We spoke with Paul Piazza, VP of Customer Success at Webex Events, about his "Product Top 10" methodology for influencing product development. He shared insights on structuring customer success teams and strategies from his time at Gainsight and Marketo. His experience highlights the importance of aligning customer success with business goals and using customer feedback to drive product innovation.

Goals and North Star

What is the mission statement of the customer success team?

Paul Piazza's mission statement for his Customer Success teams is to understand and deliver on the ROI for both internal and external customers.

Paul states CS interacts with every part of the organization and internal customers like sales and marketing. Without a ROI, customers are not going to renew or grow.

What are the four pillars of customer success?

According to Paul’s four pillars of customer success:

1. The Product: Customer Success team has to focus on products, and be an influencer of the product. CS team should not be dictating product, but they should be a champion for the customer.

2. Nailed Handoffs: Effective communication and seamless transitions between teams are crucial. Paul stresses the need for "nailed handoffs," ensuring that information about customer status and potential risks is shared across teams (e.g., from low-touch to high-touch). This coordination helps prevent issues from falling through the cracks during transitions.

3. Data-Driven Insights: Utilizing various tools to track customer data and communications is vital for understanding customer behavior and identifying at-risk accounts. Paul highlights the importance of sharing the data with the wider organization to learn from mistakes and grow.

4. Shared Accountability: Paul believes that all teams contribute to success whether it's having a great product team, or having a great sales team. It also goes for failures. "We fail as a team, and we win as a team."

Should Customer Success teams be accountable for revenue?

Paul believes that customer success teams should be accountable for revenue. The net retention inherently includes a revenue component, making CS teams revenue-facing by default.

"If you're not revenue-facing, you're going to be a dinosaur."

As CS teams tackle the root causes of churn and customer dissatisfaction, they will impact retention and growth, which has direct revenue implications.

How to structure bonuses and incentives for the net retention goal for Customer Success teams?

Paul strongly believes the entire customer success organization should have a shared net retention goal. This includes not just CSMs, but also support, professional services, and any team touching customers in the post-sale environment. He argues that this shared goal ensures everyone has "skin in the game" to prevent churn and drive growth.

For example, if the current net retention rate is 80%, Paul typically sets ambitious goals of 90-100% for his team. This approach encourages all customer-facing teams to work together towards a common objective. Paul emphasizes that net retention should be the primary bonus goal for the entire CS organization, accounting for about 70% of the bonus structure.

By aligning the entire team around net retention, everyone is focused on addressing the top reasons for customer churn. This shared accountability encourages teams to proactively identify and mitigate potential churn risks across all customer touchpoints.

Shared goal ensures everyone has "skin in the game" to prevent churn and drive growth

Methodologies and Tools to Influence Product & Revenue

What tools and methods should customer success use to track customer data and communications?

Paul's team uses Gong for call recordings and analysis, along with health scores, to monitor customer data and communications. They have developed tools tailored for both low-touch and high-touch models, allowing them to scale efficiently while achieving economies of scale.

Using Gong and Listening to Customers

• Call Analysis: The team employs Gong to analyze customer calls, focusing on sentiment trends and frequently mentioned pain points. This data informs their high-touch strategy, enabling them to prepare customized solutions based on common issues identified across their customer base.

• Churn Identification: By examining patterns in customer interactions, the team can pinpoint recurring issues that contribute to churn. This proactive approach allows them to address these problems before they escalate.

• Advocacy for Call Recording tools: Paul is a strong proponent of using Gong in customer success organizations, having implemented it in six different companies. He appreciates Gong provides free access to call recordings for all team members.

• Team Engagement: Paul categorizes calls based on product lines, features, or engineering focus areas. He encourages product and engineering teams to listen to one or two customer calls weekly and curates relevant snippets for them. This practice often leads team members to independently seek out more calls.

Influence on Product Teams

Enhanced Understanding: Engineers have reported being surprised by customer preferences they had not previously considered, such as the color of a button they spent significant time programming. This exposure to direct customer feedback helps engineers grasp how their work is utilized and how it can be improved.

Healthy Tension: Paul emphasizes the importance of fostering a productive tension between product and engineering teams. Quantifying feature requests and their potential revenue impact has been well-received, as it illustrates the tangible results of their efforts.

Challenges

However, this data-driven approach has not been without its challenges. Sales teams, in particular, have sometimes struggled with the new methodology. They find it challenging to justify feature requests based on quantifiable data rather than anecdotal evidence, which can complicate decision-making processes. This resistance highlights the need for a balanced approach that considers both data-driven insights and the qualitative understanding that sales teams bring to the table.

Despite these challenges, by leveraging Gong's capabilities, Paul's team not only enhances their understanding of customer needs but also drives significant improvements in product development and customer success strategies.

How can Customer Success influence product development?

Paul's "Product Top 10" methodology is an effective approach to influencing product development based on customer success insights. Here's a breakdown of the process:

Gathering Data

Paul leverages his position as the customer success team leader to collect comprehensive data from various sources:

• Customer feedback

• Sales information

• Adoption metrics

• Revenue data

Having access to a diverse dataset allows him to create a more complete picture of customer needs and product performance than what's available to other departments.

Collaborative Analysis

The process of creating the "Product Top 10" list involves both qualitative and quantitative elements:

1. CSM Input: Paul meets with all Customer Success Managers to gather their sentiment and insights about customer needs and pain points.

