Red Account Management w/ CS Leadership Office Hours

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This is a podcast episode titled, Red Account Management w/ CS Leadership Office Hours. The summary for this episode is: <p>This week we are focusing on what's included in your framework for red account management.</p><p><br></p><p>A weekly segment:</p><p><br></p><p>CS Leadership Office Hours</p><p>Every Thursday. 11:30am ET.</p><p><a href="" rel="noopener noreferrer" target="_blank"></a></p><p>--</p><p>If you want to join the discussion with thousands of other customer success leaders, join Gain Grow Retain: <a href="" rel="noopener noreferrer" target="_blank"></a></p><p>This podcast is brought to you by Jay Nathan and Jeff Breunsbach...</p><p>Jay Nathan: <a href="" rel="noopener noreferrer" target="_blank"></a></p><p>Jeff Breunsbach: <a href="" rel="noopener noreferrer" target="_blank"></a></p>
Always Evolving Your Playbooks
00:21 MIN
High Demand Customers Who Aren't Profitable For Your Business
01:02 MIN
Key Element When Dealing with Red Accounts
00:58 MIN
Bringing Together a SWAT Team
00:48 MIN

Speaker 1: Welcome to the Gain, Grow, Retain podcast.

Speaker 2: Welcome back Marcus, good to see you. Let's begin. So, for the next 45 minutes, the topic being really broad again. The question is, what is included in your framework for red account management? This is a really, really broad topic. As I mentioned earlier for the one who joined us, what we hear by red account management is the client that are about to churn. How do you highlight them? How do you identify them? Why, what are you doing? And if for any of you you have a template, a framework or a book, playbook that you can share, you are welcome to join. Do we see any hands raised? Let's see. I don't see any. I'm going to have to pick someone.

Female 1: I see Matt [Vadala's 00:00:58] and Russell [Barnes' 00:00:59] hands up.

Speaker 2: Matt and Russell. Thanks. Let's start with Matt.

Matt: I just want to start with really one quick strategy, not as formal as a playbook or a framework. The biggest tool in a customer success tool belt is collaboration. It was mentioned during the round table talk with the success hacker team and Jay yesterday. It is something that I will continue to emphasize until I can't emphasize or speak anymore. It's something that I think is a great way to learn. Learn about your colleagues, learn about what else is going on in your business. It's not only for the sake of putting out a fire or taking care of a red account. Obviously our goal is to not even have those red accounts, but nonetheless sitting down with the other teams and saying," Hey, where have the touch points gone wrong? What's happened? How can we remedy this and make them an advocate out of them being a red account?" And then hopefully use that to really reinforce a great framework or a playbook. And I will yield my time to those who can speak to those topics.

Speaker 2: Matt, I love what you're saying because it's definitely on my top three as well. Collaboration. Just before we dive in and just stop, go to the team, the product, the sale, the person who will close the deal and say," Let's brainstorm why." Maybe there's something we see as a pattern within the industry. I've seen that a lot in the supply chain, just to mention one example. We see the digitalization of supply chain moving to more sustainability approach, data transparency so-

Matt: Precisely.

Speaker 2: I love that. It's really starting with the team before we acknowledge anything to the client.

Matt: Especially unearthing those who may just be silent accounts. They may not be voicing those same opinions and we could have the opportunity to approach those as well.

Speaker 2: I love that we can then, once we identify the pattern within industry, be proactive to those silenced accounts who are not yet red and say," This is something we see. We'd love to have a conversation with you." Again, it's about us delivering as to maximize the value you get from our service, and the client will see that as pure value. Before we get to jump to Russell, anyone who would like to jump into what Matt just shared about collaboration? All right, Russell.

Russell : Sure. Thanks. I was in the same breakout with Matt so we're double represented here. To me the main theme that came away from ours was, we didn't get to the point of sharing our frameworks, but we... The theme was that failure is a really important learning tool. Especially when you're talking about read accounts, you're not going to win them all. Some of them are going to cancel. That can be okay if it's a bad fit, but the important thing is to take a lesson from that and always be evolving your playbooks to account for the things that you learned.

