This statement was made by Richard Owen, CEO of Satmetrix, during a keynote at Totango’s Customer Success Summit, Feb 26-27, 2017 in San Francisco. This blog offers my insights into the key topics and ideas coming out of the conference. If you attended the conference and have additional insights, please leave them in the comments below.
If you didn’t make it to the event, I’ll help you experience the conference faster than a jackrabbit hopped up on caffeine. If you don’t like reading, listen to this on Reduce ChuRn Radio.
The overall two main themes from the conference are:
Let’s dive into bots first. I’m not talking about bed bugs, although there is a rumor that those are on the rise. If you want to hear about my scare bed story during my very first AirBnB stay, you can listen to the podcast.
I’m talking about chat bots and those cute little programs in software like Slack that you can ask to do your chores. Bots were mentioned a lot and the host, Totango, introduced their new bot called “Zoe.”
Zoe is a conversational interface that organizes the company around the customer by enabling company-wide safe access to customer data, volunteer participation, and meaningful impacts. This is not a tool for your customers to use. It is for internal staff to easily and quickly access information about the customers. They demoed Zoe Slack by asking it to show information about a fictional enterprise. Then they asked about what is important to ensure the enterprise renews. Zoe found experts in the organization to join the discussion. If you want to learn more about this new capability, you can visit Totango’s website.
In the keynote panel discussion titled “The 2020 Chief Customer Officer, all the speakers seem to agree that chat bots are in our future. The quote I wrote down was “The future looks like chat bots for some of the routine interaction with customers, while Artificial Intelligence will help us understand the customer and how to engage with them.” The panel also predicted that “by 2020 we will talk to a bot more than our spouse!”
Claire Burge, Founder of “This is Productivity” provided a different opinion about the future of bots in one of the first conference keynotes titled “The Future of Work is Chaos.” She said people are different from artificial intelligence because of empathy and the ability to listen and question. Claire goes on to say we need to do better at our interactions with customers. Based on what I heard her say, she is basically saying CSMs need better executive presence to engage, align, inspire, and move them to action.
Let’s talk about the second major theme of the conference, which is customer success must produce revenue for company sustainability. Many people would argue that if customer success reduces churn then they are already growing revenue for the company. A few different speakers attempted to make that case that keeping churn low is going to be a standard duty of customer success just like answering support calls is a duty of support. Beyond churn reduction, they said the SaaS business model isn’t sustainable unless customer success can take on a new revenue producing role.
Interestingly, I interviewed Mikael Blaisdell, founder of the Customer Success Association, while at the conference and asked him about the future of customer success. The very first thing he said supported this theme from the conference: “Often company executives think customer success is only about fighting churn. If they do, we are losing the battle. To stay relevant, we must create revenue for the company.”
Mikael’s point is that once customer success is implemented, that level of churn becomes the baseline and executives will see the current level of churn not as something amazing and new, but standard operating procedure.
Mikael’s final statement summarizes his point: “Customer success needs to stop thinking so much about churn fighting and focus on increasing adoption. Raise your focus and tie your plays to new money.”
Monday’s final keynote by Thomas Lah, Executive Director at TSIA, made a strong case that SaaS companies are doomed if they don’t turn customer success into a profit center instead of a cost center. Their research indicates “49% of companies monetize customer success because the business model where Customer Success costs all come out of CoGS isn’t profitable.”
In the future, it appears it won’t matter what your churn rate is because your business won’t be sustainable if customer success isn’t creating strategic value for customers that increases revenue for your business. Thomas Lah and TSIA is not saying customer success isn’t important or shouldn’t fight churn. But you also must do more. What does more look like? One idea I offer is to offer your customers a strategic benchmarking service. Since your SaaS platform probably collects all types of important information related to the business success of your customers, your division is uniquely positioned to offer a report with competitive advantage insights. If you want to learn more about how to do something like this, contact us.
Other speakers touching on this topic include Don Peppers, Founding Partner, CX Speakers. He gave a keynote on Tuesday morning titled “Three Often-Overlooked Customer Success Strategies.” His main point is to “eliminate friction” by being 1) reliable, 2, valuable, 3) relevant, and 4) trustable. Eliminating friction is a big economic principle I remember in my business classes in college, many years ago.
If I remember the economic friction concept correctly, the point is that economic gains can be achieved by eliminating hard and difficult interactions inside businesses, between businesses, in an economy. A classic example of this is a business that builds something, say a car. They utilize a parts supplier that is causing delays and friction in the process of rolling a new car off the line. This friction is dragging down economic returns of the car company.
While Don didn’t come out and say customer success must start producing new revenue, his point about customer success needing to reduce friction is still making the point if you subscribe to the elimination of friction as an economic principle.
Here is a simple example. If customer success is monitoring usage and knows a customer is hitting a limit that requires a higher featured plan, a proactive Intercom bubble could make it extremely easy for that customer to upgrade without having to leave the app, go find the page on your website to upgrade, or stop and call customer service.
I heard a few other great interesting ideas to help you in your work.
Kia Puhm of KIA CX Consulting used a great analogy about the importance of customer journeys. She said “Building a customer journey without understanding the customer value is like asking the customer to get in a car for a road trip without telling them where they are going.” Instead, she said the better way to build a great customer journey is “After the customer tells you where they need to go, explain that you know the best route and can get them there successfully.”
In other words, be a Lyft driver.
Evan Klein, Founder of Satrix Solutions, recommended companies leave an empty chair in company meetings to symbolize the voice of the customer and remind internal staff to consider the impact on the customer.
Finally, I’ll leave you with one of the more provocative statements made by Richard Owen, CEO of Satmetrix who said: “Marketing spend is simply a tax on your business’ inability to get your customers to advocate for you.”
I would like to Thank Guy Nirpaz, CEO of Totango.
On the last day of the conference, I had my luggage at the conference for a later flight, but the conference staff would not allow me to store it anywhere. I was forced to pull my carry-on bag with me to all the sessions. Guy was receiving people in the main hallway and must have noticed my frustration. He asked if he could help with anything and I explained the situation. He told me to follow him. He took me to the Totango team room and said I could store my bag there.
I was impressed because not very many CEOs can be found out in the main hall of their conference offering their help participants. In addition, Guy would be going on-stage shortly to moderate a round table discussion. He wasn’t holed up in a room trying to prepare. He was ready and felt his best place was with his customers.