Reducing Risk Through Operational Excellence | Michael Popa

Speaker A: Foreign.

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Speaker A: Welcome everybody to the Customer Service Secrets podcast. Excited? Today we're going to be talking about improving the customer experience and reducing risk through operational excellence. And to do that we brought on Michael Popa. Michael, thanks so much for joining. And how the heck are you doing?

Speaker C: Good, thanks for having me.

Speaker A: M. Yeah, appreciate you taking the time. I think this will be a, uh, fun talk track, especially as we think about this idea of operational excellence. So many people I think, thinking this year about the year of efficiency and you know, how to get a little tighter with everything that's going on in the world. Um, so I think this will be a fun one to kind of dive into. Before we do that, um, you know, maybe just tell us a little bit about your background and some of the fun things you've done in this, this idea of customer experience.

Speaker C: Absolutely. Um, I've been in, I think I've been in the customer experience, customer success and service space most uh, of my career. Uh, I was doing customer success before it really was. Yeah. But it's uh, it's good to see it get the focus it has and just the evolution of it. Right. Over the 10 years or so has been extraordinary. But I've done, I've worked at large technology firms, uh, that have had products that have done managed services and I've worked for several startups, uh, that were early stage startups, mid stage startups that either didn't have customer success and needed to build it or were getting into what I would call their next uh, generation of customer success. Right. So they've done it, they got to a certain point but realized they needed to elevate it. Uh, and that's where I came in. But uh, been in specifically the customer success space for over 13 years. Wow. Uh, and that breadth of experience is anything from customer success management or slash, what some people call account management to customer, uh, service, technical support, professional services, customer operations. So um, the full, the full book.

Speaker A: I love it. Yeah, that's um, um, I love that line. You know, I was doing the customer, uh, you know, success before it was called customer success. Ah. But boy. But to your point, it has really taken a turn in the past 10 years and uh, really a life of its own, a seat at the table in many companies. And I'm sure we'll touch on a little More of that as we go through. Um, do want to dive into the topic, but I always like to try to ask people a little bit outside of work, you know, humanize you if you will. Um, hobbies, um, fun experiences, embarrassing moments, anything you want to share with the audience?

Speaker C: Yeah, you know, I, I'm live in the mountain west. I love being outside. Um, and I also love, you know, investing not just in my teams, but in myself. So I was part of a leadership development program that for six months you developed yourself as a leader. Uh, you had a dietitian and a strength and conditioning coach in graduation was traveling to Tanzania for a week long workshop concluded with climbing Mount Kilimanjaro. So that's my mountaineering right there.

Speaker A: Wow, that's awesome. And, and you actually some.

Speaker C: I mean, yeah, for sure.

Speaker A: Wow, that's impressive. Um, that again, I'm, I'm making myself probably look a little dumb here, but that's one of the seven. It's one of the. In Kilimanjaro. It's a big one. Is it?

Speaker C: It's one of the top. Is it the top 10? Top 7?

Speaker A: It is 7, isn't it? Something like that.

Speaker C: Uh, it's the largest, its largest freestanding standalone mountain in the world.

Speaker A: Right.

Speaker C: Meaning it's just a single mountain. It doesn't have the mountain range, the mountain ridges. It's the highest single standing mountain in the world.

Speaker A: That's awesome. Wow. Good for you. How long ago is that again?

Speaker C: Uh, it'll be two years ago this March.

Speaker A: Wow, Good for you. That's super fun. Well, um, I have not done that, so we'll just leave it at that. Um, okay, let's jump into this topic at hand. So I wanted to start big picture, um, again, such a breadth of experience in your background with this whole idea of customer experience, customer success. As you think about helping companies, you know, reduce this risk, operationalize themselves, get to that word, excellence, you know, where do you typically start? What's kind of that, um, that pillar you, you start as you want to get through that transformation.

Speaker C: Yeah, it's, uh, and just, you know, as I mentioned, most of my experiences with startups, so there's a lot of work that needs to be done, uh, going from early, ah, stage to mid stage and maturing. And a lot of that really is what's the strategy? Uh, and that strategy is where do you invest? Where do you need to invest? Um, so it's the core of operations. Right. Just because it's customer success and it's in SaaS, you can't leave the fundamentals, the business fundamentals behind. Yeah, totally. That it just comes down to what's your strategy, what's your process, what's your infrastructure and how does all that work together? So that's where I typically start, is understanding the objectives of the company. Understand where we want to go, uh, where we want to take not just customer success, but the entire customer life cycle. And how do we build a strategy in conjunction with sales and operations so that we're investing in the right building blocks to write milestones in the right sequence.