2. Data Corroboration: He then supports or challenges these observations with quantitative data.

3. Multi-faceted Analysis: Paul examines the information from various angles, considering:

   • Number of customers affected

   • Potential revenue impact

   • Frequency of issues

Interestingly, these different data points rarely align perfectly, providing a nuanced view of customer needs.

Creating the "Product Top 10" List

The final list is categorized into three main areas:

1. At-Risk Product or Churn Reasons

2. Customer Logos

3. Revenue impact

Presenting to the Product Team

Paul presents this list to the product team, not as a directive, but as valuable input for their decision-making process. He emphasizes:

• The potential revenue impact of addressing (or not addressing) these top issues

• The balance between customer needs, revenue potential, and development feasibility

Influencing Product Development

By consistently applying this method and holding the product team accountable, Paul effectively influences product development to align more closely with customer needs and business goals. This approach ensures that the product team has multiple perspectives to consider when building their roadmap, ultimately leading to better-informed decisions, improved customer satisfaction, and driving revenue growth.

What is an example of customer success influencing product?

Paul believes it is not essential for all teams to align perfectly; instead, the focus should be on providing insights that can shape the product roadmap. By quantifying customer feedback—such as requests for specific features like APIs—Paul can demonstrate how these gaps affect customer satisfaction and ROI.

For example, if customers cannot integrate their Salesforce with the marketing platform due to missing API features, it creates a substantial issue. Especially when the competitor can. Coupled with the Gong snippets and contract value of the customers behind this reason, this data-driven approach allows Paul to effectively advocate for product enhancements that meet customer expectations and respond to competitive pressures.

The product roadmap is evaluated quarterly to support strategic planning and prioritization based on sales and engineering input. Paul emphasizes the collaborative process where product engineering teams use sales feedback to identify high-impact features that minimize customer pain points. Concentrating on high-impact features will maximize resources and enhance value. He also highlights the need for ongoing communication about customer churn and retention to proactively address potential losses and improve the product.

Proactive Churn Prevention Strategies

What should the customer success team do after the churn analysis or the “Product Top 10” customer feedback?

“Identification without action leads to customer churn.”

If a problem is recognized but not addressed, customers are likely to leave. For instance, if a support team notices a customer has called multiple times about a buggy app, but the CSM is unaware, this disconnect can result in churn.

Once an issue is identified, it should be integrated into the CSM's playbook. If the CSM is aware of upcoming calls, especially one related to renewal, they can proactively address potential issues. For example, during a renewal discussion, the CSM might say, “I’ve identified nine challenges you’ve faced, but we’ve increased our engineering resources to resolve them.” This approach mitigates potential problems before they escalate.

“I’ve identified nine challenges you’ve faced, but we’ve increased our engineering resources to resolve them.”

Additionally, CSMs can use these insights to identify upsell opportunities. If a new feature, like an API, is being developed and could benefit the customer, the CSM should gauge interest early in the renewal process. This proactive communication can lead to successful upsells.

In summary:

• Identify Problems: Recognize issues before they escalate.

• Proactive Communication: Inform CSMs about critical issues before renewal discussions.

• Upsell Opportunities: Use insights from customer interactions to identify and pursue upsell potential.

• Team Coordination: Ensure all customer-facing teams share information and work towards common retention goals.

Companies can reduce churn and enhance revenue growth by fostering a culture where everyone shares responsibility for customer retention and satisfaction. 

How can customer success managers identify at-risk customers?

To identify customers at risk of leaving, Paul stresses the importance of truly listening to them. This means paying attention to their behaviors during interactions, not just their words, and staying in touch with executives as renewal dates approach. He also believes it’s crucial to share relevant information on potential risks.

"listen to what's being said by customers, not just what customers are saying."

Paul trains his team to "listen to what's being said by customers, not just what customers are saying." This includes observing customer demeanor in meetings—looking for signs of disengagement—and assessing the engagement levels of decision-makers, especially whether key executives seem distracted.

• Is the customer leaning in during conversations, showing engagement?

• Is a key decision-maker, like a director, distracted by emails or their phone during important discussions?

• Pay special attention to executive engagement as renewal dates approach

• If an executive seems disengaged close to renewal, inform the renewal team immediately

By noticing these subtle cues, CSMs can identify potential issues that could lead to customer churn if they are overlooked. Taking this proactive approach is vital for addressing the main reasons for churn before they develop into larger problems.

What are the proactive approaches to preventing churn?

Paul approaches churn prevention with a "firefighting model," emphasizing the importance of identifying potential issues before they escalate into churn. He believes in "being at the fire before it starts," which helps minimize the number of "fires" and ultimately reduces churn.

"being at the fire before it starts"

By identifying and having a high level discussion using Paul's "Product Top 10" reasons, organizations can pinpoint primary factors that need addressing and develop targeted CS and Product strategies to mitigate them. Gathering insights from various sources, such as customer feedback, support tickets, and account management interactions will help direct the team to become proactive.

For example, proactive approaches might involve:

1. Regular health check calls with customers, even when things seem to be going well.

2. Monitoring product usage data to identify declining engagement early.

3. Conducting quarterly business reviews to align on goals and address any concerns.

4. Setting up automated alerts for specific trigger events, such as a drop in user activity or an increase in support tickets.

Paul's team can stay ahead of potential issues and intervene before they lead to customer loss by consistently analyzing and addressing the top reasons for churn.

By analyzing the main reasons for customer churn and organizing customer success teams around common goals, Paul's methodologies help reduce churn and encourage a culture of continuous improvement, all aimed at enhancing customer experiences and retaining revenue.