GSD Podcast: Driving Revenue Growth Through CSM with Chad Horenfeldt and Kristi Faltorusso
Listen to the podcast here.
In this podcast episode, host Jeff Kushmerek with his guests Chad Horenfeldt, and Kristi Faltorusso, delved into the critical aspects of Customer Success Management (CSM). This blog post provides a deep dive into the key takeaways from their discussion.
Importance of Accurate Forecasting in Managing Renewals
During their discussion, one of the key points that stood out was the critical importance of accurate forecasting in effectively managing renewals. Customer Success Managers (CSMs) emphasized the need for a well-defined target that not only keeps themselves and their team aligned but also holds them accountable for their actions and outcomes. They highlighted the significance of setting clear and achievable short-term milestones, as these serve as stepping stones toward the realization of the long-term vision. By doing so, these milestones act as a unifying force that not only motivates and inspires the team but also propels the business forward, ensuring continuous growth and success.
Distinction Between Customer Health Forecast and Renewal Forecast
The focus of the conversation shifted towards exploring the frequently disregarded differentiation between customer health forecast and renewal forecast. This important distinction was highlighted by Kristi Faltorusso, who emphasized the significance of not making assumptions based on a customer's color status. It was emphasized that a 'green' customer does not guarantee renewal, nor does a 'red' customer automatically imply churn. These distinct metrics convey unique narratives, and comprehending their implications can significantly impact a Customer Success Manager's approach and the overall revenue growth of the company.
Synergy Between Sales and CSM
They also emphasized the critical alignment between sales and customer success management (CSM). These two functions work hand in hand, supporting each other in achieving the company's overarching targets. By fostering a spirit of collaboration and open communication, they create a strong foundation for success, allowing for effective coordination, problem-solving, and continuous improvement. This synergy between sales and CSM enables the company to deliver exceptional value to customers and drive long-term growth.
Account Planning for Larger Enterprise Accounts
Chad Horenfeldt, a seasoned expert in account planning, emphasized the criticality of initiating account planning early on, especially for larger enterprise accounts. By delving deep into the client's desired outcomes and understanding the intricate dynamics of the relationship, organizations can forge stronger connections and drive meaningful results. Encouraging cross-functional teams to actively engage in account planning and meticulously scrutinize all its components paves the way for a comprehensive playbook. This in turn enables organizations to proactively address any potential weak areas in the account plan, fostering success and growth in the long run.
Frequency and Effectiveness of Internal Team Meetings
The key to a successful implementation of the discussed strategies lies in the frequency and effectiveness of internal team meetings. By regularly convening and defining intervals for these meetings, team members can ensure that they remain in sync, share updates, brainstorm ideas, and collaborate effectively. This level of coordination and communication fosters a cohesive team environment, where everyone is aligned and working towards the shared goal of customer retention and renewal.
The podcast "Driving Revenue Growth Through CSM: The Role of Forecasting and Renewal in Customer Success Management" offers a treasure trove of invaluable knowledge for individuals seeking to become masters of CSM and propel revenue growth. In this engaging episode, Jeff, along with Chad and Kristi engaged in a comprehensive discussion that delves into the intricate details of effective forecasting and renewal strategies in the realm of customer success management.
Transcript:
Chad Horenfeldt 00:28
First of all Jeff, I'm a big fan. I love everything that you do. And I love your passion and your content and your CS community. So yeah, I'm so happy that we can connect. I'm just thinking
Kristi Faltorusso 00:40
I told Chad yesterday when I saw him that you're a big ego guy, and that he should stroke your ego a little bit to get it started.
Jeff Kushmerek 00:46
I'm a big ego guy.
Chad Horenfeldt 00:49
Is this being recorded?
Kristi Faltorusso 00:50
Yeah,
Jeff Kushmerek 00:51
this will all be edited. I promise. We are ready. But anyways, I'm here with Kristi and Chad, we have to start like, we're just BSin' way too much here. So we're here to talk about one of my favorite topics, which is forecasting and essentially, from green to red. What the f*ck happened? Right? Oh, there'll be a bleep put in. So, so this is a topic that just absolutely kills me. And, and I brought I was just perhaps with some adult beverages, lamenting in person about this with Kristi, we started going way off on this. And then thank God, there was no recording devices around and then we decided to bring Chad in to kind of make sure that we don't go to off the rails here and everything. And so first of all, if this ever happens to any of you, have you ever gone from green to red with any of your your ever? Leader? As a CS leader?
