesign your, your kind of
model, but it doesn't mean youcan't charge for
Speaker 1 (19:34):
It.
And I think a lot of companiesbuild around charging customers,
first customer sales, into thecost of good sold, really.
And I think that your experienceand what you're just speaking to
is completely different.
And if a company let's say isalready charging with cost of
good sold, and that's howcustomer success is bundled into
(19:54):
that, how would you kind ofadvise, or what would your
thinking be if they're okay.
Now we should definitely startcharging for this service.
What's kind of the mind shiftthat that company would have to
do in order to move away fromcost of good sold to that added
cost for service.
Speaker 2 (20:10):
I would first have the conversation in terms of
like, why, you know, because Ithink I've seen cogs, uh,
profile be super different in,in, in every organization I've
ever worked with.
The percentage attributed tomarketing to sales can vary
anywhere between 20% and 80% CSis included.
It's not included.
Like we, we normally kind ofsleepwalk into this through
(20:31):
financial metrics in many cases,right.
Because you know, the firstquestion I would have is like,
who's validated that like who'svalidated CS as part of cogs
and, and is the percentage evenright?
If they, if they are part ofcogs first and foremost, the
second aspect for me is where doI see the value of that?
Like, if, if, if my line item,if my cost is implied in a
(20:52):
subscription service, then wheream I getting value from that as
a CS leader?
How is that reflected back intohow I hire, um, the ratio of
CSMs to accounts that I need tohave, you know, of cuz
effectively I'm covering mycost, right?
The subscription service iscovering the cost of my
organization or a proportion ofthe cost of my organization, but
do I see the value for that?
(21:13):
And that's where it gets lost.
Speaker 1 (21:14):
Yeah.
And it gets, it gets lines, getblurred and it, and almost,
yeah,
Speaker 2 (21:18):
Completely because they're literally blurred
because they're commingled withso many other things.
If you look at the sales org,like nobody ever doubts the fact
that if you hire a sales guy or,or, or, or lady there's a,
there's a, a quota attached tothat, right.
Nobody doubts that.
And if that quote is met, youcan have another one and you can
have another one, you can haveanother, we have, we don't have
(21:39):
that.
We never have that.
Now, when I look at all of thediscussion and the AR arguments,
and I probably would use it likethat on, on LinkedIn and all the
thought leadership, where shouldthis live?
Where should that live?
The bulk of all of thesediscussions to, to me is born
out of attribution, some form ofthe need for attribution of
something that the organizationrecognizes as valuable.
(22:02):
And so that's kind of the firstplace I would start if you
haven't necessarily moved downthat path.
I think the second area for me,and, and where I've seen it in
the past as a, an early stagekind of exercise is not
necessarily from a CSperspective, more holistically,
but to look at this from theconcept of what are the actual
(22:23):
milestones in a customer journeythat you feel that if there was
a higher level of attriattribution of value to, through
a cost inherent, would you beable to accelerate a customer
experience?
Um, so when I go back to bizarre, my bizarre voice days, um, we
(22:44):
had an onboarding process thatwas, you know, super, um, eh,
kind of consistent, I guess,across the board.
But we acknowledged there wasprobably about two areas of that
onboarding process that we knewthat if we got right, it would
accelerate time to value 20, 30times.
(23:05):
Um, and you know, one of the,the, the, the ladies I hired at
the time Kim wood, who came onboard as a CSM, um, I pointed
her in that direction to juststart to flesh out if we were to
charge for a service, what wouldthat service look like?
And what would the value beassociated with that service?
And that evolved into aconsulting organization at
bizarre voice in Europe, whichwas then evolved globally.
(23:27):
Because for the first two years,we built a really strong revenue
line item and started to seeonboarding, basically be cut in
half and at five X higherquality.
So that was where I kind ofstarted this journey early on.
And it wasn't PA professionalservices because it wasn't your
(23:48):
traditional kind of, you know,um, engagement.
It was very much around anonboarding flow, but looking at
a couple of different areas.
And then as you evolve, youknow, you kind of evolve layers
on top of that layers on top ofthat.
And then the package potentiallykind of evolves with that.
But, but yeah, that that'salways been my take on it.
I, I honestly, I think about allof the things that I pay for,
(24:10):
why I pay for them andparticularly the things that I
don't really think about why Ipay for them it's because the
value I get is so kind of equalor are higher than, than what
the cost is.
And I think it's more aroundhaving the confidence of that in
terms of what the engagementmodel is first, before you start
to look at rolling out a cost tothat.
Speaker 1 (24:29):
Yeah, I know.
And then you mentionedimplementation, onboarding, and
starting with that side of thejourney.
And I think most businesses, ifI think of even the larger
organizations out there,Salesforce, Microsoft, Adobe,
they're always charging for somelevel of customer service,
whether it's professionalservice, success, support,
there's some sort of charge.
And I think we've, like yousaid, blurred the lines of like,
(24:51):
how much do you put in cogs intothe actual, you know,
subscription cost of yourbusiness.
But I do think that you bring upa good point about really like,
you know, starting smallgrowing, et cetera.
But I think another, you know,good thing for leaders think
about is the ROI of charging forsuccess.
Really?
Like what are some metrics thatyou think customer success
(25:13):
leaders should really start totrack to make sure that they're
bringing back to the business?
Hey, us charging for success isreally returning a bigger
investment.
Like you said, sales leaders,don't question.
If you have an AE, they carry a,a certain target.
They hit that target.
They get paid for that, but youalso know how to hire access, uh
, more AEs for that, for thatrole, but we don't do the same
(25:35):
for success.
So how should leaders reallylook at the ROI for charging for
success?
Speaker 2 (25:39):
So going back to my original point, the first thing
is pilot.
You pilot, pilot, pilot, pilot,trial, trial, trial fail so many
times before you actually hitthe right thing.
Because when we started with Kimway back when, and she, she will
be the first one to attest toit.
We trialed a lot, like wethrough a lot of different
iterations in terms of what itwas gonna look like before we
actually rolled it out.
Speaker 1 (25:59):
I really think that a lot of people don't do that or
they're afraid to, or they thinkcustomer success should be built
a certain way.
And I, I still say that like thecustomer success is developing.
There's no harder, fast metrics.
And it's so different at everyorganization that you do success
at that there is no way there's,there's no problem with trialing
it.
Like try it.
If it works great triple down onit, if it doesn't go back to the
(26:22):
whiteboard
Speaker 2 (26:23):
Hundred percent, like a year ago, year, 12 months, 14
months ago, we didn't have anadvocacy program.
14 months later, we've, youknow, nominations three awards,
UK wide, you know, 14 K studiesattributed to revenue.
Like it, all this stuff, just,you, you, I think the last point
you made is the most importantpoint.
There's just a lot of noise outthere in the customer success
(26:44):
world right now that thatassumes there is a certain way
to do this, or a certain binarysort of five steps, 10 steps,
where should this live?
Where should that live?
Like, I don't care honestly,about any of that stuff, because
if my org is different in 90% ofevery other org out there, but
my customers are seeing value,my team are engaged, my NPS is
(27:06):
high, then I'm doing the rightthing and I would never want you
to look at me and think, oh,how, how do I do that?
Because it's not relevant toyou.
You have your, your kind of yourenvironment you are living in.
I mean, I've worked inenvironments where literally
retention was just bombing.
Like that was my job at thetime, my job wasn't to build a,
a phenomenal, you know, um, uh,successful, efficient CS org.
(27:28):
It was like to stop the leak inthe bucket.
Speaker 1 (27:30):
Yeah, yeah, yeah.
And you have to take it at amoment at a time, like every
leader that's like, oh, how doyou build this amazing engine of
customer success?
I'm like, well, look at what isapplicable to your situation.
What's happening at yourbusiness?
Is it churn?
Is it upsell?
Is it retention?
Like figure that out and work onthat
Speaker 2 (27:48):
Understand a hundred percent.
And it might be one thing alwaysthink about the world in terms
of run the business, change thebusiness.
And I think in CS, everyone isso focused on change the
business, the strategic things,the, the kind of the, the, the,
the big rocks, but running thebusiness is hard.
And, and in our world, andespecially in this environment,
it's getting harder and harder.
