Today’s interview is with Fred Shilmover, the CEO and co-founder of InsightSquared, a provider of sales intelligence solutions for high-growth technology companies. Fred joins me today to talk about InsightSquared and their journey with implementing a customer success programme and how and why they changed it.
This interview follows on from my recent interview – Ethics, technology and the impact of our decisions on customers and employees – Interview with Cennydd Bowles – and is number 252 in the series of interviews with authors and business leaders that are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.
Highlights from my conversation with Fred:
- Customer success has become a ‘thing’.
- Customer success and sales are not really that different anymore.
- The huge shift to cloud computing, subscription-based business models and recurring revenue are the drivers behind the customer success movement.
- Nick Mehta and the team at Gainsight deserve a lot of the credit for developing a lot of thinking around the customer success movement.
- But, does customer success need to be a C-level title or even a separate department or is it more of a fundamental shift in thinking about how we conduct business?
- Is it healthy to separate revenue in an organisation between acquisition and renewal?
- Having separate departments to handle acquisition and renewal can cause mis-alignment between them.
- Customer success needs to be the responsibility of the entire organisation.
- In 2017, InsightSquared did have a customer success team, where renewals, support, enablement, professional services etc were all covered by the same team.
- But, they have since moved away from that approach due to some mis-alignment between their pre-sales and post-sales teams.
- Two main problems they faced:
- Bundling renewals, support, enablement and professional services together with renewals didn’t allow the rest of the group to have a real identity, and
- It focused them on the wrong things i.e. renewals rather than customer success.
- What they have now done is eliminate their customer success department and they have formed a services department. Their mandate is to drive success of customers through the products and services that they offer.
- Meanwhile, all of the folks that were responsible for customer relationships, renewals, expansion etc have been moved into the sales department. Now, they have a sales department that is comprised of pre-sales and post-sales people and they have embedded their customer success people within the sales teams that cover certain territories.
- Their structure isn’t fixed, however, and they expect it to change. The reason being is that they realise they are on a journey as they migrate from being a product focused company to a customer focused company. They fully expect their journey to take more than a year.
- Their objective is to maximise the amount of alignment they can create by creating these small, almost nuclear families, where the pre-sales and post-sales activity on the same account is managed by the same people in the same team and the same manager.
- The managers of those teams are now rewarded on net changes in ARR.
- This has also allowed them to innovate around thinking and process that they can bring to the rest of the organisation.
- The next thing they did was to step back and start to look at everything they did from the customer’s perspective i.e. rather than looking at InsightSquared running a trial, they realised that actually it’s about the customer evaluating whether InsightSquared is a good for for them them or not.
- For them, that was a fundamental change in perspective.
- They have also introduced a degree of reward into the compensation/reward plan and structure for their account managers (responsible for new business) that is directly related to the customer’s success post-sale. That helps foster team alignment, cooperation and collaboration.
- To help with that they have identified leading indicators of customer success and now know, pretty early on, based on their trajectory with their products, whether the customer is going to renew or not.
- Old wisdom: You never get a second chance to make a first impression.
- The crucial period is the first 90-120 days post-sale.
‘Sales isn’t physics. It’s not complicated but that does not mean it is easy. It’s often really hard to do the things that seem obvious.’ – Frank Cespedes of Harvard Business School at an InsightSquared event.
- Even though they are only getting started with their journey they are already seeing improvements manifest themselves in their retention rate (a lagging indicator).
- Also, they are also hearing good anecdotal evidence from both their teams (better harmony and teamwork) and from their customers (appreciate the change in approach) to support their progress.
- People don’t change their behaviour when a person from a vendor tells them to. They change when someone with authority from inside their business asks them to change or shows them how it will benefit them.
- With that in mind, they now also position the success of the relationship they have with their customers as being a two-way street i.e. both parties have to do work to make it successful.
- They also insist that their project has an executive sponsor that is present and involved in order to give it the best chance of success.
- In fact, they won’t move forward with the customer if they do not have an executive sponsor in place as they know it will be a collective waste of time.
- Customer success is not about a programme it is more about a philosophy/mindset and change of perspective.
- The recurring revenue model, particularly for software/technology firms, has put them more in line with the customer.
- Even in a commoditised market, superior service and technology aimed at a particular market still wins.
- Every situation is contextual and there will be trade offs that need to be made depending on what you want to accomplish.
- There is no one size fits all solution when it comes to getting customer success right.
- Ultimately, what people want is a solution to solve a problem, not a piece of technology.
- Go talk to your customers. It’s amazing what you will find out.
- The next stage in the journey for InsightSquared is to make this approach part of everything they do i.e. to see everything through the lens of their customer.
- Fred says that if you have Salesforce.com and you have sales people and you don’t have InsightSquared then, in his humble opinion, you are doing your business a disservice.
- Check out InsightSquared. They have just won G2Crowd’s #1 ranking for customer satisfaction for the fourth year in a row.
About Fred (taken from his InsightSquared bio)
Fred Shilmover is the CEO and co-founder of InsightSquared. He has helped grow the sales intelligence company from a single spreadsheet into one of Boston’s premiere tech startups. Prior to founding InsightSquared, Fred was a corporate development associate with Salesforce Ventures and before that he held several key roles at Bessemer Venture Partners including associate and Director of IT. He is a board member of TUGG, an organization that brings together tech entrepreneurs with social enterprises that support at-risk youth. Fred received his B.A. from Tufts and an MBA from Harvard Business School. He is an mediocre triathlete and runner, but he tries hard. In fact, he managed to complete the last three Boston Marathons. He enjoys turning large pieces of wood into small ones. Fred is also an avid wakeboarder.
Thanks to Pixabay for the image.