Make 2016 the Year You Conquer Customer Success

Scott Golden
Director of Customer Success Strategy
@SctGldn
sgolden@gainsight.com

3
The Secret to Rapid
Growth in 2016

Lincoln Murphy
Customer Success Evangelist
@lincolnmurphy
lmurphy@gainsight.com

“The purpose of business is to
create and keep a customer.”

The initial sale is critical, but
it’s just the tip of the iceberg

Customer Success is when
your customers achieve their
Desired Outcome through
their interactions with your
company.

Why is Customer Success
something you should care
about?

David Skok | Matrix Partners | http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/
Customer Success Drives First-order Growth

Customer Success Drives Second-order Growth

0x
5x
15x
20x
EV/RevenueMultiple
Dollar Net Renewal Rate
60% 70% 80% 90% 100% 110% 120%
Source: Altimeter and FactSet 10/2014
10x 7X
15X
CSM Drives Third-order Value

It’s too important to be
thought of as “post-sale” or be
left to chance.

How is Customer Success
different than what most
companies normally do?

Customer Success is Transformational
1. Acquire the Best Customers
2. Engage & Deliver Value Quickly
3. Expand Their Investment
4. Mobilize your Advocates
5. Retain & Renew Customers

1. ACQUIRE THE RIGHT
CUSTOMERS

Ready
Willing
Able
Acquisition Efficiency
Success Potential
Expansion Potential
Advocacy Potential
Ideal Customer Profile

Success Potential
• Only Acquire Customers with Success Potential
• Technical Fit
• Functional Fit
• Experience Fit
• Support Fit

Use Customer Success to
influence your
Marketing and Sales

“Enter the conversation already
taking place in your customer’s
mind.” – Robert Collier

“Enter the conversation
already taking place in
your customer’s mind.” –
Robert Collier, c1937

Customer Success = Their Desired Outcome

2. ENGAGE & DELIVER VALUE
QUICKLY

Success Milestones are the
steps required for a customer
to achieve their ever-evolving
Desired Outcome.

“Customers that take an
upsell offer stay longer”
- McKinsey & Company

Customer Lifetime Value is the
Key Metric

“Customers that come in
through advocacy stay
longer and buy more.”
- McKinsey & Company

“Customers that advocate
for you become stronger
customers themselves.”
- Influitive

When Customer Success is
operationalized around Desired
Outcome-based Success Milestones,
renewals become a non-issue…
renewals just happen.

INTERMISSION
We will return shortly…

45
Budgeting for Customer
Success in 2016

Allison Pickens
VP of Customer Success
@PickensAllison
apickens@gainsight.com

10 Tips for Planning for 2016
(1) Position Customer Success as a Company Imperative
(2) Articulate the Benefit to Other Departments
(3) Pinpoint Your Metrics
(4) Invest in Data
(5) Budget to Benchmarks
(6) Focus on What’s Scalable
(7) Plan to Specialize
(8) Assign Value to High-Touch CS
(9) Develop a Repeatable Methodology
(10) Invest in Customer Success Operations

Customer
Sales
Renewals
Support
Services
Marketing
Product
Ensure solid handoff
Create more targeted renewals
experience
Highlight high-priority customers
Reduce implementation time
Identify customer advocates better
Give visibility into non-adopted features
#1: Position CS as a Company Imperative

Customer
Sales
Renewals
Support
Services
Marketing
Product
Get visibility into customer details
Drive higher renewal rates and
expansion
Prioritize tickets
Identify opportunities for services
Proactively identify advocates
Prioritize customer enhancement requests
Finance
Drive collections
#2: Articulate the Benefit to Other Departments

#3: Pinpoint Your Metrics
Operational Financial
Renewal Rate
Upsell ARR
New Business ARR
Risks Resolved
NPS
“Green” Customers
Opportunities Identified
Advocates Created
Sponsor Changes Identified

“Green” Customers = CSM version of “SQL”:
• Objectively valuable: No one can contest the achievement.
• A discrete unit: It’s clear when the achievement is complete.
• Measurable: We can create a Gainsight dashboard to track our
achievements.
• Frequently achieved: We can recognize our achievements week-to-
week.
• Attributable to the CSM: No one can contest that the CSM is
primarily responsible.
#4: Invest in Data - “Green” Customers

52

Customers that move from Red/Yellow to Green/Lime in our Habits
Scorecard Measure
• Green: At least x% of licensed users are daily active users of
Cockpit
• Lime: At least y% of licensed users are daily active users (of any
part of the product)
• Yellow: Some usage, but not daily actives
• Red: No usage of Gainsight in the last week

4 Objectives in a Risk Framework:
• Address early warning signs
• Incorporate CSM judgment in assessment of risk
level
• Common view of risks across levels of the org
• Hold other departments accountable for contributing
to customer success
#4: Invest in Data – Risks Resolved