So I think, you know, thatthat's super important, but
back, I guess, to the original,sorry, I took a bit of a
(28:09):
sidetrack there.
Um, back to the originalquestion, I think the first
thing is trial and, and pilot.
And I, I, I include KPIs in thatbecause you're never gonna get
the right type of KPI, but whatyou've gotta be clear on is why
you're choosing a particulartype of KPI.
And what I see a lot is, youknow, the KPI that's chosen is
to prove something internally.
That to me, is the wrong track.
(28:30):
I think that to try to provesomething internally is one leg
of, you know, a, a KPI suite.
But if we look at it externally,the, the key kind of metrics I
look at here, there's, there'sthree that we're looking at kind
of, certainly in the past.
And right now the first thing is, uh, attachment and adoption
from a, a net new perspective,no matter what you do in CS, if
(28:54):
you can't be easy to do businesswith, you're not gonna be
successful.
And we can, we can complain andwe can moan, and we can talk
about this deal, that dealproduct market fit bad, AEs, all
that kind of stuff.
But if we're not easy to dobusiness in, in the startup
world, then we're not gonna besuccessful.
So the first thing I always lookat in anything like this,
whether it's paid, whether it'sa new services, is it easy to
(29:16):
sell?
Am I reps selling it?
Right?
So that's the first thing.
So attachment type rates towhatever you, you path, you go
down.
The second one is time.
Whether you agree with themetric or not time to value,
like, are we doing somethingfaster?
And is it something moreimpactful than other stuff?
For example,
Speaker 1 (29:36):
We live in a world where time is value.
It's a very important metric.
Speaker 2 (29:39):
We're on 12 month contracts.
In some cases, some of them areon 30 days, you know, notice
periods for, for termination.
Like we gotta get this thingspun up and spun up fast.
And then the third one is, isdepending on the kind of revenue
metric you have, if you decideto go down that path, either
renewal or repeat.
So our customers renewing, andare they renewing at a higher
(29:59):
rate if they get a higher levelof service?
And if that service is paid for,is it having that impact?
And then obviously if it's notrenewal, uh, sorry, recurring,
uh, is it happening more andmore?
So for example, if you decide tocharge for a health check or
call or whatever you want, um,is it leading to something else?
Is, is it leading to anotherone?
Is it leading to an expansion isso it's more second order
(30:20):
revenue from the piece of workthat you've done.
So again, going back to myprevious experience, you know,
we, we, we had a, uh, anonboarding service that came at
a premium price where ourconsultants would go in and
effectively map out the journeyfor the customer, uh, early
stage sales cycle and late stagedeal.
Um, and there was a cost tothat, but what we found was they
(30:41):
were onboarding quicker, better,and expansion happened faster.
So straight away, you've got,you know, a suite of KPIs there
that you can actually go withand say, well, if I have five
more of these people, I'm prettysure I can five X, those numbers
and they're good numbers.
And then the last one is CSATNPS.
You know, you wanna make surethat customers are happy with
the service you're providing,particularly if there's a cost
(31:02):
attached to it.
That's really, really important.
Um, because that just is aself-fulfilling prophecy.
If, if I'm charging and thingsare happening better and faster,
and customers are still happy,then the chances are that your
worry about a cost associatedkind of goes away pretty quickly
because you ability to say, Iwould pay for this and I pay for
this again, because it wasvaluable.
(31:23):
You know?
So it's a, it's, it's a journey.
It's definitely a journey.
But I think the first question Iwould ask anybody is if you're
not willing to look at having acost associated to customer
success in any way, then why,like, why do you think that it's
not valuable enough that youcould do that?
And there'll be lots of reasons,deal sizes, you know, market
(31:46):
appetite.
I get all of that, but at thesame time, we have to believe
that what we're providing is, isvaluable enough to at least
consider some aspects of it, tohave a premium attached to that.
Speaker 1 (31:57):
I totally agree.
I completely agree.
And I know you just mentioned alittle bit around KPIs and
making sure you're trackingcertain things from a, from a
leader perspective of a returnon investment for charging for
customer success, but drawingupon what you said earlier about
how your CSMs don't have a regrevenue target, is that correct?
Speaker 2 (32:18):
Yep.
They have, have a renewalstarget.
Obviously
Speaker 1 (32:21):
You have a renewals, but not an overall like net
dollar or net revenue retentionnumber, which is another, I
guess, maybe different thingthat you guys are doing.
But if you, if revenue is notattached to your CSM, but you're
charging for customer success,what sort of KPIs do you assign
to your CSMs?
So that they're, you know, theyknow they're doing a great job
(32:43):
and that charging for theirservices is, is paying off.
Speaker 2 (32:46):
So as we move forward, so to be very clear, we
have, uh, gross revenueretention targets and net
revenue retention as a target,the upsell aspect of it.
In other words, the explicitupsell target is the
responsibility of the AMS andthe sales team, but they work
very closely with the CSM.
So there are revenue linesassociated with them, but very
much on the retention side,which is always perceived to be
(33:08):
a cost, right?
The cost of renewal, basically,as opposed to renewal being an
opportunity.
Um, but as we're gonna moveforward.
And as I think about this, youknow, from my perspective, the
same KPI still apply.
Um, if we decided at any pointto have a cost associated with,
for CS based on a certain typeof engagement model, because
(33:29):
again, going back to my originalpoint, you cannot do the same as
you've always done in charge forit, you to change how you engage
and the, the, the, the sort ofthe tenants of NPS, the tenants
of renewal and the tenants oftime to value still, um, are
still relevant from anindividual CSM or a team CSM
perspective.
(33:50):
So whether you charge or not,you know, these are kind of the,
the, the KPIs that we'refocusing on.
Now, if you think about renewal,it then moves from renewal of
recurring subscription revenueto renewal of the CS cost.
Let's say so.
So for those organizations thatmight consider a cost, let's say
a recurring 3% of thesubscription fee.
(34:12):
You know, you wanna be renewingthat if you're not renewing that
the CSMs are not doing theirjob, or you gotta do engagement
model wrong.
So they're, they, they're thekind of KPIs that, that I have
in the past sort of experimentedwith.
And in some cases, we've got, wedid we, we got them, right.
Um, but I think the more you gointo the cost being spread
across the journey, rather thana milestone, then you need to be
(34:35):
very, very explicit in terms ofrenewal of that subscription or
that, that kind of, uh, costbeing a number one priority,
because that is the revenueline.
And that becomes the revenueline for the customer success.
So obviously renewal of thesubscription is equally as
important, but now you've gotanother rev line, which is, am I
renewing my customers?
And are they continuing to seevalue in what we're offering
(34:57):
enough to be able to pay for it?
You know,
Speaker 1 (34:59):
I love that they obviously are thinking in that
way, like, Hey, am I doingenough to drive that value?
Because that's, that's whatwe're all really here for.
That's, that's why we sign upfor the jobs of, of customer
success managers.
And I think that's superimportant.
Speaker 2 (35:12):
And the other point I would make, again, like I say,
you know, I, I I've had someexperience in the past and I am,
I'm, I'm always gonna continueto, to, to evolve this, um, and,
you know, push, but respect,push outside in not, not inside
out, but I think if, if you, if,if people are out there sort of
thinking about how, how do youstart this?
(35:33):
I mean, again, I, I, I can'tover emphasize the fact that
everywhere is different.
And, you know, as I look atGoCardless, for example, we're,
we're a selfer, we started outas a very self-serve
organization.
So, you know, the, the, thecosts associated with
GoCardless, or, you know, willalways be very platform, heavy
subscription, kind of heavybecause you subscribe to a
(35:54):
service.
If you do it yourself, it'sfairly self intuitive.
But I guess the key message I, Iwould always make is that, um,
we, we just need to be, we needto think about this stuff
slightly differently, and weneed to think about it from our
customers' lens.
And so far as, you know, arethey, are they, like, not
assuming that they, they don'tsee value in what we do enough
(36:16):
to have the conversation rathertesting that hypothesis on a
regular basis, but also holdingourselves to account that if we
do go down that path, it bloodywell better be good.
Speaker 1 (36:26):
Yeah.
It should be.
You should be if you're, ifyou're starting to charge and
you're starting to really putthis into motion, it should be
something that you are ready toback, and you're ready to really
go up and say, listen, we made adecision.
