Andrew Michael

Hey, Mike, welcome to the show.

Michael Redbord

Thanks so much, Andrew. thrilled to be here.

Andrew Michael

It's great to have you today. I'm extremely excited about this episode, I think you definitely have a wealth of experience when it comes to the topic of churn and retention. For the listeners. You joined HubSpot in 2010 and led the support and services team for five years ther. You also help scale the customer team to over 500 people to support the 40,000 plus customers HubSpot serves. And now you're leading the recently launched HubSpot customer service product. Welcome to the show, Mike. Let's start with that, like what is this new product? And why is HubSpot decided to go in that direction?

Michael Redbord

Yeah, sure. So, that is the story. And I think a lot of the reason that we have launched this product is actually because of that story that you just shared about me. We grew our service and support organization, you know, into a full fledged kind of customer success operation. And through that journey, we really discovered how critical that was to your growth. And now we want to create a product that takes some of those learnings from that era at our company. Everybody kind of grow better, and benefit from some of the, you know, just the things that we learned during thosae five, six years of growth.

Andrew Michael

So what would you say is like maybe the top two or three things that you learned that you've put into this product now for people to take advantage of?

Michael Redbord

Yeah, I think that the number one thing that we learned is that it's really a team sport. And I think at this point, 2019, a lot of folks understand sort of what are the verbs that you need to do within your success organization or support organization that's relatively understood. But we wanted to really give folks a 360 degree view of the customer so that you could really service better with all the context that you need. That was number one. And the number two is that we discovered that if you really want to make service a growth driver, really want to turn customers into a growth engine, you need to do this kind of like special., next thing, this like, turn that you make with your customers, where you go from just having happy customers, that's great, but actually turning them into advocates. And so we've baked both of those 360 degree view and the advocacy stuff right into the product.

Andrew Michael

Very nice. I think one thing as well, that is an interesting topic, and maybe we can touch on a little bit. But in your view, where do you see customer support, stopping and customer success starting?

Michael Redbord

Yeah, it's really different depending on the scale of your company, I think when you're small, and you're just trying to claw the earth and make it turn just to get things going. It's very, very blurry, what is you know, a reactive support ticket versus a more proactive function where you're trying to, you know, create the energy and the customer to do something. But as you scale, I do think it gets clear, and it sort of needs to in order to scale. So for me, support is really about the reactive, it's a customer that had a question. It's very synchronous, it tends to not be hugely relationship driven, it's sort of any to help you as fast as possible, and get this as right as possible. And that ends up being a pretty reactive function that we call support. And then the more proactive function calls success is really about creating the energy in the system, kind of prodding, the customer moving forward to perhaps do something you wouldn't have done otherwise, or taking a somewhat foggy view in the customers mind, crystallizing it and driving it forward. So at scale, they do change, but often they're there. They're hard to pull apart of smaller companies.

Andrew Michael

Yeah, you mentioned that as well. Like definitely different stages of the company that can mean different things. Like maybe you want to talk us through some of the different stages that you've seen of growth at HubSpot and like what were some of the key turning points when you realized, okay, we need to make adjustments in the way our Customer Success and Support teams operating like, what were those key phases you'd say in the company's growth and some of the changes you made?

Michael Redbord

Yeah, great question, I see it as there being two really big changes and three phases, then defined by those two big changes. And so the first phase is, when you're sort of just like I said, before, trying to claw out the earth and make things go and figure it out. It's very effortful, the entire team tends to be involved in all facets of the customer experience the entire team, you know, inclusive of even folks in sales and sales and product and elsewhere, right. And that really kind of the real startup moments. And then at some point, you start to make this turn or you rather you need to make this turn that goes from all of the customer experience being everybody's job to really kind of a specialized set of functions. And now you have certain people doing reactive support, doing those tickets, you have certain people doing onboarding and handling just a segment of the customer experience. You have certain people doing renewals, and within the service and support and success organization, you kind of have a mitosis, right? Where people used to do everything. Now you've kind of split off these specialized functions. That's the change that creates a second phase, which is really this phase or era of specialization that can continue kind of ad infinitum, right, you just kind of keep going with that mitosis process within your success or, but then the third phase, and I think this is the thing that's hardest for companies to achieve. And honestly, at any scale, I think is the struggle is making customer success. And really the customer experience, the focal point of everybody and every single thing that you do it has to be the cultural focus of your executive team has to be where you spend all of your time really understanding empathizing, and understanding the detail of the fabric of the customer experience, even in teams that are quote, unquote, not responsible for it. That third phase is kind of the Nirvana, like one that if you can arrive, that feels really, really good. It's incredibly hard, I think, to go from the operational second phase where you're just mitosis in your teams into this third phase, where you really are trying to make customer experience the very fabric of your organization.

Andrew Michael

Absolutely. And it's also sort of that going back to that reactive versus proactive mode, it also sounds like as well, like this is a very, very big turning point in the organization, when you stop thinking about like supports and successes is reactive function. But then really, is this practice function of how can we continuously make our customers more successful?

