Engagements Models and Segmentation w/ CS Leadership Office Hours

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This is a podcast episode titled, Engagements Models and Segmentation w/ CS Leadership Office Hours. The summary for this episode is: <p>This week our topic is around engagement models and segmentation.</p><p><br></p><p>A weekly segment:</p><p>CS Leadership Office Hours</p><p>Every Thursday. 11:30am ET.</p><p><a href="https://lu.ma/CSLOH" rel="noopener noreferrer" target="_blank">https://lu.ma/CSLOH</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="http://gaingrowretain.com/" rel="noopener noreferrer" target="_blank">http://gaingrowretain.com/</a></p><p>This podcast is brought to you by Jay Nathan and Jeff Breunsbach...</p><p>Jay Nathan: <a href="https://www.linkedin.com/in/jaynathan/" rel="noopener noreferrer" target="_blank">https://www.linkedin.com/in/jaynathan/</a></p><p>Jeff Breunsbach: <a href="https://www.linkedin.com/in/jeffreybreunsbach" rel="noopener noreferrer" target="_blank">https://www.linkedin.com/in/jeffreybreunsbach</a></p>

Speaker 1: Retain Podcast.

Scott: What I've done in the past is, we've segmented our clients based on AR. You have the high dollar amounts, which gets the high touch engagement model, which includes quarterly business reviews, onsite. Also, more or less a dedicated CSM where they can hold weekly meetings. Quite a few of the high touch CSMs had weekly meetings with their clients to manage the project. Basically they were kind of a project manager moreso if we could think of them that way. They wanted to make sure the service engagement was moving forward and helped capture the customer voice and communicate that back to development, help coordinate meetings, all that stuff. That was the high touch CSM. Where a medium touch, they would have their QBRs probably, well, it wouldn't be a QBR, business reviews, twice a year. The CSM would help in escalating issues, but wouldn't really engage. They would capture the user customer voice and stuff, but they wouldn't have that pushiness with them, so to speak, is where it wasn't a weekly engagement with our medium touch customers, unless they were going through some hard times. So depending on how difficult the situation is or the level of visibility within the company, we've put more time in there, but just on a day to day type thing, they weren't engaged as much with the customer. Of course, our tech touch was the one- to- many approach with digital communication, connections to community articles or knowledge- based articles or something like that, that was somewhat driven by their usage, that type of thing. So our engagement models differed based on how we segmented the clients. And that seemed to be very scalable and used the team members optimally.

Jeff: So just to reiterate back to you, Scott too, so you thought about we'll say tier one, tier two, tier three, based on... Or enterprise, mid- market, SMB. Based on kind of the ARR, and then you essentially just said, enterprise gets high touch, mid- market gets mid touch, and SMB gets tech touch. So you very much linked your engagement model with your segmentation.

Scott: Yeah.

Jeff: Okay, cool. Is anybody do anything different? Have they looked at approaching them separately or try and deviate from just kind of aligning those two at the same level? crosstalk

Speaker 2: So in high- touch we had a different approach. We had something called logo accounts, strategic accounts, and revenue accounts. Logo accounts were big global accounts which were important for the sales team to win more accounts. Even if the revenue was low, we tried to give them really, really good treatment so that these logos can be our references. Strategic accounts would be any account, which would give us really interesting product feedback, or they are a new account in a new geography so that whenever we are building another account, it was important to have a reference. So we treated these accounts in a different way. And then there were the high revenue accounts, which were very, very critical, get the best treatment in terms of having an individual CSM, QPRs, in- person meetings, direct access to the leadership as well in terms of escalations and hyperactivity of turnover time in terms of getting back to them as well. So this was just a segmentation within the high- touch model, high- touch customer model itself.

Jeff: That's interesting. So you looked at breaking down high touch into kind of micro segments or sub segments, and then each of them had an engagement model specific to the outcome. And that's something slightly different than strategic, which had something slightly different than geographic, which had slightly different than high revenue. Cool. So that's a little different than what Scott was talking about doing that kind of micro segmenting and looking at engagement models broken down by that way. I think Anna, you were chiming in I think at one point, did you have anything to add?