Speaker A: You feel like, um, you know, I mean a word like strategy, some that we all use. We. It's one of the, I think it's one of the top words used in like LinkedIn. Um, yeah, the resumes or something like that. Right. So we all think we're strategic, um, where do you feel like? But yet we lack so much strategy in companies. You know, so there's a moment of realization there of if we think we're strategic and we're not. Just quick thoughts on where you think. Companies often maybe go wrong in this idea of yes, they know they need a strategy, yes, they have a strategy, but yet they don't have a strategy, what are they typically missing or not getting it right.

Speaker C: Something I see often that causes some challenges. And those challenges or uh, the challenges I'm getting ready to mention do reflect through to the customer. And that's really around what's your sales strategy, your go to market strategy. And specifically what I mean to that is, you know, customer success is still new. There's a lot of sales personnel out there that aren't used to it or familiar with it. Uh, so you're bringing, if you will, a new team member into that, um, account team structure that has responsibilities. But what I'm getting at is what's your route to market? If you need to be aligned strategically on sales does this. Sales engineering does this. Customer success does this. And they are all one team. But what are those roles and responsibilities for each of them? What's that, Raci? Right, that responsible, accountable consultant and informed model for all of them.

Speaker A: Yeah, yeah, yeah.

Speaker C: And then that needs to align to compensation. Right. If you are comping sales on landing net, new comping sales on cross selling and upselling and renewals. Right. Then that needs to be aligned to how you go after and do the ongoing management of customers. To be clear, uh, it's not a one size fits all. I've done customer success at several companies and it's not a single playbook you can take into a single customer. Uh, for example, I don't believe that customer success managers should be put on commission. However, their bonus should be structured to accomplish their goals. Right. So it's really aligning on the roles and responsibilities with sales all the way down to what are the metrics each one's accountable for and how are they compensated for that.

Speaker A: I love it. I think those are great principles. And you mentioned a word, raci. I think, um, just for those who aren't as familiar with that. What. Maybe mention that one more time. What is that and what does it stand for?

Speaker C: Yeah, Raci. It's raci. It's responsible, accountable, consulted and informed. And when you look at business processes, you really look at those and say, okay, who's responsible for doing this? Who's accountable for it? So if it doesn't get done, who's that throat to choke, but who actually has to go do it? And then consulted and informed is okay, who really needs to be aware of this? Being informed and then consulted would be. These are people that you likely need to talk to as you execute in accomplishing this. Yeah. Um, just provides a lot of clarity when you look at business process and, uh, roles and responsibilities.

Speaker A: Yeah, I've always liked the. Sometimes I've struggled with the last letters, but I love the responsible, uh, and accountable that those are. Always been helpful in some of my background. You mentioned the metrics, and it's one of the things I think people just struggle with. Uh, I like some of your concepts. You know, you mentioned words like alignment. Um, you know, the one thing m we don't have to get into necessarily specifics. But yeah, you know, oftentimes you said, I don't really like to see the compensation, at least their base concept be aligned around their goals. Maybe that's more around like a commission structure or a bonus structure. Any quick double click on that. I mean, just metrics. I think metrics and aligning with composition is so important, but boy, that seems like that's a tough one to find a balance on. And the best way to do it.

Speaker C: Yeah, you know, for me, and I know there's differences of opinions out there. Right. But I think if you look at customer success and again depends on their roles and responsibilities within your go to market. Right. But for me, uh, they do need to be in a bonus structure. But to put them on a commission, I think starts to cloud the water from having the customer's best interest in mind versus having customer success be the focus. Um, and I believe in team goals when you look at customer success organizations, um, they typically don't get all the funding that you get to build a sales team. So it's more collaborative. Right. Someone's burden gets heavy. Other CSMs will engage and help m the customer along. Right. So getting a renewal in my mind should be shared across a group or a larger team, uh, instead of individual customer success managers. But CSMs, I think you'll see primary responsibilities regarding to retaining or accounting. Oh, geez. All the acronyms. Customer success being, you know, um, ndr, Net dollar Revenue retention, you know, their contribution to that primarily and typically includes the renewal.

