It is important to remember that customers are not a single entity but made up of multiple stakeholders who are decision-makers, functional owners, users, IT, and members of the C-suite. Each of these stakeholders can have a completely different definition of the outcome of value from your product. In this chapter, we'll share some best practices for managing these multi-stakeholder environments. We'll also cover some proven tactics for dealing with risks of your customers and, if possible, early enough to avoid cancelations and churns. If the customer does churn, it's equally important to learn from the experience to prevent future such scenarios. These are all critical processes for any Customer Success Manager.

Stakeholder Alignment: How to Manage Executive Sponsors and Other Customer Stakeholders

We often hear from Customer Success and Sales leaders that there are two common reasons for churn or downsell (revenue compression) of customers. One: an executive sponsor changes. Two: there is a lack of perceived value for your product or service among the Executive Sponsors. When you dig into these symptoms some more, the most actionable root causes turn out to be a few things:

• You, as a Customer Success Manager, were not aware of the shifting priorities at the customers' businesses.
• You did not keep up with the change in what “value” meant to them.
• Your company was not top of mind with executives.
• You were not engaged with multiple levels and key influencers within the customer organization.
• You were blindsided when your champions and sponsors left, especially in the high-volume and SMB segments where it's hard to keep tabs on all executive changes.

In response, we developed a Customer Success centric framework for operationalizing Executive Sponsorship programs. The purpose is clear: as your customers change priorities and shift strategies, maintaining alignment with customer executives and decision-makers becomes paramount to sustaining and driving growth for your organization while helping customers attain their goals. When executed well, it can also create opportunities for expansion (cross-sells and upsells). Simply follow the six recommended steps below to operationalize the process.

STEP 1: Define and Map Out the Key Personas

Similar to customer segmentation, you will want to identify people with related goals, needs, challenges, and motivations. With your customers, that includes sponsors, buyers, system administrators, power users, and adoption champions. Your primary focus should be on decision-makers and influencers, as well as any potential “blockers.” We also recommend adding a “persona” field to the Contacts table in your CRM. Here are some examples:

• CEO, CFO, COO – if they are critical to your buying decision.
• Sponsors, buyers – typically SVP or VP of functions that tend to use your product or service.
• Influencers – CIO, IT, Operations.
• System administrators and power users.
• Adoption champions – tend to be managers and directors of functional teams who can drive accelerated adoption of your offerings.

Now, follow the ideal flow illustrated in Figure 12.1 to operationalize the process.

STEP 4: Track your Buddy Outreaches

Executive-level contact, even if contentious, is a step in the right direction. Be sure to track all successful and unsuccessful stakeholder alignment engagements as a Health Score measure. Doing so, you will be able to see progress over time (see Figure 12.4).

• Create an Engagement Score as part of your Health Score rubric that measures how often you connect with key personas at your customers.
• Track weekly improvements in the Engagement Score.
• Use one-on-ones to identify blockers for improving the score.

Risk Management: What to Do When a Customer is Trending Toward Cancelling: How to Proactively Escalate Risk and Save the Customer

Managing customer risk is something you will encounter every single day as a CSM. Learning how to react, maneuver, and escalate for help is critical to your success as well as your customers'. Hopefully, you work in a company culture that has empowered you to mitigate risks and raise the red flag without repercussions, all for the benefit of preventing customer churn. Even with the right culture, companies sometimes lack a process to identify customers at risk or, if it does exist, the data and related information are scattered between systems and across teams. The lack of operation can be a recipe that results in unexpected churn, the number one nemesis of CSMs. Additionally, CS teams can struggle with knowing what risks warrant escalation and instead find themselves in a perpetual firefighting mode, never actually able to focus on helping the customer attain their desired outcomes.

Let us turn, then, to steps for establishing a consistent and repeatable process to identify, monitor, escalate, and resolve risks, leveraging your leadership and cross-functional teams within your company.

Reduce Churn with a Deep Understanding of Why Your Customers Have Left

One of the best ways to understand your customer churn is not to think about it in terms of retention or the lack thereof. Rather, view churn as a teaching moment and as an opportunity to learn deeply about how to prevent it. Ask yourself, “How can I use this otherwise negative event, to rise to a higher level of proactive engagement with my remaining and future customers?”

When a customer decides to no longer be your customer, it is your and your company's responsibility to find out why. Many steps led to the customer's churn, and there is a significant amount of valuable data to be gathered. However, you can't just go in expecting customers to open up about their experience. Customers often feel a wide range of emotions when churn happens: aggravation, betrayal, relief, embarrassment, failure, frustration, and anger, to name a few. The challenge is that most people are not well-trained in navigating these often uncomfortable conversations with customers while also drawing out the root-causes of churn.

Every single customer who churns should be interviewed. While someone from your company will likely want to reach out directly to the customer to draw out the why, it's actually a best practice to use an outside agency or an anonymous well-written survey to solicit unbiased feedback about what really happened. That's because there's an art to getting the customer to reveal the real reasons they churned.

