Mark: Welcome back to “Burning Presales” podcast, where I’m joined on the airwaves again by my good friend Don Carmichael. It was a pleasure to have you last week. Thank you, Don, for coming back. And today you’d like to talk about customer success.
Don: Oh, and yes, presales servicing, customer success and the challenges that’s caused over time and a vision of the future of it, which actually fits into, if you listen to the last episode that I was on, is that there’s a continuing theme. [00:00:30.312]
Mark: Excellent. Well, tell us a little bit about that then, Don.
Don: Okay, so first, we’ll place some history to this is that hopefully most people will recognize that in the kind of SaaS and the consumption world, that actually the real money is obviously made after you’ve made the initial sale, and it’s all about retention and expansion. That’s the game. And I think there’s some amazing figures. Was it 85%, 86% of Salesforce’s revenue is recurring revenue? [00:01:00.312] So, recurring as in every year, or every month, people are kind of paying in, you know, they’re paying their whatever it is, $180 a month or whatever. I don’t know. However much Salesforce is these days. So, that’s a huge focus. But for a long time now, there’s been a huge challenge with how customer success worked with presales people.
Now I know lots of companies who’ve still got this massive challenge. They’re customer success people who want to try to drive [00:01:30.312] some expansion, or even retention because, you know, if you haven’t been able to measure what the delta is, you know, what the baseline kind of, you know, value proposition was and where you needed it to kind of move to what the outcomes were, if you haven’t been able to prove that you’ve actually been able to do that, you know, some customers, you know, buyers will come back and say, “Well, hold on a minute. You know, we’re paying this amount per month or per year, but you haven’t delivered what you said you were going to deliver.” [00:02:00.312] So, you know, so that’s a challenge for customer success people because of course they’re measured on, you know, retention and expansion.
You know, the point is it costs you so much, customer acquisition costs, cost of sale, however you measured it to get these customers in the first place. In some cases, you know, these clients, customers, you need to retain them for let’s say three to five years before you’ve even made a profit. So you can kind of see why it’s super important that, you know, presales, [00:02:30.312] if we’ve been focused as a presales team on before the sale, you know, the literal meaning of presales and it’s all about getting new customers in there, it is sometimes a huge challenge in working with customer success because maybe you’re not even incentivized on that. It’s just, you know, something you do as a favor for them.
So one point with this, one argument with this is that has gotta change. You know, if you look at a traditional CRM [00:03:00.312] sales, Chevron, you know, it goes from kind of left to right, all the different stages. You know, we’re now saying, you know, presales people, you now need to go right, which is you need to go beyond the sale and you need to have, you know, a much stronger relationship with customer success because that’s where the money is actually being made. You know, ask a chief revenue officer, you know, because they know inside out, where are we actually making money? So one is that’s got to be overcome and sometimes we really don’t help ourselves in the way that we measure presales, you know, KPIs, compensation, [00:03:30.312] you know, it’s almost like, you know, we’re doing a favor to customer success. It actually isn’t contributing to kind of quota comp. So, that’s a thing to overcome.
But the second thing is, what that led to in the past and then certainly I’m still seeing it in some companies, is, you know, anything that happens in customer success is seen as, you know, they’re kind of second best, is that, you know, if we have to put a demo together, you won’t put anywhere near the same amount of effort for a net new thing, [00:04:00.312] customer. You know, it’s kind of like, well, we kind of do it, but we don’t really wanna do it. We’re not putting a huge amount of energy or investment into it. You know, any demos that have to happen as part of kind of retention or expansion, to be honest, it can be quite lackluster. You know, we’ve already got these people as a client. Why do we have to put much effort into it? But, you know, customer success people, the same as net new sales people, they know that, you know, [00:04:30.312] especially for an expansion, demonstrations and being able to see, you know, what this new functionality is. Buyers are still in buyer mode, aren’t they? They’re still buyers, whether it’s later on in the cycle, you know, from net new, or whether they’re an existing client. They’re still buying. We shouldn’t imagine that they’re gonna change their behavior in any way and how they go about buying.
Mark: So much, so much. And what’s great then is that you see a lot of people, [00:05:00.312] I think the shift right of presales means that there’s no option but to concentrate on the value delivered…
Don: Exactly.
