In this episode, we're joined by Emilia D'Anzica, customer success (CS) expert and founder of Growth Molecules.
Emilia shares her thoughts on the evolution of customer success, its role in the modern cloud market, the biggest struggles facing enterprises today, and how cloud revenue leaders can become more closely aligned with their customer success organizations.
On the modern cloud economy and the need for customer success
"It starts with having to educate your clients who are used to on-premise platforms. How can you leverage the cloud experience to gain information like usage and where they're stumbling? They've already fallen in love with your product – you're on a honeymoon. But then what? That's where CS comes in." (04:02)
On the role of account-based marketing (ABM) in customer success
"You have to be using account-based marketing strategies. And that often means having an account management team that collaborates very closely with customer success, and has a journey map with key touch points." (10:20)
"You need to incorporate all the different personas – understand their pain points and how you can make them look like a hero." (09:41)
On today's biggest struggles for the top cloud companies
"Some of the big companies – what they're doing is buying technology to fix or bandaid problems." (11:38)
"[Another problem] is implementing technology without really understanding your customers' needs. What's in your customer success playbook? Pause, take a step back, assess, and survey your customers and your employees." (12:43)
On celebrating customer success managers (CSMs)
"I do believe that at the center of a CSM's job is to make sure the customers are renewing, and anticipate in advance if they aren't going to. That's what they should be working on – and they should be incentivized on it." (24:28)
"If [CS] can expand a customer, they should get more than one hundred percent. Why not? Sales does. Why not incentivize and celebrate CSMs the way you celebrate salespeople?" (25:12)
Michael Pollack [00:00:09] Hello, everyone, and welcome to Selling in the Cloud, a podcast about the business of cloud sales and marketing, brought to you by intricately – the authoritative source product adoption usage and spend data for sales and marketing teams. I'm Michael Pollack, and I'm here with Sarah E. Brown. And we are your co-hosts.
Sarah E. Brown [00:00:39] Michael, welcome to today's show.
Michael Pollack [00:00:41] Sarah, I'm stoked to be here.
Sarah E. Brown [00:00:42] Likewise. In this episode, we're speaking with Emilia D'Anzica, who is an experienced customer success leader who's led customer success at companies like Walk Me and currently help some of the top cloud companies in the world grow their customer success teams and increase their revenue. And today, we're really looking forward to getting into those topics with her.
Michael Pollack [00:01:00] Emilia, thanks for joining us.
Emilia D'Anzica [00:01:01] Thanks, Michael.
Sarah E. Brown [00:01:02] So tell us a little bit about your background – brief history of how you got to be where you are today as a customer success leader advising top companies around the world.
Emilia D'Anzica [00:01:11] Well, it certainly didn't start in customer success because that word didn't exist, when I even went to university. I have a degree in Canadian studies and a minor in social history, but I fell into tech just driving to San Francisco on my way to Santa Monica and fell in love with the dotcom boom and got my first job working for the Slavet Brothers in San Francisco for a company called Guru.com. And I never looked back. I just became really obsessed with technology and the customer experience. And I think the customer side really stuck with me from my childhood. My parents had a pizzeria, six children, a farm where we picked all the vegetables to put on the pizzas. And my job was to either serve the customers or clean the floors. And I just really love serving humans and having that interaction. And so customer success seemed to fit best with what I love to do the most. That's how I got to being where I am today.
Michael Pollack [00:02:20] First of all, that's probably the best background I think we've heard from any guest. And so I love that. And I have so many questions I would love to pepper you with about pizza in the Bay Area and what your opinions are on various dough types and oven temps. But I'm not going to do that. That's probably an episode for another podcast and another lifetime here. But on our show, we talk with leaders across sales and marketing the cloud space. And the biggest thing that comes up again and again is this migration to cloud from what was once upon a time buying a piece of software, like you bought it once and that was kind of the end of it. The thing that comes up again and again is the role of customer success in recurring revenue businesses. So I would love for you just to articulate why do you think customer success matters and what does it do? And as a bonus question, just how the modern cloud economy today has unlocked and created the importance of customer success as it exists today.
