The Future of the Cloud Is Customer Success
•
1 j'aime•829 vues
The Future of the Cloud Is Customer Success
Recommandé
Recommandé
Contenu connexe
Tendances
Tendances (20)
Similaire à The Future of the Cloud Is Customer Success
Similaire à The Future of the Cloud Is Customer Success (20)
Plus de Gainsight
Plus de Gainsight (20)
Dernier
Dernier (20)
The Future of the Cloud Is Customer Success
- 1. ©2017 Gainsight. All Rights Reserved. The Future of the Cloud is Customer Success
- 2. Agenda •The State of the Cloud – 2017 (20 Minutes) •Customer Success Edition •Revenue Growth in the Helix (20 Minutes) •Question and Answer (15 Minutes)
- 3. ©2017 Gainsight. All Rights Reserved. Bessemer Venture Partners The State of the Cloud 2017 Kristina Shen BVP Partner
- 4. Breakdown of the cloud 100
- 5. Breakdown of the cloud 100
- 6. HOW DO I SCALE? HOW MUCH SHOULD I BURN? HOW FAST SHOULD I BE GROWING? KEY QUESTIONS FROM TOP PRIVATE CEOS
- 9. The new growth standard? 8 YEARS TO $1B Dropbox is the Fastest SaaS Company to $1 Billion Revenue Run Rate
- 10. Years from $1M to $10M ARR How do the top cloud companies perform? Source: CapIQ, internal sources and company announcements.. Note: Use quarterly revenue times four as a proxy for ARR.
- 11. Years from $1M to $10M ARR How do the top cloud companies perform? Source: CapIQ internal sources and company announcements.. Note: Use quarterly revenue times four as a proxy for ARR.
- 12. Years from $1M to $100m arr Source: CapIQ, internal sources and company announcements.. Note: Use quarterly revenue times four as a proxy for ARR. Note: Assuming it takes 24 months from founding to $1M ARR if do not have actual data.
- 13. Years from $1m to $100m ARR 5.3 yrs Top 25% Source: CapIQ and internal sources. Includes 46 public or recently acquired public companies from the BVP Cloud Index. Excludes companies who reached $100M ARR prior to public reported periods. Note: Assuming it takes 24 months from founding to $1M ARR if do not have actual data. Use quarterly revenue times four as a proxy for ARR. Public Cloud Companies 7.3 yrs Median 10.6 yrs Bottom 25%
- 14. From $1mm ARR BVP GROWTH BENCHMARK BEST GOOD BETTER Years to $10M ARR Years to $100M ARR 3 Years 7 Years 4 Years 10 Years 2 Years 5 Years
- 16. Defining the efficiency score % Annual Revenue Growth Rule of 40 += % Profit Margins
- 17. Defining the efficiency score % Annual Revenue Growth Rule of 40 += % Profit Margins * Burn defined as FCF for this analysis % Annual CARR Growth Efficiency Score += % Burn*
- 18. SHOPIFY 2013 GROWTH-DRIVEN EFFICIENCY SCORE Power 112% -4% 108% % Burn*% Revenue Growth = VEEVA 2013 FCF-DRIVEN EFFICIENCY SCORE Power 62% 19% % Burn*% Revenue Growth + = Multiple successful models of efficient growth 81% + * Burn defined as FCF for this analysis
- 19. DIFFERENT EFFICIENCY SCORES AT DIFFERENT STAGES Source: 43 companies in the BVP Cloud Index, CapIQ Note: Average efficiency score of the 43 public cloud companies. Efficiency score defined as % annual CARR growth + % FCF margin. Prior IPO – 3Y IPO – 2Y IPO – 1Y IPO IPO + 1Y IPO + 2Y IPO + 3Y 73% TIME 56% 53% 45% 38% 35% 32%
- 20. The bvp efficiency rule (>$30m arr) EXPANSION ($30-60M ARR) %CARRGrowth+%FCFMargin 70% 50% 30% IPO (~$100M ARR) PUBLIC ($150M+ ARR)
- 21. %Rev.Growth+%FCFMargin 70% 50% 30% EXPANSION ($30-60M ARR) IPO ($60-100M ARR) PUBLIC ($100M+ ARR) ? The bvp efficiency RULE
- 22. THE BVP EFFICIENCY RULE (<$30M ARR) BVP Efficiency Score Net New ARR Net Cash Burn > 1 For Example: ($ in M) $15M (= $25- $10) $10M = 1.5 BVP Efficiency Score 2016 2017
- 23. HOW DO I SCALE?