Kristi Faltorusso 01:51
Only once a week? Only? Once a week?
Chad Horenfeldt 01:53
Yeah, all the time.
Jeff Kushmerek 01:55
Now, what do you think's the biggest reason for that? Kristi? Is it? Because for me, I look at usage and if the usage is high, I just assume that they're going to renew.
Kristi Faltorusso 02:04
Okay, well, oh, but you also know that usage has nothing to do with retention. Right. So should we start there? Do you want me to answer the first question?
Jeff Kushmerek 02:10
I think we should start with my hypothesis that if you're used to just high, I've got nothing to worry about. I'm gonna mark this as green and move on to the next customer. Great.
Kristi Faltorusso 02:19
Okay. So can I share a little story, little story if I could, okay, so it was once working at this company. And one of the CSM is on my team said, our customer has the highest usage, highest adoption of any other customer, every single person who has a license who's using it, they log in all the time, I cannot prioritize them right now I have to go take a call with this customer. I'm really focused on project plans with these 123. They're all renewing right now. Well, this high usage high adopting customer,
Chad Horenfeldt 02:49
High paying customer?
Kristi Faltorusso 02:51
High enough where it hurts was using the platform so well to effectively offboard us and onboard themselves on to another solution. So usage did not decline because they needed to have something in place. But in parallel, they were onboarding a new product, and then deprecated us. So we went from great usage, great usage, great usage to no usage and zero in a day. So I will never be convinced ever, ever, ever. That usage adoption is a key indicator of retention.
Chad Horenfeldt 03:24
Yes, I agree. It's one component.
Kristi Faltorusso 03:26
It's one of so many, right? Yes. Yeah.
Jeff Kushmerek 03:33
So my favorite thing is I don't in chat, I love your opinion on this. I don't like even using colors like green to read to me is half the problem right there. Right? You are, in my opinion, you need to run these things like sales forecasting, and they don't deal in colors. They deal in percentages, complete stage gates, somebody's at my front door. And going from there, how do you run your forecast?
Chad Horenfeldt 03:57
Yes, good question. So I don't use green, yellow, red as the main component of the forecasting. So what we do in forecasting, usually with forecasting, if you look at like new deals and opportunities, they use, you know, like a stage one, stage two, stage three, and we use that but I use that just for you know, have we reached out to our customer have we you know, got, you know, red lines back or whatever, right? I use the stages for that. But I renewal probability is different. So I use a very simple renewal probability it's a percentage and 90 to 100%. They're going to renew, there's no question they're not going to renew. And in fact, a client could have a health score of red, because they might turn in a year or two. And we know that there's a problem there. But right for this renewal, they're going to renew. And so it's 90 to 100%, that I have a 50 to 90% is a there's a chance they may not renew for a particular reason. And then zero to 50 is a read and you know, again, percentage they're most likely not going to write. That's the typical approach. It's not to channel munging but there obviously are, you know, intricacies in that process. Yeah, I'm not sure if that's Kristi, like if that's what you are.
Jeff Kushmerek 05:06
Yeah, Kristi, but why don't they just renew if they're on auto renew?
Kristi Faltorusso 05:11
Yeah, everyone, no, you're also not supposed to let them know that they're going to auto renew, you can notify them 29 days before the renewal. So just shy of that 30. So ironically, I did work for a company where the auto renew was like their secret weapon, which was the most uncomfortable thing as a CSM. I promised myself that when I became a grown up, and I became a very own leader, and I could build my very own processes around customer success and renewal management, I would never, ever do that. Because the aftermath of forcing a customer to do something that they don't want to do is horrible. It's a horrible, and it's a horrible experience for you, you're throwing resources at this company in hopes to save it. So if you just think about, like, what's involved from a resource and capacity planning, I mean, it's just nobody wins. So no, I do not do that. Our team actually we notify through, we have some initial automation that goes out to our customers 125 days before the renewal, that lets them know that we are about to enter the renewal window, which starts at 120 for us formally, so 125, they get an email, and it does walk them through, like, here's all the information you're going to need to know to initiate this conversation with your CSM, who will be reaching out in a few days. One of the first bullet points we have though, is if your contract includes an auto renew, and we encourage you to go look at that, you must notify us in writing at least 30 days prior to your renewal date of your intention to not renew. Right. And every communication we have with our customer. If there's an auto renew, we make sure an ally are we saying it on calls with them that we are putting it in writing. And I know that like listen, maybe I'm pushing it too much. But I don't want them to ever feel trapped or tricked, or be in a situation that they don't want to be in, that's not going to make them successful that they can't afford. Like let's also be honest, right now with the economy the way it is. People are just trying to keep keep the business afloat. I don't know lock somebody into something that's going to like, I don't know, be the thing that they don't need when they need something else can afford it. So no, I will never do that with auto renews.