Support Company Sentiment Habits
Exec
Owner
Director of Support VP Customer Success VP Customer Success VP Customer Success
Definition
What volume of open
support tickets does
the customer have,
and what’s their
priority and duration?
Is there a change at the
company that will affect
the customer’s use of
Gainsight?
Is the customer generally
happy? (e.g. NPS)
Is the customer using
our product in a
significant, sticky way?
Readiness Implementation Product Bugs
Exec
Owner
VP Sales VP Services VP Product VP Engineering
Definition
Was the customer
ready to purchase
Gainsight?
Is the implementation
project plan on track?
Does the customer
require a product
enhancement?
Does the customer have
a high volume / priority
of bugs open?
1 2 3 4
5 6 7 8

59
#4: Invest in Data - Risks Resolved

#5: Budget to Benchmarks
15 Cents of
Fully Loaded CSM Cost
per $1 of ARR
>
Accounts /
CSM
$ ARR /
Account
Salary + Overhead /
CSM
x
Pacific Crest Survey 2015 showed that median spend on renewals is $0.13 per $1 of ARR

#6: Focus on What’s Scalable
Exec
Sponsor
Designated
CSM
Pooled CS
Support
Automated Outreaches
Content
Community
Product
“Automate your job”

Seed
“Unicorn” CSM
Series A
+ Support
+ Onboarding
+ Operations
Growth-stage
+ Customer
Marketing
+ Renewals
+ CS Architects
+ Premier CSM
Pre-IPO
+ Training
+ Advisory
Public
+ Partners
+ Managed
Services
+ Domain Experts
#7: Plan to Specialize

Premium +
Premium
Standard
#8: Assign Value to High-Touch CS
Client Strategy Manager
4 EBRs / year
Onsite Strategy Workshop
Change Management
Customer Success Manager
2 EBRs / year
Strategy Session
Best Practices Workshops
Pooled CS
1 EBR / year
Strategy Webinar
Content

#9: Develop a Repeatable Methodology
Predictable Revenue Predictable Value Delivery
Sales Development team Customer Success team
New Business ARR Renewal ARR
SQLs Green Adoption

#9: Develop a Repeatable Methodology

Responsibilities Sales Operations CS Operations
Data
Reporting • Share sales results and forecasts • Share renewals/upsell results, forecasts
Analysis • Analyze leading indicators for sales • Analyze leading indicators for renewals and upsell
Processes
Engagement process
• Determine timing and content of meetings to
optimize conversion
• Determine touchpoints for CSMs to drive adoption
and NPS
External communication • Coordinate with marketing • Manage 1:M communications
Risk management • Provide visibility to at-risk deals • Detect early warning signs for at-risk customers
Opp. identification • Identify top accounts • Identify top customers for upsell
X-functional coordination
• Coordinate processes across teams to help
meet sales objectives
• Coordinate processes across teams to help deliver
on customer needs
People
Team structure
• Manage AE territories, account segments
and forecast hiring needs
• Tier customers, assign to CSMs, re-distribute load
and forecast hiring
Compensation • Determine structure and quotas • Determine metrics and targets
Enablement • Create collateral and data for AEs • Provide collateral and data for CSMs
Systems Technology • Implement and manage tools for sales • Implement and manage tools for CSMs
#10: Invest in Customer Success Operations

70
Building a Best-in-Class
Customer Success Team

Barr Moses
Senior Manager of Business Operations
bmoses@gainsight.com

Agenda
• Define Metrics for Customer Success
• Track progress and celebrate achievements
• Segment Your Customer Base…
• …and structure your CSM team accordingly
• Operationalize Customer Success
• Create Standard Best Practices for Customers Success
Managers

Agenda
• Define Metrics for Customer Success
• Track progress and celebrate achievements
• Segment Your Customer Base…
• …and structure your CSM team accordingly
• Operationalize Customer Success
• Create standard Best Practices for your team

Questions to Consider
• Do we track Retention or Renewal Rate?
• What does Healthy Usage mean for us?
• What is our target cost of CSM / ARR managed?

Executive and Board Dashboards

Week-over-Week Renewal Rate
Gross Renewal Rate
Net Renewal Rate

Week-over-Week Renewal Rate
Gross Renewal Rate = ARR secured / ARR due
Net Renewal Rate = ARR secured + Upsell / ARR due

Renewal, Upsell, ARR

Upsell Drivers

Usage: Page Views and Active Users

Customers by Top Usage

Features by Top Usage

Growth in Healthy Users

Burning questions:
• Why do we segment customers? What are the objectives, design principles?
• How do our customers segment and structure their engagement models?
• How do companies use one-to-many engagement models at scale?
• How does Gainsight segment their customers?
• How do you implement a segmented engagement model?
Segmented engagement models
1
2
3
4
5

Objectives and Design Principles
In order to execute at scale, segmentation is critical to deliver what each type of customer needs
in a manner that’s scalable for the company.
Customer Needs
Value to company
• What do our customers need in order to be successful?
• Are there themes across these groups?
• What is the value of each type of customer to us?
• How can we affordably serve each segment?
1