Emilia D'Anzica [00:03:14] Yeah, I think if you think about a very large company, like we'll up SAP, for example, they had to educate their customers on how to be cloud customers. They were used to on-premise platforms. If you think about Adobe in 2013, when they told their clients, we are no longer going to sell you a platform where you have a license for one computer; they had to take the time and build a customer team to educate their clients on how to be a cloud customer. And if you go look at the history of Adobe and where they were from a financial perspective in 2013, and then you look at them even at 2018, their revenue stream has skyrocketed. So I would say it starts with having to educate your clients who are used to a traditional way of on-premise platforms to how can you leverage the cloud experience so that information you can get from data, your client usage, where they're stumbling with your products – using that to make your company better is really powerful. And that is where customer success comes into play. Once the sale happens, then what? They've fallen in love with your product. You're on a honeymoon. But then what? And that's where customer success is really powerful.
Michael Pollack [00:04:41] I have a question on that. So you point out, rightfully, that a lot of customer success happens after the deal happens. In your point of view, is that a time and place comment that, "hey, customer success happens after the deal is closed"? Does customer success happen from the first interaction? Where does customer success begin and end? Can you comment on that?
Emilia D'Anzica [00:05:05] Yeah, I recently spoke at a conference about this. Customer experience starts for your clients, when they have a pain point. They may not even know your product exists, but they have Google and they can search for how to alleviate my data pain point, for example, that they're experiencing. That is customer experience. Customer success can start during the trial. In fact, I'm working with a company right now and their trial is where 60% of the onboarding actually occurs so that the customer or the prospect has so much impact from the experience that their conversion rate is over 60% for anyone in the trial.
So that, to me, is customer success and customer success needs to be involved before the opportunity's closed. But in the more traditional senses, where there isn't a freemium model or a trial, then I would argue it typically starts when the opportunity is closing and you're educating your sales team on the key fields. You need them to fill in that CRM so that the customer can be engaged with in a meaningful way and quickly with the customer team. That's where I would say would start.
Sarah E. Brown [00:06:26] I'd love to dive into this idea of revenue and where customer success can influence it. And you've been in this industry for many, many years and seen the evolution. I'm curious, in 2021, what role does customer success have in revenue generation?
Emilia D'Anzica [00:06:42] I would say more than ever, customer success is responsible for growing a company. If you think of the first deal you're selling to a client, let's say it's for $25,000 – that $25,000 will take you through the first 12 months. But for you to recoup the money it takes for you to build the platform and actually start making money, it might take you two years or three in some cases. So you need to think about how are you going to get the client to stay? And actually see impact year over year to the point where they're not even looking at your competitors. Because if you think about how many people are going to your website and looking at those brands and then calling them up and saying, hey, I noticed you use X product, it really speaks to how important customer success is. The revenue your customer success managers can influence is from the minute that deal's closed.
And look, customers have buyer's remorse. I've had it several times in my career where I purchased a product. It's my reputation on the line. It's going to impact my team. And suddenly I'm having buyer's remorse and looking through a contract to see how long I have until I can get out. So they do play a critical role on revenue. And even if you think of companies like RingCentral, when they spoke at SaaStr last year before everything shut down, the CEO talked about how the CS team was responsible for over 40% of the revenue. And that's because they're so responsible for that growth and ensuring that the customers are coming back and renewing.
Michael Pollack [00:08:30] You raise a good point there and something we've now had a number of guests talk about, and some of it comes up on this podcast quite a bit is this notion of ABM and as it pertains to CS, the importance that CS has in the various accounts that they're deployed into, if you look at ABM, is kind of an evolution around, I'd say it's a combination of tactics and data and strategy for sales and marketing to work together. Is there a similar component that CS uses or is ABM an extension of CS, or is this an extension of ABM? How do you think about that alphabet soup there? How do you counsel your clients to approach that?