Michael Redbord

Precisely, yeah, it becomes much more of a system dynamics kind of question rather than a, you know, multifunction, how do these two things work? Lots and lots of different things that are additive to, you know, create sort of the customer experience at scale.

Andrew Michael

Yeah, so let's talk about in the context, now, our customer success, support, in the context of churn and retention. So something like, I've noticed as well, speaking to quite a lot of companies, like some earlier stage that are still getting into and trying to understand how to go about tackling the problem, they typically end up saying, Okay, let's get a team together, or let's put customer success in charge of churn and retention. And in my view, as well, and having spoken to quite a lot of other companies now I think like churn is really a company wide problem. But how do you see churn and retention? Like, where do you see it living within an organization? Do you feel it is the core responsibility of a customer success team?

Michael Redbord

Yeah, so I think when you're trying to first get a hold on churn, it is extremely powerful to have a team that is responsible for something. So when you spawn that customer success team, I think it's actually very important to give them a number, it should be a critical number to the business that will drive their visibility, that will drive their influence around the business. So I do think when you start the organization, it's actually very important for them to own the churn number, right. And perhaps even the upgrade number and other financial metrics is it gives them a seat at the table. As you grow, though, what ends up happening is that if if churn remains only solely the remit of the customer success team, you can never make that turn from the second phase of just sort of teams doing their things, the third phase where your company really becomes obsessed with the customer experience. And so there's a start and an end there are in order to create the energy in order to get that customer success team stood up, yes, they should own the number. But over time, it should become much more of an operating metric at scale for the business become the responsibility of the C suite, the CFO, the COO, and yes, success plays a part. But actually, that part sort of diminishes over time, which is a little bit counterintuitive, right? So at the beginning hundred percent, and then it changes as you grow.

Andrew Michael

Yeah, I've always had like a little bit of an issue with this as well, in the sense that churn is a very hard metric to measure where the impact is coming from. So there's so many different areas within an organization that impact this number. So putting that number on a specific team seems like a big stretch when you go about measuring their impact within the organization because they specifically like software, and SaaS and product lead org foundations, like, more often than not like the changes to product or with the big changes are coming. So tying it back to a specific team, it feels like it's a difficult stretch, and like an almost hard goal for them to achieve.

Michael Redbord

Yeah, but I think if you don't do it at the very beginning, it's hard to get the team off the ground in a serious way, if the only thing that a success team owns is, you know, time to first response on a ticket, or, you know, some usage metric that is a function of onboarding, these are just weaker metrics. from a business standpoint, it's hard for that leader of success to get a seat at the executive table. It's hard for you know, the board and your investors to care about it. And so to get it launched, you almost need to overcorrect that in a certain way. And really give them the number and focus there.

Andrew Michael

That makes sense. And I think just giving them that power as well then to raise it as an issue and really try and get the buy in from the rest of the team as well. Because I think it's one of those lagging metrics that often gets pushed down the back, Can people tend to say, okay, like, it's it's not an issue today, but they don't see that it's going to be an issue tomorrow. So talking about that day, and then talking about like money metrics here with in terms of customer success team, like, when we look at churn and you said early days, they're going to own that metric, like what does that mean for organization? How are you measuring your team against it? What are some of the indicators that you're looking at that go into it?

Michael Redbord

Yeah, I think you actually just said it a moment ago that because churn is a lagging indicator, you know, it's a place where you can kind of begin to work on it. But actually, the place you should end up is on all the leading indicators, and what is the health of your customers, what are the moments in the journey that you should be alerting based off of risk or opportunity, right. And the interesting organizational thing that happens when you give churn to one team is they basically get frustrated by the fact that it's a lagging indicator, and it's really hard to move. And they start to make that journey backwards in time into leading indicators from the lagging indicator of churn and so leading indicators, like health and onboarding, quality, or even deal quality of time of sale, or even if they're, you know, I think really kind of clever back into the sales organization to the comp plan. They basically work the churn problem backwards and into what's called primitives. And I think that's a very, very powerful motion. But it's not something that teams will really do unless they really, really own the number because you have to get away from the lagging indicator into the leading indicator. And a really good success team will basically take that journey, right away, the moment that you give them the metric of churn.

Andrew Michael

Cool. So let's talk through the beginning then as well about getting this team set up initially. When you're going about think about like introducing Customer Success into your company and introducing sort of that focus around channel retention, what are some of the key things you need within the team? What would someone like the profiles? Who would you be looking for to bring on as your first hire in a startup?

Michael Redbord

Yeah, I think empirically speaking, what happens out there is the first hire this first kind of service-y, for lack of a better term hire tends to be really a support person, someone quite reactive, that just like clears through the queue of stuff and like is able to just bump through things. And that that's sort of just empirically what happens. Some companies that I think take a slightly better route, they really are hiring more of a success type person that really cares about the customer experience and wants to deliver value and as a real partner early on, especially to the product organizations are trying to find that product market fit. And that type of hire, I think can move the company at an early stage forward really, really far. And yes, they can do some of that reactive work as well, they tend to be a little bit more expensive, it tends to be a little bit more outcome oriented a little bit almost more salesy in a certain way, they bring the energy into the system, as opposed to just reacting to the work, those type of people can I think really move forward, that quest to find product market fit in early stage company, and then sometimes a lot better fit than what most people end up doing, which is just kind of hiring the support type person to clear the queue at the end of the day.