Speaker A: Yeah.

Speaker C: Uh, and then often does include an upsell or cross sell. While they might not be closing that cross sell and upsell, uh, they'll identify it, nurture it and then bring in sales when you need to negotiate or get into T's and C's. If it gets to that, the net dollar revenue retention, customer success absolutely should be contributing to that. But for my view, it's more of a team perspective. Right. While there are great individual contributors, you're going to have, you know, if you're on a five, a five point rating system, you'll have your fives, you'll have your fours, your threes, your twos and your ones and you take care of that during performance reviews. But goal attainment for things like did we hit our renewal rate for the quarter? Uh, that's a team effort, I think.

Speaker A: I like the team focus. That, that does make a ton of sense. Um, it's something maybe should be talked about maybe a little more often in this type of environment. Okay. So one is kind of sales strategy getting alignment on that, um, with customer success, the post sales strategy. Love the racing. Where do you go next? What's another big principle you've kind of used to uh, help guide some of this structure and strategy?

Speaker C: Yeah. I think for logically aligning on the process roles and responsibilities is. Okay, how do we, I'll say systematize, but what's your infrastructure and what are the tools you're using?

Speaker A: Okay.

Speaker C: And again, this stuff becomes very transparent to customers if you don't have something in place. And as we start talking through these, these items we're going to talk about today, you'll start to see a correlation. There's overlap in all of them and I guess that's why it's strategy. Right. They all have to support each other. But what are your systems? Right. So what systems are you using? How do you get a, uh, single source of the truth throughout the entire sales cycle? What we discover up front in the marketing efforts and in the sales motion. Those salient points need to process through the system so that all everybody else knows what's going on, knows how we got here, right? And then it goes into the management piece. But having those systems end to end now you have the ability to do a couple of things. You can get the operational excellence because you can now forecast your demand on uh, customer success. If you're in a hyper growth organization and you're not scaling customer success aligned to your internal operating metrics, you're going to get in a pinch. And that pinch could be reducing the scope of customer success, therefore impacting the customer's velocity to value. Right. So you need to be able to forecast your demand and how, when do you hire, where do you hire and get the right people in seats. So as the customer, customers come on board, you've got a bigger team to build that. So you can use this AIBI in your system to forecast your hiring, but then to also benefit the customer. Um, customers really appreciate partner knowledge. So understanding that when I onboard a customer, I'm not asking the same questions that the sales team asks when it comes time for contract management and invoicing. It's accurate and it's correct. It's the same thing the sales guy told me about. It's the same thing I signed. My name's correct on the invoice. Right. It's just those things resonate with customers and it's really showing that you, I'll say know your customer, but this is more from a systematic perspective, right?

Speaker A: Yeah, yeah. It's interesting. You probably heard me laughing a few times because I, I've lived and experienced some of that. I. The name thing you meant, you know, the name is spelled wrong. Um, I've made that mistake, you know, and that actually made a customer in the handoff so frustrated that they um, I experienced where maybe they were looking for a reason to cancel. We ended up getting them back, but it took some, I mean they were very offended that the name was spelled wrong. And I'll never forget that when they went up to my CEO, it went all the way up to my CEO, long time ago in my career. But small things. But the handoff, you know, I think that's something that watching the customer experience throughout that journey. Um, and boy you exceed that. You know, the. And look, it's across the board whether you're in B2B or B2C, right? It's like, how do you not know me? Or hey, we just bought Something from you. Now you're asking the same questions that I told somebody else. Is there ways you found, um, tips on tools and best practices to make sure that that information flow does go with the group?

Speaker C: Yeah. It's kind of what I touched on to start. Right. Is do you, do you have a unified integrated system that you use to run your business, that you use to run the customer life cycle? Right. Then you get back to the racing. Who's responsible for setting up that information, managing and editing that information. Right. As you go through the process. Um, but I think you know, the, the uh, it's not that recent, but the kyc, uh, know your customer is very important.

Speaker A: Yeah.

Speaker C: And having the right operational processes help you and help everybody understand that customer.

