Monday, November 2, 2015

How I Came to Live on a Sailboat

We leave the things we love for the love of things we have yet to discover. It is often sad, always exciting and each time holds the promise of being the best one yet.

Whenever I am asked to share an interesting fact about myself, I like to share that I have moved 14 times in the last 17 years, including seven different states. This was not intentional and when I was starting my career I never imagined I would have found so many great opportunities around the country. Although I moved for a girl a few times, the majority have been moves for great career opportunities.

My most recent move brought me to Silicon Valley from Park City, Utah. Like a few of my prior relocations (leaving Truckee, CA comes to mind), this was a difficult place to leave. We had found a beautiful log home at the top of Summit Park, regularly went backcountry skiing out our back door, and frequently saw moose wandering down the street. But after two short years in the Wasatch, enjoying the deep snow and solitude of life at 7500 feet, it was time to move again.

Relocating as much as I have for my career has not always been a great idea. Moving to San Francisco in 1998, though I was not in technology at the time, proved to be poor timing. And while it was a tremendous career opportunity, the years I spent in Dallas I remember as being particularly sad and difficult. Although it’s always easier to connect the dots in hindsight, I still would not have traded any of the experiences along the way for where I am now.

Yesterday, my wife and I sailed out of San Francisco Bay, under the Golden Gate Bridge, and down the coast to our hailing port of Half Moon Bay. Here amidst the fishing boats we will live on a sailboat together. I will commute over the Coastal Range a short 30 minutes to Palo Alto to work with Kahuna, another incredible career opportunity, as the VP Customer Success.

Living on a sailboat, like many of my moves, was never part of the plan. It was an aspirational goal, maybe a bit of a romantic idea, that we talked about during one of our many road trips up the Oregon coast. “Wouldn’t it be cool.” It was fun to think about but never something we seriously considered. Then with our move to Palo Alto, living on a sailboat became a question of “Why not?” Although there were a lot of reasons, none of them were good.

After selling our home and reducing our possessions to the bare minimum, we are now moving onto our boat “Volatility”. It is a big transition from a spacious log home in the mountains to a cozy bunk with the wide open Pacific in the backyard, but it is an incredibly exciting new chapter in our lives. As I think about the many career decisions and stages of personal and professional development that have brought me here, three things stand out.

Embrace Change  While it can be difficult to start over in a new company or industry (or both if you move from HR Technology to Mobile Marketing Automation), embracing change is a critical step in realizing the opportunity. It is almost never the case that you can simply rinse and repeat the same processes, tools and people you enjoyed at your prior company. While you definitely bring the best of what you learned with you each time you move, embracing the new opportunity is critical if you are going to realize your potential. Actively embracing change will smooth the transition, from establishing new routines to building diverse work relationships, and focusing on learning a specific new skill set as a part of your new role will also help ensure that you are living in the present.

Maximize Your Opportunity  Embracing the change is an important first step, but just as important is maximizing your new opportunity. With each career move it is important to hit refresh on your personal and professional motivation for work to ensure you bring fresh optimism, a healthy constructive attitude and the ambition needed to accomplish big things. If you aren’t ready to sign up to do your best work, stay put and enjoy the scenery. There is nothing wrong with that. But when you’re ready and you do make the move, make the most of it.

“If you are going to eat shit, don’t nibble”  A great line from Ben Horowitz in his book, “The Hard Thing about Hard Things”, this is an important lesson I have learned in my own career and from my many relocations. If you are going to do something, just go ahead and do it. Living on a sailboat might prove to be a terrible idea. I have heard there is a thing called a Sharknado? But even if sharks do fall from the sky, we are all in. Transitioning out of my HR Technology comfort zone and into disruptive Marketing Technology might prove to be difficult, but I am all in. While it is probably not the best sailing philosophy, “If you are going to eat shit, don’t nibble” has been shown time and again to be sound advice for career management.

Sailing under the Golden Gate Bridge was a defining moment in my life and career. Living on a sailboat in Half Moon Bay and helping to build a great company at Kahuna will be a defining next chapter that I am thrilled to be writing.