Andrew Michael

Yeah. So you've hired your first hire first couple of hires then fit the profile you described now, what are some of like, the first things that you would have them tackle? Like, how would you think, like, advise a team to get started? Like, what sort of tools? Should they be looking into? Like, start from there?

Michael Redbord

Yeah, I think you have to understand your business and what the key moments and in the the sort of very early on version of the customer lifecycle you have are for most startups, then if you're bringing on some customers, right, and your product is changing pretty rapidly, the place to focus is on the new customer experiences. And often then that first person ends up doing onboarding, right. And I don't think there's anything wrong with that, I think it's a pretty natural place to focus. And especially if your product is changing rapidly, and perhaps even your go to market and your value proposition is changing with that, then you get a really fast cycle time on the distance between your go to market, your actual selling process, or you know what the value proposition your customers are signing up for. And then whether or not that sticking or not an onboarding, that's a pretty fast crank cycle, that's a really useful place to put that first service person in order to make your product market fit better. So while focusing there, as far as tools go, I honestly do not think that this is the time to complicate it. What we're really talking about here is like the primordial ooze of a company, right? They're not even really formed into a proper business yet. And so trying to operationalize any process into a toolset is really tricky. usage data, incredibly important, right visibility into what the customer is doing incredibly important, but really a toolset. You know, I would use things like Trello, and kind of simple project management tools, a simple CRM, I wouldn't yet try to move to a real customer success platform, I wouldn't get tried to take any processes and automate them away, because you don't quite know what's going to work or not at that stage of a company.

Andrew Michael

All right, let's fast forward then as well. Now, so early stage, I can get her to want to stick to basic tools that keep things simple, really try and understand what's working. Let's fast forward now, maybe 12 months, 18 months, you're getting some momentum with your customer success team. You've got onboarding setup, you're starting to make strides there. When do you feel it's a good time to start introducing like a customer service, service, customer success focus tool? And what are some of the things that customer success team should be looking at all?

Michael Redbord

Yeah, so when you when you first start to scale that team where you'll enter that phase that we talked about earlier, that kind of mitosis phase where used to have people that did everything, and now you're starting to specialize and jobs are splitting into specialized functions. That's really the first point to me were super important becomes super important. Because what you want to not do, what do you want to avoid, I think pretty much all costs is siloed. Any one of those functions away and putting some critical piece of customer lifecycle data, or support ticketing data, or usage data and some system that nobody else can get to. And this is often what happens, you spin off a little team, oh, we're going to go to onboarding. And we're going to manage our stuff over here in the system that the support folks, you know, not can't see, sure they can have logins, but they don't see as a matter of course, because when they're doing a ticket and their help desk, they don't see you know, the Trello card that has a customer on it. And I think that's really the first key moment when it comes to tooling. Because you want to make sure you don't break the 360 degree view of the customer, that's just such a step backwards from that moment where everybody on everything to now have multiple teams working on multiple systems that don't talk to each other from a system standpoint. So that's when you want to really I think, invest in CRM, get a 360 degree view of the customer, have your Help Desk embedded with your CRM, get the data that you need in there. So you have a single reference point for customers. That's key first moment. And then as that service team grows, your start, you're gonna start to find things that work, basically, your people are going to start doing things that become a matter of course, and sort of become wrote, like the email that you send, you know, whenever a customer does a certain action, you've now found roughly right speaking the right email there, right, that's now the right time to automate and start thinking about investing in a real customer success tool, or just essentially a better way to automate some of those processes and actions. And frankly, a lot of them are going to be triggered emails that you want to send out. So you don't have to send a human based email. And that can even be something like an email marketing solution can cover a lot of that, right. So that that point at which you want to start automating can only come after you really know what you're doing. And where you've identified a certain moment in the life cycle that you feel extremely confident that you've quote unquote, like solved, that's the right time to really put into link, automate it and then enable your people to work on the next thing that they go figure out and automate that next one away.

Andrew Michael

Yeah, that makes sense. And let's talk about then. So we talked about onboarding is one thing, we started talking about figuring out like what works in automating solutions like, and you talked about having this specializations or focuses within customer success, like on being one like onboarding being one, what would you say is like the key pillars of a customer success team? And what sort of key areas of focus does a customer success team need to own?