Speaker 2: I love that. It's a good opportunity as well to circle back to the product team and say," Can we take some time?" Just again, it's part of this improvement. How can we provide more value? How can we improve?" And most importantly, and I see that on the Gartner side, often we see client thinking," Oh, this is a sales approach trying to get us back," but really when the customer success reached out and said," We just want to improve, so tell us what and we can acknowledge that and get back to you and see if there's an opportunity to work together." Anyone would like to jump on the important topic, which is essentially, failed into delivering something specific, being really authentic and open to the client's feedback? All right. Ed, and then we move to Jeremy and Numra.

Ed: Yeah, sure. One thing that we did at InteliSecure that really made a big difference. We put together quarterly internal reviews at the senior executive level of all of the red accounts that were over about a quarter million in ARR. We asked the CSMs to come in with the sales counterparts, present one slide. What's the situation, what's the history, what's the problem, why are they red and what do you need? What was interesting was we did that every quarter. It engaged the senior executive team in what the problems were. It got their help to connect with executives at these accounts. It got them to make changes in the operations. We identified systemic issues that triggered a process improvement project so we got their commitment. And we got them more engaged in the day to day. Senior executives are dealing with investors and financial providers and things like that. To get them into the ground truth really helped a lot. So I would highly recommend that process. Have your CSMs put together a plan, present that to the senior executive team and then see what happens. Really good things do come out of it.

Speaker 2: I love that. It reminds me of a conversation, I think you guys were involved a couple of... It was maybe a month or two ago about, how do you communicate the value? How do you quantify how successful your customer success team is to the CFO on this yearly budget? Because every year, customer success as any other team, we need additional budget to grow the team and always to better serve the client. So if I'm hearing you correctly, this is something we can as well definitely leverage to present to the executive team, to the board, to request additional fundings.

Ed: Yeah. People need to have tangible examples. When they really see it, when they experience it, then they understand it. You have an abstraction between what's happening on the ground with customers and what executives are doing so if you can ground them on what's happening, then they can see it. If they hear it multiple times, they know it's a problem and you get their commitment and their motivation for action. Then the money can follow. Right? I need to see it. I need to believe it. I need to have a personal, emotional connection to it, and then I can justify it with the numbers.

Speaker 2: Thank you. Thanks. Anyone would like to jump on Ed's comment? Madur, would you like to comment on Ed's?

Speaker 7: Yeah. Hi, everyone. Something similar was discussed in our group. Same with our company too, we do have a strategic meeting every month going through all major accounts, especially focusing on the red ones. I think the topic that came up in our group also given that we have CS team or the customer success, we do have an ongoing record of what's going on with our customer so we kind of have including collaboration. We also have a tool of getting the pulse of the clients before it even goes to them. I think something like this helps not just managing the red clients, but even before we go to the red part. So I definitely agree with Ed that this is a very good way of both collaborating with the senior management and also managing our clients in a much more proactive way.

Speaker 2: Thank you. Thank you, Madur. Jeremy?

Jeremy: Yeah. Hey, everybody. My comment's going to be a little different, although Ed, I was thinking about a quote from, I'm trying to remember the gentlemen. One of the former CEOs of Ford company who walked into a culture of everything is green. Like there's nothing wrong ever. Basically trying to correct the ship to say it's okay to report problems. Actually, we encourage you to report problems because it gives us the opportunity to fix it before it's too late. So I love that quarterly review that you're talking about. For our group specifically, we actually covered off on, Ori brought up a great example of what to do with high- demand customers who are not profitable for your business, meaning you're losing money left and right, and how to have difficult conversations from the other side. They might be highly adopted, they might be a really good customer, but for you to keep them as a customer, something has to change from that regard. So we were talking around different strategies of being able to show the value they're truly getting out of the partnership. Starting to put wedge in there where you can have the conversation around," Hey, we really want to continue to partner with you, but, we are not at a state where we can be profitable in that partnership." Then having that transparency with the customer to say," We knew initially maybe we brought you on to really help improve and fix our product, take it to that next level. But now that we are here, we have to have a conversation around, you are getting the value that you initially looked for. So how do we push that forward?" We didn't necessarily get into all the specifics of everything that we do, but being able to show the value of what other customers are getting versus what they're spending versus that profitability margin. I think our group would certainly welcome any additional feedback, but about being willing to be transparent and sharing information like that upfront rather than waiting until it's too late. And then you're in a situation, especially if you're in a smaller company where it's a sink or swim moment to have that conversation. That's the feedback that I wanted to add to the conversation today.

