I wanted to really introduce Growth Molecules and Sabina Pons, general partner with the Growth Molecules team, to really focus on customer success as a core focus and as part of this round table. Sabina has worked with a number of software businesses and really helped scale them, both from a revenue perspective, but also scale their customer success organizations, respectively.

And purpose of this round table is really around contract negotiations, how to manage that, upsell, and extend those contracts with your clients today. So with that sort of context, I’ll turn it over to Sabina to do her justice in terms of the actual intro, but excited to have folks join in for this round table session.

Thank you. Thank you for having me, Jerry.

Hello, everyone.

Nice to see you. Since we have a smaller group today, I think we can do a quick round of introductions. And I would love to understand where you’re geographically located today, what company you’re with, and then what your role is. That way, as I share some key tips with you, I can do that in a context that will resonate. So I’m just gonna call out from my screen. And then if I could ask you to pick the next person after you’re done, from whoever on your tiles on our little Brady bunch of you, makes sense to you. So with that, I will choose Katie.

If you could tell us where you’re located, what company you work for, and what your role is.

Absolutely. Nice to meet you, everyone. I’m Katie Corder- Paul. I am located in the Denver Metro area. I work with Proof. We are a legal platform, and I am the VP of Customer Success here. And I will send it to Lauren.

Sure. Thanks, Katie. Hi, everyone. My name is Lauren Fish. I’m located in the Seattle, Washington area. I work for a company called Authentic ID. So we do fraud software and detection, identity proofing. And my role here is the director of the accounts team. So I manage all of the account directors who are in charge of renewals. I’m also a player coach. So I manage accounts myself and then help my team with that as well. I’ve been here about three years. So great to join. And with that, can I go to Lou?

Hi, yes.

Go to Lou.

Lou is in New York City. It’s a snowy day here for us, but I’m with Drawbridge. We are a cyber risk assessment company. So we’re focused primarily on alternative investors and private equity companies. And that’s essentially what we do. We assess their cyber risk across their technology platforms. I’m the head of customer success here at Drawbridge. And I work directly with clients, but also managing a team of about 30 CS folks that are kind of straddling the professional services and software as a service world, right?

So we’re in that process where we’re tech enabled. And I think that makes us a little bit really spot on in terms of where financial services are today, leveraging platforms to help clients, but then also keeping that consulting touch.

Yeah, absolutely. Longridge team, anyone else wanna do quick intros? I know Jerry, but I don’t know if anyone else knows everyone else.

Yeah, maybe super quickly on my end. Maybe I should have mentioned at the start, Jerry is one of the associates on the investment team here at Longridge. And a pleasure to obviously meet everybody here and I’m excited for the discussion.

And I’m also on the Longridge team.

I’m Victoria Masali.

I’m the people operations manager at Longridge and handle kind of a little bit of everything that’s not investment related. So like cybersecurity compliance and kind of some HR hiring, event management, basically anything and everything to kind of get the job done.

All right, perfect. Well, thank you all for your quick overviews, a couple of key things. For Katie, we’re working with another legal SaaS company right now outside of the portfolio. I wonder if they’re a competitor. I’m going to guess that they maybe are. Lauren, nice to meet you as well. Our companies have worked together in the past, which I’ll talk about in a moment. And then Lou, for you, super interesting to be straddling that.

We have a lot of clients also and also my history in my career of what I would call hybrid, where you have maybe a perpetual license or an on- prem or a managed service. Then there’s a SaaS component. And really trying to bring those things together, I was talking to among my kids’ school board and my colleague, I guess, in that capacity. She works for Synchrony Financial. It was formerly Care Credit. And they do lines of everything from sofas to dental work. And I said something about, well, I work in tech, blah, blah.

She goes, well, we all work in tech. I work in tech too, you know what I mean? And it’s changed. So definitely appreciate where you’re at with that. But it’s so nice to have you. And thank you for having me. I’m going to share my screen and get us kicked off here. And give me one second. Please confirm that you can see my screen. Okay, excellent. So a little bit about me. I’m based in Southern California. I’m going to go from the bottom up here, human first. I’m a soccer mom. I have two kids, a six- year- old and a 10- year- old.

The boy is the older girl is the younger. My husband also works in tech. And we have the honor of working in spaces that we love. So I joined Growth Molecules about three years ago, and we’re only three and a half years old. I followed my mentor and our founder, Amelia, here. She kept asking me during COVID, you know, you want to join? You want to build this business with me? And I said, no, I don’t want to leave my 401k match and all the things that come with working for a larger company. But eventually she wore me down and I said, yes. So here I am.