Anna: It's kind of similar to what Scott was talking about, but slightly nuanced where our initial cutoff is based off of AR in terms of whether they get a CSM or not. But then within that bucket, it's really more differentiated based on a combination of revenue, their need, and their opportunities. So we have the protect, invest, nurture buckets that are an additional layer on top of revenue that help determine some of the engagement models in terms of, do they get a monthly health check on top of their business reviews and things of that nature. So, still revenue is the highest, or I would say the heaviest weight, but there is then some nuance amongst those that are ultimately assigned to CSM based on some other of those categories.

Jeff: And then it sounds like too, Anna, just to go down that path a little bit further, it sounds like you think about, you don't necessarily change activities based on different engagement models. It just changes the cadence or changes the way it's delivered. So for instance, if you said there's a business review, in high touch it's in- person or in- person, if that was a thing, or it's led by a CSM or there's multiple people there, but as you move down, a business review might mean a monthly report that we send them that was very digital. It sounds like you keep similar activities, but just change the delivery method and the cadence as you kind of move down the engagement model.

Anna: Yep. That's correct.

Jeff: Cool. Matt, I think you've got your hand raised, what is your thought here about engagement model and segmentation?

Matt: We went down a slightly different path quite early in the conversation and really it was questioning and challenging why we have an engagement model and why we segment. And I think I referenced a guy called Dave Jackson, who some of you may know, and Dave's very outspoken and one of his views around segmentation, engagement is we do it for the wrong reason. We do it for our own selfish benefit. And if we really think about it, we maybe should look at segmenting and modeling our engagements around our customer's needs. And don't get me wrong, I don't do that. I haven't done it, but I think we need to start thinking about that more and more for all of the things we do. How do we do it for our customer's needs and benefit? Just because they're the highest spending and what we class to be the highest importance doesn't necessarily mean they want a dedicated CSM that goes and purchase on the end of their desk four days a week when we could go and see customers. So I think we've got to think about it slightly differently than the way we have been doing it. It's not easy. And that changes things that are probably deeply ingrained in some of our CS organizations and some of our minds for many years now. But I do think it is time that we probably looked at it slightly differently now.

Jeff: Yeah. I think that's the interesting part, is when you think about segmentation and engagement model, people, I think, mainly associate them together, right? High touch is an enterprise type customer, which I think has been true. Or you can say it's necessarily true because they're used to that type of experience. But I also think that there should probably be differences and flexibilities in those. There should be ways that we can kind of move customers to where they need to be. Maybe just to give an example, I think of the path that you were going down, Matt, this isn't necessarily a big example, but one thing that we're trying to do here at Higher Logic, we have a community product and what we've tried to do recently is actually start breaking down, we have a primary and a secondary use case or primary outcome and secondary outcome that they're trying to achieve. And one effort that we're trying to do over the next month or so is actually hold sessions like this, kind of a workshop style peer- to- peer session. But we're actually trying to do is invite people who have the same primary outcome to those meetings. And so we're trying to break the meetings into, hey, you might be different sized organizations or different stages, but you're all trying to achieve the same outcome. We think you can learn something from one another. So we're trying to, I know it's not to the extent you were talking about, Matt, kind of changing everything, but for us I think it's going to be a really nice exercise to see, do these people share a lot? If we bring them together and say," Hey, you're trying to achieve the same thing." Is there a really, a lot of shared knowledge or peer- to- peer discussion that's happening? Is that the right way to lead that type of session? That's kind of one way that we're thinking about doing it right now.

Matt: I think that's a really good way. We did some good stuff like that when I was at Autodesk. The other thing that we considered was maturity. And how would you choose to measure maturity within your user base or your customers? That's another way that may be a different way to think about it.