Mark: …rather than just the features in the box. And customer success teams that win, and I happen to know one very closely, shout out to my CS brethren, they really focus on helping customers with business [00:05:30.312] change, and business change happens continually.
Don: Absolutely. So, extending on from the argument or, you know, proposition I made in the previous one about are we seeing the end of live demos, that tends to also happen in the customer success arena. You know, if you go for an expansion, customer success people, like salespeople, understand that buyers want to have demos. And that’s a challenge for us to put the investment in [00:06:00.312] to do that. So again, this is gonna be another world where if you are doing live demos at the moment, is that this has got to change into kind of video to kind of fit into how the buyer bought in the first place, but also how, you know, the buyer enablement world, how buyers kind of think. They want to self-consume some of this, and then probably in a live setting, ask questions, you know, perhaps, you know, challenge some of the things they saw in the video. And maybe our skill set [00:06:30.312] in a live setting is more about consulting, more about advising and objection handling, you know, rather than…and using our knowledge of case studies, you know, driving value-driven stories.
It’s more about that than where we put the mouse and where to click and what features and functions there are. All of that is kind of moved into video. And buyers, if that’s how it worked as part of the original buying process, we’ll expect it to work that way. They kind of would wonder why [00:07:00.312] are we doing a live demo now? And also because live demos aren’t scalable and if we’re measuring presales people in the wrong way, you know, from a customer success person’s perspective, the argument we made before there, you know, we can’t afford to put that much effort into it. So, you know, all of these point to the same thing, is I’ve made the argument that even in high-end enterprise kind of space, we should be moving towards the idea that you need less, if any, live demos, the [00:07:30.312] same in customer success or even more so because the drivers that are behind it are even stronger.
Mark: Well, I mean, I couldn’t agree more and I’m looking forward to your DEMOFEST session, Don. I mean, I think it’s gonna be fascinating. There’ll be a lot of chat in response to these ideas. I think we very much welcome it. We’re seeing a lot of change and I think there’s some very brave companies that are stepping forwards into this bold new [00:08:00.312] world and there’s some that aren’t. And I think over the next year, not even over the next few years, I think over the next year, we will see that make or break processes across the land. So, it’s an absolutely fascinating area.
Don: There’s a whole load of things that we do and we get involved in that need to be constantly challenged. I mean, you know, maybe at some future kind of “Burning Presales” thing, we should have a go at proof of concepts and proof of value because the more you talk to people about those, you kind of [00:08:30.312] beg the question, “Why are you doing this?” And sometimes the answer is because that’s the way that we sell, or it’s driven by the buyer’s perception of risk which is, “I think it sounds really risky. I think we’re gonna need some kind of proof of concept here to prove that this is actually gonna work for us.” Well, you know, in a buyer enablement world, that’s a failure because you didn’t anticipate that they would perceive risk in that way, and you should have prepared for that with content, case studies, [00:09:00.312] you know, perhaps references, you know, certainly video content that goes, “This isn’t a risk. We’ve done it before. Here’s where we’ve done it. Here’s some people you can speak to.”
Mark: And I think it’s our job to educate the buyers as well, because many of them will be doing some of these things because that’s apparently how you are meant to do it. Some will ask for a POC because they’ve been told that they should by maybe someone who isn’t involved in it and [00:09:30.312] doesn’t realize the reality of it. So, it’s definitely our job to help them with these things and so we can.
Don: Yep, yep. Like RFPs, I class RFPs in the same as proof of concepts. I used to absolutely hate doing them and kinda absolutely why are we doing this and is it just because, you know, it’s part of the sales, we always have to?
Mark: Wow. I love the amount of questions that come out of this. We will have to get you back on Don. It’s always [00:10:00.312] fascinating discussing these topics with you, whether it’s on “Burning Presales,” whether it’s on “Two Presales in a Pod” or any other places across the internet you can hear and now if you are watching on Spotify, see us. So, thank you for coming on, Don, and we look forward to inviting you back on very, very soon indeed.
Don: Thank you so much for the opportunity, Mark. It’s been brilliant. Thank you.
Mark: See you back. Cheers. Bye-bye.
Don: Bye.