I am the managing director of the organization. That means that I help with business development. I oversee post- sale client delivery projects. I’m executive sponsor in everything that I’m involved with. Everything that I sell, essentially, I help oversee. And sometimes I do delivery myself, depending on the project. I formerly am a chief customer officer. I was the global vice president at Mavenlink, where I helped grow and scale the team from 14 million, not the team, the company from 14 million to over a hundred million.

And we were acquired by AKKR, merged with Kimble, and now it’s known as Contata. I had four CSMs when I got there that were very reactive, really glorified support people. And by the time I left, our team was 104 people. I had everything post- sale. So the onboarding programs, I had customer success proper, and we did own renewals and expansions. So when I left, 72 million of the company’s revenue was ultimately my team’s responsibility.

And I also oversaw community and loyalty, which was customer advisory board, our first user community, client gift programs, and other recognition programs in the advocacy realm, as well as support, global support, 24- 7 follow the sun, you know, technical support. And then I had an operations team to underpin all that. I needed help with capacity planning. I needed help with forecasting. I mean, just running that engine became really large. And that all happened in about five years, that growth.

So it’s possible, it’s doable, and just getting the right people in place. A little bit about Growth Molecules. As I mentioned, we’re three and a half years old. We are an advisory firm. I use the term customer success loosely. What I really mean is the protection revenue of recurring revenue model, SaaS and growth there. Thinking through customer journey mapping, like workshops, it doesn’t just start when it gets the customer success team. That’s a full gamut. You know, there’s some good thought leadership out there on the sales funnel.

It’s now sideways, more of a bow tie. And we have to think about that whole entire bow tie. With that, we get to work with customers like each of you across all different stages of growth. We’ve got some right now that are Fortune 300 or Fortune 500, excuse me, publicly traded, live giant, who are just dabbling with customer success or they have it, but they’re not really doing it the right way. And so they need help. They need help enabling their teams.

In other cases, there’s a couple of really, really small, you know, series A, maybe just hit a million dollars in ARR and we’re working with their CEO or COO. They haven’t hired success leadership. And so we’re working in a fractional capacity, two days a week, kind of getting them started because they don’t wanna make that full investment yet or where they have made that investment and their leader is a little more junior. Maybe a director of CS for the first time and they want some additional help. So it really runs the gamut there.

We’re proud to have many accolades. And we just hit, I think it’s 112 five- star G2 reviews.

The way that we’ve organized our businesses into three practice areas really bringing the culmination of our experience together. We’re small, there’s only 12 of us, and we plan to stay sub- 20. We don’t ever want to get bigger than that because that boutique world where we can actually all talk to each other and work with different of us in the house to pull together key ideas. We’ve all been global leaders. We’ve all started as CSMs and managers and directors and VPs and chief customer officers.

And so we have our academy where we focus on enabling corporate teams and are giving them the essential skills to have conversations with customers where you have to tell them no. You can’t have that scope creep bleed in and take up additional resources, but you obviously want to protect the customer relationship. So how do you do that in a way that’s mutually beneficial? How, for example, do you have the mindset, which we’ll talk about today, of starting the renewal at kickoff?

That doesn’t mean you’re literally having a renewal contract conversation at their onboarding kickoff call, but it’s a mental philosophy and a shift that teams need to make that every single touch point, regardless of who it is, is in some way shaping not only the ROI calculation that the customer experiences, but the value. The value is a feeling. So how do we keep that going? And so we do that by enabling teams. We have the pure play strategic advisory.

We do a lot of customer journey mapping workshops where we’ll either do it on Zoom, most of the time on site, where we’re bringing together leadership from different dimensions of the business, sales, marketing, operations, CS, professional services, support.

Usually operational leaders are in there and executives, and we spend a day, day and a half, sometimes three days is the biggest we’ve done, where we’re first mapping out what we call your future history, what we want the end game to look like for your growth for the next 12 to 18 months and beyond. And then what do we want your various user personas or your economic buyer and then the user personas to think and feel and know and understand about your business at that moment in time across their journey.

And then the other key piece of that is what do you need to do internally to operationalize that plan? So it’s not just some cool abstract art, you know, mural, post- it board we create, but then we have to talk about the change management. And there’s a bunch of beautiful ideas that come out in the vein of high in the sky, no budget, no, you know, political reservations. We can do whatever we wanna do to make this customer experience fantastic. Well, then there’s real life.