Segmenting the customer base is essential to understanding the key breakpoints in your customer contact and CSM
coverage model strategy. The below charts show the segmentation strategy most commonly deployed within the
industry.
Customer Base Segmentation Strategy
2 Tiers 20%
3 Tiers 56%
4 Tiers 18%
> 4 Tiers 7%
Tier
Allocation
75%of
respondents tier their
customer base as
part of their contact
strategy
Key segmentation considerations:
• Expected annual customer touch points per
segment
• Target net renewal rate performance for each
segment
• Potential revenue or expansion customers in
low-$ segments
• Expected cost-of-sale % per segment
• Avg. contract size per segment / segment
volumes
• Areas for efficiency gain
23%
30%
47%
Other / Combo
ARR $
Customer ## of customers
Revenue
Other / combo
Source: Gainsight customer success benchmark report, 2015
2

1:Many Tactics
3%
61%
29%
3% 3%
Weekly Monthly Quarterly Bi-annually Annually
CSM Email Marketing Cadence
5%
15%
33%
47%
50%
52%
65%
Other
None
User Groups
Events
Online Community
CSM Email Marketing
Webinars
Deploying a robust one-to-many strategy is key not only to drive new sales by efficiently expanding your market
reach, but to drive product adoption and customer retention. The below charts show the most popular strategies
being deployed today.
Source: Gainsight customer success benchmark report, 2015
3

Gainsight Customer Segmentation
We carved out 3 segments based on revenue (ARR) and whether or not a customer represents a
strategic relationship.
Strategic Enterprise / Mid-market SMB
Overview
Present a major upsell opportunity
or help us open up a market for a
new use case for Gainsight
Customer above a certain ARR
threshold that are not strategic
Customers below a certain ARR
threshold that are not strategic
Customer
Needs
• Need guidance in shaping the
evolution of their CS
organizations
• Want us to support the change
management effort
• Already experts in growing their
team, but need guidance in
executing their CS strategy
within Gainsight
• Starting to build their CS teams
and want to digest all the
information they can get on best
practices
Value to
Gainsight
• Highest potential ARR customers
• Huge expansion potential
• High retention rates
• Strong brand value
• Significant ARR & high retention
rates
• Fast sales cycle
• High advocacy rate
• Substantial product feedback
4

Implementing a Segmentation for Your
Customer Base
Five considerations for implementation:
1. Ensure consistency in messaging from marketing  sales  CSM
2. Limit “transitions” across segments (ideally, never)
3. When transitions are necessary, emphasize benefits of how the new model matches specific
needs of the customer
4. Consider bundled prices for CSM support
5. Encourage innovation: How can we scale every touch point?
5

Demonstrate the value you deliver
to your customers to promote
adoption, advocacy, and growth
DEMONSTRATE
Value
5 Pillars of Customer Success
Build a consistent, effective customer
journey through one-to-many strategies
and high-impact, timely one-on-one
interactions
OPERATIONALIZE
Customer Lifecycle
Build a world-class organization by
measuring impact and improving
cross-functional coordination
ENABLE
Cross-functional Visibility
Make it easy to spot and act on
opportunities for growth and candidates
for advocacy
DRIVE
Expansion & Advocacy
Proactively identify signs of
customer risk and collaborate
cross-functionally to address
issues
MANAGE
Customer Risk

Demonstrate the value you deliver
to your customers to promote
adoption, advocacy, and growth
DEMONSTRATE
Value
Build a consistent, effective customer
journey through one-to-many strategies
and high-impact, timely one-on-one
interactions
OPERATIONALIZE
Customer Lifecycle
Build a world-class organization by
measuring impact and improving
cross-functional coordination
ENABLE
Make it easy to spot and act on
opportunities for growth and candidates
for advocacy
DRIVE
Proactively identify signs of
customer risk and collaborate
cross-functionally to address
issues
MANAGE
Customer Risk
Today’s example

CSM Touch
(Automated
CTAs)
Tech Touch
(CoPilot)
New Customer Onboarding Adoption
Seasoned
Customer
1:many
welcome email
1:many emails
boosting
adoption +
best practices
1:many nurture
(e.g. product
releases)
1:many email
with project
plan + training
content
Schedule kick-
off call and send
gift basket
EBR every X
months
(depends on
the segment)
Detailed
playbook 90
days before
renewal
Schedule
check-in +
trainings with
customer
Best Practices to Define
Your Lifecycle Touches
1) OPERATIONALIZE
CUSTOMER LIFECYLE

Designing Your Lifecycle Strategy
• What are your customer lifecycle stages?
• How will lifecycle touches vary by customer segment?
• What types of 1:many communication (emails, blogs, webinars) will be most
effective with each segment?
1) OPERATIONALIZE
CUSTOMER LIFECYLE

DEMONSTRATE
Value
OPERATIONALIZE
Customer Lifecycle
ENABLE
DRIVE
MANAGE
Customer Risk
Today’s example

Questions?
Allison Pickens
VP of Customer Success
@PickensAllison
apickens@gainsight.com
Barr Moses
Senior Manager
Business Operations
bmoses@gainsight.com
Lincoln Murphy
Customer Success
Evangelist
@lincolnmurphy
lmurphy@gainsight.com

Make 2016 the Year You Conquer Customer Success

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