- 24. The guiding principal ltv cac 1 Spend More Efficiently 2 Retain Customers 3 Sell More To Your Customers
- 25. Customer acquisition cost cac payback CAC PAYBACK PERIOD (months) Total S&M costs last quarter = New cmrr added last quarter x % gross margin
- 26. CAC COCKTAIL SALESREP PRODUCTIVITY SALES SUPPORT SDRS, CSMs M A RKETIN G Cac cocktail formula SALES # of AEs Quota Inside sales Field /enterprise sales Ramp time Inside sales Field sales Attainment rate $400k-$800k $1-1.5m 1-3mo 6-9mo 70-90% LEAD/OPPORTUNITY GENERATION # of SDRs Opportunities/SDR/month Close rate Marketing Spend (% of Total S&M) Inside/field sales model Freemium/internet sales 15-25 15-30% 25-33% 33-67%
- 27. Note: Assumes monthly new bookings increases by $5k per month. REDUCING CHURN HAS REAL BENEFITS
- 28. Note: Assumes monthly new bookings increases by $5k per month. 0% Churn (100% renewal + upsell) 1%Monthly Churn (-1% growth) 1% Monthly Upsell (+1% growth; Net Negative Churn) ~$95M ~$75M ~$115M ARR in Y6 5x 5x 5x Mult $475M $375M $575M Equity Value 1% Churn = $20M ARR = $100M in Valuation 1% IMPROVEMENT IN CHURN = $100M+ IN Valuation
- 29. Find the model that works for you UNDERSTANDING YOUR model SMB EnterpriseMidmarket 12 Mos 18-24 Mos3-6 Mos AVG ACV CHURN / UPSELL CAC PAYBACK $12 - $50K<$12k $50K+ 1% Monthly<3% Monthly <1% Monthly, Upsell
- 30. Multiple ways to be successful: upsell major driver 12 Mo CAC Payback, 100% Retention 24 Mo CAC Payback, 115% Retention Note: Assumed 80% gross margin, and no other expenses. Revenue Cash Flows (Gross Profit – S&M) S&M Costs Year 1 Year 2 Year 3 Year 4 $10 $8 $0 $10 $10 $10 $8 $16 $24 $10 $8 $16 $12 $1 $13 $12 $15 $24Result in same cash flow after 4 years
- 31. Revenue Growth in the Helix Allison Pickens Gainsight Chief Customer Officer
- 32. Agenda • Congratulations to the Cloud 100! • The Helix Model of Revenue Growth
- 33. First, congratulations to many of Gainsight’s customers who made it into the Cloud 100! ...and many others!
- 34. What do these companies have in common? They all... ●Do customer success well ●Know recurring revenue is cheaper than new revenue ●Recognize that successful customers help you grow faster by generating new business
- 35. Agenda • Congratulations to the Cloud 100! • The Helix Model of Revenue Growth
- 36. It’s a new world Your customers have more power than ever before
- 38. Customers Expect Outcomes, not Transactions
- 39. More than ever before, it’s an imperative to make your customers successful
- 40. When cross-functional teams work in harmony to ensure customers achieve their desired outcomes driving exponential growth for your business. Cus • tom • er Suc • cess / kəstəmər sək ses/ˈ ˈ
- 43. Lead for New Logo Lead for Renewal Lead for Expansion
- 45. 86% 89% 89% 95% 13% 13% 16% 22% 117% 106%102%99% Transactional Helix Avg. Gross Retention % Avg. Expansion Rate % Avg. Net Retention %
- 47. Tech Go-to-Market: Make Customer Success a Cornerstone of Your Customer Experience Strategy Customer Success Management is the Key to Outstanding B2B Customer Experiences Grow Fast or Die Slow: Focusing on Customer Success to Drive Growth So how can a midsize manufacturer “break on through to the other side” …? Their best bet is to take a page out of the SaaS vendors’ playbook and deploy a customer success function. - Geoffrey Moore
- 48. Customer Success Strategic Priorities People Rally your teams around the customer; define their success by customer success Process Jumpstart your program around key initiatives aligned with driving customer success and growth in the helix Technology Enable your team to drive more value at scale with data driven insights and automation
- 49. What Our Company Looks Like To Us CEO Sales Marketing Customer Success Engineering Product Finance
- 50. What We Feel Like to Our Clients…
- 51. What Modern Clients Expect…
- 52. Pre-Customer Success: Lifecycle Defined by Hand-offs CEO Product / Engineering Marketing Sales Customer Success (…and other departments) Hand-offs between silos Customer Journey
- 53. Post-Customer Success: Work in Harmony to Drive Optimal Customer Journey CEO Product / Engineering Marketing Sales Customer Success Customer Journey
- 54. What Modern Clients Expect…
- 55. Q&A
Notes de l'éditeur
- The truth is, we’ve actually been operating in a new environment for longer than we like to admit. Due to disruptions across industries, your customers have more power than ever.
- Your advocates and detractors have never had a higher platform to share their experiences. And the truth is, whether you’re aware or not, your customers and partners are speaking about you in the marketplace. (click) As in the United Airlines debacle, a few isolated experiences now have the power to reach millions in a matter of seconds, impacting your ability to retain and grow existing business and land new business.
- Compounding these effects is the fact that customers have higher expectations than ever before. Whether its IT, Healthcare, Industrials – customers demand that vendors and partners help them achieve their outcomes, not just delivery of the tool or service as in the past. If these outcomes are not met, they switch to a competitor and become detractors in the market place.
- It’s never been more important to drive success for your customers. Across industries, across geographies, across portfolios of offerings, companies are finding that they must think differently about their customer and about how they interact with their customer.
