Making Renewals Simple: How analytics and reporting can help seal the deal

"As the World Churns" podcast Episode 4 transcript, featuring guest Guy Rahamim:

< Listen to the full episode here >

Host:

As probably most listeners know in the CS world, about 80% of future profits comes from 20% of existing customers. So this obviously means that retention is pretty important and that's where your retention analysis comes in for this. You need data obviously, or more importantly, insights that reveal trends that incite action, ie. analytics. Guy, let's start with baselines. Why are these important and what are some starting points that you have at your company, Linear B?

Guest:

At the beginning, I remember this subject was really interesting to me since Linear B also is all about data. So we pretty much help engineering teams to get better based on their data. So this is something that we live day to day, and we work with our customers also to gain insights from their data. I think it's quite obvious that we would also need to use that data in our day to day process as customer success managers, professionals. I think that the data that we are tracking is more related to the product or service itself based on usage, like number of logs, which features create the most engagement, what features are enabled and which ones are not. And also we try to incorporate some other parts that are more of a CSM sentiment that also describes how we feel about our relationship with the champion.

Guest:

So data, I think it's really important to tell the story, because if you come to your customer and you want to tell the story, you can't make up the story no matter how good it sounds, a made up story will not get you far. So you have to pick it up with data. I think it's really obvious in the onboarding process when you come to a new customers and you want to set goals for improvement. In the very beginning, you need to set some baseline and have data surrounds it. And you have to be able to measure that, to be able to show the return of investment for your customers, when you will have the future calls for about renewals and retention, what are some baselines that you use? The baseline that we use for tracking the customer engagement is logins for the product usage in different features, the end involvement of, uh, more advanced features. And I think this is the bulk of the baselines that we track in the way we do it.

Host:

Okay, cool. So when we talk about data, we sometimes gets this data versus human insight argument. Do you feel that hunches and data are at odds or do you think that in the right hands they can work well with each other?

Guest:

So I really believe this is like, uh, two parts of one bigger picture, because if you're going to only look at data, it'll not tell you the whole story. And I can share, like, from my previous experience that I had customers that if I only looked at the data, they looked amazing. But then again, you can be one day out of nowhere, they're going to tell you, Hey, we are looking at different vendors or we are not very happy, or I don't see any any value from the product, but the data hows they're happy. The data shows differently. So I think only counting on data to tell you the whole story might sometimes lead you to not the most accurate places. And then again, only looking at hunches, I think it will go even worse because if you just like, I think, I believe that customer is happy because with us, when you start a sentence with, I feel like, or I believe that. So in order to have the complete picture, you need to incorporate both data and your hunches. But also hunches are not coming out of the blue. They can be derived from how often you meet with your champion, how keen he or she is with jumping on a quality. Is it hard to get the response? Do they attend webinar or events that are being held by a company? Do they agree to take part in case studies or talk to marketing or referring to other customers or prospects? And I think another subject that is worked highlighting is also the number of feature requests. So, you know, feature requests can sometimes be a, I wouldn't want to say a drag, but if you get a lot of them, it sometimes can make you feel that maybe they're not so happy. Or, the other hand, I tend to see, to look at it. They're really engaged. They care for your service or product. They want to make it better. And they also want to make it more suitable for their use case. So they would gain more value. So this is another like really important aspect because I prefer a customer that is asking repeatedly for feature requests than a silent customer. The healthier one is the one that is making those requests.

Host:

Okay. I presume at linear B you use a CRM solution like Salesforce or HubSpot or something, right? And then you have a customer success solution and some people wanna track info in both. And I hear this a lot. Is there a single point of truth and how do you get all the data from your CRM and your CS solution and which one do you trust and how do you make decisions on sometimes disparate data like this?

Guest:

Yeah. So for instance, for us, our CS tracking solution integrates with our CRM solution that integrates with the product. And I think that's the beauty of, uh, of SaaS in my previous company, I was working in, in a platform as a service. And I remember struggling very hard to gain visibility on what's going on on the customer end because you are really dependent on engagement and you cannot really see what is going on and you are jumping on calls. And for the most cases, you will not have visibility on your platform and you are depending on what they're sharing or choose to share or tell you. So that was a real struggle, uh, moving into the fast realm, uh, where you have this great world of automations and integration integration. So yeah, so you can pretty much get it all in one place. And we also use like a third party tool to gain like further, like in deeper dive insights on specific parts of our service.

Host:

Well, that's good to hear, let's get into health scores. How do health scores play into your efforts for retention? How do you use health scores in your retention analysis and how are they good and where maybe do you see limitations in them as we mentioned earlier?

Guest:

A health score can tell you a story, but I don't think they can tell you the entire story. When you build your health score, this is an ongoing effort where you try to make it always to make it better and improve and more accurate. So you have parts that rely on usage and, and logins and feature enablements and so on and so forth sentiment too. Yeah. And, and the other end, you also have a CSM, uh, sentiment part in that. I think it tells a good story, but you can never rely on that on 100%. And I think this is where the role of a good customer success that is manager that is proactive, uh, approaching the customer, always reiterate, always asking to see, do you get the value you want to get from our product? Can I help you maybe to shed some light on best practices with using, because we are supposed to be our product or service experts.

Guest:

And we are also experts on how helping other people to use our product. So combining these two, um, values together, that's the missing part in health score? What was the missing part of the health score? It's something that is, it's still ongoing basis. You need to refine it and you need to make it more accurate. And I think that only through trial and error, you can feel like examples. Like, Hey, I see like a customer with he's using. He is not happily jumping on calls. Maybe he's too busy. Maybe, you know, he is like, there are people who like to be self-served and like to use help docs and figure out their own. There are like hands on, but when it comes to renewals, there are like they will renew and they will extend and everything looks good. And on the other hand, you can have surprises that health scores are good.

Guest:

And then you hear that customers are not very happy in the vast majority, from my experience so far, usually the customers are considered healthy we'll renew and we will retain them. So, uh, I think we get it right maybe 95% of the time, but you do have to keep on rerating to make it more accurate, but only from trial and error and from, you know, collecting stories. And I think this is the great part of like, you know, sharing from, with your peers and having like an open discussions and asking questions. I'm a great believer in asking questions, like, why do we set like a certain score? Like why is it 10% and not 20%? Why do we believe that you talk about weighing the scores? Yeah. I'm talking about weighing the scores like CSM sentiment. Like what part should it be? Because this is a, I think the end game or like the most important question is, do I believe that this customer will renew or not?

Host:

How do you guys weigh your health scores?

Guest:

We have a part that is more, um, tracking the usage and the lot number of logins and enabled features and connecting the different integrations. And we have a CSM sentiment, uh, part, and I can tell that the CSM sentiment is not as, as big as the usage and adoption and the setup let's, but it's still important. It's still very, is important because I don't think a sentiment can come really in play when, when the product or service is not all set up and they have, you know, all the tools and they're ready to go and use because, you know, if, if the product is going to sit there and no one is going to set it up, so this is already like a flag that should be raised. And this is already a problem in day one or in day 30, that you need to start working and thinking how to re engage and how to make your champion set up the, the product or service.

Like what you see? <Hear the whole "As the World Churns" interview with Guy Rahamim here.>