Chad Horenfeldt 07:11
Wow. Yeah, I don't I agree with Kristi there. I mean, we have different, we set up different processes based on the segment the customers in, but you know, we make it really clear, it's like, Hey, you're going to auto renew at these terms. So you need to let us know, like, are you going to reduce? Or, you know, do you want to have a you know, further discussion around this? And no, we're going to larger enterprise customers. You know, we look to set up a meeting, and we kind of have that discussion. And we make sure we get all of our eggs in a row and or eggs or whatever the expression is to make sure
Kristi Faltorusso 07:39
we're getting the ducks in a row. We'll get to the eggs for later, Chad,
Jeff Kushmerek 07:42
You count you're eggs after the duck Yeah. So So Chad, I like kind of some of that. But my problem is, is that I formed these really great bonds and relationships with my customer, I get really uncomfortable talking about financial stuff with them. And so I prefer just to kind of let the auto renew slide and not have any conflict between our relationship.
Chad Horenfeldt 08:02
ducks have eggs, so
Jeff Kushmerek 08:04
Oh, right.
Kristi Faltorusso 08:05
They do
Chad Horenfeldt 08:08
I mean, it's not up to you. I mean, you know, the customer is going to dictate whatever it is that they do, and what I found, again, like the the larger customers, you know, if you don't like doing this, you're gonna hate talking to procurement. And I think what I've seen, I've talked to a number of different businesses in the last month, few months. And what's what we're seeing is that the whole purchase process is consolidating into you know, they're they're getting an external vendor to do some of these negotiations, or it's going right to the CFO procurement. It's no longer that original buyer that's allowed to make a certain decision. And whatever that number was, let's say they can make a decision of like 15,000 20,000, like, either getting lower than that, like in terms of what they can actually approve. But yeah, if if you don't like that you're in the wrong profession. Or you should look for a company that maybe will allow you to do that. But a lot of those companies, those CS teams are being like, oh, because the Law Center is tied to our to revenue, the more your position is potentially at risk, depending on how what the leader did to make sure that they proved value within your team. So probably another whole discussion there. But I would say that the overall theme is that customer success is under attack right now. And you know, these processes like forecasting, this if you don't have your forecast together, you're done. As a sales leader. Yeah. You have greens go to red.
Jeff Kushmerek 09:38
Yeah, let's talk about forecasting a minute. But I know Chris, you had an opinion on the relationship aspect of things, right. Like
Kristi Faltorusso 09:45
I mean, I have opinions about everything. Jeff, what about the opinion about not being able to have a conversation with somebody
Jeff Kushmerek 09:51
we met at like the Farmers Market at the kombucha stand.
Kristi Faltorusso 09:55
Let's be honest, I can have the strongest and best relationships with anybody, right? At the end of the day though we are in a commercial relationship, right? That doesn't mean that I don't like you, that we're not friends and I don't want you to succeed. But our relationship, the primary basis of it is tied to a contract, which has dollars involved. And I always make sure that it's very clear, and I talked about this all the time kickoff to the renewal process doesn't matter. We're in a commercial relationship, my job is to help you achieve your goals. Because if you do that you will stay and grow with us. That is my objective. And that is your objective, are we clear that we both have these, these are our goals, great. You can't shy away from these conversations. And if you're a CSM, who doesn't know how to do this, go ask your manager, someone needs to get you trained, because you cannot avoid it. avoidance is only going to cause risk for your business and risk for you as a professional. So to Chad's point, if you want to know the fastest way to get fired, avoid having the tough conversations.