We're gonna stand behind it.
And this is what's gonna be the,the forward movement of how we
run success at echo cardless orany organization.
(36:47):
And that brings me to, uh, our,our final question really on
this topic, because I think alot of people are probably
motivated and inspired to, Hey,we should really start charging
in some aspect for success, butthere are legacy customers that,
uh, don't expect that.
But plus it might be veryshocking if you come to them
saying, Hey, by the way, everyyear from now on, we're gonna be
(37:10):
charging this much on top ofyour subscription for your CSM.
How do you best introduce ormanage legacy customers when you
start charging for success?
Speaker 2 (37:20):
Well, I think, you know, if you look at Salesforce
is kind of a good example in allof this kind of thing, you know,
the, the sort of the, it goesback to the value for me.
And again, I'll, I'll caveat allof this in terms of like, you
know, I've had experience in thepast and a couple of, you know,
very specific set set of areaswhere, you know, the value on a,
at a particular point ofengagement was perceived high
(37:42):
enough to be able to sort ofreally over index on that in
terms of a cost.
And because that cost got higherand higher, obviously the
ability to, to, to offset thatwith revenue became more and
more, uh, critical.
Um, I think, I think it goesback to what I talked about
earlier on, I think you have tolook at the journey that these
customers are on.
And, you know, we talk aboutthings like digital scale CS
(38:07):
versus, you know, high touch CSall the time.
We talk about portfoliosegmentations all the time.
Like none of this stuff isbinary.
None of this stuff is binary.
The key is my, my old CEO,current CEO, actually an old one
that used to talk about sort ofred face tests for any, for
anything that you do as an, asan organizational leader, not,
not just in this context, butanything in other words, like,
(38:29):
you know, if, if you're toexplain it, you know, can you
explain it credibly?
And can you explain it sort of,kind of get getting awkward or
getting kind of embarrassing tosome degree.
And I think, you know, in thisinstance, there, there is an
onus on us as leaders to justlook at our journey and really
identify the phases of thatjourney that we feel are
underserved, perhaps because ofa resourcing situation or an
(38:52):
ability to, to, to justify, youknow, increased head counter
cost.
But that if we serve properly,we'll have a, a force multiplier
impact on how our customersengage with us.
And I think that's the firststep I would, uh, encourage
everybody to take a look atbecause the one kind of area I
really want to reallyoveremphasize here again.
(39:14):
And I sound like a Paris, but,you know, you cannot do the same
thing and charge for it.
Like, that's not what we'retalking about here.
And that's where I've seen somany people fall into that trap.
You cannot do the same thing andcharge for it.
You can completely reorg andrebuild based on having a world
where there is higher value anda world where there is the same
as, as is like lots of orgs dothat.
(39:36):
You know, I mean, I know, uh,you look at Zendesk, you look at
Salesforce, like these arereally slick organizations that
do this really, really well, butunderlying everything is the
value that's inherent in whatthey offer is equitable to what
the cost for that looks like.
And I think that's the keymessage here.
It is not about charging for CS.
(39:58):
It is about value kind of the,the, the value that's inherent
in however you want to engage.
And then you can start to lookat whether or not that merits,
uh, a different pricingstructure,
Speaker 1 (40:11):
But that's such a good key takeaway.
And I love it.
And I've just made a note of it,of how you cannot expect the
same results doing the samething again and again.
So how can you expect yourcustomers to start paying for
something if you're doing thesame things again and again, and
it's so, so important, like youcan't just expect, you know, net
dollar attention to increaseyear over year.
(40:32):
If you're not doing somethingdifferent to help that metric,
the same thing is when you startcharging for customer success,
thank you so much, pat, forsharing all those takeaways and
all the insights I wanna wrap upwith our quick fire question
session, where I challengeeveryone on the podcast to try
to answer these next fewquestions in a sentence or less.
(40:53):
I know it's gonna, but let's,let's go.
Are you
Speaker 2 (40:56):
I'm ready?
Go for
Speaker 1 (40:58):
Awesome.
What do you think is next forthe CS industry?
Speaker 2 (41:02):
Wow, that's, that's a , that's a, that's a tough one.
Um, I think digital the, the wayI think about CS is enterprise
and scale building forenterprise and scale.
And I think the two will becomevery conflated rather than S and
I think the ability to have ascale level of engagement across
your enterprise stack is goingto become more and more
(41:23):
prevalent and vice versa.
So it's not going to becomesegmented separately.
I think they're gonna come moreand more together and more
layered on top of each other,rather than two different modes
of interacting.
That's something that I I'm I'mI see myself even moving towards
on a regular basis.
Speaker 1 (41:40):
Yeah.
Maybe we're gonna have to have adifferent conversation about
that, but, uh, we'll move on tothe next question, which is,
what is your favorite app eitheron your phone or your laptop
that you cannot live without?
Speaker 2 (41:51):
I'd have to be Spotify.
I, I live in it.
Absolutely.
I wouldn't survive without.
Yeah.
Speaker 1 (41:56):
Amazing.
And I think I know what you'regonna say to this next one, cuz
I heard it earlier in theconversation, but what sort of
compensation should a CSM get?
Should it be just a base salaryor a base salary plus uh,
commission or bonus of somesorts?
Speaker 2 (42:09):
Yeah, I, I, I'm gonna get on the fence on this and say
it utterly depends on theorganization that you're in and
the scale of the organizationyou're in.
Uh, my, my default has alwaysbeen based with variable, um,
where I won't get specific iswhat that variable should look
like.
That's where you need theoptionality depending on what
you're trying to achieve as abusiness.
Speaker 1 (42:27):
Amazing.
And the final question is whatis your favorite part of
customer success or being a CSM
Speaker 2 (42:33):
In innovation?
I love it right now because I,I, I you've, you've heard when I
talk about it, you know, earlier, um, I'm obsessed with not
necessarily following a path andmaking sure that I play the ball
that's in front of me.
And I wanna make sure that, thatwe're constantly innovating and
constantly trialing and, anddoing so with a, a really clear
customer lens and, and hopefullyjust surprise and to delight
(42:54):
them, you know, with somethingthat they never thought they
needed until you had it for them.
So I think that's the bit for methat I love there's no, there's
no playbook here.
Like really there's no, uh,there's no fixed kind of
methodology that we all live by.
Speaker 1 (43:07):
I think it keeps us on our toes and keeps us young
and challenged and whatever youwanna say, but thank you so
much, pat, for your time reallyappreciated so many insights.
If our listeners do have anyother questions or follow ups or
wanna get in touch, what's thebest place to find you?
Well,
Speaker 2 (43:22):
LinkedIn is where probably the second most lived
in app.
So, uh, outside of Spotify.
So by all means drop me a linein LinkedIn, more than happy to,
to have a chat with people asmuch as I, I, I can and share
the mistakes I've made and, andwhat, what they shouldn't do.
Speaker 1 (43:35):
Thank you so much, pat really appreciate your time
and speak soon.
Speaker 2 (43:38):
Thanks so much.
Speaker 1 (43:40):
Thank you for listening to the customer
success channel podcast today.
We hope you learn something newto take back to your team and
your company.
If you found value in ourpodcast, please make sure to
give us a positive review andmake sure you subscribe to our
channel as we release newpodcasts every month.
Also, if you have any topicsthat you would like me to
discuss in the future, or youwould like to be a guest on the
(44:02):
podcast, please feel free toreach out all my contact details
are in the show notes.
Thanks again for listening andtune in next time for more on
customer success.
Hello everyone.
I'm your host, Anika zer.
And welcome back to the nextepisode of the customer success
channel podcast brought to youby plan hat, the modern customer
platform.
This podcast is created foranyone working in or interested
in the customer success field.
On this podcast, we will speakto leaders in the industry about
their experiences and theirdefinitions of customer success
(00:27):
and get their advice and bestpractices on how to run ACS
organization.
Today on the podcast, we will bespeaking to pat Fillon, who is
the chief customer officer at gocardless, where he is a
strategic leader of a veryrobust customer success team
ranging from onboarding tocustomer success managers, to
(00:50):
support prior to his time at gocardless.
He was chief customer officer atbrand watch and VP of customer
success at bizarre voice.
And he has decades of experiencein customer facing roles.
