The Rise of Customer Success in the Channel

Allison Pickens, Chief Customer Officer at Gainsight, joins me, Jen Spencer to discuss customer success, aligning vendor and partner relationships and more on this episode of The Allbound Podcast.

Jen: Hi, everybody. Welcome to The Allbound Podcast. I’m Jen Spencer, and today I’m joined by Allison Pickens, who is the Chief Customer Officer at Gainsight. For everybody who doesn't know Allison, she's been recognized as a top 50 sales leader. She's an Ivy League graduate. She's worked for and advised multiple SaaS companies and has been featured on a variety of podcasts, and even hosts her own. So I’m very happy to have her here with me today. Welcome, Allison.

Allison: Thanks so much for having me, Jen.

Jen: Oh, I'm so glad to have you here, and I think it would be great if we could just get started with you sharing a little bit about Gainsight and what you guys do. 

Allison: Absolutely. Gainsight is a customer success platform, which means that we help you orient all the different departments at your company around the successes of your customer in order to generate higher retention rates, higher expansion rates, and stronger new business through really strong advocacy from your customers.

 

Jen: Awesome, such a critical element in any SaaS organization. One of the reasons I'm most excited to have you here today is because there has been so much talk in the SaaS industry about customer success and about the intersection of customer success and channel partners. I was wondering if you could talk a little bit about where you think customer success can really meet the channel in today's modern SaaS market?

 

Allison: The topic of aligning with your partners around the success of your customer is one of the hottest topics in the customer success industry right now, everybody is talking about it. I don't think anyone has figured it out quite yet. It's probably one of these trends that will fully emerge, I think, a few years from now. That's probably when we'll see it really widespread. But there are a number of companies that are at the forefront, pushing on their vendor relationship, and the way that they describe their vision for partnering with their channel involves a few elements. So one of them is developing, first of all, a shared sense of accountability for the outcomes of your client, which is a new thing. Expecting partners to be accountable for customer success is a new thing, so that's the first pillar. The second one is they're realizing that in order to work more effectively with their channel partners they have to have a shared 360-degree view of data on their customers. And then, from there, the third element is they want to make sure that they have a shared definition of target for those metrics. What are the KPIs that matter, and what thresholds do we expect our channel partners to achieve with their clients? Finally, the fourth one is about having shared, prescribed playbooks for each stage in the customer journey. As a vendor, what do you expect your channel partners to do at each step?

 

Some of the leading companies out there that are thinking about this are actually training their partners on these playbooks and ensuring that there’s strong buy in. So that's what the vision tends to look like. Again, some of the leading companies in this area are pushing on a few initiatives to try to get to that end stage. One of them involved is first defining the return on investment that your channel partners should expect from investing in customer success. For example, in the SaaS industry and increasingly in other industries, folks take it for granted that you should make your customers happy. If you're a channel partner with a razor-thin reseller margin, it may not be obvious that this is an investment that you should make.

 

So customer success organizations are helping them put together that ROI model to justify that investment. Secondly, vendors are thinking about, "How do we make sure that we're prioritizing which channel partners we work with to start?" Some channel partners are boutique firms that don't have a ton of resources. Others are large with a robust executive team, and sometimes they have a customer success executive on staff. As you think about profiling your partners, it's worth identifying what are those major attributes that would define a partner that would be most inclined to be successful working with you on this and piloting this customer success initiative so that eventually you can roll it out to a much larger percentage of your channel partners.

 

Vendors are also thinking about, "How can we develop that shared view of data on our customers? For example, how can we share the upcoming renewals that a channel partner should be focused on? How can we make sure that they're aware of the Net Promoter Score ratings that the end customers have submitted?" So actually, at Gainsight, one of our big focus areas this year when we think about our product roadmap is allowing that type of information sharing to take place.