Anna: Sorry. I can't, my hand raise thing is not inaudible, but I think it's interesting too, with what you were saying, Matt. It just made my brain think about the possibility of having customers, it's ingrained as part of their monthly service fee as part of their contracts, like the paid for CS model, right? Because if you have a really small customer that does want a lot more engagement or once that robust account analysis, unfortunately for myself, and I feel like probably for a lot of others, as a business, I can only have so many CSMs and there's things that I'm accountable for as the leader that I have to deliver on in terms of revenue retention and things like that. But what we've been exploring and talking about within Avid is, okay, if a customer wants to pay for that, if it's important to them and they care about it and they're willing to shell out a little bit of extra money to help cover the cost of me needing more CSMs in order to staff for that need, we've started talking about what are the different levels and how do we tier differently if we were to do it a little bit more based on what the customer was actually asking for and wanting as opposed to just what we were trying to achieve as a business. So it's just very interesting because we've just been talking about that, but talking about it from the lens of a paid for CS model specifically.

Matt: We did some research on that at Autodesk, funny enough, a few years ago where Autodesk customer success was a paid engagement or part of a paid engagement, but there were customers that didn't necessarily want the entire engagement that they were paying for. So how did you make it almost modular? So you might have a menu of eight things that would be part of the CSM offering or portfolio or toolkit. And so actually, do you know what? I want quality health checks, if that's something that you may offer, but that's your business reviews? You say they're great, but for me, they're not. I only want one a year, so I don't want the four. And you start picking and choosing what you deliver and see if that is something that can be scaled and could be financed both internally and if your customers are willing to pay for.

Anna: Yeah. That's what we're exploring right now actually.

Jeff: Even looking at it like that too, Matt. Even just packaging those up into three different tiers and saying," Hey, here's kind of the slim tier." You want one QBR and you want this, but that way. Because I think the challenge if you give somebody a Chinese menu is then you have to go deliver against it and it hurts our effectiveness or efficiency internally because we, now our switching cost is high for us, essentially. So even thinking about, can you go to your customers and say," Hey, are these packages appetizing enough? Do these make sense, what we're including what we're not including?" To even start seeing, if you could build out a more repeatable model as well. Josh, you've got your hand raised.

Josh: I put my comment in the chat about figuring out which cattle to treat temporarily as a pet based upon their current or potential size. And in doing that, one of the things is even while they are in the pet phase, even in a high touch environment where you might hit that cattle more is looking at product- led growth and having a lot of focus on usability because even when you're training the trainer or however you're going across that enterprise, you're going to have to go and engage in subsequent trainings, changes in a desired outcome and other use cases. And as much as you can soften the earth and allow the person to self- serve with some, or hopefully no coaching, then everybody benefits because the reason that people use the tools is not to become more proficient at using the tool. It's to get that value. Go home on time or whatever it is that they're personally seeking inside of their job role.

Jeff: I think that's a really good point too. I think one of the interesting points maybe that I've started to see is how tech touch used to be thought of as a segment, but now it's really starting to become something that's holistic. It needs to be applied across all customers. And we need to think about unifying experiences across these technologies that we're giving our customers in terms of self- service. In the past, it was, we could get away with a knowledge base that's separate from academy. That's all very, do we just kind of piecemeal it together? But now it has to be a unified experience and that needs to be across the board. It can't just be, we think of the lower third of our customers as just getting a tech touch strategy. Kristen, you've got your hand raised.

Kristen: I just wanted to mention that it's really important to understand where your customers are going in the space that you serve. It's not just your tool, but it's how they use your tool to do a bigger job, what Josh was referring to. And that in every place that I've worked, I've always had use cases be the basis for how we service our customers along with the value of the customer. But always the use case, always based on what the customer is actually doing and understanding their maturity at how they're doing so that you have a different type of ROI. You're not just saying," Yay, your product usage has gone up by 50%," but" Your product usage has gone up by 50%, which is indicated X KPI, which is related to your outcome based KPIs and has changed the growth of your needs as a company, your business outcomes." Making that connection is huge. And then segmenting how you get people to those points is based on their use cases and the complexity of their use cases.