Today, we'll be chatting withpat all about charging for
customer success in hisexperience.
He has not only built and scaledCS teams globally, but he has
(01:12):
also added a monetary value to aCSM and added an additional
charge for customers to workwith customer success.
Sometimes it is tricky to knowif CS should be a part of cost
of good sold, or if we chargefor it as a premium service.
And if we do charge for it, howdo we justify this, this and
many other questions will beanswered when we speak to pat on
(01:35):
charging for customer success.
Welcome pat to the podcast.
I am so very excited to have youon with us today.
And I know the topic we aregonna talk about is probably a
bit controversial in thecustomer success world, but
before we actually get into thetopic today, can you please tell
our listeners a little bit moreabout yourself, your role at
GoCardless, how you've, uh,ended up where you are today?
Speaker 2 (01:57):
Yeah.
Hi, Annika.
Nice to, to see you again and,and thanks for having me on.
Yeah, so, I mean, in a nutshell,um, I'm chief customer officer
GoCardless, um, we're, uh, arecurring payments platform,
global recurring paymentsplatform.
We've got in excess of 75,000customers globally right now and
expanding, uh, prettyaggressively, um, in, in many
(02:17):
different markets.
Um, I've been at the companythree years really, um, next
week actually, and my world kindof encompasses, uh, customer
success management, professionalservices, customer experience,
uh, support and customer success, uh, operations, uh, you know,
it's, it's a team of about 140people globally right now and
(02:39):
again, growing quite quickly.
So yeah, I I've been in SASsince I keep using the term
since SAS, I guess, was a thing.
I mean, I, I, I started my, mycareer as an account manager in
a, in an on premise, you know,software capacity after doing,
uh, a little bit, uh, on my ownand, and not making a phenomenal
success way back in the daysbefore investment capital was a
(03:02):
thing.
And, and, and, uh, you know,when, when cloud was, was scary
for people because they worriedpeople would run away with their
data.
So it was, uh, it was aninteresting transition, um, and
really I've, I've progressedfrom CSM.
Um, I started as a CSM bizarrevoice, uh, and was very
fortunate to join the companyand progressed, uh, accordingly
and yeah, for better or worseended up where I am.
(03:23):
So that's, that's my, uh, mylife story in a pretty short
nutshell.
Speaker 1 (03:29):
Thank you for sharing and alsolike awesome trajectory.
Awesome.
To hear how long you've been inthe industry.
And also that you're a chiefcustomer officer.
Cause I th I know that's veryaspiring to some of our
listeners, if you even thinkabout in the early days of SAS,
the title CCO wasn't regularlyaround in, in the SAS world,
it's, I'd say relatively new,but obviously in an amazing
(03:53):
position, sounds like the teamis, is brilliant at GoCardless,
but for, for our listeners, canyou maybe give a little bit of a
background of how you ended upin the position or if anybody
wants to be CCO,
Speaker 2 (04:05):
I'm always asked that.
And I, I honestly don't have agreat answer for it.
Um, you know, the, the, there'stwo things, there's two
variables.
I think that have really playedinto the position that I'm in at
the moment.
The first one is the rightcompany, and I was super lucky
to join bizarre voice.
Um, you know, it's a companythat will always hold a, a very,
very, uh, special place for mebecause it was an organization
(04:26):
that I, I, I acknowledged thatwell for me anyway, um, you
know, to be clear, I'm sureother people maybe had different
experiences, but for me it wasan organization that
acknowledged that excellence inexecution, um, merited, um, uh,
recognition.
Um, so that's the first thing.
And, and, you know, I'm, I'mactually, uh, talking a little
(04:47):
bit about this, I think nextweek around the path to CCO and,
you know, like choosing theright company is just super
critical, uh, and not just, notjust a customer centric, again,
that kind of nebulous term, butmore a company that suits you as
an individual that has, um, uh,a strong view on, on where the
customer lives within thatorganization.
(05:08):
That's really, really importantand really hard to do.
The second one is timing.
My timing was great, you know,throughout my career.
Um, I mean, I'd use the termtiming slash luck, um, you know,
luck and timing.
I don't think people understandhow huge, a part that plays in
your career trajectory.
And every time I speak tosomeone, I, I, I talk to a lot
(05:29):
of CS leaders on that path andpeople aspiring and, you know,
my, my, one of my main points islike, you, you can control what
you can control, but, you know,there's a lot of other variables
and, and timing and luck play ahuge part in that as well.
And then I think the last onehas just been really good at
what I did.
I never really looked at nextstage.
Like, I, I never looked attitles.
I never looked to the nextstage.
(05:50):
Now I understand that, you know,now, and depending on, you know,
background or depending onbeing, you know, let's sort of
call it out, like, depending ona certain amount of privilege
that I would've had as a, as amale and a tech environment,
sort of, you know, 10 years ago.
I, I understand that that was aprivilege to not have to worry
about stuff like that, but, butdefinitely from an underlying
(06:11):
perspective, I was just verygood at what I did.
And I understood what my, mycustomers needed.
I understood what my managersand my bosses needed, and I
acutely understood the power ofperception.
And I think, again, that'ssomething that I don't think a
lot of people spend enough timethinking about.
It's very much, when is it gonnahappen as opposed to why should
(06:34):
it happen?
And, and whenever I think aboutpeople in my team, you know, I,
I, I always think aboutpromotions in the context of, if
I'm to announce this promotionnow will 90% of the companies
say, well, of course, likethat's annoying, or will they
challenge me?
And if, if there's any risk ofchallenge, I tend to be a little
careful, a little more careful,probably.
(06:54):
And usually that just comes downto people that are leading
without the titles and leadingwithout the, without the, the
desire, I guess, for it to beacknowledged as that, and just
excellence in execution.
Like you cannot get away fromexcellence in execution, if you
are awesome at your job, thingswill happen.
They will happen.
That's kind of what my path was.
(07:15):
And, and it's a combination of,it's an amalgamation of all of
those things at different pointsin time that just, yeah.
Came, came to fruition and, youknow, so long, well, we'll see
how long it continues, but asyou get higher up it's food
jaded, it kind of gets tougherto be, you know, excellent than
what you do, because what you doexpands exponentially.
(07:36):
And, and, you know, really forme, it's now hiring, you know, I
just wanna hire great people andmake sure they're excellent at
what they do.
And internally make me lookcompetent, uh, every now and
again,
Speaker 1 (07:46):
Thank you so much for sharing all that background.
I know it's super aspirationalfor a lot of people to be in the
position you're in, but I dolove a lot of the pieces that
you just said about making suretiming is right, as well as, you
know, you are executing on whatyou're set out to do.
And coming back to that timingbit, you have been at some
organizations that have justreally exponentially grown as
(08:09):
well.
And the startup customersuccess, SAS experience that you
really have experienced inLondon, I think is a, a unique
one.
What do you find special aboutthe region or the industry and
sector of customer success thatyou're working in?
Speaker 2 (08:22):
It's definitely a lot higher profile in the last five
years, let's say than it hadbeen in, in, you know, the early
stage of my career.
Definitely.
And I think, I think from, froma, from a UK perspective, my
last two companies were UKheadquartered companies.
And that, again, wasn't a, anexplicit decision I made having
worked for us companies for 15years, but there was an element
of, I was interested to see whatit would be like working for a
(08:45):
company where I was in the HQ,because I've a long time I've
been a regional leader, which,which is a skill in its own.
Right.
And I've, I've definitelydeveloped.
And I remember back at, um, atthe tail end of my career at
bizarre voice, I, I, I, I kindof acknowledge that actually
being a regional leader leaderin a hub, sorry, in a spoke for
a us hub is a skill in itself.
Speaker 1 (09:07):
It is, it
Speaker 2 (09:08):
Is variables that goes on in terms of keeping the
teams together, unified,avoiding the them versus us kind
of stuff.
But, but when I came to, to abrand watch, you know, that was
my first experience of, of theUK CS culture, if you like.
And I think, you know, what Ienjoy about it now is there's a
little keenness about the U theUK that I obviously I, I
(09:30):
resonate with because, you know,it's part of my own DNA coming
from Ireland.
We're not, we're not great as,you know, flagging or shouting
about what we do oracknowledging a regular business
.