Speaker 2: Thank you, Jeremy. Just a quick clarification point, when you say a highly demanding client are we're talking about a client who expected white glove treatment, that is actually not mirroring their investment with a vendor? Or just being a client a little challenging every day?

Jeremy: Yeah. Ori, do you want to come off and maybe add a little color to that?

Ori: Yeah, sure. This client basically, maybe 50% of what we were doing for them was in line with our product roadmap while 50% was very dedicated to cater their needs. Going into the deal we knew that, but they constantly kept on adding more requirements and demanding higher quality and demanding faster turnaround for our deliverables, which left us in a position where over 50% of our engineering resources are dedicated to this customer and they're maybe paying us to cover one or two engineers on a yearly basis. So obviously we're burning millions of dollars on this deal to make it work. It helps us, but still, now that our product is more mature and they're gaining much value on their business, I know 70% of their business is built on what we've delivered to them. They're getting 70% of deals through us. So that gave an opportunity to open this discussion. Be very candid on the state of us not being profitable, their interests of us being profitable and continued growing as a company and supporting them and building a partnership together, building more trust together for them not to be nitty gritty about every additional price that we're requesting.

Speaker 2: That's a really good example, and I love that, Ori. I feel like it's very close to having clients with legacy product, legacy pricing, and trying to get them to the new pricing and the new deliverable. One thing that I love about what I'm hearing as well is, customer success, it's quite challenging to quantify success. I'm working for Gartner. Are you leveraging our services? It's hard for me to quantify your success by leveraging us because obviously we're not directly impacted your business. But in your case, you're able to say," Hey, Mr. and Mrs. Client, by using our services, we were able to increase your winning rate by that much." That may be your question to the group, just jumping on what Ori said. Do you have any best practices, again, you can share when you have faced this similar challenge? Either getting a client outside of a legacy pricing, or simply over- delivering and he end up costing you more and the client will not move to the next pricing to be aligned with their expected services?

Ori: Yeah. I'm glad to share since we really focused during this short time on this topic. Jeremy brought up a great point as well, where he outlined a lot of customers that were legacy and paying and had significant discounts, to share with them a snapshot. What we charge, what's the average of our customers, what's the average our customers are paying and where the current discounted customer is, to give a perspective on how significant it is and to offer them in advance maybe a year ahead to prepare budgeting towards an increase, considering that current state. So being transparent as Jeremy mentioned, being upfront, allowing them to prepare and budget accordingly. Or alternatively, lock in for a longer term as maybe another option instead of paying more per year.

Speaker 2: On our Gartner playbook, we have something that really aligned with what you said, I'm happy to share with the group. Rather to focus on the investment, we decided to break it up by company size and we aligned specific features and deliverable per company side. So when we present that to the client and said this is inaudible, company knew this is usually how they're investing with us. It makes it a little more relevant to them. I see Marcus you have your hand raised. Is it to cover this topic or would you like to change to another piece?

Marcus: It was just an additional add on to the overall conversation about the red playbooks. So I can jump in now or we can continue on with where we were.

Speaker 2: Go ahead.

Marcus: I think one of the things that I think is key when dealing with a red account is oftentimes we get really focused on dealing with the decision- maker and the primary individual who's involved in the process. I think it's still important as part of your red playbook to try and find and look through like, who are the power users and maybe some of the people who aren't power users and try and have conversations with them ahead of having that key conversation. There's so much valuable information that you can find out. Are they getting value? What are the challenges they're facing? is there anything else going on? Is there some political items happening within the organization that you need to know about which may be causing this account to be red? I think that should be part of any playbook, is getting the greater holistic picture versus just focusing on what the key elements are, or the initial person who's reaching out to have that conversation.