So how do we pare it down and figure out what are the three key needle moving things that we can do to help accelerate, you know, maybe it’s an issue with churn, maybe it’s an issue with customer satisfaction, you know, maybe not enough upsells or expansions are happening. So we’ll align on those company OKRs and then figure out a path to get there. And then our third bucket is tech services. So we are agnostic in the space of customer success platforms.

We have partnerships with Gainsight, TurnZero, Catalyst, PlanHat, Vitaly, Missing Someone, Tatango, and we do implementations and also optimizations. And the latter is the most fun because you’re getting in and dealing with something that’s maybe was a poor implementation or wasn’t maximizing the investment. And so we help teams fine tune it, optimize it, and then enable teams, administrators, and get everyone back, usually saving about six to seven hours a week. Customers that we’ve helped, again, they ran the gamut.

You’ll see a couple of private equity firms on here. Teams have hired us to help with their due diligence to go in deep. In other cases, we’ve helped build out their IP in- house for their centers of excellence. And we also work, as I said earlier, directly across many verticals. The common thread is tech and typically B2B. But the one I don’t have on here because we’re not advertising our work that we’ve done with Authentic ID, but in this context, in a small group, I know we can do that.

So with Authentic, we did a diagnostic assessment where we go deep over the course of four to six weeks. We interview our customers’ customers. We talk to internal employees. We do surveys, anonymous surveys, and then we look at all artifacts that you’re willing to share with us. So job descriptions, variable compensation models, the churn reason codes, looking at your team segmentation, your business segmentation, your personas, how well does marketing personas and sales personas and post- sale teams personas all map?

And do they all understand when they’re, are they all speaking the same language? So we went through that as well. And then we did an onsite workshop. And some of the results were paring down the 15 goals that Authentic ID had for the year, getting them down to six so they could actually be actioned off of and achieve. We helped the company rally around those. We put those key results and KPIs in front of the leadership team, got that alignment, and then helped with a lot of coaching and did hands- on with CSMs as well to help lift morale.

I don’t know from your perspective, Lauren, if there’s anything else you’d want to add about that project. I wasn’t personally on it, so I’m sharing the second hand.

Yeah, no, we had Jennifer for the majority of it, and she was great. And it was nice to have somebody kind of throughout the whole process. They learned a lot about our business, and then really came in and were hands- on directly managing some of the account directors for a while. And then we did a really kind of culmination with customer journey mapping, which was really cool to visually do in a room with everybody.

Thank you. All right, so for some context setting for today, obviously, you all have roles that are dedicated to this post- sale motion. And most of you already believe and understand the value of customer success. There’s a lot of times where we’re asked to partner with leaders like yourselves to help convince their own executive team, their own leadership team, of why you should get the budget you need, why you should have additional information and tools and resources to help you thrive. So this is a slide that’s really helpful.

You’ll have this afterwards. But thinking about the mission of protecting revenue, that when you have a dedicated function owning that, regardless if you call it account management, if it’s customer success, if it’s partner specialists or partner engagement specialists, the spirit of it is that you’re able to help improve customer experience. By doing so, by just 5% of that improvement typically increases profits really significantly. Still see.

Same thing with growth, making sure that your teams are enabled with the plays and the tools and the empowerments, like the permission, essentially, to offer certain things at certain times to really help with that expansion. Do you have the right motions in- house to know who owns it? If it’s a CS, what we call CS qualified lead, do they know the right probing questions to ask? Are they aware of the right climate? Are they comfortable asking that question that’s really scary to most CSMs?

And that’s, if you, Mr. Customer, Ms. Customer, if you were to renew tomorrow, can I count on your signature? Or how likely are you to sign a contract renewal? And typically CSMs are so buried and understaffed and overworked that they’re scared to ask questions that could potentially lead to more work. It might open up a can of worms. Now they have to go get a product demo scheduled and go help fight some fire. So there’s a feature request that’s been on the backlog forever. And essentially, it’s a scary question.

But if they can get ahead of that, then you have the runway to make corrections before renewal is due. And then you can ask the right questions also to probe for revenue growth and expansion and upsell, cross- sell. And then also teams, when they’re nurtured, it feels good. They feel that you’re making investment in who they are. And it leads to employee satisfaction. And customers feel that. They feel when your team is happy. They feel when your team is proud to represent your logo. I’m going to pause really quickly.