And I, I, I do like that to someextent, but I do think it's,
it's what I, what I try to bringfrom my us experience, because
there's a lot of value in thatkind of, um, excitement around
(09:53):
things and that kind of, youknow, uh, external celebration
of success and acknowledgingthat we're doing a, a sort of a
really good job.
Um, and I think the second oneis how early stage it is, or it
was here, you know, the abilityto shape something, um, pretty
significant, um, the ability,particularly in the world of
(10:15):
startup to be able to embed itearly on and in the seat that
I'm in to be in a position to bethe, the voice in the room that
says, you know, this sounds, youknow, great from an efficiency
perspective, but have we reallythought about what the impact is
gonna be?
So I think it's probably accessand exposure is, is kinda a
difference when you're, whenyou're in startup world,
(10:36):
certainly in the UK, butculturally, I think that's the
difference I've seen between theUK and the us, where you need to
build that muscle of like justMo you know, I use the word
excitement very explicitly, butjust, just, you know, being out
there and celebrating what we doand, you know, acknowledging
that what we do is hard and whenwe win, we wanna make a big deal
about it.
(10:56):
But at the, on the flip side, Ithink the UK is I, I, I use the
term quietly brilliant in my, inmy team a lot.
And, uh, there's a lot of quietbrilliance in side because it is
very much like, let's get itdone, get it done well, and
then, you know, assume thatwe're going to get credit for
it.
Speaker 1 (11:14):
You bring up so many good points about the
differences.
And I really like how you sharedthe regional leader and then
making a conscious decision tobe a leader for a UK company,
because I also feel that thatstruggle, pain, whatever you
wanna call it is, uh, sometimesyou just feel us versus them and
also disconnect, no matter howmuch we're in a global world, on
(11:34):
zoom meetings, there is still alevel of, of difficulty when
you're executive team is allover or in different locations
and, you know, making thosemindful decisions like you said,
in your career of, Hey, this isthe bet I'm gonna take.
And this is where I wanna seemyself.
And because of a mix of timingexperience and the bet you're
taking it, it's landed you whereyou are.
(11:56):
So thank you, uh, for sharingall those pieces.
You already mentioned a littlebit about the team you run at go
cardless and customer successmeans very different things at
different organizations, as weall know, but I think you
mentioned service CSM support.
Is that roughly give us a littlebit better understanding of what
the org looks
Speaker 2 (12:13):
Like.
Yeah.
Customer success management,professional services, which is
effectively onboarding and whatyou would classify as maybe
implementation services, as wellas, um, you know, in all school,
I guess, professional services,kind of the, you know, high
value interactions, uh, globalcustomer support.
Um, we have operations andprograms, um, within our team as
(12:34):
well.
So we have a team that looksafter kind of the big rocks
across the CS, the customersuccess group.
Um, and then probably thebiggest difference that I, that
I experienced here comparable toin my, in my previous roles is
we have a very, very, uh, Imean, you, you met Hamish, we
have a very strong customerexperience and advocacy team
within the customer successgroup.
(12:55):
That's a, that was aninteresting one because
traditionally that wouldprobably live in marketing in
more SaaS companies.
Speaker 1 (13:00):
Yeah.
I know when you first told meabout it, it's not something I
would think in customer teamright off the bat, but I love
that it is.
Speaker 2 (13:07):
Yeah.
But we took, we, we, we put ourhands up and, you know, we said
two years ago, maybe, um, youknow, look, this is not gonna
work if it's not focused on ahundred percent.
And, um, I, I tookaccountability for that and, and
Hamish leads the team and, youknow, we've seen the results are
just spectacular.
Um, when you've actually got the, uh, the advocacy and
(13:29):
experience team kind of on thehook with the CS leaders,
because they're, you know, Ibasically have the capability of
, of locking everyone in a roomand saying, we're not leaving
until it's figured out.
Like, and I think that's, that'sthe, this simplistic view I have
on, you know, you spoke to me,you know, can I, can I basically
put the fear of God of thepeople, uh, and, uh, and have
(13:52):
them listen to me.
And, and in that case, that wasdefinitely one of the functions
we felt was needed.
And we've got a superb, youknow, NPS process flow here.
I mean, hing again, does afantastic job with our NPS
insights into the business.
So, so that's kind of, you know,my world, um, the interesting
kind of very explicit decision Imade with my chief revenue
(14:13):
officer is we don't, we don'thave, uh, uh, an actual upsell
commercial target within the CSMteam.
Yeah.
I was very explicit about that.
I've, I've worked in every oneof every environment imaginable
when it comes to upsell.
I mean, literally I've gonefrom, you know, fully upsell to
zero upsell to some kind ofweird hybrid in the middle.
(14:36):
And I, I'm a huge advocate indivision of labor first and
foremost now how that divisionpans out is up for discussion,
but what I, what I really wantto avoid where I can, when I can
help it at all, is havingmultiple focus, uh, for team
(14:57):
members.
Like they need to be accountablefor something that's very
tangible that they can influencedirectly and that we can track
without being, um, what I wouldcall, uh, punitive.
So, you know, when I look at alot of the, you know, CS
platforms, for example, you know, uh, that space is evolving now
pretty dramatically, which isgood because it, it kind of
(15:20):
initiated very much, um, fromwhat I could see from a, from a,
a leader's lens in terms ofcontrol, rather than actually
making it easier for you to doyour job as a CSM.
I think for me, the same applieswith, with responsibility.
So I've had CSMs, who've been asresponsible for upsell
responsible for retention,responsible for NPS.
(15:42):
Like no one can do the job ifthey're the four or five metrics
that, like, what do you do?
Where do you focus?
Like if I super MPS score and Ibomb out on upsell, like, do I
get fired?
Do I get promoted?
I don't know.
Like, so, so from myperspective, we made a conscious
decision on that.
And the flip side to that wasthat with my chief revenue
officer, um, we're very, veryexplicit in terms of the
(16:04):
workflows.
Speaker 1 (16:05):
Yeah.
And also keeping them veryfocused by the sounds of it
Speaker 2 (16:08):
That said we have pipeline generation targets.
So we have CS QLS, if you wantto call
Speaker 1 (16:15):
'em that.
Yeah.
That's something that I've heardmore commonly in SAS now.
Speaker 2 (16:18):
Yeah.
So, so my team part of theirvariable comp will be, and has
been in the past, um, attainmenton a, on a team level of amount
of, of QLS.
And then that's very, verytightly aligned with how they
engage with the, with the EE.
So it's not perfect by anystretch, but then again, no
model is right.
(16:38):
And, and I'm just playing forthe model that I think works
best for us, because I want myteams to focus like a hundred
percent on expansion of volumeand adoption.
Speaker 1 (16:47):
I think that you're already leading into our topic.
Great, great segue, pat, but weare talking a lot about revenue
and customer success.
You already mentioned how withyour CRO, that's a big part of,
you know, your focus here at gocardless.
But I think in your overallexperience as a CS leader,
you've had a very controversialstance on charging for customer
success.
(17:08):
And I know some businessesreally don't do that, but before
we kind of dive into to all thedetails, like, what is your
stance on, on charging forcustomer success?
Speaker 2 (17:18):
I, I, I'm not, I'm not sure I'd be necessarily
controversial or necessarilythat it's a stance as such.
I, I just, I guess over theyears, I just don't necessarily
default ever to, uh, aninability to add a cost to
something that's of value.
Right.
And I think that's where, youknow, we've talked about this
(17:40):
before.
I think the question is not somuch, should you charge for what
we do?
The question is, is there avalue to it and is that value
acknowledgeable through a fee ofsome sort be that recurring or
one off like charging forservices has been around since
it's, it's always there, like,if you talk about professional
(18:00):
services, people wouldn't bat aneyelid, literally wouldn't bat
an eyelid.
Um, and I think the, thechallenge that I've seen is that
we've morphed from this world ofaccount management into customer
success management over the last15 years.
And account management was neverperceived to be a chargeable
resource because there wasupsell attached.
Yeah.
Speaker 1 (18:19):
There was a target that you had to hit to, to earn
your seat.
Speaker 2 (18:22):
The revenue generation is there.
It was just, it's just in adifferent guys.
But the challenge is because itkind of morphed from an am with
a target to a CSM, with a targetto a CSM without a target.