About David Verhaag 


David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Thursday, October 15, 2015

Six Qualities of a Future Customer Success Leader

 
I have made several great hires since joining Kahuna seven months ago, but our next addition to the team, the Director of Customer Success, is perhaps one of the most challenging roles to fill. I am passionate about the role a Customer Success Manager can play in driving the success of a growing software company and the Director is a key driver of that team’s success. Having spent years at SuccessFactors before the Customer Value organization was established, I saw first hand the gap in business performance created when there is no one team or individual specifically charged with driving long-term customer value and success. After the Customer Value function was established I fully appreciated the tremendous opportunity the role and team represented.  Our team at Kahuna has grown to the point that it is time to add a Director of Customer Success to lead a team of Customer Success Managers and help drive long-term value and success for our fantastic customer base.

Below are the six things that I look for when hiring a Director of Customer Success.

Customer First Focus  As with all roles on our Customer Success team a focus on the customer must come first. This sounds obvious but it can be surprisingly difficult to identify individuals who are as passionate about serving customers as they are about building CS processes, hiring great people and leveraging technology. It is easy to get distracted with the building and forget the why. In our search for the Director, we are looking for an individual who gets as excited about the customer’s success story as they do their own. Our ideal hire frames the success of the CS programs not on the organization’s growth, process efficiency or recognition, but on the results it drove for the customers.

Thought Leadership  The role of Customer Success Management is still evolving. Over the last few years we have seen the rapid evolution of the function as more and more companies come to understand the potential of Customer Success and iterate the roles and responsibilities to find the right return on the investment. In our search for the Director, we are looking for a thought leader who will embrace the opportunity to define best-in-class Customer Success, understanding that best-in-class tomorrow won’t look like it does today.

Voice  As much as I love the Customer Success function, I appreciate that my opinion of how to build and lead the function is just one of many. In our search we are looking for an independent leader who will drive their own innovation and balance input from the executive team, including me, with a passionate defense of their own ideas and vision for the team.

Partnership  I have noted in a prior post that the role of Customer Success Manager is a difficult one. The most effective Customer Success Managers leverage the team to solve problems and the most effective Customer Success leaders take a view of success broader than just the Customer Success Manager role. Our ideal Director will take a full customer lifecycle view of the function and seek to build strong partnerships with our Director of Technical Services and our Manager of Technical Support to create a seamless partnership for our customers. This will require building strong relationships within the team as well as earning the respect and collaboration of our key partners in Sales, Product Management and Engineering.

Execution  In my mind, execution is everything. Our Director will talk the talk AND walk the walk. Period. In a fast growth business like Kahuna nothing is more important than execution.

Career Development  Supporting the development of others should be a priority for every leader. Professional development is also a passion of mine and one of the reasons that I enjoy working in a startup environment.  Along with the rapid growth of the business comes rapid career development opportunity. Startups like Kahuna create a wonderful incubator for future leaders and our Director will see the role as a leader and a developer of our talented team.

I am incredibly excited about the opportunity to hire our Director of Customer Success. This hire will be crucial in providing our customers with another level of advocacy and subject matter expertise within the business. The role will also provide our team with a leader who can drive execution through collaboration and partnership both internally and externally while providing learning and growth opportunities for the team and building tomorrow’s best-in-class Customer Success function.


About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Tuesday, August 11, 2015

Customer Success ≠ Inside Sales

Photo: Peyri Herrera

I am frequently asked about building and growing successful Customer Success teams. More and more organizations are finding conviction around the need for Customer Success even if they don’t fully understand how to structure, align and incentivize Customer Success Managers. It is often a case of “I know I need it! Now tell me what it is.”

There is a common mistake that leadership makes when establishing Customer Success or evolving the team because of a failure to deliver adoption, customer advocates or renewal results. That mistake is aligning the function too closely with Sales, staffing the function with Sales Managers or Sales Leaders and/or giving the Customer Success team a sales quota. While it is true that one of the key value propositions of the Customer Success function is growing revenue from the customer base, creating a Customer Success team charged with selling is a misguided approach to achieving that goal. It is a bit of a security blanket for Customer Success leadership, “If I own the number, I can justify the value.”