Chad Horenfeldt 10:53
Yeah, I'd say is that, you know, it shouldn't be that challenging. Like, you should have a renewal playbook that has several options in terms of here's things that I can do to help you, you know, if you're going into renewal negotiation, which you will, first of all, it should be really clear in terms of how you approach the renewal, how you're showing value, you know, how you're selling future value in terms of maybe product roadmap, you know, here are things that you can do that will actually achieve additional value. Here's what you've achieved already. And then, you know, beyond that, once you've sold that value, and you've established relationships with the right people, then if you get into the negotiations, there's only certain levers that you actually have. And at the end of the day, the CSM was like, here, this is what I can do. You're asking me to do that? No, I'm sorry, I can't do that. And then like pushed, he said that you'd bring in your manager to help, you know, potentially, you know, do some finessing on the negotiation side. But it shouldn't be, you know, all that crazy. Now I've, in this past year, I've seen crazy, I've seen things I've never seen in my entire life in terms of negotiating. But there should be a basic playbook that you're working with. And I agree like, you know, for some CS professionals, it does become very challenging when you don't have that playbook. And also when you haven't been adequately trained. And you're not necessarily stuck for success, whether there's a definitive process on what you should do. That is where the CS leader needs to play a strong role. And make sure that that's been established.
Jeff Kushmerek 12:19
Now, I love it. But my problem, though, Kristi, I'd love your opinion on this is that, you know, when I get together with the CS team, every week, we are going through all these, you know, support tickets and problems that my customers are solving, we never have time to even talk about forecasting.
Kristi Faltorusso 12:35
Well you need to book a separate meeting, I don't know what to tell you. You need to prio, like if you're the leader, and this is where you're spending your time, you need to prioritize what matters, right. And I always tell my team, which I have to lead by example, prioritize with impact in mind, if I know that right now, what I have to get to is the forecast because we have to run this business so we can survive another day in this economy, guess what, we're having conversations about the forecast. And I will tell you that the meetings I run are very uncomfortable. And it's not because I don't love my team and trust them at doing the right things. But it's my job as a leader to find the things that we're not doing to make sure that there are no surprises. So while they might feel like we're in a good place, and we've had a great conversation with the director, I want to know why the VP hasn't been involved. And I want to know, are they the influencer or the decision maker? Like, I'm going to ask the tough questions, I'll follow med pick, or you're going to ban we can do whatever whatever philosophy methodology you want to do, we're going to follow one of them, I prefer med pick. And we're going to go through that just to make sure that we're checking all the boxes across the board. Because to Chad's point, listen, I have seen green customers leave and read customer stay. And so we cannot make the basis of our forecasts around money tied to how our customers feel about us because I don't care. You can hate me today and renew tomorrow. And I'll worry the next day about how to make you like me again. But for right now, right? The focus is how do we make sure that our customers are in a position to make the decision to continue to work with us,
Chad Horenfeldt 14:03
I think, you know, there are ways that you can show a little bit more empathy, and caring to customers in this process. So one of the things is, first of all, understanding what their budget cycle is, and kind of how that works. And, you know, for the larger customers, like you can't do this roll every customer. But just understanding that a little bit so that you can make sure you've tied these conversations around that. I think the other thing that tends to throw wrenches and things is that when you have, you know, price increases, or you have, you know, just additional costs that maybe they didn't anticipate, you know, maybe have a usage based pricing, and, you know, maybe there's certain spikes that are going to happen to their business. And so, you know, you know, as an example, so I had a customer where I knew that they're going to expand into another area, it's going to cost them more because they're going to use a new part of our product. And so what I tried to do there is you know, knowing their business, that there is challenges and other parts and knowing the entire relationship that we've had, you know, a bit of a challenge in terms of just getting them on boarded. I tried to make sure I've smoothed over those different pieces, so that they are going to be paying more we're doing right by our business and our products are going. But, you know, maybe making that price increase gradual or something to that effect. So there's there's definitely those different components. And again, this goes back to the playbook back to the levers and things like that. But yeah, you know, as Kristi said, you know, it's like, show me the money, like, I, you know, pay me essentially, like, you know, I've gotten to discussions like I, this procurement person, this person was like, you know, what, great, but pay me because, you know, if not, and I don't want to get to this, I don't know what, Kristi, you've done this before. But I don't wanna get to the point where I'm gonna turn you off. But I have gotten to some points where we've played this game of chicken, and I've turned customers off. And when you're working with mission critical systems, it's extremely painful. But I've found that. So unfortunately, on the other side, the CFOs, they want to play chicken. And it's a dangerous, dangerous game. And again, like that can really try the relationship that you have, and you don't want to get to that point. But there's only so many levers that you have
Jeff Kushmerek 16:02
Chad, were you the guy that threatened Jason Lemkin was that, you
Chad Horenfeldt 16:06
No, I have not worked with Jason Lemkin professionally.