Then the, the, the kind of therevenue line just got further
and further away until we wereleft with a point where in many
cases we were in a scenariowhere it's like, well, we've
(18:44):
never done it.
So how can we start doing it?
Now, my, my belief firmly isthat I think where, where
customers perceive value andwhere customers perceive that
the addition of a resource isgoing to get them kind of, you
know, what they want faster thanI don't think charging or
(19:04):
attributing a cost to that valueis something that we should be
shying away from.
I think, I think it's where weget sloppy and actually
literally take a service thatwe're providing now stick a cost
to it, and then assume it's justgoing to be all of a sudden a
cost service.
That's where that's where weI've seen a lot of this go
(19:25):
wrong.
You have to fundamentally changehow you engage.
You have to fundamentallyredesign your, your kind of
model, but it doesn't mean youcan't charge for
Speaker 1 (19:34):
It.
And I think a lot of companiesbuild around charging customers,
first customer sales, into thecost of good sold, really.
And I think that your experienceand what you're just speaking to
is completely different.
And if a company let's say isalready charging with cost of
good sold, and that's howcustomer success is bundled into
(19:54):
that, how would you kind ofadvise, or what would your
thinking be if they're okay.
Now we should definitely startcharging for this service.
What's kind of the mind shiftthat that company would have to
do in order to move away fromcost of good sold to that added
cost for service.
Speaker 2 (20:10):
I would first have the conversation in terms of
like, why, you know, because Ithink I've seen cogs, uh,
profile be super different in,in, in every organization I've
ever worked with.
The percentage attributed tomarketing to sales can vary
anywhere between 20% and 80% CSis included.
It's not included.
Like we, we normally kind ofsleepwalk into this through
(20:31):
financial metrics in many cases,right.
Because you know, the firstquestion I would have is like,
who's validated that like who'svalidated CS as part of cogs
and, and is the percentage evenright?
If they, if they are part ofcogs first and foremost, the
second aspect for me is where doI see the value of that?
Like, if, if, if my line item,if my cost is implied in a
(20:52):
subscription service, then wheream I getting value from that as
a CS leader?
How is that reflected back intohow I hire, um, the ratio of
CSMs to accounts that I need tohave, you know, of cuz
effectively I'm covering mycost, right?
The subscription service iscovering the cost of my
organization or a proportion ofthe cost of my organization, but
do I see the value for that?
(21:13):
And that's where it gets lost.
Speaker 1 (21:14):
Yeah.
And it gets, it gets lines, getblurred and it, and almost,
yeah,
Speaker 2 (21:18):
Completely because they're literally blurred
because they're commingled withso many other things.
If you look at the sales org,like nobody ever doubts the fact
that if you hire a sales guy or,or, or, or lady there's a,
there's a, a quota attached tothat, right.
Nobody doubts that.
And if that quote is met, youcan have another one and you can
have another one, you can haveanother, we have, we don't have
(21:39):
that.
We never have that.
Now, when I look at all of thediscussion and the AR arguments,
and I probably would use it likethat on, on LinkedIn and all the
thought leadership, where shouldthis live?
Where should that live?
The bulk of all of thesediscussions to, to me is born
out of attribution, some form ofthe need for attribution of
something that the organizationrecognizes as valuable.
(22:02):
And so that's kind of the firstplace I would start if you
haven't necessarily moved downthat path.
I think the second area for me,and, and where I've seen it in
the past as a, an early stagekind of exercise is not
necessarily from a CSperspective, more holistically,
but to look at this from theconcept of what are the actual
(22:23):
milestones in a customer journeythat you feel that if there was
a higher level of attriattribution of value to, through
a cost inherent, would you beable to accelerate a customer
experience?
Um, so when I go back to bizarre, my bizarre voice days, um, we
(22:44):
had an onboarding process thatwas, you know, super, um, eh,
kind of consistent, I guess,across the board.
But we acknowledged there wasprobably about two areas of that
onboarding process that we knewthat if we got right, it would
accelerate time to value 20, 30times.
(23:05):
Um, and you know, one of the,the, the, the ladies I hired at
the time Kim wood, who came onboard as a CSM, um, I pointed
her in that direction to juststart to flesh out if we were to
charge for a service, what wouldthat service look like?
And what would the value beassociated with that service?
And that evolved into aconsulting organization at
bizarre voice in Europe, whichwas then evolved globally.
(23:27):
Because for the first two years,we built a really strong revenue
line item and started to seeonboarding, basically be cut in
half and at five X higherquality.
So that was where I kind ofstarted this journey early on.
And it wasn't PA professionalservices because it wasn't your
(23:48):
traditional kind of, you know,um, engagement.
It was very much around anonboarding flow, but looking at
a couple of different areas.
And then as you evolve, youknow, you kind of evolve layers
on top of that layers on top ofthat.
And then the package potentiallykind of evolves with that.
But, but yeah, that that'salways been my take on it.
I, I honestly, I think about allof the things that I pay for,
(24:10):
why I pay for them andparticularly the things that I
don't really think about why Ipay for them it's because the
value I get is so kind of equalor are higher than, than what
the cost is.
And I think it's more aroundhaving the confidence of that in
terms of what the engagementmodel is first, before you start
to look at rolling out a cost tothat.
Speaker 1 (24:29):
Yeah, I know.
And then you mentionedimplementation, onboarding, and
starting with that side of thejourney.
And I think most businesses, ifI think of even the larger
organizations out there,Salesforce, Microsoft, Adobe,
they're always charging for somelevel of customer service,
whether it's professionalservice, success, support,
there's some sort of charge.
And I think we've, like yousaid, blurred the lines of like,
(24:51):
how much do you put in cogs intothe actual, you know,
subscription cost of yourbusiness.
But I do think that you bring upa good point about really like,
you know, starting smallgrowing, et cetera.
But I think another, you know,good thing for leaders think
about is the ROI of charging forsuccess.
Really?
Like what are some metrics thatyou think customer success
(25:13):
leaders should really start totrack to make sure that they're
bringing back to the business?
Hey, us charging for success isreally returning a bigger
investment.
Like you said, sales leaders,don't question.
If you have an AE, they carry a,a certain target.
They hit that target.
They get paid for that, but youalso know how to hire access, uh
, more AEs for that, for thatrole, but we don't do the same
(25:35):
for success.
So how should leaders reallylook at the ROI for charging for
success?
Speaker 2 (25:39):
So going back to my original point, the first thing
is pilot.
You pilot, pilot, pilot, pilot,trial, trial, trial fail so many
times before you actually hitthe right thing.
Because when we started with Kimway back when, and she, she will
be the first one to attest toit.
We trialed a lot, like wethrough a lot of different
iterations in terms of what itwas gonna look like before we
actually rolled it out.
Speaker 1 (25:59):
I really think that a lot of people don't do that or
they're afraid to, or they thinkcustomer success should be built
a certain way.
And I, I still say that like thecustomer success is developing.
There's no harder, fast metrics.
And it's so different at everyorganization that you do success
at that there is no way there's,there's no problem with trialing
it.
Like try it.
If it works great triple down onit, if it doesn't go back to the
(26:22):
whiteboard
Speaker 2 (26:23):
Hundred percent, like a year ago, year, 12 months, 14
months ago, we didn't have anadvocacy program.
14 months later, we've, youknow, nominations three awards,
UK wide, you know, 14 K studiesattributed to revenue.
Like it, all this stuff, just,you, you, I think the last point
you made is the most importantpoint.
There's just a lot of noise outthere in the customer success
(26:44):
world right now that thatassumes there is a certain way
to do this, or a certain binarysort of five steps, 10 steps,
where should this live?
Where should that live?
Like, I don't care honestly,about any of that stuff, because
if my org is different in 90% ofevery other org out there, but
my customers are seeing value,my team are engaged, my NPS is
(27:06):
high, then I'm doing the rightthing and I would never want you
to look at me and think, oh,how, how do I do that?
Because it's not relevant toyou.
You have your, your kind of yourenvironment you are living in.
I mean, I've worked inenvironments where literally
retention was just bombing.
Like that was my job at thetime, my job wasn't to build a,
a phenomenal, you know, um, uh,successful, efficient CS org.
(27:28):
It was like to stop the leak inthe bucket.