Customer Success should not be another name for Inside Sales.

Go Where the Problems Are
Sales Managers go where the money is. That’s the job. And making quota each quarter is hard work. I have tremendous respect for the challenges of selling and carrying a bag. But the drive to hit their number is exactly why Sales is the wrong alignment for Customer Success. Customer Success Managers need to go where the problems are, not just where the revenue opportunities are. Managing churn requires that Customer Success Managers invest time in the account that is “sold out” or experiencing challenges. An unhappy customer is not a great investment for an Inside Sales Manager working to make quota, but it is exactly where the Customer Success Manager needs to dig in. A “sold out” account can be a great place for a CSM to build a highly reference-ready partner, to find a secure customer to partner with on beta testing new features, or a place to drive exceptional adoption and ROI. These are all valuable contributions that a Customer Success Manager should drive, but they won’t help a Sales Rep make their number.

Charged with this function, Customer Success is best aligned directly to the CEO through a Chief Customer Officer or VP of Customer Success. This alignment ensures that Customer Success has a seat at the table to act as a voice for the customer on par with the voices of the Sales, Marketing, Product and Engineering organizations. As an active advocate for the customer, the VP of Customer Success can help drive the organization to ensure that customer commitments are delivered, issues that are driving or creating customer risk are discussed and addressed, and executive partnerships are established, maintained and leveraged all while driving customer adoption, earning advocates and ensuring customer retention.

Selling is Not Delivering
Structuring a Customer Success team requires that leaders understand the full value proposition of Customer Success while appreciating that selling the value of the solution is not the same thing as delivering the value. Delivering is hard work in any company and especially difficult in a software as a service start up defining a new market. Delivering can often be mistaken for implementation. But delivering value doesn’t end with the implementation sign off, and in most cases that is just the beginning. Ensuring that customers adopt the product, embrace the disruptive use cases and change management required, leverage the full features and functionality of the platform and manage through the inevitable challenges and issues of software requires a proactive, trusted advocate focused on the customer’s health: a Customer Success Manager. To achieve this, a well-structured Customer Success function is focused on three things:

1. Driving adoption (delivering the value)
2. Earning passionate advocates (recognizing the value)

3. Securing renewals (selling the value)
 

The role of Customer Success is simple: ensure that customers are successful. Executing on this role is difficult and requires a hybrid skill set that is part Professional Services, part Marketing, part Operations and part Sales. The key to a successful Customer Success structure is ensuring the leadership and team find balance in the full set of skills and don’t identify too closely with the structure of the Sales organization.

A common objection I hear is that Renewals is really a sales activity. And it is. At least, the renewals transaction is. But the process and hard work of ensuring a customer values the product and services enough to renew in the first place is the work of Customer Success. The structure I have seen to be most effective is for the Customer Success team to own customer retention (health) and for Sales to own customer renewals (transactional sales). Through an effective partnership, the CSM sets them up and the Sales Rep takes them down. The CSM is the trusted advisor and the Sales Rep is the bad cop who negotiates the dollars.

Incentivize Success
I will share more of my thoughts on compensation and bonuses for Customer Success Managers and leaders in anther piece, but one of the key elements in building and growing a great Customer Success team is ensuring that the right incentive plans are in place. Again, Customer Success is not Inside Sales. Setting a Customer Success Manager up with a quota is automatically setting them up to fail at the most important aspects of their job, ensuring customer success. Customer Success Managers should have their compensation aligned to the same three areas of focus noted above.

Driving Adoption  Customer Success Operations should establish a baseline of healthy customer adoption and CSMs should be incentivized to ensure their portfolio’s adoption patterns are aligned with the health curve.
 

Earning Passionate Advocates  The Net Promoter Score is an effective way of measuring the health of the portfolio from a reference-ready stand point and leveraging the relevant industry benchmarks to measure your effectiveness. Each Customer Success Manager should be incentivized to ensure their portfolio is meeting or exceeding the target and that there are mutually agreed upon plans in place to correct any issues. 