Kristi Faltorusso 16:09
So you weren't even why he got on that panel and said what he said and wrote a blog, but that wasn't, you
Chad Horenfeldt 16:16
know, I read his blog post. You know, if I was maybe trying to promote my business, maybe that's what I would do, like, try and screw over.
Kristi Faltorusso 16:25
I mean, you could take the credit for it, since it seems like no one else is raising their hand.
Jeff Kushmerek 16:30
national treasure, but yes, let's go back. I just have to tell my wife, I'm not today. No, no, I'm not under duress, nobody's I'm okay. Sorry, my wife was worried that I was threatened by some of the aggressive language that was coming over the computer,
Kristi Faltorusso 16:43
Oh, you stop it. Can I just say to Chad, you make you make an awesome point. So when you mentioned about managing the cause their customers budget cycles. So I manage GE at one of the companies that we were with, and let me just tell you, that they're not operating off of my my, my four month budget cycle. So we would actually start working on the renewal a year in advance with their legal and procurement teams. And all this because we an ELA, so an enterprise license agreement, we were working with so many different parts of GE, that to orchestrate that level of commercial contract like that was a beast like that was someone's full time job, just to manage all the steps of that every single day. Now, I'm not saying that we're all working with every GE, but we're working with larger companies. And Chad, I think you hit it right, the best thing we can do is really understand what our customers need to make informed decisions and to manage this process on their end, I think so oftentimes, we are forcing our customers to do what we want them to do within the timelines that we need them to do it. I think, if we pull them into that process, right, this is our way to demonstrate a little bit more empathy, but then also probably have a more favorable outcome for the business. Also, ahead of risk, like a great
Chad Horenfeldt 17:53
example of that is, you know, there are, there's going to be price increases. So get over it, like there's price increases, but you know, some of the levers that I would use were, well listen, I have to increase your prices, you know, you've been using X amount more. And the customer's like, Listen, I don't budget for that right now. Like, I can't pay for that. I'm like, listen, that's fine, here's what I'm gonna do, I'm gonna give you a few options, you can pay less, but it's going to be a lengthier agreement, or you can pay more, and you know, it's going to be you can sign for a year. And so I think that by giving them that flexibility, and then just saying, listen, like, you know, you've, you've used our support team X amount of time, like you're wanting, you know, this premium type of service, you know, you can potentially go to a competitor, you will not get that, right. But, you know, we've established a lot of things here, and here's what I'd like to do. But I there's only so many things I can do to help you here. I mean, you want us to be around in the long run. And, you know, we want to provide you with that optimal service. So, you know, those are things that, again, preparing your team having to have those, those great conversations. I do think, though that one thing we haven't really talked about is we've been focusing on forecasting, we've been focusing on the renewal process. But if we back up, you know, into the journey, and what are the things Christy you had mentioned around, you know, identifying, you know, who the right players are, but one of the things that I learned, you know, while back, and I think this is from zYv, was around evaluating that relationship that you have with those particular stakeholders. So, you know, one of the things that we did, and I think this was really what saved us going into 2022, because I was noticing that you're getting price pressure from customers, and some of those early renewals in 2022. And so we started evaluating and creating account plans for clients over a certain size, and we would focus on what their business outcomes were, what it was those success metrics they need to achieve. And then we evaluate the stakeholders and we evaluated you know, these the relationships strong, you know, is it sort of medium, is it weak? And that's going to allow us, you know, as part of those forecast meetings to dive further and then determine, Okay, what type of strategic engagement we need to have with that customer. So as we know what their business outcomes are, we're aligned there. And B is that we know what is not only who the stakeholders are, but what relationship do we have with the stakeholders? And how do we create a firmer relationship with the stakeholders? Yeah, so you know, I'm not sure if that is.
Jeff Kushmerek 20:09
That's my big thing, Chad, because because as I always say, the relationship gets sold up here between the A, and then the champion gets pushed down to post sale, and then the relationships happening here, right. So this person's not going back, whether it's the CSM or the ADR, or whatever, whoever it is, is not communicating the value back to that champion. And what winds up happening is that there's a mid year meeting and the CFO is like, you need to trim off like X amount of dollars, are you using this, this this and that, if you haven't been telling them that like, look, here's the value that you're getting. You've, as Kristi would say, you're meeting your core outcomes, right? Your core objectives, right? And going from there, then they'll be like, Yeah, I signed up for these guys. I'm not hearing from them. I don't know what's lose it and we'll figure it out later or something like that. Then you go back in at the 9, 10 month mark, and they're like, who are you? Like, you know, I haven't heard from you. I lost the budget on you. So, so sorry. Yeah,
Chad Horenfeldt 21:07
yeah. It's so frustrating. I think what I'm getting I get really frustrated about this is that what I'm hearing is that well, salespeople or CSM can't do that. They can't, they can't elevate that conversation. They can't talk to decision makers. And I think that's a load of shit. I think that the problem is, is that I'm sorry, I know, you've probably brought me on here for the, you know, the calm one,
Kristi Faltorusso 21:26
for you to be more riled up. Chad, bring the energy. Let's go Chad.