Are there questions about the mission of customer success or anything else that I’ve covered so far? There were questions. There’s two questions that were submitted. I’ve woven them throughout in the upcoming slides. But at any point, please stop me. If there’s an add- on, something that you’ve experienced that you really want to share with the group, feel free. It’s meant to be conversation. OK, so renewal processes. Again, regardless of the ownership of this, there’s so many things that are critical to nail down and get right.

I’m a big proponent of data governance and garbage in, garbage out. When I mentioned I inherited a team of four people, this was in 2016, 2017. Yeah, 2016. And there was literally a year of contracts that had gone back to paper. And it had only been from, I think, a year or two before I was there. And so I literally inherited a filing cabinet of actual paper contracts. And so the first thing I did was I got an intern and had him scan all those into Salesforce. And then that still didn’t get the right data fields.

I mean, I didn’t even know what renewals were due and how much they were. And kind of what the history was. The big aha moment I had that some, it’s surprising how many companies I work with don’t have this ironed out. But the concept of a midterm license expansion, that if in- app there’s capability for additional licenses to be added on a user level, if that’s your business model where each person is a different seat, so to speak, if you can add more licenses in- app.

At any point, are our customers getting charged for that additional license? Or are you waiting until renewal to then look at how many licenses were sold in that midterm contract and then charging? So like Lauren, for example, for you, do you have, is it a per user license model today? No, it’s not. No. I’m sorry. Is it consumption based? Consumption based.

Correct.

Okay. Anybody else on the call have a per user model? Like, you know, Lou, I know yours is a unique business model as well. What is, how does your licensing structure work?

It’s a subscription- based license for the platform. And then the platform ingests the products that we’re producing through a production team on the CS team, if that makes any sense.

So the go- to- market pricing is platform consumption based as well, usage based?

Well, that’s what we’re moving towards. I think traditionally we were report- based and that’s kind of where I mentioned earlier that we’re transitioning into more of a truer CS structure, but we’re hybrid. So initially we were report- based produced by a team. We’ve transitioned to leveraging a platform to now produce and deliver the reports, which helps us drive a subscription- based recurring revenue model.

Okay. That makes sense. And then Katie, how about you? Same? Yeah.

Yeah.

We are also transaction- based.

Okay. Okay. Perfect. So then the piece I was talking about, you know, isn’t directly applicable to that type of a model, but what is important and applicable is that you’re thinking about the renewal process for your team and that people are clear on ownership and responsibility and where to go to get the right information about the history of the contract.

And oftentimes what happens for teams that are moving quickly or they’re more junior, they don’t think about going to the latest, I’ll call it the high- water mark of usage and consumption, like where the client level is now versus where they were when they purchased. They’ll typically just go back into the CRM and look at, oh, well, they bought for 50K and sometimes they go to renew for 50K and they don’t realize they actually got up to a level of 56K. And so you should be renewing them at that 56K threshold.

And sometimes the teams don’t have the tools or the know- how to do that. And so making sure that process is clear is really important. And then when we think about those processes, do people in ancillary teams understand? So does support know that there’s a renewal cycle going on? Does the CSM or the person owning that renewal at that moment in time have visibility into those other activities that could be going on with other team members internally? And so that’s really important and really critical to achieve.

And it could be something as simple as locking a few folks in a room together and mapping out your internal process together cross- functionally. And it might be something that starts on spreadsheets, and that’s completely fine. If you have tools or resources to help automate any of that, that’s fantastic. And that’s a whole separate conversation. But certainly, starting small is perfectly fine. So from a renewal perspective, when we talk about each of your business models, is it such that they’re annualized contract terms?

Or are you focusing more on a month- to- month? Or are they multi- year? So let’s go back in backwards order here. Katie, let’s go with you. Definitely.

So our model is really different. And maybe potentially terrifying to hear about. So go with me on a quick journey. So ultimately, we’re a double- sided marketplace. Part of our marketplace is law firms, collection agencies, and property managers that need to serve people papers. So post on your door, hey, your rent is delinquent. Or, oh, hey, are you Sabina Pons? You’ve been served. So that’s one side of our marketplace. And then the other side of the marketplace is the actual process servers that are doing that work.

So on our client side, the firm side, we don’t have contracts, we just like acquire clients and then we might find that their needs are more complex so we’ll build a more bespoke process for them, they’ll do a lot of business with us, but it is like truly month over month transaction. If we see compression, that’s where we may engage with them, but I’m three months in, by the way, here, so I’ve been brought in to sort of like, hey, let’s figure out what this post- sales journey actually should look like.