Securing Renewals  Again, the role of Customer Success is about setting customers up to renew, not necessarily driving the transaction itself. An MBO plan for portfolio revenue and logo retention has proven to be an effective balance of holding the team accountable without driving the wrong quota oriented behaviors in Customer Success. 

Structured and aligned to the right set of objectives, Customer Success can have a dramatic impact on the organization. But a common mistake in building Customer Success teams is going the Inside Sales route. This is an easy mistake to make but one that will ultimately undermine the full value and contribution of your Customer Success organization.


About David Verhaag 


David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Wednesday, May 20, 2015

3 Tips for Building and Maintaining C-Level Relationships



In my previous post, I noted the challenge of balancing strategic interactions with tactical execution in the role of customer success. To effectively drive change, help customers achieve their business results and ensure a productive long-term relationship, Customer Success Managers need to align with C-level leadership. Establishing these relationships is easy. Our partners in Sales often introduce Customer Success to C-level leaders during the hand-off. But maintaining and growing these relationships is often a challenge for CSMs who all too frequently focus on the technical aspects of the project and go into the weeds on the technology while losing sight of the business implications, or simply do not do their homework to understand their customer’s business or the challenges faced by the C-level leader. CSMs fall into the trap of thinking tactically and talking technically, and as a result lose the C-level relationship that can help them be successful. Having seen this story play out many times, I have identified three effective strategies for maintaining and growing these C-level relationships.

Understand the customer’s business - There is a common refrain in Sales, Marketing and Customer Success organizations: “We need to understand our customer’s business better.” What is uncommon and a differentiator for CSMs is actually taking the time to do it. At HireVue, I created a short video training that provided my CSMs with a method for breaking down a customer’s annual report to understand the key business challenges the customer was facing. The method is not complicated and involves simply reading the CEO or President’s letter in the annual report, noting specific themes, summarizing those themes and tying them back to the solution we provide. It sounds simple and it is. But the process of reading the CEO’s summary of the business and identifying themes that tie back to the solution provide a CSM with the basics, and it is just the basics, to have a credible conversation that is focused on the business and not just the software. CSMs often avoid this simple exercise because they mistakenly believe they need to read and understand the complicated financial statements, cash flows, or income statements. The CEO is telling the Customer Success Manager everything they need to know. They just need to read and understand it. 

Own the pitch - The elevator pitch is another simple concept that is often neglected or underutilized by Customer Success. Owning the value proposition, your company’s elevator pitch, is table stakes for Customer Success. Beyond just mastering the 2-minute pitch, understanding the underlying concept can help Customer Success build effective relationships with busy C-level executives. The 2-minute pitch is effective because it focuses on the core concepts and eliminates the extraneous detail. An effective strategy for Customer Success to maintain relationships is training them to apply this method to their engagements with the C-level. For every point of discussion and ask from the executive, prepare a 2-minute drill. Challenge them to eliminate the extraneous detail, identify the core points and value proposition and ensure that only the essential elements remain. One of my favorite executives summarized this approach well: “Just get to the fucking point.”

Have a perspective - C-level leaders don’t want to hear a laundry list of options. Too often CSMs are eager to please and end up having conversations with leaders that focus on options and/or product flexibility. "You can do it this way, or you can do it this way, we allow you to configure it this way or this way...". C-level leaders want an informed perspective backed up with data. "Here is what I suggest and why". Creating effective and productive relationships with C-level leaders requires that CSMs identify a perspective, back it up with data and be prepared to defend it. I have coached my teams in the past that you don’t have to get them to agree to your way but you do have to show them A way. Challenging CSMs to refine their perspective and back it up with data has an added benefit of ensuring that they have validated their recommendations. Through this exercise I have found CSMs rethinking the recommendation or changing the specific ask that they were going to make of the C-level leader.

One of the most important and rewarding roles a CSM can play is as a partner to C-level executives. Building and maintaining these relationships over time requires that CSMs engage leaders with a style that focuses on business outcomes and deliver their message in a way that resonates with C-level work and communication styles.