Jeff: I think maybe to pull on that thread a little bit too. I think one of the things that, especially from our consulting days over the last number of years, I think one of the things that we also noticed is that there's a propensity to always talk about our tool or what they purchased from us. And I think what Josh hit on and what you hit on is our tool is only 10% of their day, 20% of their day, 30% of their day. So yes, we need to make sure that they're getting the value and that we're kind of evoking, hey, you are getting this value from the tool. But I think the CSMs that I've seen that are great, always can unlock the other 70% of that person's job to help them. Hey, how do you connect this to other projects you're working on or other departments? What's happening in the market that you can go talk about in relation to our product or your product? So I think that's the other thing that comes across a lot is thinking about how to enable your teams to go build a relationship, to do the 70% because I think the 30% is kind of table stakes. It has to get done. So how do we get our teams to think about that? The other part that the customers need as well. Phillip, you've got your hand raised, sorry. Go for it.

Phillip: No worries. I've been trying to figure out what happened. What changed my Zoom. So, like a lot of people have been saying, we actually started off with this segmentation and we actually were very surprised that as we built out that lower engagement model or tech touch, is what people are calling it. But we were doing things like office hours, things that were one- to- many approaches. We found out that a lot of these larger customers that we were putting in these high touch situations were actually utilizing the same strategies that we were using for the lower touch engagements. And so if you find the right things that work, it starts to merge everything together. There's always going to be... Obviously you need to make sure that they're getting the outcomes that they're looking for. But we had these large customers that were coming to our office hours that we had originally set up for these smaller customers and it actually really helped with their adoption as well and hitting their goals. I liked one of the things that somebody else was saying, I can't remember who it was, about getting customers together that have similar outcomes that they're looking to build towards. And I think that all can be put together so that we can still build those outcome- based groups together, and help to lower our need to be holding the customer's hand at every single second.

Jeff: I think the thing that comes to mind too, what you mentioned is thinking about... I also think that there are opportunities to leverage some of the digital channels that we have to still execute on some of these things. So if we do a business review, how do we enable that through technology that makes it easy, that we can engage the customer and get that type of activity done. And trying to make sure that we're segmenting based off of use cases like Kristen mentioned and Matt, trying to think about the customer lens first, rather than our internal lens. I'll share an example. I'm never really shy or bashful. This is a work in progress, but I'll just share it for like 30 seconds, so you guys can see. But this is a project that I've been working on here. This isn't necessarily our customer engagement model, so to speak. But what we're trying to do is just map out, what are the types of engagements that we're having with customers? If you read this as a customer, how do we know them? How do we empower them? Know me, empower me, connect me, lead me, amplify me. Amplify has to be worked. If anybody has a synonym for that, think about it. I'll send this out to you. If people are curious, you can take a screenshot, I don't really care if you want to steal my work. It's not really mine. I've stolen it from other... I've meshed parts together. But this is just an initial way that we're trying to at least outline here are the core activities that we know can happen with customers across some of these channels. And then underneath this, what we're going to have are programs. So for instance, if you were to look at, hey, what happens for that product node at the bottom where it says," Know me"? Now we've got three programs or four programs that we're running underneath that product node that are consistent programs. Which tiers get this? Which tiers of customers get this? How do we deliver it? What are some of the underlying pieces? But this is just one way that we're trying to go expand or get some clarity around how we're thinking about our engagement model. So again, not really broken into high touch, low touch, mid touch yet, but just more, what are the types of activities that we want to be happening? So if that's helpful, it gives you ideas, I'm always happy to share and kind of lend it out. But that's just one way that we've started looking at it here recently. Actually, and on that question, I know we've only got probably eight minutes or so that we have left. I know Scott, you had mentioned a couple of key activities that you have. I think we've thrown out words like health check or business review, but are there things that you all now have figured out that your customers enjoy about some of these... If we have a high touch engagement or mid touch or low touch, whichever one it is, are you identifying or have you identified certain activities that customers really value? Is it the EDR? Is it scheduled reporting? Office hours types events? Are there any ideas that you can throw out now about what you find to work with your customers and what sticks out if anybody has any, just start throwing them out here in the last couple of minutes. It will be fun to kind of talk about this.

Scott: I found customers like QBRs. They also like the community, having a community to go to so they can self serve. They like to have... Golly darn. I mean really based on personality, they like various things. So those are the two things that's coming up right now.

