Episode 21 Transcript

Banoo: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Banoo Behboodi, and my guest today is Dave Yusuf, Senior Vice President of Customer Success at Q2. Dave has a rich background in leadership roles in both PS and CS, and I'm excited for our discussion on the topic of Customer for Life. Dave, great to have you with us.

Dave Yusuf: Banoo, it's a pleasure to be with you as well

Banoo: As we've discussed, the goal of any company is to turn every customer into a customer for life. In the case of a software company, this means how to retain them, but also how to drive growth. Whether it's through expansion of usage, adoption, subscription fees, but also referrals and referrals to other prospects. Today I'd like to get your perspective on how you orchestrate a customer for life journey. How do you manage that through a complex organization where you've got handovers from implementation to support, to customer success, to product team? How do you make all of these various teams work together in tandem to make it a seamless experience for our clients? And how do you manage and measure that success? Because unless you're obviously effectively measuring your delivery, you won't know how to continuously improve that. So what are the potential roadblocks in the journey? Let's get into it. Let's get started by having you walk us through your career leading to Q2, what it is that you do at Q2, and how that journey has impacted where you are today.

Dave Yusuf: I had a very interesting career journey starting out as a microprocessor design engineer and then moving up from IT to product management to sales and then running my own security software start-up. And then I've spent a big chunk of my career in service delivery, customer success, and support. And I've also been very fortunate and lucky to sit in many different seats. I've been chief services officer, SVP of services, Group VP of services and support, solution strategy, sales and marketing as well as business unit GM. And I've also had the opportunity to work in a variety of different industries for some of the leading software firms like Q2, NextGen, Sphera, Epicor, Allscripts, CA Technologies, and MCI Verizon. And in summary, I guess I've had a great opportunity and it's been a majority of my career viewing and servicing customers from a variety of different lenses. I think that is what I love about my job, is just being able to focus on the customer and making sure that we're delivering value to our customer, and that's kind of what excites me every day.

Banoo: Yeah, and it is with this rich background that I was interested in your perspective, and so how does one create a client for life and post sales client journey, customer journey?

Dave Yusuf: The short answer is by creating customer centricity and alignment around the business outcomes that we wanna drive. Let me explain what I mean. We all want our top line and bottom line growth bookings and revenue growth, EBITDA, and margin expansion. I've spent a lot of time in private equity firms where EBITDA is king and it gets beaten into you, but these are outcomes and end results. But you get a multiplier effect around these things if you can focus on understanding and creating customers for life. The goal of any software company is to turn every customer into a customer for life and not only retain but also drive growth in terms of usage, adoption, subscription fees, or any of the metrics we wanna look at. The challenge is creating customers for life is not a task that can be delivered by a single department within a company.

In my experience, what I've found is that customers for life are created by orchestrating and managing the wholesale customer journey. So you have several different journeys, you have the deployment journey, you have the usage and adoption journey, you have the customer care and resolution journey, and you also have the customer success journey. And if you can successfully manage these journeys in a parallel way where it leads to a business partner-like relationship with the customer, the outcomes are not only obvious ones, the things that we all care about (retention and growth), but it also creates a strong reference, which is critical in today's digital social media driven business environment that we all operate in. But it also creates a partnership for strengthening the go-to-market approach. And you can collaborate with your key strategic customers to road test your product roadmaps, your emerging functionality gaps or trends and maximize your ROI. So that's been a short way, is how I approach customer journey and customers for life.

Banoo: So on that point, let's get into the “how.” What are some of the best practices around orchestrating and measuring success across these multiple customer journey segments? Clearly, as we said, unless you can measure it appropriately and drive everyone in cohesiveness to drive that customer success, you can't continuously improve the process. So for example, on deployment journey, usage and adoption, customer care and resolution and customer success, how do you bring it all together and measure appropriately?

Dave Yusuf: All right, now we're going deep. The challenge in most organizations is that each of these customer journey segments are managed by different functional teams. So the implementation services team is generally managing the deployment journey. You have your customer support team managing the resolution and care journey, and you have your customer success team typically managing your relationship and strategic planning. And Banoo I'm sure you remember in the early days at Sphera when we pulled every button together to understand the customer journey maps and where the gaps were, we all walked away enlightened with a renewed sense of excitement around the roadmaps. And that helped us shape our vision and our go-to-market approach across the company in every department. And similarly, and also taking it in a different direction, I view the software firm as a car with four wheels, you have sales, customer success, and services, typically in the front, and you have product and support in typically the rear wheels. And like cars, they could be the front wheel, rear wheel, and all-wheel drive. And similarly, some companies are sales-driven, while others are more technology or product-driven. But I think the best outcome comes around creating customers for life is when you can become an all-wheel drive. Or you can drive alignment around these different functions to create momentum and velocity for the company where there is not only a focus around each of these areas, but there is a focus around how do we drive alignment to gain forward momentum, right?

Banoo: So Dave, from your perspective, what's the role of culture and organizational value in bringing all these different departments together with that one optimal goal or objective of superior customer experience and that customer for life?

