David Sakamoto:You have to help them drive change and change is hard. We're humans, we like our the way that we've been doing things and people don't naturally like to change. So if you really want to be that partner to really add value, you're the person that's helping transform that organization, and you do it through your solution. You do it through your customer success engagement. But really, I think if you're able to help customers drive and adapt to the constantly evolving and fast moving new world, that's where you're going to really be the partner. That's where you're really driving those business outcomes.
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Ciaran Doyle:In today's episode, I'll be talking to David Sakamoto, VP of Customer Success at GitLab, about some of the issues with customer experience; from measuring it, to its actual existence, and what organizations should be focused on to ensure positive outcomes for their customers, as well as for themselves. I'm Ciaran Doyle, your host for this episode of Flourish CX. And as you listen, ask yourself, is your experience making your customer successful or is experience the outcome of their success with your product?
David Sakamoto: I lead customer success at GitLab, and everybody always likes to know where do you report. So customer success at GitLab is in the CRO organization. It includes our solution architect with sales engineers, and our professional services team and our TAMs, which are, effectively, like a customer or success manager. So it's a solution architect, professional services, and TAMs.
Ciaran Doyle: So what's something someone couldn't see on your LinkedIn to let us get to know a little bit more about you?
David Sakamoto: I definitely wouldn't put this on my LinkedIn, but I'm super accident prone. So I think I've broken both collar bones, both legs, my ankle. I think I've had over a hundred stitches from my neck up.
Ciaran Doyle: Oh wow. Being accident prone, we usually ask this question, what would you be doing if you weren't in your current role? I'm guessing not a bull rider or something like that.
David Sakamoto: Definitely not. My career would be very, very short-lived. The reality is I'm not sure, because the funny thing is, if I went through my career, I've done this really eclectic background. It, thank God customer success came along because it brings the connection and collection of my experience, between product engineering, operations, services, program management. So luckily it came along because it, I believe, it fits very naturally for customer success.
David Sakamoto: But one of my passions, as a kid, was doing digital animation. So I saw star wars and was super inspired, and I had a... Probably my side dream job would be working at Pixar or somewhere like that. Industrial light and magic.
Ciaran Doyle: Very cool. I guess it's a happy accident you're in customer success. So let's dig into that. What are some of the problems, issues, misconceptions people have around customer experience?
David Sakamoto: I think customer experience is important, but a lot of times people think of customer experience as the function. And I may stir things up a little bit, if that's okay, but I somewhat view of that as just a pure function that's somewhat antiquated. And then I associate that with, call it customer success 1.0 versus 2.0. So if you remember the days of perpetual software, you'd post sales would be like, "hey, all right, we got high NPS. Great. Yay." And so I feel like CX is, you talked about NPS, you talked about customer effort score, which are important things that consider as part of the journey. But I think the modern customer success has overlayed and is a much better focus for organizations in being very considerate and thoughtful of customer experience within that motion is certainly important, but it, that alone, isn't the goal. I think we've evolved to much broader view of what customer success looks like, and so I kind of think customer experience is a little antiquated.
Ciaran Doyle: We've had people on here saying that customer experience isn't any one thing, it sort of touches anything, but what you're saying is it's so amorphous, it's almost not tangible in any way, shape, or form.
David Sakamoto: So if I think of, what is the thing? So I'm, obviously I'm a little biased towards customer success, but I think ultimately the miss in it, and I even see customer success organizations that don't have this, is incorporating a better definition of delivering value or outcomes to that customer. The true business problem that you're solving as well as the commercial result. So net retention or net ARR, increase ARR. I think that it's been trumped by a better, more comprehensive view of what you should be delivering for your customers and for your organization.
Ciaran Doyle: So why are people being misled to focus on CX when it's not driving the right outcomes?
David Sakamoto: I'm not sure. In the reality, it's a great focus as a component of a much broader mosaic of things that are important for both the customer and growth. So I think of, if you think of a more balanced, concrete view, tangible results that you're going to drive, think of customer success in really two planes; driving those outcomes for your customer, and driving growth for the business. And I definitely believe if you do the first one really well, you're driving those outcomes, you're delivering value through product adoption, and you do it with a good experience, you're going to help drive that growth. But again, it's one component of ultimately what you're going to be looking to drive with a modern customer success motion.