Emilia D'Anzica [00:09:05] Yeah, I worked on a project around ABM last year with an ABM expert. She was responsible for ABM for sales and marketing, and me with the customer team. And what we realized is that they're very much dependent on one another. The marketing team and sales teams were selling to certain personas. But the customer success team was interacting with different personas. They weren't necessarily the buyers, but they were consuming the product. And so we quickly realized as we were building that ABM strategy across the whole customer lifecycle, you really need to want incorporate all the different personas, understand what are their pain points and how do you make them look like a hero. That's the first point.
The second is not enough companies take the time to invest in account-based marketing for their current customers. And like with the RingCentral, where the CEO gets up and says 40% of the new revenue coming in is from customer success, that's really powerful. They're a billion dollar company. Forty percent of that billion of new revenue is from current customers. How are you doing that? You have to be using account-based marketing strategies. And that often means having an account management team that collaborates very closely with customer success and has that customer journey map with key touch points of, when to proactively reach out to a customer, when to understand where's there an expansion opportunity, where's there cross-sell, upsell – those kind of things are really important as well as, oh our champion just left. There needs to be some sort of trigger to reach out. That's also account-based marketing for customer success.
Sarah E. Brown [00:10:59] You know, Emilia, you work with today's leading companies, including several of the top cloud companies in the world. I'm curious, what are some of the challenges these teams are facing and what are you seeing across the industry that people are struggling with?
Emilia D'Anzica [00:11:13] So one is technology. Large companies who are publicly traded, very successful, have come to me and said, we're struggling. We bought all this technology and we don't know how it's talking to each other. And our teams are now broken. They're no longer communicating in a way that's helping our customers. And we need help identifying where we can improve process and strategy. And so I would say some of the big companies, what they're doing is buying technology to fix or bandaid problems. So taking a step back and saying what's my customer success playbook and building that customer success playbook and identifying the key moments where you can optimize tech touch with technology is far more powerful than saying, here's your budget. You have to spend it before the end of the year or you'll lose it and go pick some technology. And I'm not making that up. I was at a conference last December and I sat at a table with a woman at a again, a publicly traded company. And I said, you know, what are you doing here? And she said, I don't know. All I know is I've got to buy some tech before the end of the month because I'm going to lose this budget. And then for next year, I won't have it again. So she was going to pick a customer platform just to be able to spend that money. And that's such a wrong strategy.
The other is implementing technology without really understanding your customers' needs and again, building that playbook. So pause, take a step back, do an assessment, survey your customers and your employees. Those employees on the ground know way more about what your product team should be building than your product team because they're talking to the customers every day. So I think those are very common challenges that the larger you get, the bigger those problems get because leadership becomes so far removed from the voice of customer.
Michael Pollack [00:13:22] That example you share. Well, I feel like most people listening want to laugh at that. It's so pervasive and so common. It's terrifying. And I just like a personal bent, just for a second, I'm here in the Bay Area, I know you're in the Bay Area. In the Bay Area, there's a little bit of like an overemphasis on technology is panacea for everything at times. And I'm a firm believer that as the quantity of communication goes up, the quality tends to go down. The more systems we're trying to pay attention to, the less we can really pay attention to and understand what's going on. And I think that synopsizes the challenge that many businesses have today, particularly ones that are buying tons and tons of SaaS software. So you're definitely striking a nerve with that one where I agree with you tremendously. And so to come to a question here, one of the things we talk with guests on the show about quite a bit is data, right? What data really matters in your role? In the CS function, there's increasingly a push, at least from my side or my observation, of net revenue retention as being kind of a key metric to kind of rule them all. I'm curious, do you agree with that? Do you think there's other metrics that matter? And then the follow up question that I want to give you now to also ponder is on the comment of RingCentral and the 40% of revenue there. Is 40% awesome? Could it be better? Obviously, I know that's good, but I'd love for you to comment on both those things.