Kristen: I've noticed that working sessions are super, super effective. So we spend the first 15, 20 minutes, training on how to think about a particular topic or use case. And then we say, this is how you use the tool to do this. Now let's find your particular use case and we're going to sit together and do the thing. They love it when we just are with them holding their hand in that session. So we've actually built working sessions into all of the packages that we give our customers based on their tier. So they love those. People need connections so badly, especially with COVID. Super effective.

Jeff: We've found... That is the... What you just hit on, we're trying to go do that in a little bit of a bigger session. We're trying to get kind of a five to 10 customers into a... They all have the same use case. And hopefully we can go to kind of drive a similar thing, but I like that and I like the way you kind of outlined it. Janae? Hopefully it's Janae. Is it?

Janae: It is, yeah. Thank you. I wanted to add both to your thought, Jeff, and Kristen's thought about that 70% of the time. I think those working sessions afford you the ability to share your insights and trends and what you might be seeing outside of their own business. And so those are the areas that I feel like our clients were most interested in learning about because everybody wants to know what the Joneses are doing. And so as you have the conversations, yes, you can apply it to the way their reporting looks and what have you. But I think that some of the 70% space and the value that the CSMs bring to the conversations and what the customers most want is other people's information. And they want you to analyze it for them. And they want you to tell them how it applies or how it varies. Because to the point of only having 10% or 20% of their time in the day, you've just condensed that even greater by telling them what you see from it, because we are the experts with our tools. They are not. And so anything that you can do that reduces my workload, but enables me to do my job better is absolutely what I want to hear about. And so that's why, again, if I don't have to learn the tool, because you're going to do it for me, or you're going to just tell me the shortcuts, those are the things I think that provide the most value when you interact with your clients.

Jeff: I think that makes a ton of sense. Similar, we have an office hour session that we've started leading with our customers on Tuesdays and Thursdays. And I think one of the things that we found as well is that they just enjoy that connection like Kristen mentioned, just hearing other people... Just hearing," Hey, I'm struggling with this," on a call with 50 other people. And being able to talk about it has been really impactful. The other thing that we've tried to do slightly, I think in the same vein, Kristen, but it's certainly not as in- depth is we try and take the first five to 10 minutes of a session to teach them something new or teach them something about the product. And in those office hours settings, we kind of have a broad group. So it's not necessarily targeted to a specific industry or use case. It's a little bit more broad, but customers still have really enjoyed it. We'll have our subject matter expert come in. Like today, we have a session later for... We have a marketing automation products and we have a session later. Our content leader here at Higher Logic is actually coming in to talk about the value of SEO. And so we're going to do five to 10 minutes of a session about one specific thing they can do. And then the rest is really open for discussion. How do we bring some questions up? But bringing experts in from our team has been a really valuable exercise because even though SEO probably doesn't have the most to do about our products, it still is maybe one component. And it's just really nice to bring in somebody else. Last week, we had somebody from our design team come in and they talked about great designs that they were doing and how they did that. And so things like that have just been really valuable to pull in. Different people from the organization who might not necessarily sit in front of a customer all the time and shows expansion of our team and people who are here. Awesome. Next week was about how do you coordinate activities internally? Sorry. You've got multiple teams. Anna's over here, just laughing up a fit. You have multiple teams trying to engage the customer, whether it's professional services, support, customer success. So how are you coordinating activities internally to make sure that we're not overstepping or we're both reaching out to a customer at the same time. We have customer marketing, we have marketing emails going out. How are you coordinating some of those activities when you think about customer engagement? So that's the big topic for next week that we'll talk through. Then the third week is metrics and then the fourth week is an open Q and A. Good to see everybody. Appreciate all the dialogue and we'll see you all again here soon. Hope you have a great weekend.

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This week our topic is around engagement models and segmentation.

A weekly segment:

CS Leadership Office Hours

Every Thursday. 11:30am ET.



If you want to join the discussion with thousands of other customer success leaders, join Gain Grow Retain: http://gaingrowretain.com/

This podcast is brought to you by Jay Nathan and Jeff Breunsbach...

Jay Nathan: https://www.linkedin.com/in/jaynathan/

Jeff Breunsbach: https://www.linkedin.com/in/jeffreybreunsbach