Dave Yusuf: Yeah, conceptually it sounds simple until you start doing it, right? With this question, you've opened up a very interesting challenge that most companies are facing. When you start focusing on what we just talked about, optimizing all of these different aspects of customer journeys, you open up Pandora's box of internal turf battles. You have department-focused goals, incentives, and KPIs. What do I mean by that? Well implementation wants to build for every dollar and billable utilization is king. And then here comes support or customer success asking to give away some free PS time to improve usage and adoption, or to solve a critical issue. And we get wrapped around the axle on how do we fund this thing and how it will impact KPIs and margin and people's bonuses. I think the key is really creating customer success by having ELT. And the operational leadership team, the OLT level kind of aligned around the [inaudible 8:26] priorities. And agreeing on the approach around how we're gonna balance both the here and now goals, which are the departmental functional goals, but also the longer-term priorities and the customer priorities that we're trying to drive.

As an example, at one of my previous firms, we had a great process where every year each department created a pool of dollars and hours to fund these zero-cost services. We allocated X millions of dollars to this effort and had established a process around how to tap this with executive approval and a process around it. This made it easy and a very good approach to create alignment and funding. Everyone agreed that this will come at a cost, so billable utilization may take a few points hit, and support may need more staffing. And similarly, on the development side, we worked with R and D to build some time in each of their sprints or dedicate a whole sprint every now and then to handle usability and supportability. Which I'm sure you know is not a focus that any product managers think about and drive typically. And I've sat in the product management solutions leadership team, you know, our focus always was what can we do to create new features? How can we differentiate ourselves in the market and usability in it? The supportability was not something that we were looking to spend a lot of dollars towards, but customers and support need this to drive adoption and usage. And this is how you sort of create value in the eyes of the customer. This is a great example of how you can pre-plan to create alignment in the end, all with the eyes toward creating customers for life.

Banoo: I love the fact that you raised it's gotta be believed at the executive level, loyalty level, incentive plans that are coordinated in driving to that common objective. And I think values that are aligned, I know at our company our top two values are one, to colleagues first, or team members first, or employees first. And then the second one is superior customer experience. So I think it's gotta be all the way through your culture, it's gotta be supported by your incentive plans and it's gotta be lived by your executive. That's the only way you can really get the outcomes you want from a customer-for-life perspective. All of that said, yeah, sure, it seems straightforward, right? Get the incentive plans right, the executives aligned, but why is there so much debate? I mean this is probably one of the most talked about topics, whether it's in software or B2B, et cetera. Why is this such a challenge? And it seems like every company wants this, but results vary drastically and approach very drastically.

Dave Yusuf: Because again, it's easier said than done, right? And as I gave in my examples, I think the challenge is executive alignment and making sure that you have clear, defined alignment between the short-term functional level objectives, as well as a longer-term objective for the company. And I think this is where the rubber meets the road in terms of making the customers for life journey successful. And this is where the challenge comes in, as I shared in some of my previous examples. But it's something that we have to solve. If we're going to be successful, the results that we gain by driving such an alignment are significant for the company. So we have to figure out how to drive more alignment in terms of measuring and creating some measures of how to gauge whether you're being successful in this journey or not.

Banoo: Yeah, so how do you measure customer experience from your perspective?

Dave Yusuf: Well I think what we have in place today in most organizations is that each function and department within the company has always key performance indicators. Like for delivery where I've spent a lot of my career managing and leading professional services organizations, it's always billable utilization. It's always a backlog, and it's always their revenue that we're driving for the company. For the support organization, it's going to be case closure and productivity. The goal is how do you create a view which measures and gives you a good gauge of these customer journeys? Like the deployment journey or resolution journey and not just the individual goals and objectives and KPIs for the departments, which may or may not translate into what the customer cares about. Customers really don't care about your utilization or your margin and those kinds of things, they care about the end results and impact and ROI that they're receiving from the solution.

So I think what you can do is you can take a balanced scorecard approach by aggregating the metrics which effectively measure the customer experience score for each of these functional teams. And more importantly for the customer journey segments that you're trying to measure. So for example, for the implementation team, which is gonna be driving your deployment journey, you would look at the project backlog. You would look at GoLive delays, you would look at post GoLive, you know, sort of case volume. And for support, it will be something case backlog resolution SLAs, the escalations. For DevOps, it will be the system availability, and what I mean by system availability, it's not just that the system is up, but are the critical portions of the application up and running. For example, for us, we measure that by looking at money movement. In the end, the system can be available, but if our customers are not able to send wires and ACH transactions and things, it's irrelevant. So the key functionality that you're trying to drive within the system has to be available, and you have to be able to look at it from the DevOps, from major incident situations.

So I think once you have the score at each of these journey levels, you sort of aggregate key items to create an overall customer experience score. First, you take some of these key metrics to create a journey level score, and then you aggregate them to create a customer experience level score. This is where you're taking your metrics and turning it into more of a customer-facing scorecard of what matters to the customer, and then being able to measure yourself. It's a great concept and it seems very logical, the challenge is that none of the software tools are out there today, even when you look at something like Gainsite or Qualtrics, or Salesforce are giving you this view. So it is kind of uncharted territory and requires some brute force BI effort, and some cross-functional teaming. It is also an iterative process as the output in the first pass may not be a hundred percent aligned, but is a necessary step. And then you need a process and an alignment to drive actions to improve the pieces that this scorecard is gonna uncover that are impacting the customer experience. And you need a deliberate and aligned approach of how we're gonna go and improve this.