 

Finally, on the KPI side, a lot of vendors are thinking about, "How can we actually encourage our partners to think about a customer health score as being a primary measure of customer outcomes that they should aim for?" And even some companies are pushing the envelope and starting to think about, "Should we have dynamic margins for paying partners that are contingent on different levels of health score?" So this is a provocative idea. I haven't seen anyone roll it out yet. I think we're going to see some major changes in these dimensions over the next couple of years.

 

Jen: It's very exciting. I love how Gainsight is really at the forefront of driving this message and working with these best of breed organizations who are focused on aligning those partners with customer success. You actually recently wrote a blog called "Aligning with Partners on Customer Success." and we're going to make sure we include that in the show notes here. And in it, you talk about the shared responsibility for positive customer outcomes between a partner and the vendor. For a CEO who might be listening to this podcast, or maybe a board member, or somebody who is really thinking about the overall success and health of an organization, can you share your thoughts about the value in aligning those vendor and partner relationships?

 

Allison: It's hugely important. For so many organizations, they can only afford to hire customer success managers for a portion of their customers, that's the reality. We'd all like to say we've got infinite budget to invest in customer success, but there are real pressures that we have from our executive team and our board. So, especially for large enterprises, we typically see them start to assign customer success managers to their largest customers or maybe the strategic ones mid-market. But often the SMB customers are covered by resellers. So if I'm thinking as a board member of one of these large companies, one of my questions might be, "How do we make sure that we drive up our retention rate in spite of not having people assigned to some segment of our customer base?” And for that reason, actually working with your channel to drive higher retention rates, higher expansion rates is a very powerful initiative. I expect that a lot of executives are going to be focused on this going forward.

 

One of our clients actually is a really fast-growing SaaS company, and they've grown largely through working with channel partners. They have a pretty small sales team, so their partner organization internally is very critical. They have invested heavily in partner success managers, as well as the partner account manager team, which is focused on helping these partners drive more sales and deals. So, apart from that, they're thinking,"How can we make sure that these end customers are achieving certain milestones along the customer journey?" And the partner success managers are working really closely with the channel partners on that.

 

Jen: Do you have any specific recommendations for the customer success professionals in these SaaS companies who are beginning to work with partners to help drive customer success, any tips, tricks, feedback you can provide for them?

 

Allison: Jen, that's a great question. I would say check out the blog post that I wrote together with Chris Doell from Cisco OpenDNS, we've laid out a recommended playbook for steps that you can take right now to start aligning more effectively with your channel. The key is you don't have to boil the ocean from the start. You can pick just a handful of partners that you want to pilot this new initiative with, and they can help you actually prove out your model, iterate, and ultimately roll it out to more partners. I’m a big fan generally of the agile approach to operations, and I think, especially in customer success where we're often figuring things out for the first time, it's especially important to run thoughtful experiments so you can learn very quickly and ultimately, decide on the best practice for your company.

 

Jen: I think that's really great advice. Being able to really test and prove something out is extremely valuable, especially when we all seem to be going a million miles a minute in all parts of our business. Looking at channel as a whole, I'm wondering if you could comment on some of the biggest challenges or maybe even mistakes that you've seen leaders make when they're growing their channel and maybe the impact that's had on customer success perhaps? Just based on your wealth of experience, what can we learn from?

 

Allison: I would say don't underestimate how valuable customer success can be for the channel. I mentioned earlier a lot of resellers are struggling with razor-thin margins, but the reality is that many of them are also trying to build services businesses, which tend to have much higher margins, maybe in the 30% or 40% range. So what that means is, if they can develop a customer success program where they become more embedded with their account, the likelihood that they will be able to sell more services actually increases, because given that they're really close to these accounts at this point, they'll be able to identify new opportunities where they can add value and charge for it. Additionally, of course, there's the other value prop which most vendor-based customer success teams tend to see, and you can drive up net retention by a meaningful amount. We see as vendor organizations rise in maturity from stage to stage as we track it at Gainsight, they will experience an 18% point increase in net retention. That's super powerful, and I would imagine that, especially as we start to collect data on this, we will see a similar trend in partner organizations that start to adopt customer success best practices. So I think the key is for us to educate our channel partners on the real nature of this ROI and then start to collect the data afterward.