About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Tuesday, April 28, 2015

Thinking Tactically and Talking Technically


Over the last two years I have had the opportunity to build two amazing Customer Success organizations. Each opportunity brought its own challenges and rewards. SuccessFactors was challenged with a large and diverse customer base, 20+ products of varying degrees of technical complexity and maturity, and an increasingly complicated company structure. At HireVue, the challenges were very different. There, we had a few simple but disruptive products that could be viewed by customers as a “nice to have”, a small customer base where the relationship was often dependent on a single stakeholder, and an internal operating model that was still actively being defined. While the challenges of these two organizations can be viewed as opposite ends of a spectrum, one thing they both had in common was the need to get higher into customer accounts. To effectively drive change, help customers achieve their business results and ensure a productive partnership, Sales and Customer Success need to align with senior C-level leadership.

Customer Success Managers have a unique challenge in getting to and engaging the C-level. As the owner of the customer relationship, it's easy for CSMs to get stuck in the details. They are the individuals ultimately responsible for ensuring customers successfully implement, adopt and use the product to drive their business results, and successful CSMs go deep into the technical details to ensure all the pieces come together. They master the product so they can speak with confidence about features and functionality. They create and maintain detailed issues logs, project governance documents and other articles of good project discipline. These are important details that lead to the success or failure of any given account. Often, the CSM is also the glue that holds the relationship together and it is critical that they have the full and nuanced view of the component parts. But it can also lead to even great CSMs getting stuck at the Project Manager or Director level in the customer’s organization. The level of detail required to drive success is often the level of detail that prevents the CSM from effectively engaging the C-level. Commonly this barrier manifests itself as thinking tactically and talking technically.

To create highly effective teams, Customer Success leaders need to coach their CSMs in finding the right balance between maintaining detailed account discipline and driving strategic executive engagement. It is difficult to do both. But to impact change and lead CSMs to engage strategically with a focus on business results and business outcomes, leaders need to challenge their team to lift their heads up from the details to understand the broader context. Effective CSMs need to be able to articulate how individual decisions will have broader business impacts without getting lost in a feature functionality discussion. They also need to be able to articulate to C-level leaders the status of a project and the key issues that are facing the account without getting bogged down in a detailed project plan or issues log review. Customer Success leaders play a pivotal role here and can reinforce the right balance and behaviors by modeling strategic conversations and business focus while maintaining an eye for detail and execution focus through their one-on-one meetings, individual and team coaching and active mentoring.

The company structure and operating model can also go a long way toward aligning Customer Success with the C-level. At HireVue, one of the first changes I drove was to differentiate Professional Services (implementation, configuration and training) from Customer Success Management (relationship management, account strategy). It is difficult, nearly impossible in my opinion, to have one person turn on the software, train end users, and solve technical problems as well as engage the C-level, drive strategy conversations and manage toward positive business outcomes. Many organizations task CSMs with wearing both hats and are then surprised when Customer Success can’t get or stay aligned at the C-level. By differentiating the technical role of Professional Services from the tactical role of the Customer Success Managers, leaders can align their teams to drive the right type of influence at the right level.

Thinking tactically and talking technically is really only a symptom of the problem. But it also identifies a clear opportunity. The key to a successful Customer Success partnership at the C-level is in the balancing act between fostering strategic interactions with a focus on business results while maintaining visibility to and discipline in managing the account to a successful outcome. 

This balancing act can sometimes be a challenge, and next week I'll discuss specific strategies I've used to coach and mentor my teams toward this goal.


About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.


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Thursday, March 5, 2015

Five keys to making the Customer Success function work

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Over the course of the last two years I have had the opportunity to define and scale the Customer Success function at HireVue. Starting with a team of seven generalists (they did a little bit of everything including implementations, training, closing sales orders, support, and time permitting, account management) we grew the team to twenty-one, including true Professional Services, led by the fantastic Kara Blumberg, and best-in-class Customer Success Management. But more than just growing the team, we created a customer success-centric organization that drove significant results-- 200% increase in adoption two years in a row, industry leading Net Promoter Scores from our customers, 20% increase in enterprise logo retention and 154% average revenue retention. Through these experiences building and scaling the Customer Success function at HireVue, as well as earlier work with Mark Bissell building the SuccessFactors Customer Value function and growing that team from three to thirty, I have identified five keys to making the Customer Success function work.