Speaker 1 (27:30):
Yeah, yeah, yeah.
And you have to take it at amoment at a time, like every
leader that's like, oh, how doyou build this amazing engine of
customer success?
I'm like, well, look at what isapplicable to your situation.
What's happening at yourbusiness?
Is it churn?
Is it upsell?
Is it retention?
Like figure that out and work onthat
Speaker 2 (27:48):
Understand a hundred percent.
And it might be one thing alwaysthink about the world in terms
of run the business, change thebusiness.
And I think in CS, everyone isso focused on change the
business, the strategic things,the, the kind of the, the, the,
the big rocks, but running thebusiness is hard.
And, and in our world, andespecially in this environment,
it's getting harder and harder.
So I think, you know, thatthat's super important, but
back, I guess, to the original,sorry, I took a bit of a
(28:09):
sidetrack there.
Um, back to the originalquestion, I think the first
thing is trial and, and pilot.
And I, I, I include KPIs in thatbecause you're never gonna get
the right type of KPI, but whatyou've gotta be clear on is why
you're choosing a particulartype of KPI.
And what I see a lot is, youknow, the KPI that's chosen is
to prove something internally.
That to me, is the wrong track.
(28:30):
I think that to try to provesomething internally is one leg
of, you know, a, a KPI suite.
But if we look at it externally,the, the key kind of metrics I
look at here, there's, there'sthree that we're looking at kind
of, certainly in the past.
And right now the first thing is, uh, attachment and adoption
from a, a net new perspective,no matter what you do in CS, if
(28:54):
you can't be easy to do businesswith, you're not gonna be
successful.
And we can, we can complain andwe can moan, and we can talk
about this deal, that dealproduct market fit bad, AEs, all
that kind of stuff.
But if we're not easy to dobusiness in, in the startup
world, then we're not gonna besuccessful.
So the first thing I always lookat in anything like this,
whether it's paid, whether it'sa new services, is it easy to
(29:16):
sell?
Am I reps selling it?
Right?
So that's the first thing.
So attachment type rates towhatever you, you path, you go
down.
The second one is time.
Whether you agree with themetric or not time to value,
like, are we doing somethingfaster?
And is it something moreimpactful than other stuff?
For example,
Speaker 1 (29:36):
We live in a world where time is value.
It's a very important metric.
Speaker 2 (29:39):
We're on 12 month contracts.
In some cases, some of them areon 30 days, you know, notice
periods for, for termination.
Like we gotta get this thingspun up and spun up fast.
And then the third one is, isdepending on the kind of revenue
metric you have, if you decideto go down that path, either
renewal or repeat.
So our customers renewing, andare they renewing at a higher
(29:59):
rate if they get a higher levelof service?
And if that service is paid for,is it having that impact?
And then obviously if it's notrenewal, uh, sorry, recurring,
uh, is it happening more andmore?
So for example, if you decide tocharge for a health check or
call or whatever you want, um,is it leading to something else?
Is, is it leading to anotherone?
Is it leading to an expansion isso it's more second order
(30:20):
revenue from the piece of workthat you've done.
So again, going back to myprevious experience, you know,
we, we, we had a, uh, anonboarding service that came at
a premium price where ourconsultants would go in and
effectively map out the journeyfor the customer, uh, early
stage sales cycle and late stagedeal.
Um, and there was a cost tothat, but what we found was they
(30:41):
were onboarding quicker, better,and expansion happened faster.
So straight away, you've got,you know, a suite of KPIs there
that you can actually go withand say, well, if I have five
more of these people, I'm prettysure I can five X, those numbers
and they're good numbers.
And then the last one is CSATNPS.
You know, you wanna make surethat customers are happy with
the service you're providing,particularly if there's a cost
(31:02):
attached to it.
That's really, really important.
Um, because that just is aself-fulfilling prophecy.
If, if I'm charging and thingsare happening better and faster,
and customers are still happy,then the chances are that your
worry about a cost associatedkind of goes away pretty quickly
because you ability to say, Iwould pay for this and I pay for
this again, because it wasvaluable.
(31:23):
You know?
So it's a, it's, it's a journey.
It's definitely a journey.
But I think the first question Iwould ask anybody is if you're
not willing to look at having acost associated to customer
success in any way, then why,like, why do you think that it's
not valuable enough that youcould do that?
And there'll be lots of reasons,deal sizes, you know, market
(31:46):
appetite.
I get all of that, but at thesame time, we have to believe
that what we're providing is, isvaluable enough to at least
consider some aspects of it, tohave a premium attached to that.
Speaker 1 (31:57):
I totally agree.
I completely agree.
And I know you just mentioned alittle bit around KPIs and
making sure you're trackingcertain things from a, from a
leader perspective of a returnon investment for charging for
customer success, but drawingupon what you said earlier about
how your CSMs don't have a regrevenue target, is that correct?
Speaker 2 (32:18):
Yep.
They have, have a renewalstarget.
Obviously
Speaker 1 (32:21):
You have a renewals, but not an overall like net
dollar or net revenue retentionnumber, which is another, I
guess, maybe different thingthat you guys are doing.
But if you, if revenue is notattached to your CSM, but you're
charging for customer success,what sort of KPIs do you assign
to your CSMs?
So that they're, you know, theyknow they're doing a great job
(32:43):
and that charging for theirservices is, is paying off.
Speaker 2 (32:46):
So as we move forward, so to be very clear, we
have, uh, gross revenueretention targets and net
revenue retention as a target,the upsell aspect of it.
In other words, the explicitupsell target is the
responsibility of the AMS andthe sales team, but they work
very closely with the CSM.
So there are revenue linesassociated with them, but very
much on the retention side,which is always perceived to be
(33:08):
a cost, right?
The cost of renewal, basically,as opposed to renewal being an
opportunity.
Um, but as we're gonna moveforward.
And as I think about this, youknow, from my perspective, the
same KPI still apply.
Um, if we decided at any pointto have a cost associated with,
for CS based on a certain typeof engagement model, because
(33:29):
again, going back to my originalpoint, you cannot do the same as
you've always done in charge forit, you to change how you engage
and the, the, the, the sort ofthe tenants of NPS, the tenants
of renewal and the tenants oftime to value still, um, are
still relevant from anindividual CSM or a team CSM
perspective.
(33:50):
So whether you charge or not,you know, these are kind of the,
the, the KPIs that we'refocusing on.
Now, if you think about renewal,it then moves from renewal of
recurring subscription revenueto renewal of the CS cost.
Let's say so.
So for those organizations thatmight consider a cost, let's say
a recurring 3% of thesubscription fee.
(34:12):
You know, you wanna be renewingthat if you're not renewing that
the CSMs are not doing theirjob, or you gotta do engagement
model wrong.
So they're, they, they're thekind of KPIs that, that I have
in the past sort of experimentedwith.
And in some cases, we've got, wedid we, we got them, right.
Um, but I think the more you gointo the cost being spread
across the journey, rather thana milestone, then you need to be
(34:35):
very, very explicit in terms ofrenewal of that subscription or
that, that kind of, uh, costbeing a number one priority,
because that is the revenueline.
And that becomes the revenueline for the customer success.
So obviously renewal of thesubscription is equally as
important, but now you've gotanother rev line, which is, am I
renewing my customers?
And are they continuing to seevalue in what we're offering
(34:57):
enough to be able to pay for it?
You know,
Speaker 1 (34:59):
I love that they obviously are thinking in that
way, like, Hey, am I doingenough to drive that value?
Because that's, that's whatwe're all really here for.
That's, that's why we sign upfor the jobs of, of customer
success managers.
And I think that's superimportant.
Speaker 2 (35:12):
And the other point I would make, again, like I say,
you know, I, I I've had someexperience in the past and I am,
I'm, I'm always gonna continueto, to, to evolve this, um, and,
you know, push, but respect,push outside in not, not inside
out, but I think if, if you, if,if people are out there sort of
thinking about how, how do youstart this?
(35:33):
I mean, again, I, I, I can'tover emphasize the fact that
everywhere is different.
And, you know, as I look atGoCardless, for example, we're,
we're a selfer, we started outas a very self-serve
organization.
So, you know, the, the, thecosts associated with
GoCardless, or, you know, willalways be very platform, heavy
subscription, kind of heavybecause you subscribe to a
(35:54):
service.