Michael Redbord

Yeah, super high level, it's the reactive and the proactive, right? And that's really support and success. I think, within support, there's a bunch of different stuff. But I think the question is a little more interesting on the success side. So let's start there, at least. So within there, I think you have the onboarding function, which is a really special time, I think in a customer's life. And to put it that way, when they're brand new, and they could require as much attention as you can possibly give them. And so I see some companies out there that don't specialize in onboarding and really interesting thing happens, because now they have CSM or you know, the success employees that are both managing new customers and older customers and the new customers inevitably take up all of their time. What that means is that you end up really under investing in your aging, based on that can lead to some really bad cancellation mechanics down the road, because those new customers are always going to just suck time. And they're going to be very, very demanding. They're very excited. And they need a lot, right. So I think specializing and onboarding is a really useful kind of operational trick to make sure that you don't have that multi tenant problem in your success folks, where they are forced to choose Oh, do I spend my next hour with a new customer was really excited and wants to do everything, or an old customer was kind of unhealthy. And there's new point of contact in this works really hard and difficult. So an onboarding team is a great kind of first way to get over that hump. Then second, I think that you have another kind of key moment around renewal. And that's another place where it's useful to kind of shear off the work from a generalized worker into somebody that really focuses on that the renewal often if your go to market as just complicated commercial processes, or some discounting, or anything that's at all, customizable, in terms of contracts, your renewal is really a recycling of all of that. And you re inherit all that complexity, a time of renewal that you had an initial point of sale, that stuff is just tricky. Those contracts x, it's a different style of work. It's very detail oriented, you can even work with folks like procurement, or you start to pull in different points of contact, that can again be incredibly time consuming, incredibly high value work. But that work again gets done and sort of the ongoing success work. So I like onboarding, CSM and renewal, I think it's the first three pillars of that success organization, because it allows people to really focus specialized, but also gives the CSM the time to work on kind of just the business as usual accounts, which is frankly, where most of your install base is going to live.

Andrew Michael

like that a lot. And I like having those carriers a focus, you're not neglecting anyone at the different stages of growth. And specifically, like, as you mentioned, sort of an edge in your face, like people may be tend to go to the newer customers that are more excited, because it's more exciting work. But maybe the big impact is really looking after your old age and customers and euros really interesting blog posts around sort of why customers are your biggest area for growth. Maybe you want to talk us through that concept a little bit as well. And Stephanie, something we talked a lot about on the podcast, but in your view, like, why is customer acquisition getting harder? And why do you believe customer like growth or growth can should be coming from your existing customers?

Michael Redbord

Yeah, let me answer that through a similar ones to start, I guess, when you're small, you know, your voice in the marketplace is really just your own. Right? If you're a startup and you have zero customers, by definition, it's your own, because you don't have any customers that can shout your praises from the rooftops or damage you by writing a bad review or something. And so your marketing is really your strength when you're a startup. And when you're small. As you grow, you start to build this chorus of voices through your customers good experiences, bad experiences, present customers, cancelled customers, folks that thought about becoming your customer, but dropped out in the sales process. These are all people that now begin to have brand impressions and experience your impressions of you and the chorus of voices that describe you grows. So pretty early on in that journey and my point of view, the volume of the voices that are not you, basically your customers, your ex customers, all that the volume of their voices quickly outweighed just your ability to you know, do content marketing, or paid advertising or whatever, there's probably ways to bend that curve by investing more, but at the end of the day, you're going to have more customers, next customers, and you have marketers. And so what happens is the dynamics of power in that world, really, really nowadays, especially then towards your customers and for people that are not you. And I think recognizing that is really the first step here. And then the second step is saying, Okay, if that's the way the world is empirically speaking, that's just like the fact, how do I then get my customers to become my best marketers. And there's certain things that you can do here, operationally speaking to make that happen. Probably like step one understanding who precisely in your CRM are your best customers, tagging them understanding who they are using things like Net Promoter Score, other survey mechanisms, or ways of opting folks into that group. And then once you understand who they are sort of factoring their efforts and making the ask of, you know, having them review, you create social proof, if there's a really interesting thread on Twitter, Instagram that you want them to pile on. So I've asked him to do that building customer reference programs, once you identify them, you can then vector their energy to turn them into your best marketers. But at the end of the day, their voice at really any reasonable scale is going to be so much bigger than yours, that if you're not playing this game, and you're not trying to turn your customers into your best marketers, you're kind of just you're working on a growth strategy that is not is not going to scale at some point will really bite you. And you realize that you have this huge neglected for very fertile hopefully, population of customers that you should have been cultivating and creating social proof with the entire time.

Andrew Michael

Absolutely. I think it said like word of mouth that is severely underrated. When you think about growth in the sense as well, like, every time you actually acquire new customers through paid media through content. The longer those customers stick around you, the happier they are, the more they're going to talk about you. And they sort of build that flywheel as to say, you mentioned as well like identifying your like your happiest customers, your ideal customers, and you touched on MPs. And I know HubSpot is a very big advocate, advocate for NPS and use it like inside and outside. Maybe talk us through how you use MPs to identify these customers and how we're using it as a metric overall throughout the organization.