Define the mission of the Customer Success team  
The Customer Success function means different things to different people. Some organizations view Customer Success as the Inside Sales Team, a group charged with selling into the customer base. Other organizations view Customer Success as a Support organization dealing with tactical and technical customer challenges. My personal view is that Customer Success should be a standalone function, partnered closely with Professional Services and Support. It is the foundation of a successful customer lifecyle. It is also my view that Customer Success should not directly own customer revenue expansion. It is difficult to be a trusted advisor driving successful adoption and net promoter scores while also negotiating financial transactions with your sponsor.

Hire people who are passionate about driving Customer Success 
When I hired Customer Success Managers at SuccessFactors and HireVue I looked for five key characteristics. 

A passion for customer success  And a willingness to do whatever it takes to earn it. If a candidate can’t tell a compelling story about how they went above and beyond to satisfy a customer’s needs they don’t have what it takes. 

Excellent communication skills  The ability to tell a value story in a way that resonates with different audiences.
 

Executive presence  The ability to engage C-level executives with confidence and poise.
 

Account Management experience  The ability to keep all the plates spinning while moving multiple customers in the right direction.
 

Subject matter expertise  Whether in HR or Recruiting, possessing a strong foundation in our industry provides them with a fast start to engaging customers as a trusted advisor.

Define the measures of success 
At HireVue, my first step in driving our results was defining clear measures of success with the team. Not only did we define the measures of success but we provided the tools for each Customer Success Manager to measure their progress against those goals. The objectives naturally evolved over time, but by establishing transparent and consistent quarterly objectives each Customer Success Manager had a clear understanding of what they were being held accountable for and how to measure their own progress against those goals. Our measures of success included:

Product Adoption  We used this as a proxy for whether the customer was getting value from our partnership

Net Promoter Score  We measured and incentivized the team both on User NPS (our customers and sponsors) and Candidate NPS (the customers of our customers)

Logo Retention  This is a fundamental measure of the health of a SaaS organization

Revenue Retention  Customer Success Managers have an MBO against customer growth, and while they do not own the upsell/expansion or the transaction sales, they own setting up the customer and the sales rep to be successful

Maintain a customer first focus 
Whether you are building and scaling a customer success team in a large organization like SuccessFactors (several thousand people at the time we were scaling the team) or building a foundation in a small fast growing company like HireVue (I was employee 101), it is critical to maintain a focus on the customer amidst the distractions of defining internal processes, establishing programs, rapid product evolution, and pivots, not to mention satisfying marketing requests along the way. For Customer Success to be effective each member of the team, as well as the leadership team, needs to prioritize doing the right thing for the customer first, and figuring out how to scale, define the program and build and scale the team second.

Measure success 
As noted, Customer Success means different things to different people and measuring and benchmarking success can be difficult. Early in my role at HireVue we established clear measures of success, which is what we based the team’s MBOs on, to ensure that we could articulate the contribution of the team to leadership and the board. Beyond these simple measures we evolved the team, with the fantastic work of Dave Andreasen, to develop a deeper understanding of our customers and what success looked like. This work took the form of weekly adoption reporting, net promoter score analysis, renewals reporting, customer health analysis and index and other deep dives into what was happening with the business. 

Building and scaling a Customer Success team is a necessary step in the evolution of any successful SaaS company. The basic building blocks are relatively simple but require focus, wise hiring, consistent accountability, and a clear strategy to ensure that customers are successful.



About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Saturday, February 21, 2015

Customer Success Platform Decision



In Customer Success we occasionally receive requests for proposals from existing customers and find ourselves on the vendor side of selection processes. Often this can be the result of an annual review by a procurement team to ensure they are getting the best deal on the right software, or it can be the result of a failure to drive adoption and value at one of our clients. But regardless of how we get there the process is never fun. On a good day it requires coordinating full suite demos, requirements discussions and reselling the value proposition to an existing customer. On the bad days it requires complex RFP processes, detailed requirement validation, multiple demos to stakeholders with competing or poorly defined requirements and expectations, and a long grind to re-win existing business. Our Customer Success team knows what this feels like, so when it came time to select a software partner, we actively worked to avoid the common mistakes.