If you've exhausted every option to try to keep them as your customer, you will need to pivot quickly to understand their reasons for leaving. If you don't have the luxury of using a third-party firm, you must learn to tread lightly, approach the customer with compassion and never be defensive. Remember, every churned customer has the potential to come back in the future as a new customer. So, how you handle this exit is vital to your company's reputation and future opportunities.

Rarely is there a “blind churn”: a customer who left you when you weren't expecting it at all. You'll need to work diligently to discover the root cause. Was there a launch risk where the customer didn't make it through onboarding in a timely fashion? Did their executive sponsor leave the company and you didn't know about it? Did the users not adopt your solution nor make it part of their regular workflow? Did the product not meet their needs? Did they choose a competitor or go back to a manual process?

Even if the customer reveals their specific reasons for departing, there should always be an internal examination of other contributing factors to help you conclude the root causes of the churn. Some refer to this exercise as a post-mortem. But it's more like reverse-engineering the churn through the lens of the customer and their journey with your company. You are carefully deconstructing the customer's experience with your product and your processes to examine and analyze it in detail to discover systemic factors and failures. The goal? To ensure that the same situation never happens again with any current or future customer.

We were fortunate at Gainsight to have partnered with a firm that specializes in customer discovery and churn interviews, which we used for our customers. Yes, even awesome companies with amazing products have occasional churn. The interview results were compiled in a sizable report and sent directly to our CEO. He soon began to distribute it to every person in the company, with a mandatory directive to read it and to do so without a spirit of accusation or blame. WOW! Talk about a transparent and open opportunity to learn from failure. These reports were incredibly insightful. Sometimes they were unpleasant to read, especially if it was an account you owned or were heavily involved with. They portrayed moments that were emotional for the customer, especially that of frustration or disappointment because those very customers wanted to succeed using your product. It's why they selected you over your competitors.

What was always fascinating about these reports was that the interviewer was able to draw out an amazing level of detail and unfiltered commentary from customers. With that in mind, we were absolutely compelled to bring you the very person responsible for elevating our appreciation for the art of interviewing for the purpose of churn analysis: Alan Armstrong, CEO at Eigenworks. Alan built a team dedicated to drawing out the real stories from companies.

We are truly blessed to have him provide you with useful and actionable tips to consider for your customers, as you turn your churnings into learnings.

Tragically, this would be one of Alan's last opportunities to share his amazing and gifted insights with the world. Alan passed away suddenly, days before our manuscript was due to our publisher. He was literally the first person we asked to be a guest contributor. He was elated at the opportunity and worked so diligently to give you the best he could. It is our honor to immortalize his words here among our own.

Alan's valuable message is often overlooked. Interviewing your former customers is an incredible way to turn a negative into a positive – or going from churning to learning. We are thankful for Alan's lesson that our losses can be an education. It begins with a conversation with a human being, building trust, and listening to the customer's story. The gift of listening, once again, comes to the fore as one of the greatest skills you can have as a CSM. It must be embraced, encouraged, and used properly to benefit you, your company, and most of all, the customer.

Expansion Management: Understanding White Space in Your Customer Base to Upsell and Cross-sell Your Products and Services

When a developed, mature customer finds value in your product, they will have greater value and trust in your relationship. The customer will be open to gain more from their partnership with you. It is a natural and logical progression for them to want to buy more products, new features, additional licenses, and thus create more recurring revenue. The responsibility of Customer Success is to keep customers in a position to accomplish those things.

Let's consider our counterpart on the Sales team. Every single activity a Sales Rep performs increases the potential of closing a deal and, thus, drive sales. Now, compare that with Customer Success. It's an organization that most often is positioned on the org-chart separately from Sales. However, the goal of Customer Success is, and always will be, to empower and enable more sales to happen. While not as overt as Sales, those deals come in the form of renewals, upsells, and cross-sells from happy, engaged, and loyal customers that you, the CSM have curated.

As we reported earlier, Customer Success Managers are taking on direct commercial responsibilities. As such, it is important for you to have a baseline understanding of the concepts and motions related to expansion. There are two types of expansions: upsells and cross-sells.

• An “upsell” is commonly understood to be selling more of the same offering to an existing customer or business unit.
• A “cross-sell” typically requires a new sales cycle because, while it may be the same offering, it is to a new business unit in an existing organization or it may be an entirely new offering to an existing customer or business unit.
• “White space” represents all of the opportunities for expansion.

The strategy is to implement a process to identify and act on an upsell and cross-sell potential. This inevitably requires the use of technology, data, and collaboration with your sales organization to ensure ownership and rules of engagement are in place. More than ever, CSMs are being held to an expansion metric which often includes surfacing and acting on expansion opportunities. If they aren't receiving direct commissions, they will most certainly expect some level of attribution, credit, or recognition for the discovery.

Below are a few of the most important things you must understand as a CSM when identifying expansion opportunities (see Table 12.2).

• How does your company make money from your customers?
• What types of “widgets” do they purchase?