Michael Redbord

Sure, so NPS oddly enough is one of like the most divisive topics, I think in this industry is actually a lot better things I think to disagree and agree about, but for some reason NPS drives this huge chasm. So for us HubSpot Yes, we we do run MPs, we I wouldn't say we are like, you know, adherence to the church of MPs. But we think it's really important because it's a very, very nice and consistent and frankly, simple way to understand how much would somebody advocate for you? Because that's precisely what the question is, it's a very nicely formed question, how much would you recommend us to a friend or colleague? And so for us, that question is perfectly formed for the goal that we're trying to do, which is to grow our customer advocacy. And like, what you get an NPS is not incredibly clear signal, okay, some of your 10s will have, you know, long comments about all things you've done wrong recently, and some of your ones will say, I love you, because, you know, they just click the wrong button. But actually speaking is very useful. And you begin to get data at a human level on a contact level of who would promote you who would advocate for you or not. And that's really the first step is just to identify who might and then you start to, you know, kind of window that down and you say, hey, you gave us a nine or a 10. And I read your comment, and it looks like you really love us, would you want to join our customer advocacy program, and you you create an ask there as kind of the second step to NPS. So for us, it's just that it's really simple and clear. And it's kind of an industry standard. We're not sort of violently religious about it, I don't think but we find it very, very useful. And we've used it for a long time. So we have a lot of kind of history and tracking with the to understand how it's moved as we've moved as a company.

Andrew Michael

Yeah, makes a lot of sense. And I want to touch on the customer advocacy points. And second, but just sticking with MPs for one minutes as well. I think one of the things that I came across an issue I think was brought up at our HR recently was the concept of the question. That's actually Austin MPs is like, would you recommend this to a friend colleague? When a lot of times potentially, like, I wouldn't recommend hot jar to a friend potentially, who has no use for her job? So I think there's maybe there's some floor in the question itself is really like, it should be along the lines of would you recommend our product or service to someone like you, and making liquid more specific to the use case, as opposed to a little bit more generic? But I guess it's a little bit about around semantics there.

Michael Redbord

Yeah, I mean, that there's always noise in it, and you get a different type of noise, different type of question, I think, part of us a good survey strategy is becoming comfortable with some of that noise. And understanding how to kind of read the tea leaves is a survey, it's not a, you know, sort of pure as the driven snow empirical analysis that it's humans, and there's some there's some color in there, I think. And that's, you know, coming to terms with that and finding your truth in there is a pretty important part of accepting whatever kind of question you're going to ask.

Andrew Michael

Absolutely. So you mentioned that you have NPS, you see somebody drops a nine or a 10. And then you ask them to join this customer advocacy advocacy program. What does that look like? What does it entail? Like? How is this going to drive growth within the company?

Michael Redbord

Yeah. So I think just one little thing we do differently, just a minor correction there. It's not like we're automating an email back to somebody when they when they give us a nine or 10, at least in our, in our circumstances, that's not always appropriate, right? We're actually reading every response, because why else would you survey unless you're going to read the, you know, responses. And then we're actually saying, Oh, this looks like a good one or not with a checkbox. And then you know, but that's how the flow kind of works. And I think that's actually a very important step, so that you're not sort of just spamming people with these weird requests, and then, you know, promote you or something like that. So anyway, we got our population, we got a population there. And then from there, what we're doing is we're saying like, Hey, we saw you saw you like this, would you want to hear from us in the future, if there's an opportunity to, for you to sort of advocate for us. And so it's a very, very gentle ask, and it's kind of a one click opt in. And there's actually no more action on their part. It's not like they get access to something, or we're paying them or anything like that, what we're then doing is giving them a very, very low touch, sort of world rent way in the future, to work with us. And often those asks, are super simple. It's like, hey, throw us a review. Right? Or, you know, here, would you want to, we just launched something, would you want to tweet about this, and here's the, here's the one click to tweet about it, and the fewer clicks, and the lower the ask you can create for that community, the more they're likely to do it. So some types of advocacy, like customer reference programs are really, really powerful and higher level ask. And so there's kind of a, you know, there's a tearing and a stratification of the folks within that community, and you want to track how much engagement they have over time. And so we do that. And we have some that are like, you know, incredibly strong advocates that are customer references, and some that are much lighter, and maybe said yes, to sort of enter that program, but actually never done anything. That's okay, no harm, no foul. But those guys were not going to ask the references and spend their time like that. Makes sense? I think this is also an interesting concept when it comes to churn and retention. And the whole idea is what you touched on it in the blog post around sort of this trust factor where people don't really trust software anymore. They don't trust companies, but they still trust their friends. Are you doing anything at HubSpot to try and measure the impact of those referrals that are coming from the word of mouth? And do you ever look at churn and retention through that lens of like the difference between paid channels and referrals? And do you see a vast difference or not? I think that is that is like an amazing set of data, essentially an attribution a turn attribution by source, right, like, did you originate from earned or paid media? And then you know, what's the what's the TLV of that customer based off of original source? So yeah, we do we do some of that type of analysis. In general, we have not found a massive, massive difference in our customers. But I suspect a lot of that has to do with how we go to market where there is a salesperson involved a lot of the time, and we have so many touches, with our customers in the marketing phase that like that first touch of paid versus, versus earned is not like the deterministic factor. But I think if you have a lighter touch or a higher volume business, it's a super interesting way to look at it is again, TOV by source, just totally fascinating. One of the challenges terms of actually tracking word of mouth, you know, you can track referrals, if somebody uses a referral code, and you're an e commerce shop, you know, you can track referral source from a from like, a hyperlink or something. But some of what happens in word of mouth is I'll use a funny word here. It's just like really squishy. It's like human to human stuff. And it's hard to figure out exactly how, you know, Mike told Andrew about this company, right. And so I think you have to understand that, like, with our MPs conversation, there's just this like, squishy halo around a lot of this stuff. And yes, you can track it directionally. But you're going to have a hard time getting, you know, again, pure as the driven snow type data.