 

Jen: Gosh, I can't wait to see that data. That's going to be amazing. One more question for you, and it's pretty simple. What's the most exciting thing about working in a customer success environment?

 

Allison: For me, the most exciting thing is seeing how many people are succeeding in their careers and achieving new levels of success because the customer success industry has taken off. There are so many people that I've met who were previously in other functions, who perhaps were customer success managers in the really early days, 5 or 10 years ago, who are all now actually in leadership roles, thriving, building large teams and building careers for other people. I think that the career momentum in this space is really powerful, and ultimately I think that's been embodied, especially lately, in the instance of customer success leaders becoming CEOs. We're actually seeing Chief Customer Officers become CEOs. I think ultimately that's such a strong mark of the importance of this function, and also a sign of the really dramatic career growth that a lot of people are experiencing. I find it really inspiring.

 

Jen: I agree with you as well. It's an exciting time. It's a really innovative space, and I can't wait to see what comes next. This has been so great. Before I let you go, at the end of all our podcasts I ask a couple of more personal questions just so we can get to know you a little bit better. So, I've got four more questions for you if you're ready, really quick.

 

Allison: Let’s do it.

 

Jen: All right, so first question is, what is your favorite city?

 

Allison: Honestly, I would say my favorite city is San Francisco. I live in San Francisco, and I really do love it. I think the open-mindedness of folks out here and the innovative spirit are unmatched, and I feel grateful to live here.

 

Jen: Absolutely, I agree. Question number two, are you an animal lover?

 

Allison: I am, I love animals.

 

Jen: Do you have any pets at home?

 

Allison: I don't, no. I travel a lot to see clients, so it's a little bit tricky to take care of a pet. But I often think about getting a dog actually. If I did get a dog, I would say it'd be a labradoodle. I just think they're adorable. They're fluffy, they're energetic, they're happy, and at some point, I would love to have one.

 

Jen: Oh, they are adorable. Okay, question number three, Mac or PC?

 

Allison: Definitely Mac. I used to work in finance actually, and for that PCs at the time were actually far superior to Macs. But nowadays, now that I'm no longer in spreadsheets all day, I'm very happy to be using my MacBook Air.

 

Jen: Awesome. Okay, last question. Let's say I was able to offer you an all-expenses-paid trip. Where would it be to?

 

Allison: I would really love to go to the Galapagos. I've been reading a lot about animals lately. I'm actually reading this book that's about how it's very difficult for us as humans to assess accurately the intelligence level of animals. And when you look at the research, it shows that animals are actually a lot more intelligent than we give them credit for. So, over the years, as you mentioned, actually I've become a big animal lover, and I would love to go to the Galapagos, where you can see all sorts of species that you can't find anywhere else and just really appreciate them.

 

Jen: Oh, that sounds wonderful. Well, thank you so much. Thanks for sharing a little bit about yourself, your insights about customer success and channel partners. It was so great having you. If any of our listeners would like to reach out to you personally after the podcast and maybe connect with you, learn more about customer success and channel, what's the best way for them to reach you?

 

Allison: You can reach me at my profile on LinkedIn. Feel free to add me to your network. I accept pretty much all customer success-related invitations that I receive, so feel free to connect there.

 

Jen: All right, wonderful. Make sure you add that personalized invitation. Let them know that you heard Allison on the podcast, so she has a frame of reference. I think that's always helpful. But, again, thank you, Allison. Thanks, everyone else, for tuning in, and we'll catch you next week with an all-new episode.

 

Allison: Thanks so much, Jen.

 

Man: Thanks for tuning in to The Allbound Podcast. For past episodes and additional resources, visit the resource center at allbound.com. And, remember, #NeverSellAlone