  	Upsell	Cross-sell
  All businesses	Licenses, devices, or locations	Features Additional or Premium services
  Software as a service	Hours of services or training entitled capacity	Additional products
  On-premise businesses	Product version/upgrades services upgrades	Additional products
  Consumption businesses	Entitled consumption/capacity

• Do you know all the offerings of your company well enough to at least identify potential opportunities you could pass to a seasoned Sales Rep?
• What data from a customer could give you an indication that one of these opportunities exist?
• Have they deployed or used most of their “widgets”?

Reportability is equally important to any process you establish. Create a dashboard for managing the expansion pipeline. You read that correctly. As a CSM, you very well may be managing your expansion-sales pipeline (while still being partnered with a Sales Rep). Below are some of the essential data points that should be included, which means you'll need to ensure you are capturing them somewhere reportable.

A table showing open expansion opportunities:

• Customer Name
• Expansion Value
• Expected Close Date (sorted, soonest at the top)
• Notes from the most recent Timeline entry
• Link to the most recent Timeline entry.

A stacked bar chart showing open expansion CTAs:

• Values: Expansion Value
• Bars: Calendar Month of Expected Close Date
• Stacked Series: Forecast Category.

A table showing forecast categories that changed in the previous week:

• Customer Name
• Expansion Value
• Expected Close Date (sorted, soonest at the top)
• Forecast Category Before
• Forecast Category After.

You will also want to follow best practices for forecasting each opportunity. If your organization has not defined probabilities yet, the model shown in Table 12.3 may be a good starting point:

The White Space or Expansion Opportunity dashboard should be integrated into the regular flow of work and internal meetings with your leadership. Table 12.4 calls out the three most important CSM expansion management dashboards specifically intended to help track and drive additional revenues from within the portfolio of customers you manage.

Advocacy Management: How to Turn Your Best Customers into Evangelists

We know that happy customers, when achieving their desired outcomes, are the only ones genuinely willing to refer your company, product, or service to friends, family, or colleagues. Customer advocacy starts on the first day of the Customer Lifecycle with the intent of creating a Customer Advocate. Moreover, the advantages of an advocacy program can be felt across the enterprise and especially in Sales and Marketing. The benefits of an advocacy program are evidenced in research from the Harvard Business Review which showed that 84% of B2B buyers are now starting the purchasing process with a referral, and peer recommendations are influencing more than 90% of all B2B buying decisions.¹

As such, Customer Success Managers are uniquely positioned to turn your customers into advocates of your company. As an organization, you should implement all of the following ingredients of a successful advocacy program, but you can certainly start with any number of them and build out from there.

1. Deliver value: Just do it!
2. Demonstrate Value: Show you did it!

   CSQL	CSQA-only
   Renewal Upsells Cross-sells Referrals	Case studies Improved adoption Increased Health Score Completed training Testimonials and third-party reviews NPS promoter Speaking at your events

3. Establish advocacy milestones. Okay, we'll explain this one. Because you will get “credit” for anything bad that happens to your customer, you better take credit for everything good. Every one of the events or milestones listed in Table 12.5 should be considered either a Customer Success Qualified Advocacy (CSQA) or a Customer Success Qualified Leads (CSQL) if they were sourced directly from you, the CSM. Similar to a Marketing Qualified Lead (MQL) or Sales Qualified Lead (SQL), a CSQL is a considerably higher value lead because it comes from an existing customer and generally appreciates a higher probability of a closed sale. At Gainsight, our Customer Success Team establishes quarterly targets for CSQAs and CSQLs because we know all of the listed activities are leading indicators of portfolio growth and overall good health.
4. Identify likely advocates: utilize your Health Scores and technology to quickly and easily identify customers based on usage, sentiment, and NPS, value achieved, engagement, willingness to advocate, Success Plan progress, and active engagement with your marketing and community events or online forums.
5. Manage sales references: find a way to easily report which are your best customers and which ones are eligible for providing references. Be sure not to overuse them and always seek their permission first.
6. Promote and reward your advocates: we asked Customer Success Advocacy thought-leader Chad Horenfeldt, VP of Client Success at Updater, to provide additional color on this topic:

   Advocacy rewards your most loyal and supportive customers as it provides them with opportunities to attend and speak at events, to have their names highlighted in industry publications or on your website, and to gain access to influential people in your company and industry. Giving them some of your swag can also go a long way. Advocacy shows that you care and appreciate them. It's a secret weapon that can help retain and grow your most strategic customers. By creating this type of reciprocal relationship, you can confidently count on your advocates to help you when you need it – whether it's mentioning your company to their colleagues or providing a key reference to seal your next deal.

7. Report the impact: create and establish a dashboard that illustrates some level of revenue attribution to all your good work as a CSM. A dashboard can be easily accomplished by adding a couple of fields on the Sales Opportunity Record to include CSM Name and CSQA Type. Now there's an awesome report for your CS Leader to present to the Board of Directors.

•••

We have covered the history and the essential skills and competencies required of the Customer Success Manager's job function. We have also outlined the various activities that will be encountered on a daily basis as a CSM. Now it's time to shift to the leaders of Success teams and provide some insights and best practices unique to managing a team of often very diverse CSMs.