How Zuora Built Customer Success

Many people think the biggest challenge in scaling a company for growth is managing a rapidly expanding workforce.

It’s not.

If you have the right hiring discipline, processes, and enablement, you can manage this growth without too much challenge.

The harder task is not to lose sight of your core principles.

As you get bigger, you inevitably lose the intuitive customer insight that you enjoyed as a small company. The problem is that customer insight defines your core principles. Lose one, and you lose the other.

So how do you build a focus on Customer Success into the very fabric of your people? How do you turn that focus into a framework that you can measure, organize around, and apply everywhere across the company?

Here’s how my company, Zuora, came up with our applied framework. I’ll also provide some suggestions that will (hopefully) help you create your own definition of Customer Success.

A Little Background

Customer Success is actually a relatively new concept. When I started at in the late Nineties, it didn’t even exist. There was barely any customer support! Service calls lasted hours, and a customer with a question was considered a resource drain at the end of a sales chain.

So what changed? We did. As consumers, we’ve become more informed and demanding, and by a lot. We’ve shifted from buying products (DVDs, automobiles) to enjoying services (Netflix, Zipcar). In more and more aspects of our lives, we’ve separated the solution (a ride) from the device (a car). We’re not as interested in managing the decline of physical assets anymore.

So, companies have had to pivot from selling products to managing services, and services require huge amounts of customer engagement. Product metrics like units, margins, and inventory have been replaced by relationship metrics like renewals, upsells, and churn. Companies are less concerned about the number of units shipped than the successful outcomes they deliver to each and every one of their customers.

How Do We Get Closer To Our Customers?

A few years ago, Customer Success at my company was actually pretty easy. Zuora had a small office of less than thirty people. We had lots of insight into our customers, because there weren’t that many of them, and there weren’t that many of us! We also had a pretty straightforward billing product.

Today, it’s a different story.

We now have over 400 employees around the world. We have lots of customers representing a broad array of industries, and our product is much more complex. It’s a comprehensive back-office solution that handles a range of financial solutions for subscription-based businesses: commerce, billing, finance, etc.

A couple of years ago, we noticed that we were starting to lose touch with our customers. We were becoming siloed, and more focused on the metrics that mattered to our departments than the ones that mattered to our customers. And because our product did so much, it was hard for any single employee to understand what we did for any customer.

So, we took our managers to an off-site in Sausalito, California, and tackled some existential questions: Who are we? What do we do? How do we get closer to our customers?

Our biggest challenge wasn’t functional, but aspirational.

After three days of this stuff we were ready to strangle each other, but we came out of it with a pretty great vision. Our goal was to create “a world subscribed,” to help all companies transition from product to subscription models. We would help them grow by implementing smart pricing and sales strategies, flow by streamlining their back office, and know by providing them with the right metrics.

So we felt good about ourselves for a few weeks … then we realized we still didn’t have a plan. We needed a blueprint. How do we accomplish the goal? How do we actually help our customers?

This time there was no fancy offsite, just a whiteboard. We identified nine core processes. We help our customers price, acquire, bill, collect, nurture, account, measure, iterate, and scale.

These nine processes represented the nine keys to success in a subscription business. And there were precisely 9 keys. Not eight. Not ten. Nine.

But nine is still kind of a lot.

So we banged on it. We looked for the weak link. But every time we tried to pull one key out, the whole thing fell apart.

We decided to test it. We got 150 of our customers in a room, showed them the nine keys, and asked them to rank each one by importance.

It was a pretty even distribution … almost scarily so. There were no clear losers.

We tested it again. We looked at all of our support cases on Zendesk, and mapped them against the 9 keys. Even distribution. We had our product managers test it against new feature requests. Even distribution.

Ultimately we arrived at 9 keys. They were comprehensive, mutually exclusive, and evenly distributed in relative importance.

So then what did we do? We went glamping.

Zuora Goes Glamping

We went to Costanoa Lodge, on the California coast halfway between San Francisco and Santa Cruz. They have tents, but they come with nice comfy mattresses and minibars (glamour + camping = glamping. Get it?). We took two hundred people.

We split into 20 groups and assigned each group to one of our actual customers. We gave them sales process material, professional service information, case support details, and everything else they’d need to walk in a customer’s shoes. And we asked them to figure out the customer story against our new 9 Keys keys framework.

I had no idea if the exercise was going to work, but it turned into a transformational weekend for us. Everyone got into it. And the quiet departments (finance, engineering) taught the louder ones (marketing, sales) a lot in the process. Finally, we all had a common language.

Today we map pretty much everything we do against the 9 Keys: marketing collateral, employee onboarding, sales decks, support analyses, etc. It’s a framework that runs through our entire customer engagement cycle.

Our account executives analyze new prospects against the 9 Keys to make sure we have an accurate cross-section of their business. All of our monthly product updates are measured against it. When we acquire a new customer, a write-up goes out to the entire company that describes that customer’s aspirations against each of the 9 Keys. And, as you can imagine, this information is devoured by everyone.

Everyone knows the 9 Keys, from VPs to engineers to receptionists to product managers. We’ve got it on murals, postcards, and key chains. I even had it tattooed on the back of my neck (it may or may not have been temporary).

We’ve instilled the 9 Keys as a culture. And as a result, churn is down, customer satisfaction is up, and customer engagement is consistent.

The Nine Keys

PRICE: In the Subscription Economy, pricing and packaging is the most valuable strategic weapon.

ACQUIRE: Subscription businesses need to establish fast, simple, streamlined customer acquisition workflow across multiple channels.

BILL: Subscription businesses have to bill new customers at sale, prorate customers who sign up mid-month, bill existing customers at different times of the month, bill for usage and more.

COLLECT: Businesses deal with many more collections in the Subscription Economy, and the collections process is much more complex.

NURTURE: Adding new subscribers is critical, but in the Subscription Economy, 90% of customer transactions reflect changes to existing subscriptions.

ACCOUNT: The subscription delivery model poses new challenges for accounting and financial processes.

MEASURE: Subscription businesses want to drive accurate and timely decisions leveraging key metrics from bookings through revenue recognition that provide unparalleled insight into customer value and the financial health of the business.

ITERATE: The Subscription Economy has infinite pricing options, but customers will start simple and then iterate.

SCALE: Subscription businesses need a reliable enterprise-grade system with services that are built on a secured, mission-critical and scalable infrastructure.

Customer Success Framework

  • Recognize that one of the first victims of corporate growth is intuitive customer insight.
  • Empower your employees to step out of their roles and truly see things from the customer’s perspective: their goals, their aspirations, and their challenges.
  • Boil down what you do for your customers into the fewest number of items possible, but don’t make the breakdown so small that it fails to capture what’s important. And then test those essential items like crazy against your customers and your proprietary data.
  • Finally, discovering your framework is only half the job. Make sure you instill it into your corporate culture. Everyone has to be on board. This means getting every department to redefine what they do and how they do it around your Customer Success framework.

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