Ciaran Doyle: And I think as we have more of these conversations, there's this idea that the customer is not always right, is very much real today. And you said something before about making a customer happy doesn't, necessarily, make them successful. And I think that's another way where yes, the customer experience is great, but you're not delivering a good outcome for you or your business.
David Sakamoto: I think of it a couple ways, because we've all had experience where their happy customer turns and it's shocking, and it's disappointing, but it does happen. But I think that's truly the indicator of what you said is it doesn't necessarily mean you're driving an outcome. They could be happy. They could like you. Ciaran, I like you, but doesn't mean I'm going to continue to buy a product. So it's really understanding and really aligning the organization around how you're going to drive those outcomes and setting up a set of metrics, predictive metrics, that will help you ensure that you're delivering those.
Ciaran Doyle: There's no shortage of customer experience metrics. So why are these metrics like NPS, like CSAT, maybe even customer effort score. Although, that seems to be much more real capturing the moment of what customers are trying to do. Why are the metrics not telling this same story? Are people focused on the wrong metrics?
David Sakamoto: I think there's a couple things. Wrong metrics is one of them. So at GitLab, when we look at it, we have a proved methodology that we're working in term terms of, are they adopting the product and, ultimately, weaving in? Are we ultimately building outcomes? We're trying to look to verified outcomes of working with a customer. Do you understand the risk with that organization? That could be risk to their business or risk to stakeholders. Are you, ultimately, delivering those outcomes? So you identified they're trying to accomplish and do you have a process, a success plan, that's tracking it? Truly measure and actually deliver to those with confirming with the customer, have we done this.
David Sakamoto: The V for prove is voice to the customers. That's where we do, I do believe those customer experience metrics do play a part. I also believe you have to look at them over time. You could see variability based on specific experiences in that journey. So I think you've got to look at that as an indicator, not an absolute.
David Sakamoto: And I think the other one, I think that probably, too, their most important, the E; engagement. So product and engagement is, are they engaged? So are they have cadence calls? Are they participating in events? Are they participating in the customer advisory board? So really looking at, are they investing, also, in the relationship? So again, the product, risk, outcomes, voice of customer, and engagement.
Ciaran Doyle: And actually, I think we've had a few people on that said just not responding to either a survey or an invite or some kind of communication, that, in itself, is telling as a metric of if they're not happy or they're apathetic, that's the response you're going to get. So that's also a warning sign.
David Sakamoto: Absolutely. And I think another example that, and I've heard this [inaudible 00:09:06] that's great. We don't have any support cases. No, that actually could be very bad. You ultimately want indicators to know that they're actually leveraging your product and sometimes if they're due, you'd expect, at some point, they're going to have questions or going to need help. Or if they're not responding, these are all signs of a disengagement that you should be paying attention to.
Ciaran Doyle: It sounds like, from what you're saying, it's customer experience seems to me to be a very one direction relationship where you're just giving a good experience. Whereas what you're talking about, there's a lot more give and take. Is that the approach people should be taking when they're thinking about their relationship with their customer? That it's not just, they ask and I give, it's also a little bit more like understanding and being a partner to them.
David Sakamoto: That's right. And, again, I always arc on that value to customer and value to the business. But ultimately, I think most solutions are driving some change. Whether it's just a change in your process or something with GitLab, we're driving it, we have a Dev Ops platform. So often we're looking at more of a dramatic, digital transformation or they're transitioning to modern apps. And if you just look at that relationship is, you come to me, I ask questions. You're not being the partner that you could be. And ultimately, sometimes you have to give guidance and support and help them drive change within their organization.
David Sakamoto: And it's not just product, right? You need to be thoughtful around, for us, oftentimes teams BYOB; bring your own tools. And so we need to help them get the value of our platform by bringing on other teams, standardizing on certain capabilities, you get that efficiency, that reuse, you get compliance, you have improved security. But it's not always natural, so sometimes you have to really... To be that partner, you have to help them drive change and change is hard. We're humans. We like the way that we've been doing things and people don't naturally like to change. So if you really want to be that partner to really add value, you're the person that's helping transform that organization, and you do it through your solution. You do it through your customer success engagement. But really, I think if you're able to help customers drive and adapt to the constantly evolving and fast moving new world, that's where you're going to really be the partner, and that's where really driving those business outcomes.