Chad Horenfeldt 21:30
Yes, the problem is, is that we're not equipping the CSMs to be able to have those conversations in a correct way, like an asking, you know, what, what Bob London calls these disruptive questions. And it really teaches them to not just ask them, what their goals are, what keeps them up at night, those things like, you know, your executives who are gonna call you to fall asleep, they're going to shut off their video, and they're not and they're just gonna like tune out. You have to ask them, you know, questions that are really going to engage them, and so that you keep them involved. And the other thing too, is I think that's been really hurting ces as a whole is that we get used to working out of our home offices, you know, working and just talking to our colleagues and texting and emailing. When you need to get out there and go visit your customers, COVID is over, and go visit your customers. I don't care if they're spread out and you can't get everybody into an office. But you have to build those relationships with customers of a certain size
Jeff Kushmerek 22:27
never never lost a customer I visited Jason Lumpkin quote.
Chad Horenfeldt 22:33
Yes, I should have visited Jason Lumpkin.
Jeff Kushmerek 22:38
Kristi, my my fault with a lot of this is with the CS managers that can drive their teams to be able to accurately predict and forecast and
Kristi Faltorusso 22:47
when you have a manager that doesn't know how to forecast, how can you expect to have CSMs that know how to forecast? Right? Yeah, I mean, everything stems from the top down. So we need to stop pointing fingers at our teams, kind of like what happened in that in that session, you may be listened to. But yeah, we're we're blaming the frontline teams, for their inability to do what we expect them to do. But let me tell you something. When we originally built out Customer Success years ago, we're like, oh, let's say 20 years ago, the idea and the premise of customer success was not to have these commercial conversations. So we've been building and fostering this profile of these right people to be strategic and be consultative, and to be the value drivers. But when we decided to say great, customer success will now also be responsible for the commercial motions and manage revenue, we never stopped to shift the profile, or to focus on the proper training enablement that sales gets, so that they know how to do their job. So we're training CSMs, and like how to have tough conversations and like how to do a good business review. But who is training these teams on how to forecast how to have tough conversations, how to negotiate effectively, nobody is making that investment. So when these teams are seemingly not doing what they're supposed to be doing, it is not because of the their willingness to do it, it is because they don't have the skills to do it. And it's either your job as the leader to hire the right people with the right skills, or focus on developing those skills with your team.
Jeff Kushmerek 24:11
So you're telling me if I'm hearing this, correct, that that former school teacher that just switched careers, is expected to be able to have those conversations?
Kristi Faltorusso 24:20
Well, you know, my favorite my favorite revenue conversations are with former kindergarten teachers. So yeah, one. Right, like, let's invest in them. Yeah.