Emilia D'Anzica [00:14:44] Yeah. So I do think net revenue retention is a key indicator. Both Dave Kellogg and I spoke at SaaStr this past fall, and little did we know that we were both talking about the same thing. But it is a huge indicator. And when you're thinking about raising money, for example, if you're a nonpublic company, that's what your investors, your VCs are going to ask you about. So you better have strong metrics there. For SMB companies, I would say, you know, they're looking at around 90 for enterprise and bigger. You better be closer to a hundred. Really good. When I think of TalkDesk, just for example, one of the women leading customer success, she talked around 130% growth you need to be thinking about. One of my clients, I was in their Salesforce looking at their dashboards and I saw one of the reports saying you need to be at 150, that's the goal we want to be at this year, that's our 2021 goal. So companies are getting really aggressive around their goals and it's central to customer success.
Michael Pollack [00:15:53] Just to pause you for a second there. Just so our audience is following along. When you say one 150%, what that means is for every customer you have today that's paying you one dollar, the goal is by the end of this year to get them to pay you $1.50?
Emilia D'Anzica [00:16:04] Exactly. And how do you do that? Well, you can't just do it with one product, you have to be constantly thinking about building your products, but more products for your customers to consume. But how can you do that if you don't have data to understand what your clients want? And that's hopefully going to answer more of your second question. Companies who are building platforms and just putting add-ons without really understanding what the client needs, are going to sell a lot of the product. If you think of book writers, unless they've gone and interviewed people and understood what's missing out there, they've looked at the data online to see is that keyword even being searched on or are there any books on it? It's the same thing with your clients. If you're building products or trying to sell to a group of people who don't need the product, you're really wasting time and money.
So things like – I know people don't believe in net promoter scores, there's a huge debate around it – but I think it can be the beginning of conversations with your clients. I've worked on projects where it's had huge impact for the leadership of a Fortune 50 company for me to present. I just interviewed 56,000 of your customers. Here's your NPS score. I called a hundred of them around the world and here are the deep insights that I was able to extract from that data. And you can't get that unless you're really spending the time with your clients and understanding what they need. So I would say your clients are the second piece of the data that you really need to understand to grow your business.
Michael Pollack [00:17:50] You make a comment in there and something we've thought about in our businesses. I've said it jokingly, but sometimes I do wonder, is the future of cloud sales or cloud purchasing one that maybe sales doesn't exist for? And that effectively, CS is the whole thing. If you think about cloud-based products, that CS as kind of the beginning and the end, and obviously marketing plays a piece in that – I understand in an enterprise construct, of course, what sales does and the enormous value sales adds. But do you see a future in cloud products where sales is rolled to some extent is subsumed by some of CS? And is that where products like maybe RingCentral or TalkDesk or some of these examples you shared – is that where it's going?
Emilia D'Anzica [00:18:35] I believe that there might be a slightly different shift. A few years ago, customer success was this fight between leaders where people were saying, no, it's not the customer success manager's job to sell. And then there are people on the other side like me saying, what are you talking about? Of course it is. Your customer success manager is the face of the product. If they're not delivering impact to the client, how can you be looking for expansion opportunities? So, of course, it's their job to sell and you should be incentivizing them to, just like a sales manager as. And so I see more and more companies recognizing the fact that customer success is a sales position. But the client, the prospect, is not still in a curiosity stage. They've now developed a trust with you. And so your sales play with that client is different. And so while I believe salespeople will always be important, they hold a very important job, they know how to ask very strategic questions for prospects, and they know how to persuade customers or clients to select their platform. What customer success managers, how they sell, is through trust and enabling their customers to be successful with the platform. And when I see that, I mean, how do I make my client look like a hero to their boss and how are they able to recognize more revenue, save time, be more efficient with your product, then a CSM is doing their job in selling and renewing. So I think there will be always some sort of divide. But I do believe they're merging and more and more customer success professionals are no longer shying away from sales.
Sarah E. Brown [00:20:35] So our audience of cloud revenue leaders, you know, is interested in thinking about alignment across departments. And I'm curious if you could give any advice to other cloud revenue leaders who are listening to understand how to better work with their CS orgs. What would you advise them?