These days Customer Success software is a fast growing market, and with good reason. To effectively drive customer adoption, satisfaction, retention and growth, you need to fully understand your customer’s experience and be able to articulate their business results. To do this at scale you need the data collection, data management, reporting and analysis of a Customer Success platform. The market for these platforms has evolved considerably in the last three years. There are a couple of key vendors defining the space and new ones are popping up with some frequency. When it came time for HireVue to select a vendor (a process that is just getting underway) we didn’t want to repeat the mistakes we see customers make and require an overly complicated or bureaucratic selection process. We also didn’t want to challenge vendors to meet a set of requirements based on the way we have always done things. Instead we chose to follow a relatively simple selection process.

1.  Identify the real business problem
2.  Engage the vendor to understand what type of partner they will be
3.  Define requirements but remain open to the vendor’s recommendations and subject matter expertise
4.  Keep the process as simple as possible
5.  Have a plan to pay for it (it is funny how customers often skip this step)
6.  Have a plan to make it successful even before you decide on a partner


As a Customer Success team frequently challenged to compete in these processes to save accounts or win business a competitor is actively selling into the account, we have sought to learn from mistakes we’ve witnessed and practice what we preach in terms of vendor selection. The steps are relatively simple, and the following outlines the basics of how we think about the process.

Define the business problem  Our hope is that each vendor, especially if they are selling Customer Success software, would ask or help us define our business challenge and align their solution ROI to that problem. We started our internal process with the business problem in mind to ensure that as a team we knew and agreed what problem we were trying to solve.

Engage with the vendor executive team  The market for customer success software is both new and rapidly growing. In our view, the CEO and CCO should be happy to engage with a prospective customer. Engaging the executive team was important to us because we wanted to be sure that we were selecting a business partner that could grow with our needs and not just a vendor to sell us software.
Update: One of our prospective partners proactively engaged us on requirements discovery, leveraging our subject matter expertise to evolve their product even before we were in the position to buy software.

Outline and validate the requirements  We sat down as a Customer Success team (the core users of the system and data) and defined our requirements for the platform. We segmented these requirements by must have and nice to have. We kept the requirements simple. This is not a 200-item spreadsheet of corner case requirements, rather the basics of what we need the solution to do. We are optimistic that the vendors, and especially the partner we decide on, will come to the table prepared to show how they can meet our requirements and then share the requirements that we should be looking for based on their industry expertise.
Update: One of our prospective partners recommended (wisely) that we engage the broader organization, not just Customer Success team, to ensure that we meet the needs of key stakeholders. They recommended a smart and simple process for doing this that doesn’t dramatically slow down the decision making process but engages the stakeholders to help us proactively drive buy-in and extended use cases.

Budget  We know that the right solution isn’t always the cheapest, and any solution worth implementing is not free, so we budgeted for the software and ensured that the budget aligned with the decision making process. We know we may be off the mark in the total dollar amount we need (only slightly if you are one of the vendors reading this), but understand the flexibility of negotiating a multi-year agreement.

The decision team  We defined, as a team, what the decision process would look like. We are engaging the key stakeholders in the solution review but are not extending the initial review to the full team. Having been on the receiving end of too many cooks in the kitchen, we kept this team as narrow as possible and shared it with the vendors who asked.

The decision process  We are scheduling all four vendors, the leaders in the space, to present to the decision team in a two week period. Following our review and tentative decision we will ask that they present to the broader Customer Success organization to start the process of gaining their buy-in and support. We plan to mandate the use of the platform for all Customer Success activities, but want the broader team to share their perspective and be a part of the decision making process without slowing us down.

I have been on both sides of the vendor review and negotiation with companies of all sizes, and appreciate that this is not a revolutionary approach to the selection process. But by keeping the basics of this process in mind and maintaining a “simple is fast” approach to vendor selection, organizations can be confident they will end up with the right business partner and software solution that meets their growing business needs.


About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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