- Therefore, companies are turning to Customer Success. Customer Success is defined by three key factors. First, it’s cross-functional in nature. Your sales, services, support, account management, product and other teams need to work in harmony to deliver value to customers. Next, the company needs to have an intense focus on identifying their customer’s desired outcomes, and working in harmony to achieve them. Lastly, Customer Success when done right, can drive exponential growth for your business. Let’s talk about how this happens.
- You are undoubtedly familiar with the Sales funnel - selling a solution and providing support for that solution, but optimizing your processes and your teams so that they can capture more net-new market share with les s focus on nurturing established customers to ensure they receive the full value of their investment. Companies operating with a similar model often have market-facing organizations focused on prospecting through marketing and lead generation, large field sales organizations building relationships and positioning your solutions against competitors, and sizeable support organizations who are reactively responding to customer concerns. (click) In the Land and Expand funnel you can see a similar focus at the top of the funnel to build the customer portfolio, but the bottom of the funnel is equally important. In this model you extend the level of support and care you are providing to Customers throughout their lifecycle, engaging proactively to ensure you retain and grow the relationships that you worked so hard to capture from the top of the funnel. This shift has been driving businesses across industries to focus on delivering different experiences to their customers in the form of customer success and you’ve been on this journey. (click) But where are we today? (click)
- In working with hundreds of companies, we have helped customers drive new business relationships into successful customers. As expected, this motion leads to ever greater opportunities within the organization. This is the basis for the TSIA lifecycle concept ”Land and Expand”. What was unexpected, though, was that Expansion wasn’t the only lead a successful customer created.
- A successful customer actually creates three new leads: a lead for renewal, a lead for expansion, and a lead for driving new business.
- As a result, we believe the new customer success driven model for growth is the helix. Successful customers drive each revolution, and each movement up the chain creates exponentially more leads, new business and greater growth.
- We’ve seen the helix brought to reality. In our experience working with companies, we have benchmarked them along a maturity spectrum, from “new to customer success” primarily focused on the linear Sales funnel, to maturing organizations who’ve embraced the Land and Expand hourglass, to organizations that are “predictive” in their ability to drive success for their customers and are realizing the benefits of the helix. We’ve seen gross retention grow as organizations mature. Further, we’ve seen businesses able to leverage successful customers to drive expansion. The result is exponential growth in the helix.
- The trends observed within our own customer base are similarly represented in other studies and their findings. (click) 1 – As retention rates increase, your annual growth rates also increase 2 – A single percentage point increase in revenue actually contributes nearly 7% to your bottom line 3 – Companies with increase retention rates have significantly increased valuations 4 – And finally, these results aren’t just a snapshot in time. Customer Success contributes to predictable and sustainable growth over time.
- The imperative of customer success isn’t a micro-trend. Gartner, Forrester, and McKinsey have independently recognized that, in order to recognize your maximum growth potential in this ne _______ BACKGROUND Geoffrey Moore Source article - https://www.linkedin.com/pulse/manufacturers-dilemma-geoffrey-moore …when manufacturers do commit to customer success, and demonstrate it through systems of engagement that involve the customer in a direct dialog, then the customers reciprocate… Because they can see that you want them to succeed, they in turn want you to succeed as well.
- We’ve seen three drivers to ensure success with Customer Success. The first is rallying your people around the success of your customers. The second is to align your processes to key initiatives that will drive successful outcomes for your clients and help you realize the growth in the helix. And the third is the technology that will help you to operate at scale and put the data and insights you need at your fingertips.
- This is probably the way that you typically think of your company structure. Each of you have built sophisticated teams and processes to meet your targets, deliver on your strategic initiatives and contribute meaningfully to the success of [Customer Name].
- But this structure, while it looks great on paper and can work well to drive internal initiatives, leaves customers feeling like they are boxes on an assembly line being passed from organization to organization.
- What clients expect is a perfectly orchestrated partner who anticipates their needs, blends in with the right resources at just the right moment and fades out right on time – leaving no gaps or and without awkward pauses – but playing just the right note at just the right moment in time.
- But we’ve defined their experience with us through a process of hand-offs. Each handoff requires explaining themselves again or learning how each new team operates and what it means for them and their experience. And this experience creates friction within your organization – Product and Engineering want to know how their products are being used in the field, but they have to ask Customer Success for access to clients. Sales captures deep intelligence about the client’s organization, their needs, the challenges they’ve faced that have brought them to the point of investing in your solution, but once the deal is closed and the new customer is transitioned to Customer Success you have to re-learn or read through pages of notes to find the salient points to continue to build that same rapport. Clients have high expectations of you and you have high expectations of yourselves. How do you meet those expectations?
- Pivot by 90 degrees. Stop defining the customer journey by the team they are working with or the handoff, but rather orchestrate your teams to support clients across the entire journey. Tap into the strengths and expertise of each team at just the right moment in time so that your client has a seamless experience, and your teams are playing to their strengths and maximizing the impact they can have on the client’s experience.
- What clients expect is a perfectly orchestrated partner who anticipates their needs, blends in with the right resources at just the right moment and fades out right on time – leaving no gaps or and without awkward pauses – but playing just the right note at just the right moment in time.