Chad Horenfeldt 24:31
One thing though, Kristi, I don't think it's just the skills. I think that the other thing is that it's also the time. And so, you know, I think that especially now because, you know, there's been a lot of layoffs, and there's, you know, even more thrusted on the CS organization, and I think what's really, really important is the CS leader, make sure that they're assessing where they're CSMs are spending time where the time sucks, you know, do they need a really good CS platform, I know someone that works for those organizations that they can use that are the is there have data in all sorts of different places, can they not get access to the data? Are they doing support? Are they doing onboarding? So it's really important that you assess where that CSM is spending their time, and either take things off their plate, fix the product, you know, or just build it by better tooling that they need. So you have to look at the aspects too, because I think that, you know, if I'm a CSM and I listen to this, you're like, great, like, you know, throw renewal responsibilities, but How the hell am I going to do that? When I have all these other things I have to do, and you know, our products, you know, in the toilet, and I've got just got like, 30 more accounts on my plate. Yeah,
Kristi Faltorusso 25:36
yeah. Now know, Jeff, no, no, no, Jeff, Chad, I love that. And this goes back to everybody out there who's saying we need to do more with less I like literally want to physically hurt other people. We should not be saying that we need to do different with what we have. And so chat to your point, right? Like, let's do a big assessment, let's understand what the teams are doing right now. And if we don't have the bandwidth, if we don't have the resources, if we don't have the tools, if we don't have the people, fine, then shift them to what you need them to do to drive the business outcomes, then guess what, we're not having QBRs? Then guess what, we can't do weekly calls with these customers, you have to decide as a business though, what you want to prioritize. But if you go to your team, and you say we're gonna do more with less, you're insulting them,
Jeff Kushmerek 26:20
right? No, I'd prefer to retail your customers put people down to different service levels. And
Chad Horenfeldt 26:25
I don't I don't add to this, I don't think I wouldn't, I'm fine with removing. And I just funny, because I wrote a post on this saying that CEOs should own, you know, revenue. But I'm even fine with, you know, that moving to sales, as long as the focus in CS, and as a whole of the company is focusing on capturing business outcomes, and making sure the customers deliver on them. I think that the thing that I'm seeing that, you know, companies are selling the vision, and they're like, yes, our product is XY and Z, and we solve challenge, you know, A, B, and C, and they sell it. And then they just look at adoption, it's like, oh, adoptions doing well, you know, number of users purchase versus, you know, use or whatever usage metric is x, and then they're like, oh, it goes red and insurance. It's like, Well, were you actually, you know, making sure that when once they purchased the new what the exact success metrics they're trying to achieve are. And again, so I'm, you know, in some ways at this moment of time, because it's so crazy. And renewals are so insane. And upselling is so important, that responsibility that can go into sales, potentially, but it's more so like focusing on the outcomes, rather than just doing the busy work of like, I gotta do business reviews, or I got to be with my clients on a weekly basis, great, they're still going to turn if you're not focusing on the right, you know, important aspects around their business.
Jeff Kushmerek 27:42
No, I agree and add work in some companies that their salespeople aren't doing the renewals, you know, they they've got, they're working in this industry for many years, they know, if they go to a new company, they want to maintain those contracts and things like that, that's like, Fine, still compensate the CS team for doing the work that makes sure that when they hand it back over to the salesperson or the for the renewal, that the accounts in good shape by doing all of these things, so they may not be having the actual
Chad Horenfeldt 28:09
show that say how they're impacting, you know, the bottom line, and again, like, it's not just based on activities, you know, what are those things you're actually accomplishing, you know, to, you know, have part of those activities. And it could be no usage could be an important part. But is it usage of those key items that you've demonstrated, you know, through data analysis, that they actually create greater stickiness with your product. So it can be integrations with other systems, it could be certain automations. But again, like it's not going to replace having those types of, you know, important strategic conversations within the pier have the right period of time, not just you know, two days before the renewal
Jeff Kushmerek 28:52
is shifted for the last topic, right, right back to getting CS managers to be better about forecasting. And what Dr. Kristi has pinned on this, like, I think we probably do ours in the same sort of way. I learned the hard way. I was for 15 years, sitting on every sales Monday morning pipe crawl. Because we all I was always on products that needed PS to get implemented. And so I was or break whatever, it also they weren't bringing Cs into the conversation. And so I was there to be like, Okay, we're gonna jump in now and help with X, Y, and Z. Now sometimes in those meetings, I wouldn't speak at all right, but it was being in there. But I saw when people week to week over week would say yeah, that deals gonna close. And then those deals wouldn't close. And then those it's it's a brutal environment, right. But at the end of the day, you learn that I'm saying this activity is going to happen, I get questioned, then did you do this? Did you do this? Because just like our renewal processes, these sales processes are well thought out. Okay, well, did you find out when the procurement is their procurement? How long does it take to sign a deal? How's it And those are the things that, of course, you'll see is there's no training that that is there for that, right? So people need to get this type of methodology in their place. And then they need to filter that down to their teams as well, too. Yeah,
Kristi Faltorusso 30:16
yeah. I mean, I emulated much of my forecasting and renewal process and the commercial end of it from what I've learned from sales, to be very honest. And so I run it through, you know, committed pipeline, best case risk and churn. So it very much feels like that of the sales. And we do similar percentage forecasting to so I've got 9070 3010, and zero. So everything feels like if you're used to hearing how the sales team ran their pipeline, and their forecasts and probabilities, same thing here. And the numbers we would just adjust, right? So if I'm forecasting at, at best case, and it's 30%, what I'm doing is I'm taking like 30% of that revenue, and I'm kind of bucketing that in. But I know that week to week, I've got to pull levers, right? So I've got to figure out a way to get to my number. And so if I see something slipping, how am I making that up? Right? Because that's the other thing is like you have to have maniacal focus on those numbers. And if you have a target, that's your target, your target doesn't move. So you got to figure out what's happening beneath that. And what are you going to do to get there?