Speaker A: Yeah.

Speaker C: But from a customer success perspective, whether you're starting new or you're continuing to grow and optimizing that group, um, understanding how you're segmenting your customers, the traditional segmentation, high touch, mid touch, low touch. Right. And when you segment them, what, what scope of service, if you will, is associated with that? Right. And how much, how much effort do you put towards a one to one relationship versus a one to many? Or what uh, the would you get full automation in there, maybe for your lower touch, but knowing your customers so that you segment them up correctly, they get the right experience associated with their positioning in that segmentation. But then also the profile. Right. Who, who's, who are the customers influential? Who's the decision maker? Who's our champion? Knowing those things is very important. This is how you reduce risk. If your champion leaves, you better know who's coming in or who else now is going to replace that champion. Right. It's a big risk. Uh, so to be able to be aware of each customer's role in the decision making process, uh, is very important. And then how do they budget? How do they buy something? Uh, I would say that if they're buying your services with discretionary funds, that account should never be green. You know, someone found some change in a couch cushion and they want to go out and give your software, you know, your solution, a trial run, if you will. It's a paid for proof of concept. Um, I'd be concerned if it's discretionary funds, not named funds for a strategic initiative they're trying to address.

Speaker A: Fascinating.

Speaker C: Knowing this intimacy, if you will, of your customer on how they're buying, where the money's coming from really helps, you know, how closely do I really need to monitor the health of this customer? Because these are some of the intangibles that would be leading indicators into risk of churn.

Speaker A: Love it. Love it. Yeah, that risk of churn and being able to note some of that. I hadn't thought around the, the, the discretionary funds. That's an interesting one. But love the idea of knowing your customer. It's something that's really resonating with our audience as people try to deliver just a better overall customer experience and finding ways to do that in a way that resonates with the customer. Just matters so, so much. Um, people I think expect. With all that's going on, people just expect you to. Again, kyc. I think so you don't know to know them a little bit. So. All right, well, hey, let's look to wrap here. Really appreciate the talk track. Um, if you take it, take a step back, you know, a lot of companies trying to deliver better customer experience, trying to get more operationally sound. If you had to summarize or kind of leave the audience with one tip or tidbit if you will. Um, but what would you say?

Speaker C: Yeah, we talked a lot about operations and it needs to be a focus and it's, it's, it's an evolution. You're never really done implementing your processes and your systems. It's uh, it's always a continuous improvement effort.

Speaker A: I love that.

Speaker C: Customer onboarding is the, I think so important. Right. There's um, gentleman by the name of Lincoln Murphy who is in this customer success space. And I love a quote of his. It says the seeds of churn are planted early. And what he talks about is what's that customer experience and this all the way back to the sales motion, to the implementation motion.

Speaker A: Yeah.

Speaker C: Uh, and the customer success organization needs to engage early, typically in the pre sales or the closing process. Uh, uh, and that's very important. Right. As it transitions from sales. That's a knowledge transfer. As you meet with the customer and give them comfort on how implementation is going to go and they meet the leadership and the engineers that are going to be there helping them implement. It typically helps you close and close faster because now they know your method, they know this team, they get confidence in that team. But the most important thing is what are they responsible for? For the implementation.

Speaker A: Yeah.

Speaker C: Right. Customers need to be fully aware of these are your roles and responsibilities for implementation. We're going to lead you through it, but we typically can't do it all. We need your engagement. So that right there, once you have the operations and the processes in place, that customer onboarding, if you think you're starting it early enough, I would challenge you start it earlier. And that's in the sales cycle. Start that earlier in the sales cycle because it, it will only set you and the customer up for success.

Speaker A: Yeah, yeah, you got to get back there a little. That's back to that handoff data transfer. But, yes, start earlier.

Speaker C: Great.

Speaker A: Great piece of advice. So, uh, again, Michael, thanks so much for joining. Um, really appreciate the talk trek for the audience. Um, have a fantastic day.

Speaker C: Thank you. Take care.

Speaker B: Thank you for listening. This podcast is brought to you by Customer Now, a part of Meta. Understand your customers like never before with the help of our top rated customer management platform. And make sure to check us out@kustomer.com that's customer with a K. To learn more about customer service secrets.