Banoo: So I love the concept, right? The balanced scorecard, there is so much material out there and controversy around whether you use NPS, CSAT, and all the other different methods that come around the voice of the customer and getting feedback. And the concept you're introducing here with this balanced scorecard can complement any of the other survey-based CSAT, MPS, et cetera. And they are based on understanding the journey, so it's gonna be that that balanced scorecard will be different for each company. It's going to be based on their analysis of the journey and if I'm understanding you correctly, understanding what the client journey demands of a product team. What would be a client’s success from a product delivery perspective, from a support perspective, from implementation. Then having those measured, and together that forms the balanced scorecard. I just love that concept because I think that's why you have so much controversy around some of the other measurements (NPS, CSAT) because it's not necessarily taking into account across various departments, bringing them together in this one balanced scorecard. I think that's a great idea. So what are the challenges in getting there with a balanced scorecard outside of, I know you talked about that you have a tool in the market, et cetera, what else is the challenge, and what should our listeners look for when they're developing this concept?

Dave Yusuf: Yeah, the big trap that people fall in, and we've been doing balanced score cards for decades, so that's not a new concept, the challenge is that all of those balanced score cards are looking at the business only from our lens and looking at it from only what we care about. The only thing most organizations would look at is they would have an NPS score, they would have a customer sat score, and they would look at that as a measure of how well are we doing for the customer. They would look at things like what is our retention rate? Well that's very self-serving in my view. That's very self-serving to us as a company of what our retention rate is or what our net churn, our net growth number is. It's all very internal company facing. I think that the challenge here is to put ourselves in the customers’ lens and take a look at it from a customer's angle and see how do we view this from the customer journey, and what customers care about. So we focus and tilt this balanced scorecard toward things that matter to the customer. So it's not about our billable utilization, it's not about how much margin we are making or things that we care about. Which are still very important and something we need to continue doing, but in order to measure and engage the journey, we have to view it from the customer's lens. And this is where the trap comes in, is that most business leaders and most organizations are very comfortable measuring from their lens, but struggle when they try to go and look at it from the customer's angle.

I'll give you an example, and I think it's a lesson that I learned very early on in my career for a very large Fortune 50 company, was a customer of mine, and I was an executive sponsor for that company. And we had closed a very large sales transaction and it so happened that about a month later, we had our sales conference, internal sales kickoff coming in for our new year. And we wanted to create some visibility and momentum and some rah-rah with our sales team around this particular win. So we wanted the customer to record a video for us saying why they selected us, and I still remember this conversation with this CIO. I mean, it's been more than a decade ago. They said Dave, I'll do this for you as a favor, but I want you to know that so far, this is your success, it's not my success. My success is going to come when you guys implement the software we have, and I started getting value from it and I started getting the ROI. So I will help you get your success and celebrate your success, but you gotta get me to my success. And I think that's the lens that we've gotta look at. And I think if we do the scorecard from the customer's lens and look and see the metrics and the measures that are important to the customers. And are true to ourselves, right, that we are accurately gauging ourselves in those areas and measuring and ranking ourselves, I think you can drive a true improvement in this.

Banoo: Excellent conversation Dave, thank you, it's been very informative. And I'd like to ask that you come back sometime in the future so that we can see the progress you've made at Q2 with this balanced scorecard, but it's been extremely informative. I like to usually finish off by asking the speakers what they’re reading. And what are their recommendations in terms of books that have influenced their thinking, whether it's a professional or personal life, any recommendations for our listeners?

Dave Yusuf: I think I'll point to a couple of things. One, I just love the Harvard business review and they come up with a lot of short articles and I think I would encourage everybody, there's always something very relevant and very timely that they're talking about. I mean there are a lot of conversations taking place around the great resignation and how do we bring employees back into the office now that they've been working remotely. And it's challenging the managers of how to operate differently, and I think there's always some great nuggets of information there and they're very bite-sized consumables, so I would encourage everybody to look at that. But a great book I read recently it's called Think Again by Adam Grant, and it's a good book. In this book, Adam, through short stories, is reinforcing and exploring the importance of rethinking versus sort of clinging onto our old beliefs and biases. Especially I think for business leaders, the more we have been in these kinds of senior level roles and the more we have been able to deliver successes, we sometimes get trapped by our playbooks. We want to come in and always wanna apply the same playbook that we may have seen successes, and we have certain biases and beliefs. And the interesting thing is the world is always changing and we need to change our thinking as well. And our beliefs need to evolve with the business with the times. It can apply equally in your personal and professional life, so I think this is a great read and that's a couple of areas.

Banoo: Yeah, I love that fresh thinking. Dave, thanks for a great conversation, really appreciate your time. I know you're a very busy individual. As always, please reach out to us with questions, comments, or topics you would like to hear more about at podcast@kantata.com, we would love to hear from you. Thanks Dave.