Andrew Michael

Absolutely, yeah, it is super difficult to but it is one of those interesting sort of areas where you have this feeling that something's happening, but you just can't really track it to really have this strong correlation towards it. So let's talk a little bit about now as you start to go from startup to scale up and your company starts growing, one of the concepts that you advocate for quite a lot as well. And is that keeping close to the customer? And this is something as well, we've touched on in the past, but how do you advise companies and organizations as they start to scale to stay in touch with their customers and not get lost? Because I think this is more often than not like, as you mentioned, and as the company starts to scale, you get different specializations. And slowly, slowly, team members stop moving away from the customer from when you that early stage, small startup, everybody does everything mode. What are some of the things you recommend to teams to stay close to customers, as you start to scale that what some things teams can implement?

Michael Redbord

Yeah, the short answer is do things that don't scale, right. And I think when you're small, yes, you everybody kind of works with the customer. And, you know, your support folks, that with your engineers, and it's all it's all good, everybody's really communicating a lot. And yes, as you grow, sometimes individual contributors move away from the customers tend to have people who now you know, are employed and hold job functions that are have nothing to do with the customer. They work in like payroll, or, you know, HR or something like that. But I think actually, the scariest thing that happens in terms of folks will be away from the customer is not the existence of payroll, HR, and HR person, those are those are finding everything, it's that your executive team starts to move away from your customers, early on your executive team, you know, they're going to be very involved in like escalations and closing big deals, all that because they're just big folks at the company that can help with those key moments in the businesses growth. But as you scale, you know, when you hire in like an SVP of sales, or CIO, or an SVP of service or success or something, now your CEO is spending perhaps less time and they're spending more time outside the business with investors, or working on the next round, as opposed to inside the business driving growth. And while in general, that's a healthy pattern, and that that's all good. And well, you need to do some things, like I said, that don't scale to tether. Those really key people in your C suite, your officers at your company, back to the customer experience. So for us, we make sure every month we have like a whole customer call, which often ends up being basically the world's most expensive support call with our entire executive team is really driven by our founders, and it just tethers us all back to that customer experience. And it's a way for the executive team to lead by example, that everybody should be talking to customers, because if you're not spending that time, on the phone, or with your customers face to face, you're just missing some of that really key fabric, some of that emotive element of what the customer experience really is. And yeah, you can like read the PowerPoint and see it on a spreadsheet, but you're missing the nuance that really makes or breaks the experience. So I'm a huge proponent of doing stuff like that, that doesn't scale at every level in the organization.

Andrew Michael

And how long are these calls? How many people are on them? What is the topic? What gets discussed?

Michael Redbord

Yeah, so the calls are probably 40 minutes, right? The number of people on them for us as our entire executive team, which is, which is quite a few it's a full room. But the calls are really led by our CEO, Brian, and then oftentimes, the customer will view the conversation into something we don't prep them, right. It's we asked them, please be honest, we do them on video, by the way. And the call will veer into something you know, that has to do with some product. And the product owner of that, like myself was the general manager of product line will pipe up. And so it's very much a moment where we're all in it. And we're listening. And we're, we're caring. And I just think that environment is what you want to create. Absolutely, I think it's it's one of those things that you can read feedback, or you can hear it from a teammate. But when you actually hear it coming firsthand from a customer, that's the moment you actually empathize and you like accuracy. That's where action happens. As well as like, as you heard from a customer's voice, it's a little bit more immediate, you put a little bit more weight to that feedback as well.

Andrew Michael

Yeah. Cool. So I wanted to throw a question at you as well and see your thoughts on it rosters to lot of previous guests as well. What what would be some of the things that let's imagine you're in a new scenario, now you've put into a new job and you're at a company, and things are not looking good for them in terms of churn and retention, you've been tasked to try and help turn things around? What are some of the first things that you would do to to help this company?