Ciaran Doyle: So when we talked earlier, you were talking about that firms should adopt a commercial mindset. The question that a lot of customer experience people will have in customer success, people [inaudible 00:11:38] is how do you walk that fine line between just giving the customer what they're asking for, and also making sure you're leading them to a place that's strategic for your business and also for them. How do you make those decisions?
David Sakamoto: I'll answer it somewhat in the context of customer success, because oftentimes you're bringing together that cross section between services and operations. It's kind of like that older school post sales. But when I look at the modern view, you're bringing that sales, that commercial mindset, and even, maybe, marketing. So it's beyond the challenge of finding people with that right DNA and the way that we look at it and position it to those team members, because I'm not a sales person. That's not... I chose this job because that's [my line 00:12:22]. I really love customers. I love helping people. And the way that we align it is we're selling through that value. So our job... I view customer success is we are helping sales, but we're doing it to ensure customers are getting value from our platform. They're getting a good experience and are ultimately, we talked about, driving those outcomes.
David Sakamoto: And if we do that, we've earned that right to at least renew or that we've earned the right to have an expansion conversation. The other thing we do is part of that motion, because you do have to... Part of that motion does include some commercial aspects of prepping for renewals and you want to enable your team with the ability to ask about that. Why they may not be driving the transaction themselves, and may not be negotiating, but they need to be comfortable with that. And the way that we somewhat approach that, you build that into the process. At this point, here's some questions you can ask, and template them. We give training, we use MedPic for our customer success manager. So we help them be comfortable with the process of discovery, and positioning, and overcoming objections.
David Sakamoto: But you can process it. Just, at this point at the renewal, you ask them if you were going to renew today, would you? Why are why not? That's a fair question to ask because renewal is part of their journey. If we think of customer experience, we want them to have a good journey through their whole motion in orchestrating among the different team members that may play a part in work. Setting that up for the renewals rep or the sales rep to come in and help drive that transaction.
Ciaran Doyle: Part of your customer success team, going to the customer from a position of strength, not of one of service and that typical customer experience, please take your pick and we'll just go our merry way. What ways do you show the customer the value that you're bringing in order to substantiate that return of value for value, and also just show the value of your team to the larger organization so that they can continue to invest in this long-term customer-focused approach.
David Sakamoto: I look to the customer journey. So if you defined what the customer journey is, and what are the right things you need to bring to the table to add value. And there's a process behind that. You literally set up; here's the stages, here's the processes, here's the playbooks, here's the metrics that go along the journey. And what you're doing is you're defining an intention. You've defined what the journey is and how you're going to add the right value at the right time. But then assuming that it's customer, because you could do digital, or a customer success manager-led, or hybrid, if it's involves a customer success manager, then they can also bring their creativity and insight to help adapt to that very specific customer need. Or maybe their culture, their values, of how do we drive or change management? How do we ensure that we're adapting that process to their goals?
David Sakamoto: What's different, when you're building that intention at various stages and you're orchestrating across the whole org, whether it's your customer success managers, you're bringing product in at certain points, you're bringing sales rep in at certain points. And so you're really making sure that you're serving the customer in the way that has the intention, which I think different from before. If you think CX, I feel like it's a lot more around request base basis. So it's, in some ways you could say it's reactive. I know people would contest that and I somewhat would, as well. But I'm just framing there's a difference between have an intention in moving forward with the customer and somewhat I'm pushing them. We talked about that consulting, trusted advisor view versus ask me what you want and I will give that to you, and I'll give you a great experience. I'll make you happy.
Ciaran Doyle: So how do you set up an organization to have customers be successful, but also keep this commercial mindset? I know the way you are structured is actually very interesting that you're under the revenue side of the house, not the services organization. So you already have that mindset of customer success is critical to revenue, but also a revenue generating department. So how should other organizations think about this and how should they start structure to themselves so they have a win-win for themselves and for their customers?