If you do it yourself, it'sfairly self intuitive.
But I guess the key message I, Iwould always make is that, um,
we, we just need to be, we needto think about this stuff
slightly differently, and weneed to think about it from our
customers' lens.
And so far as, you know, arethey, are they, like, not
assuming that they, they don'tsee value in what we do enough
(36:16):
to have the conversation rathertesting that hypothesis on a
regular basis, but also holdingourselves to account that if we
do go down that path, it bloodywell better be good.
Speaker 1 (36:26):
Yeah.
It should be.
You should be if you're, ifyou're starting to charge and
you're starting to really putthis into motion, it should be
something that you are ready toback, and you're ready to really
go up and say, listen, we made adecision.
We're gonna stand behind it.
And this is what's gonna be the,the forward movement of how we
run success at echo cardless orany organization.
(36:47):
And that brings me to, uh, our,our final question really on
this topic, because I think alot of people are probably
motivated and inspired to, Hey,we should really start charging
in some aspect for success, butthere are legacy customers that,
uh, don't expect that.
But plus it might be veryshocking if you come to them
saying, Hey, by the way, everyyear from now on, we're gonna be
(37:10):
charging this much on top ofyour subscription for your CSM.
How do you best introduce ormanage legacy customers when you
start charging for success?
Speaker 2 (37:20):
Well, I think, you know, if you look at Salesforce
is kind of a good example in allof this kind of thing, you know,
the, the sort of the, it goesback to the value for me.
And again, I'll, I'll caveat allof this in terms of like, you
know, I've had experience in thepast and a couple of, you know,
very specific set set of areaswhere, you know, the value on a,
at a particular point ofengagement was perceived high
(37:42):
enough to be able to sort ofreally over index on that in
terms of a cost.
And because that cost got higherand higher, obviously the
ability to, to, to offset thatwith revenue became more and
more, uh, critical.
Um, I think, I think it goesback to what I talked about
earlier on, I think you have tolook at the journey that these
customers are on.
And, you know, we talk aboutthings like digital scale CS
(38:07):
versus, you know, high touch CSall the time.
We talk about portfoliosegmentations all the time.
Like none of this stuff isbinary.
None of this stuff is binary.
The key is my, my old CEO,current CEO, actually an old one
that used to talk about sort ofred face tests for any, for
anything that you do as an, asan organizational leader, not,
not just in this context, butanything in other words, like,
(38:29):
you know, if, if you're toexplain it, you know, can you
explain it credibly?
And can you explain it sort of,kind of get getting awkward or
getting kind of embarrassing tosome degree.
And I think, you know, in thisinstance, there, there is an
onus on us as leaders to justlook at our journey and really
identify the phases of thatjourney that we feel are
underserved, perhaps because ofa resourcing situation or an
(38:52):
ability to, to, to justify, youknow, increased head counter
cost.
But that if we serve properly,we'll have a, a force multiplier
impact on how our customersengage with us.
And I think that's the firststep I would, uh, encourage
everybody to take a look atbecause the one kind of area I
really want to reallyoveremphasize here again.
(39:14):
And I sound like a Paris, but,you know, you cannot do the same
thing and charge for it.
Like, that's not what we'retalking about here.
And that's where I've seen somany people fall into that trap.
You cannot do the same thing andcharge for it.
You can completely reorg andrebuild based on having a world
where there is higher value anda world where there is the same
as, as is like lots of orgs dothat.
(39:36):
You know, I mean, I know, uh,you look at Zendesk, you look at
Salesforce, like these arereally slick organizations that
do this really, really well, butunderlying everything is the
value that's inherent in whatthey offer is equitable to what
the cost for that looks like.
And I think that's the keymessage here.
It is not about charging for CS.
(39:58):
It is about value kind of the,the, the value that's inherent
in however you want to engage.
And then you can start to lookat whether or not that merits,
uh, a different pricingstructure,
Speaker 1 (40:11):
But that's such a good key takeaway.
And I love it.
And I've just made a note of it,of how you cannot expect the
same results doing the samething again and again.
So how can you expect yourcustomers to start paying for
something if you're doing thesame things again and again, and
it's so, so important, like youcan't just expect, you know, net
dollar attention to increaseyear over year.
(40:32):
If you're not doing somethingdifferent to help that metric,
the same thing is when you startcharging for customer success,
thank you so much, pat, forsharing all those takeaways and
all the insights I wanna wrap upwith our quick fire question
session, where I challengeeveryone on the podcast to try
to answer these next fewquestions in a sentence or less.
(40:53):
I know it's gonna, but let's,let's go.
Are you
Speaker 2 (40:56):
I'm ready?
Go for
Speaker 1 (40:58):
Awesome.
What do you think is next forthe CS industry?
Speaker 2 (41:02):
Wow, that's, that's a , that's a, that's a tough one.
Um, I think digital the, the wayI think about CS is enterprise
and scale building forenterprise and scale.
And I think the two will becomevery conflated rather than S and
I think the ability to have ascale level of engagement across
your enterprise stack is goingto become more and more
(41:23):
prevalent and vice versa.
So it's not going to becomesegmented separately.
I think they're gonna come moreand more together and more
layered on top of each other,rather than two different modes
of interacting.
That's something that I I'm I'mI see myself even moving towards
on a regular basis.
Speaker 1 (41:40):
Yeah.
Maybe we're gonna have to have adifferent conversation about
that, but, uh, we'll move on tothe next question, which is,
what is your favorite app eitheron your phone or your laptop
that you cannot live without?
Speaker 2 (41:51):
I'd have to be Spotify.
I, I live in it.
Absolutely.
I wouldn't survive without.
Yeah.
Speaker 1 (41:56):
Amazing.
And I think I know what you'regonna say to this next one, cuz
I heard it earlier in theconversation, but what sort of
compensation should a CSM get?
Should it be just a base salaryor a base salary plus uh,
commission or bonus of somesorts?
Speaker 2 (42:09):
Yeah, I, I, I'm gonna get on the fence on this and say
it utterly depends on theorganization that you're in and
the scale of the organizationyou're in.
Uh, my, my default has alwaysbeen based with variable, um,
where I won't get specific iswhat that variable should look
like.
That's where you need theoptionality depending on what
you're trying to achieve as abusiness.
Speaker 1 (42:27):
Amazing.
And the final question is whatis your favorite part of
customer success or being a CSM
Speaker 2 (42:33):
In innovation?
I love it right now because I,I, I you've, you've heard when I
talk about it, you know, earlier, um, I'm obsessed with not
necessarily following a path andmaking sure that I play the ball
that's in front of me.
And I wanna make sure that, thatwe're constantly innovating and
constantly trialing and, anddoing so with a, a really clear
customer lens and, and hopefullyjust surprise and to delight
(42:54):
them, you know, with somethingthat they never thought they
needed until you had it for them.
So I think that's the bit for methat I love there's no, there's
no playbook here.
Like really there's no, uh,there's no fixed kind of
methodology that we all live by.
Speaker 1 (43:07):
I think it keeps us on our toes and keeps us young
and challenged and whatever youwanna say, but thank you so
much, pat, for your time reallyappreciated so many insights.
If our listeners do have anyother questions or follow ups or
wanna get in touch, what's thebest place to find you?
Well,
Speaker 2 (43:22):
LinkedIn is where probably the second most lived
in app.
So, uh, outside of Spotify.
So by all means drop me a linein LinkedIn, more than happy to,
to have a chat with people asmuch as I, I, I can and share
the mistakes I've made and, andwhat, what they shouldn't do.
Speaker 1 (43:35):
Thank you so much, pat really appreciate your time
and speak soon.
Speaker 2 (43:38):
Thanks so much.
Speaker 1 (43:40):
Thank you for listening to the customer
success channel podcast today.
We hope you learn something newto take back to your team and
your company.
If you found value in ourpodcast, please make sure to
give us a positive review andmake sure you subscribe to our
channel as we release newpodcasts every month.
Also, if you have any topicsthat you would like me to
discuss in the future, or youwould like to be a guest on the
(44:02):
podcast, please feel free toreach out all my contact details
are in the show notes.
Thanks again for listening andtune in next time for more on
customer success.
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