Michael Redbord

So often in that moment, when things are not going well, and I would look at the measure of it not going well and trying to understand from a quantitative perspective, like what is going on here? And I'll try to do that within like less than a week, right? This is not a matter of like data exploration at scale, over the course of months seem to get a very quick empirical quantitative sense of what's happening. Is churn bad is it that your cancellation, as bad as your upgrades or bad is something changed? Like, you just need to have that dashboard of the key kind of financial metrics that unpack that kind of headline of, hey, things are not going well. Once you have that, that enables you to start digging, right. So if it's cancellation that's going wrong, then I would start to look at customers and their cancellation reasons I would do the things that don't scale, I would spend, like the second half of that week on the phone with as many cancel customers as I could, I might also feel to survey to them, but I would just spend the time with them there. And then I would start to look and pattern match based off of what they're telling me. But what didn't work is that they never got set up. Did they feel the sales process was the wrong thing was a product reliability. Usability was a security? Was it something? Was it a competitor, right? And you can you start to kind of pick apart and pile and understand and I think a prioritized order what's actually driving that problem area. But quite often what I see is folks run in, they say oh churn is bad, so must be cancellation, right. And sometimes it's just that revenue, attention was bad. And it was that you missed a couple big upgrades because you failed to close those deals, understand what the number is first, go directly to the source, talk to them, do the things that don't scale, create the kind of groupings and piles, like I said, Have those issues, and then start to prescribe solutions against those issues and start to work against those things in a prioritized order. That's how I would pick apart the problem. For every business is a little bit different, especially depending on your scale and how much visibility you really have. But that's the right place to start, I think

Andrew Michael

very nice. And you touched as well then on the cancellations. You chose that as an example. But this is something I want to do discuss with you as well in is the concept Okay, cancellations is one thing, but then customer friction is another thing. And as a customer success team, like this is one thing that the team often needs to be doing with all the support, they need to be dealing with a sec, what are some of the areas and tips that you would advise support and success teams when it comes to dealing with customer friction? And what are the tips that you would advise?

Michael Redbord

Yeah, so I mean, an interesting example of friction is and how it balances against business outcome sometimes is like a long contract like a five year contract, right, and a heavy Terms of Service and, you know, heavy MSA or something versus a customer wanted to get out of that contract that is, in some ways, friction, but it might drive the business. So the first thing that I would recommend folks do is understand the nature of the friction that you're feeling if your customers frustrated, why Where's it coming from? And not all friction is a bad thing. If someone's saying, like, Look, you know, I feel like this contract was totally the wrong thing. I was tricked. Well, that's bad. But if they're just in the middle of the contract the contracts in place, it was an agreement that you held, and you should uphold it, right. And so sometimes that friction is a really bad thing where they feel tricked and Rob, but sometimes it's not. Similarly, you know, folks sometimes encounter cool unquote, friction when they're in a certain level of your product. And there's a feature that they really want, but they don't want to buy the next level, because there's other features in there, they don't want to pay for it. It's kind of like, you know, tough luck. And in some ways that friction is what drives our business. So the concept of friction, I think success is something that when you work with customers every day you feel a lot of and I really empathize with that because the work that we do is hard, right? But at the same time, some of that friction sometimes is what drives a business for so the very first thing I would do is look at the type of friction, and what really the purpose of it is and decide as a success professional. Is this the friction that is by design? Or is this friction that we don't want if it's friction that you don't want. Now we get into pretty interesting conversation right around. Okay, what are the points of friction across our customer base. And because various ways to track that HubSpot, we use something called roadblocks, which is really about like, Hey, we want to log a roadblock in our system for a customer who wanted to do a thing but encountered some friction. And Couldn't we aggregate those roadblocks. A lot of times, they're about functionality, and they drive a lot of our product roadmap, right? I think there's all sorts of process you can apply there. But really, the very first question that I recommend is, okay, I'm feeling friction in my job while I'm on a phone or video calls my customer is this friction, good friction or bad friction. And and that should be the decision point that helps you decide like which path you're going to go, are you going to go take that try to advocate it to make a change in your business? Or is this something that's really by design and should be there and should be there for the growth of the business? And sometimes it's got to be one and sometimes asked me the other.

Andrew Michael

I like that as on the distinction having the clear clarification of what the friction is around. What do you do in the case where it is by design for the business sake? How do you advise Success and Support reps to deal with this friction? Because I think more often than not as well, like, specifically, I think this happens when you don't, when you lack a little bit of confidence and you try to like sort of cave into all the needs of your customers. But when it is by design, what are some of the things that you recommend? Your team does?

Michael Redbord

Yeah, I think this is the place where training and sound bites and role playing and listening to calls in a group setting. And you know, some of these like, just like upscaling tactics really come into play, if there's a if there's a particular kind of piece of customer friction that you know, you believe in your company is really important to your growth, and you're not going to change it, then you have no choice but to figure out how to handle that well. And so that friction is sort of expensive from a customer experience standpoint. So you better make sure that it's paying off. And you better be investing against that in terms of skills in order to make sure that your team is really driving that friction to a successful outcome. And so I actually really like group call listening call like Phil Knight, right, get it together on a Thursday night, at five o'clock, listen to three calls as a group, talk about them. And you know, it's your week, every every second week or something that I think is a tremendously useful tool for teams to come together and socialize how this stuff works. But in a hopefully productive setting, not like when you get off the call and take the headset, you put it down and you go up. But in a setting where you can actually make progress against it in a little bit more of a thoughtful way.