Speaker 2: Thanks, Marcus. 100%. I'm always getting my American expression messed up, but you're really hitting the nail on the head. Hopefully this is right. I've seen that a lot with the account managing where we see a drop and it's usually aligned with someone new. Either power has shifted internally without sharing, or simply your champion left the company and so more than just rebuilding your product and feature, really focusing on who does what. There is something that I love to keep up to date, is my org chart. What we call capture the org chart, so you always know who is the decision maker, who is your champion and who you can rely on just to get some additional information. I see Laura, Madeline and Nora. Anyone else who would like to comment on Marcus point about champion and power shift? One, two.

Laura: I'll say just one thing really quick about it, and I know everyone else was before me. The one thing I think is important, and I don't know if anyone else has had this, but I always had a challenge in running the CS team, is when clients say at the executive level," What are you going to do to drive more adoption?" I really flipped that conversation on its head and said," What can we do in partnership together to drive adoption?" Because I do think that there gets to be a point in time as a vendor that will always be seen as a vendor, especially at the user level. So I would really work to create a plan together that had action items that were based on what they would do, and then our commitment, and then tracking that success each week and any failure each week, and then talking about what we could do to adjust. So it was a very partnered approach because I've definitely had in the work that I was in, a lot of customers say to me," This is your problem." It doesn't work that way when it comes to delivering services and I think you have to challenge customers to create not an A and B scenario, but here is a C scenario of us working together and pulling in resources from your team to be successful.

Speaker 2: Thanks, Laura. I love this comment. An engagement plan is really a key topic, a key piece into your playbook. I love working with this client around this engagement plan and capturing their objective, really measuring progress or giving homework to the client. Say," I will get back to you by then, but you do need to get back to me by then." As well, why not identifying what are the roadblocks, both within your company as a vendor, but as well, clients? Some of the specific milestone. Again, always having this objective in mind and those timeline and deliver on inaudible time. Thank you, Laura. This is really good. I see Madeline and Nora. We're going to start with Nora, but before that, any comment on Laura's engagement plan within this red playbook? Nora, you would like to-

Claudette: Hi, it's Claudette. I wanted to make a comment. I totally think Laura is on point about getting engagement. One thing I learned when it came into play when we were using the playbook was, and if you have the version of the playbook that's transparent, that one that you can share with the customer. Review with them, or some version of it that," Okay, these are the steps we're going to go through. This is what we're going to do. These are expectations," if you want to say. Then, where you can make the edits to what the customer may not see there that they want to have on their end. A part of that adoption plan, and the playbook. I've used it before where I've shared the playbook and it's helped. Everybody knew. Then what's interesting is that obviously the manager, if you're working with the manager, then you go share with the team. And so the team now becomes informed about what also the adoption of the new technology or software, or whatever the product is that you're dealing with. So I just thought Laura's points were really great, and if you have one that's transparent of a playbook that you can get early on to the customer's hands and review it together so you can go to market with your adoption, that would be great.

Speaker 2: Thank you, Claudette. I think it's great to share and be totally transparent with the client. I love working on those. I have designed a template for an Excel spreadsheet that I'm sharing on Google Drive with each accounts, each user, and they all have their own plan and a summary of what has been discussed and their usage, and we have specific milestone, and then we work backwards. We are connecting with the client weekly or biweekly and we're always going back to the same spreadsheet that the client has and can update on his or her part as well inaudible. So this is really useful. Thank you so much for that. This is great. Thanks, Laura. Numra. Sorry, I took a little time to get back to you.

Numra: Of course. No, thank you inaudible. I think my comment's going to tag in nicely with the last two. We have a process that we basically bring together a SWOT team for certain accounts, where they have been red for a significant amount of time, or if the at- risk revenue or the at- risk customer value is high enough to warrant that SWOT team. Those are the two points I just wanted to make, is with the ones that are trending red we do quantify that where we can, in terms of what's at risk. Is it a renewal? Is it upsell? Is it NPS on the relationship? Then two, the resolution or the improvement planning is not on the back of only CS. It is accountability distributed across and many timesthat's in the operations team as well. That is where we start to bring together a bit of a temporary SWOT team against that account. You do need executive sponsorship for that, to Ed's point, so we do get that through the regular executive reviews. We get the executive sponsorship for that account, and then we basically tag people into that SWOT team. We do document it in an improvement plan, to Madeline's point, we and it's a customer- facing improvement plan. There's timelines and it's documented and there's KPIs that we're trying to hit. And then basically the SWOT team, usually it's at least somebody, a few folks from ops. It's the client success, it's somebody from services and so on and so forth. And we talk about it together.