David Sakamoto: You've tapped on an area that's got a lot of debate. You should report to the CEO. You should report. I'm really happy that we're structured at GitLab. And as you said, we're reporting to this hero. I think in many ways, it comes from the mindset that you have with the organization. And I'm lucky. Our CRO, Michael McBride, and my colleagues, to some extent, they also, they think like customer success people. So I often quote our VP of Enterprise, Mike Pyle. He often says, "land with vision," and what he means with that is, he says land, whatever you land, the first new logo, first land, but what's most important, it's not what's less important is, how big did you close? It's more important that you land them with the vision of how we're going to deliver their outcomes and set the set expectations around what that journey's going to be and invite and set that expectation that over time we're going to expand the value.
David Sakamoto: We may challenge you to ensure that you're getting the most value from our platform, because it does require change. And so it's helpful for me, within the way that it's structured, is the mindset of my peers. Because I could see it going in a very different way if they viewed the world in a very different way. But as the customer success leader, I'm putting continue to evolve to think like the commercial mindset, but also helps that the sales leaders are also already thinking customer success, and journey, and how do we make sure that we're going to make them successful through there and we'll get the growth as a result. So in many ways, you start with that mindset of the leaders, then you work through and build that into your process.
David Sakamoto: Obviously your metrics play a really important role. Our teams measure by net retention. Part of it's because we're still working to get some of the product adoption metrics be widely pervasive, but it does set the tone. I think you're the mindset of the leaders that build that whole approach, and then how you structure compensation and metrics certainly continue to add onto that.
Ciaran Doyle: So as we're wrapping up, I just want to ask you an lovely controversial question; is the success of a customer more important than their experience?
David Sakamoto: Yes, because ultimately what they're looking for is that, when I say success, let me define success, is I'm driving outcomes, I'm delivering value. And I remember there was a VCA, I wish I could remember his name, but he actually said, "I don't actually care about NPS. All I [inaudible 00:19:07] cares that they're using the product needed value." I don't subscribe that extreme view, and none of us live in that binary view, but if ultimately I would start with, am I solving your problem? And if I do that, then I'm going to evolve and make it more elegant. I'm going to make it a better experience. Or maybe we're hard to work with. And so over time, if you're starting with you're solving problems and then you can work to do it in a more elegant way and more seamless way in a more efficient way for your customer or whatever. However they define the experience and you'll get better there.
David Sakamoto: And I think that's, oftentimes, what SaaS companies do from the very beginning, the early stage; you're solving that problem and then they do it, figure out how to do it in a better way, or they start to segment. I'm just solving it one size fits all. Then I start to go, okay, big customer, smaller customers. Okay, maybe I start to figure out how to different verticals. And so over time, I think your evolution as a company and your maturity of your solution, you start to get more specific in terms of, understanding each of your customers unique needs and you segment them in the appropriate way.
Ciaran Doyle: From your answer, it makes me think, think about those customer experience metrics in reverse that they're not leading indicators, they're lagging indicators that I've been successful, so I'm going to be more likely to recommend my experiences easier. All those things, not those experiences, make me successful. It's actually, they're somewhat disconnected entirely.
David Sakamoto: That's right. And the other way you can think about it is you can have a great customer experience, but not solve their problem. And so your relationship will be short.
Ciaran Doyle: Any closing thoughts for our audience?
David Sakamoto: We're all solving very common problems in very different places for very different customers. I'll say this, in terms of thank you for the opportunity to connect with you and your audience. To the people that are listening, find others that are peers in different companies and just build those connections. Network. It's beyond building great relationships, and I've got so many friends out of it. I learned so much from just the great leaders, and they challenge me to think about things in different ways. And it's also just a lot of fun. So leverage your network, invest in it, learn from it, give back, and I think you're going to find it very enriching.
Ciaran Doyle: David, thank you so much for joining us.
David Sakamoto: Excellent. Thank you so much. I really enjoyed the conversation.
Ciaran Doyle: Yes, we have to have you back to debate someone in CX. The great debate CX versus CS.
David Sakamoto: I would love it. I would love it. I look forward to that.
Thank you for listening to this episode of Flourish CX. To learn more, head over to zoominsoftware.com/podcast and follow along wherever you get your audio.
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