Andrew Michael

It's a very nice one, I think similar like it actually has that see that scenario where people sit down to watch recordings. We also do it similarly with customer calls, where we have these bonfire sessions, and we have everybody sitting listen to what I like as a way for team to come together. And to give like feedback to one another as well, I think can be very powerful. Love it. So last question for today. And it's something I think we just touched briefly on before the call, but what is something that you wish more people would be asking yourself, or themselves when it comes to churn and retention within their company?

Michael Redbord

I think that nowadays, middle of 2019, in the customer success industry, if you will, I think that there are some pretty normative patterns to how to how to build scale and execute a successful Customer Success strategy. It's not yet to the point of like running it inside sales team, which I think is quite figured out. And in some ways, an older, you know, practice area, but successes is starting to get, you know, pretty figured out as an operational function. And a lot of our conversation today, Andrew has really been about that. So the thing I think people should be doing more of, and often it's really, they don't do this, because it's hard is understanding around their business. What are the other factors other than just what you own as a VP of supportive VP of success? One of the other factors that are influencing your customer success? What is the structure of, you know, your checkout page, what is the structure of your sales compensation plan, how does your website and how it targets personas affect your pull through and intent of people when they actually end up in onboarding and understanding kind of at a systemic level, the factors that matter, and really partnering with the folks that own those often, and other teams, right, your peers across the table, partnering with them, to create better outcomes overall for the company. And that will also create better customer success. So it's not about the success person rolling up to the sales leader and being like you're signing up terrible deals, stop it, that's not at all. It's partnering to grow the enterprise value on the whole and these and customer success as a way to do it. So really stepping out of your own function, and partnering with other folks, but not running roughshod over them, but really creating a productive conversation in the service of your customers. But also in the service of your own growth. I wish people would do a lot more of that.

Andrew Michael

I like that. And it's like looking at it more holistically across the company of the customer touch points and what's been impacted by it, it's really hold you back from doing your job effectively. You mentioned as well, onboarding again, and you touched in the beginning, I think this is one of the case actually wants to do bring up earlier. But now that you bought in the context and make sense as well as when we think about onboarding, and the distinction of like, what Customer Success is responsible for? And what is product or marketing responsible for? I think there's like, at least in my experience has always been this blurry crossover of like, what is product and marketing responsible for when it comes to onboarding us onboarding? And what is Customer Success responsible for? When it comes? In your view? Like? Who's responsible for what?

Michael Redbord

In my view? That question is very hard to answer if those three parties marketing product and success, if you gave each of them a piece of paper and a pen, and you said draw your onboarding process, and they do something different, right? Because then you're just working at odds with each other. And the marketing team is doing one thing, the success team is doing another and it's a giant car crash of a mess. And so the way that I see it anyway, is that the first step is for those three parties to align on what that looks like. And then understand, okay, how can we each contribute to that success? What are the swim lanes so we don't bump into each other? Like, oh, yeah, marketing is going to send the welcome email. So product isn't, and neither is a service person, right? We're all going to understand that that's the email, and we're going to if something needs to change that email, we're going to make that better, we're gonna we're going to work with our marketing team or service people are going to work with them, as opposed to doing it themselves. And it's really that teamwork. That is a foundation that oftentimes isn't there. And it involves a small step back, and a little bit of like a whiteboarding for charity type exercise. But even something like that, that simple is a really good starting point to align those, those three parties. And if you're aligned, you can just do so so much more. I see a lot of success teams that kind of go it alone. And then later on down the road, they say, oh, nobody helps us. Well, that might be your fault. Because at the beginning, maybe you never went through that kind of visioning process really should take an hour, right? And to get on the same page and pick apart what should product do, what's your marketing do and what should humans do. And humans are way more flexible, they learn faster, and all that. So at the beginning, it might make sense for the service team to do a lot more over time, like we were talking about before, more and more should flow to marketing and be automated promotion more and more product once you kind of know what you're doing. And you know what the key actions that you want your customers to take are, but it all starts with a shared understanding. If you can't do that, you're going to have a really, really hard time getting really anybody to work together.

Andrew Michael

Yeah, I like that. I think definitely alignment is critical. And having that shared understanding and lack of vision for you going just makes things go along a lot smoother. Mike, it's been a pleasure having you today. Really, really enjoyed this discussion, this chat. I'm sure the listeners are going to love this episode as well. Is there anything you'd like to leave us with? Like how can we keep up to date with your work? Anything you'd advise that we check out?

Michael Redbord

Yeah, so HubSpot actually just came out with our very first state of service report that I honestly think is really excellent. I'm not just saying that because I work there. I think it's a really good report. So if you have to HubSpot. com, you can check out these data service report. If you head to HubSpot comm slash service, you can check out the service product that we've been working on now for about a year and a half. And if you want to continue the conversation with me, and you've made it this far in the podcast, I would love to please find me on Twitter at Red board my last name or LinkedIn I'd love to chat.

Andrew Michael

Awesome. Oh, thanks very much and wish you best of luck. Now, as you start to grasp this new product clubs, but

Michael Redbord

Cheers. Thanks so much Andrew. Really enjoyed today. Cheers.

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