Jeff Kushmerek 31:16
Number because I've seen some leaders be like, Oh, we lost that 130k. So I'm going to gin up some some type of upsell or something like that to this customer. So you're looking at it from the sort of,
Kristi Faltorusso 31:27
I'm looking at the totality of revenue, right? So if I've got to get to and IRR of X, okay, like is there? Where is their upsell? Where is this? Like? Guess what if that customer if we we didn't talk to them about how much lift there is? We're gonna do 4% Can we do 5%? Like, I mean, it's, it's just trying to figure out like, what can we negotiate to get us closer to that? Now listen, we're not like sales in the sense that like, we don't have this ability to just keep building in the pipeline, like we just can't keep taking leads, and try to rush them through the process. We have what we have in front of us in terms of the renewals, so we can't generate new, but this is why forecasting is so critical, because that these things, slip these things
Jeff Kushmerek 32:06
early to if you know, you're gonna have a down quarter, you have to prepare people for that instead of last minute coming in. That's a good way to get fired. Well, listen, it's
Kristi Faltorusso 32:14
like I have to work very closely with sales. Because if I know that I have a heavy churn month or quarter sales has to make that up. Yeah, right. So my numbers and sales numbers are actually kind of work in partnership, our numbers are not exclusively our own, we have a company number that we have to hit. So if I'm down, they've gotta be up. And if they're down, I gotta be up. Right? So we've got to figure out how are we building to that together. Now, that's the type of alignment though it would be really cool to see if we can figure out a way to do that all throughout sales. And CES is like have that type of collaboration and not just on numbers, but like, the spirit of the work that we do as well. But there helps. CRO Yeah,
Chad Horenfeldt 32:57
yeah, I love the target, like $1 Target, because it's not just you know, the manager keeping their team accountable and working towards that goal. But I know you know, as a CSM, I love it, when there's a number that we're working towards, like something, there's a goal that we're working towards. And usually there's a longer term vision that you're working towards as well. But having those short term, you know, mile markers that you're going to hit. That's just that's helpful. And everyone feels a part of that trying to get to that goal. And I think that does create your sinkers in better alignment with sales. But I also like to see another man in there topics around celebration and how sales and celebrates, you know, certainly ends and STS celebrate certain wins. And, you know, really that being a unified it's revenue, like, you know, whether it's new revenue, where the existing revenue is revenue is driving the business forward.
Jeff Kushmerek 33:41
Yeah. What's not also forget that when you start getting up into a company has been around for a little longer. You know, if if sales has a 20 million number, and they close it that gets added to your book of business, you wind up in an upside down relationship where you've got more revenue, or you've got more total dollars than the sales team does. Now. You're like, Huh, you know, you're the CRO like, I don't think so. Yeah, our bag is bigger. Yeah. Okay, Christy, you're one quick tip. And then just one quick tip.
Kristi Faltorusso 34:09
One quick tip, do not assume that your customer health forecast is your renewal forecast. They are different metrics, and they tell different stories. So just because your customer is green, doesn't mean they're going to renew. And just because your customer is red, doesn't mean they're going to churn.
Jeff Kushmerek 34:24
Awesome. Chad.
Chad Horenfeldt 34:26
My tip is account planning. I think it's especially like for the larger, you know, larger enterprise accounts, start that early know what their outcomes are, know what the relationships are. And if you're a leader, get your teams to be doing those and then question every item on there and then have a playbook in terms of how do you attack when there's weak areas as part of that account plan?
Jeff Kushmerek 34:47
Yeah, I I had I was at a speech I think it was somebody from box or whatever, but they obviously they're huge. They can sort of the time to do some of this but it was like in the first month you meet Weekly in the second month, he meets twice a week. And then in the last month of the quarter, you have daily stand ups to go through all of these, everything that's rigorous. But you know, we've all been there where you're meeting on on these things a lot. And it's meeting its frequent. You have to be in there, you know, and then there's all the other work you have to do so, yeah. Awesome. Well, I appreciate both of you. Thanks for allowing a Boston person to chat with two New York people. So I appreciate that. we can be friends today.
Kristi Faltorusso 35:29
Today, hold on one second, everybody. Thank you and I'll stop the recording one second.