Emilia D'Anzica [00:20:51] Well, I'm biased here, but I would say a lot of customer success managers aren't enabled. Companies that I've worked with where I've done customer success education, the CSMs have been announced to that they're now responsible for renewal. Can you imagine asking a sales person to suddenly start doing customer success without any training? How is that going to go? It'll be a disaster. They'll quit. Or if you ask a sales manager to set up their own Salesforce platform, it's not going to happen. They don't know anything about the back end of a sales platform. So, they get sales enablement and sales ops, and that's what I hope the audience here is thinking about. How are you enabling your customer success managers to sell more, to analyze data, to leverage data to help their customers better use the product? And then how are you implementing technology in a thoughtful way to make your CSMs more efficient and so that they have more time to focus on what really matters? And that's working with the client to adopt the platform, see impact from the platform and be that voice for your company. When someone rings them on LinkedIn and says, hey, do you have a few minutes? I'm thinking about buying this product. And I noticed you've mentioned a few times that you use it. What is that person going to say when you're not in the room? That's what CSMs should be focused on, having high impact in the customer experience.
Michael Pollack [00:22:34] I think that makes a lot of sense. And I guess I'd ask a question that I'm imagining is on a lot of our listeners' minds and something many of our customers are dealing with, which is, you made a comment that CS should be selling, right. And I would argue that everybody in a business, any business, in some sales capacity, in some kind of construct – but I'm curious, when you think about incentivizing CS to sell, my belief, generally, is CS owns the relationship and I would agree with your comment. It's about trust. That's that's what that person has. And there's enormous value in that. And protecting that is critical. Is it your point of view that CS should be incentivized on the dollars they generate or on the opportunities they're able to hand over to sales or on the the health of the relationship? What is your point of view? Is the right way to balance to counterbalance all those pieces?
Emilia D'Anzica [00:23:24] I would say there's no one size fits all, so we'll just start there. But what I will say in general, what I found to be very impactful for a company is, one, the core reason they should be incentivized is to get that renewal, right. If you don't have a recurring revenue business, there's a problem. So CS is responsible for that. Another thing is if your company needs – when I was working at Walk Me, we really needed more case studies and testimonials for particular platforms that Walk Me lived on. And so I started incentivizing my team; for every quarter, a certain percentage of their bonus was based on, hey, did you help us get X number of referrals, references, case studies, in that quarter? So I think because we needed that, then that was part of the incentive. And I think it's OK for these programs to change as your company needs change. But I do believe at the center of a CSM's job is make sure the customers are renewing and anticipate in advance if they're not going to, what do we do about it? And I would say start the renewal conversation at kickoff, right. What does success look like in a year from now? That's what they should be working on and that's what they should be incentivized on to get that renewal in. And it starts at the kickoff. And then everything else is just a smaller portion. So if it's an 80/20, I would argue that 15 minimum, 15% of that bonus should be in terms of renewals and then for expansion, hey, if you can expand this customer, you can get more than a hundred percent. Why not? Sales does. Why not incentivize and celebrate those CSMs the way you celebrate salespeople.
Sarah E. Brown [00:25:27] Emilia, thank you so much for joining us. It's been fantastic having you with us on the show. For those who are listening, who want to learn more about you and your work, where should we direct them to?
Emilia D'Anzica [00:25:36] They can go to my website growthmolecules.com, or they can email me at firstname.lastname@example.org.
Sarah E. Brown [00:25:44] Fantastic.
Michael Pollack [00:25:45] Thank you for joining us today. This is a great conversation and we look forward to doing it again soon.
Emilia D'Anzica [00:25:49] Thanks for having me, Sarah and Michael.
Michael Pollack [00:25:52] Well, that's it for us. And this episode may be over, but we can continue the conversation on Twitter with the hashtag #SellingInTheCloud. On Twitter, I'm @MRPollack.
Sarah E. Brown [00:26:02] I'm at @SEBMarketing.
Michael Pollack [00:26:04] Thanks to everyone for joining us for this episode of Selling in the Cloud, brought to you by Intricately, the authoritative source of digital product adoption, usage, and spend data for cloud sales and marketing teams, if you like the show, head on over to iTunes or wherever you listen to podcasts. And please give us a review. We appreciate it. Until next time!