Speaker 2: So you essentially, if I'm hearing, putting your client on a planner.

Numra: Pardon me?

Speaker 2: You're putting your client on a planner.

Numra: Exactly. Yes.

Speaker 2: I love it. One question about the SWOT team. Is it a team that gravitates around each client and move from one client to another? Or is the team specifically with product? It's essentially the product team? Can you tell us a little more about your SWOT team?

Numra: It's Not like a dedicated team at all. It's just a hat that we get people to wear for a three month, six- month period of time. So we don't pull them off their current work. We just say you are now part of this team. It could be product, it could be engineering, it could be architect, it could be ops, as I said mostly, and they wear that hat for a while. We get, again, the sponsorship from their manager and their leadership team is the key so that there's the right focus on it and the right sponsorship. But yeah, it's not a formal role. It's not a dedicated role.

Speaker 2: I understand.

Numra: Temporary group.

Speaker 2: I love that. That you're putting the client on a plan. I think this is great. Madeleine.

Madeleine: Yeah. When the world flipped on its head last March, I can't believe it's already been a year. One of our product lines became no longer relevant because the type of role that that served in our industry was essentially eradicated because of COVID and we don't know if that will come back. So one of the things that we incorporated into our playbook was a product exchange. If the customer purchased a product that is no longer valid, we were going through essentially a sales process. We put a team together as well that includes sales and marketing to put together a plan where they could change products so that they could use a part of our system now was much more relevant to their current environment to try to keep those customers. That partnered with changing how we market and how we define the value proposition of that product line that was no longer valid, really was important in terms of trying to eradicate at scale those red customers. I'm wondering if anybody else has gone through a product exchange, or I'm going to try to sell you on something else we have, because what you're using today doesn't work.

Speaker 2: One question Madeleine when you say product exchange. Is it within a specific portfolio? Are you going to be adapting features of other more expensive products? What is your strategy? Because if a client is spending 100K on one product and you're looking to upgrade this client to a 200K or lower, what are the financial impact to the client?

Madeleine: Yeah. We had to essentially look at our product pricing and address that because they were not even exchange. So we had to say, can we offer a special price to customers that are currently on this existing product line that no longer are going to be able to use that product line? We had to pack into our own version of that to this existing customer base and make it very clear that they were getting a deal. One of the challenges was the professional services and the work that went into putting them and onboarding them onto that new plan. And so we had to find ways to do that at scale as well.

Speaker 2: And it's time bound. Like, we're getting out of the woods, but if we want to provide more value, you will have access to this specific package and we're going to make your current investment until this time in nine months, 12 months. Is that the specific approach you are taking?

Madeleine: Yeah. Somewhat, or we locked them into a price for a specific term. We gave an amendment, we're putting them on a new platform. Here's your price for 12 months, was the standard. And then we'll revisit it in 12 months. Exactly.

Speaker 1: Thank you. I know Andrus you have your hand raised. Anyone would like to comment onto this topic about switching of the client's product? Exchanging product? Sherry, you've been very quiet. Would you like to help us?

Sherry: I hate to say this. I don't really have much to add. Everyone has covered this way more in depth than I probably could. I mean, we do a lot of the things that people have mentioned, and I'm trying to work on a way that we're a lot less reactive and more proactive, but that requires the collaboration of other departments and if it's not something that's a priority for them, unfortunately they have a complete lack of a sense of urgency. So, like one of those things, I'm still working on it nine months later and it's an issue. So, getting other people, like I said, to understand something that doesn't affect their day- to- day sometimes is often a challenge. Then I'm having my own code red situation internally and a code red situation with customers. Like I said, I think everyone's been really on top of this. In fact, I took some notes, but right now I'm trying to solve the code red internally.

Speaker 2: We'll go back to what Matt said earlier with Jeremy that the first step before we share to the client is circle back internally, just to get everyone's thoughts. When already we're facing internal red, this can be a little challenging. Andreas. Actually let's start with Conroy. Sorry. I see iPhone. You're on mute.

Dan: I'm off mute. Is it me?

Speaker 2: Yes. That's you.

Dan: Oh, okay. Yeah. Sorry. It's Dan actually. Conroy's my last name, but you pronounced it perfectly. I'm a sales guy. I work for Higher Logic, but before I came to Higher Logic I worked for a company where usage was always an issue and it was a common thing to have discussions around. One of the things we started doing proactively with my client manager, because I was responsible for both new business as well as renewing existing business and growing them, we started making videos of the people that were using it because nothing's more powerful than... You can say," Oh, X percent of the people are using it," but if they see one or two people, even three people that used it and got significant value on it and they're talking, it's no longer me regurgitating something that was said by one of the people in the client, it's actually them. That's what I've found to open up the doors to having a conversation that is no longer confrontational, because they take a step back and they're like," All right, it does work." Now we, somebody said it before, jointly together have to put together some kind of a plan that gets more people using it so you get more people happy and more videos like that. That's just one example. I'm not a client success person so I'm listening to all these other ideas which are fabulous, but that struck me as a way that can really bring it home sometimes.

Speaker 2: I love it. This is really good, and it's actually everything being automated and delivering a ton of value by sharing best practices and presenting how other clients are leveraging our services. The vendor services can provide a ton of value. I see Andreas, I see two Andreas. One with a raised hand and one on mute. So which one shall I?

Andreas: It doesn't matter which one. I just wanted to add and I've posted the link to an article about this on my event account playbook on rescue or recover or farewell. That there are circumstances when it's not just the product fit, when there are other dynamics. Marcus alluded to that already from a political perspective, but for example, UT dragging their heels or other departments that we depend on that are not really under our control. Part of the playbooks that I put in place analyze also, is the primary responsibility for this account going into some troubled waters, is it mainly us? Is it something that is joint responsibility? Or is it something that is more in the client's hands? And have different reactions for that. So that we're not just jumping on," Oh my gosh, this client is in red," and spending a lot of resources on something that we cannot really influence.

Speaker 2: Thanks, Andreas. It circled back to something that had been shared at the beginning when everything being automated based on usage and we see a client on our portal that being associated with the color red and thinking... The first question again is, as Matt said, go back to internal team just to get an update from our team, but as well, reaching out to the client and assuming that maybe again, as Marcus had said, the power has changed. Maybe the champion left, maybe there is another seat holder who has different priorities. Again, it's to deliver a secondary skill to really align the features we are selling, we are promoting, with what are the client expectation. I see we have another three minutes left. I would like to leave if Jeff is online the last word, but before we let Jeff jumping in, just wanted to remind you of an exciting initiatives for Gain Grow Retain communities. Hopefully by the end of the first quarter, we are going to have, no pressure on Jeff, this library where we can all going to be able to share tools and templates. I think this is a great idea. Jeff, hopefully you heard me. And again, if there's anything you would like to share, you're more than welcome to send that over to Jeff directly. Jeff? Nope, not... All right. Well, we are almost at the bottom of the hour. Any final word from anyone? Andreas? I know you're dying but-

Andreas: Everyone smile, be engaged. It's screenshot picture time. inaudible, are you ready to capture us for eternity?

Speaker 2: Let's all pretend we're having a good time. Thanks, Marcus. Perfect. Well, we're at the bottom of the hour. Thanks again all. We're going to connect on LinkedIn. Let us know if you have any questions. We have another Tuesday, a conversation next week, as well as Thursday. Next Thursday is going to be Andreas' turn and I will be his wing man, so let us know if you have any questions. Thanks again, and have a wonderful week.

Speaker 18: Hey guys, thanks so much for taking the time to listen to the Gain, Grow, Retain podcast. If you liked what you heard, please take a moment and share the podcast with your friends and colleagues and subscribe. We really appreciate it. Talk to you soon.


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