So we’re in the process now of sort of figuring out at what point do we start having contracts, because right now we have no written agreements with any of our clients, which is like sort of buck wild.

I’m going to pretend not to twitch and start scratching myself. I know, same, same. That’s why you were brought in.

That’s why I’m here.

That was a great summary of the business already, I like it.

So we’re really kind of in this phase right now where we don’t really have annual renewals, but we’re really trying to figure out at what point do we have these check- in meetings, how do we make sure that we’re scoping the full value of the client that we may not have realized up until this point, because we’re definitely seeing contraction in where there should be so much opportunity for growth. We have so many, like, fish that we’ve already caught that we just need to really dig in more.

Yep.

So sorry for the long answer, but…

No, that’s really, really helpful. And it’s, you know, I like to be a builder and an operator, and what you’re doing is really cool and a neat opportunity to really make some significant, you know, enhancements, so congratulations. Yeah, it’s fun and hard, which is my favorite part. But the reward will be sweet, for sure.

Totally, exactly right.

Absolutely.

Lou, how about you? What’s your go- to- market and pricing packaging structure like today?

Yeah, I mean, we prefer multi- year deals. We try to sell into a multi- year deal. We will do a single- year deal, but all our contracts are evergreen, so they ought to renew 60 days out of the anniversary. So we don’t really have the headache or the trouble of having to call up a client to get them to renew or re- up at the end of the year, because that should automatically happen. And in theory, what we hope to do is, when we sell, we sell a program, right? So it’s, you know, it’s through our platform, but it’s several reports.

So we have several products, sub- products under our platform product, and a client can choose to tick on, you know, one product over the next year, and they can add to that suite of products year to year. So that’s the hope on the upsell. The struggle is, and I think we all know this in our world, is that what happens when a client purchases the program, and the second year, they say, well, we don’t really need this product. Can you take it out, right, of the contract? And then it’s just a horse trade, right?

Then you say, well, maybe you need this one instead, or maybe we need to, you know, shuffle around what we’re doing for you in the product, in the program that we’ve sold you. You talked about the kickoff call and the yearly review of the kickoff call. That’s actually where we leverage most of our renew opportunities to make sure that our clients’ goals and objectives are in line with what we’re delivering. And if we have to swap out products underneath the program, we usually do it as part of that kickoff call.

This way, it helps keep the overall contract intact. And if we do need to add something year over year, we can do it in that moment and deliver value in that moment. So that’s generally how we approach it. Last thing just to add, too, is that our contracts also allow for consumer price increases, so CPI increase each year based on whatever technology, whatever investments that we put into our company, or even if it’s just inflation, we’re able to adjust our pricing automatically through a CPI increase.

And so it reserves the right, the contract reserves the right to make that increase, but does it stipulate the percentage increase amount?

You know, that’s a good question. I think it’s a range. Some of the, see, the other side of it, too, is that our contracts, you know, we’ve really kind of evolved very quickly into this. So we have a little bit of a mixed bag of contracts. Some of them just reserve the right, and then some of them gives a percent range. It really kind of depends on when the client signed up and, you know, legacy language in contracts.

One thing, you know, because I did this, you know, for a living like each of you, then when I was buying software, I was probably the least fun person to negotiate with, but I was like, I want a renewal cap, you know, a 3% renewal cap. I’d be reasonable, you know, cost of living increase, but I’d ask for quarterly payments. I’d like, I’ll sign it for a year, but here’s all the things I want. Customers are getting more sophisticated.

It used to be the case that depending on the industry, that most had only purchased software one other time in their life. And so your economic buyer was, you’re also educating them on this process, and now they’re more sophisticated. They know what levers to pull in the negotiation process. So that’s pretty interesting. Well, that’s really interesting on the, I love that there’s a CPI built in, and then the evergreen.

I think, you know, waiting until one time a year to have any conversation strategically, you know, there’s opportunity to increase that without adding a ton of more work to your team. That’s something, you know, we could talk about. So the model then for you, Lauren, for AuthID, again, I wasn’t involved on a project, what’s the strategy for your team today?

Yeah, so it’s transaction- based. So we ask our clients to forecast a volume, and we do typically try for multi- year renewals. We do have some one- year renewals. We say we’re not going to take pay- goes anymore, but I swear every few months, one turns up. Not exactly sure why. They’re usually just smaller accounts. We do have auto- renewal clauses in some contracts. We work with quite large Fortune 100, Fortune 500 companies, so the contracting is quite complicated.

We would prefer not to do it every year because it takes months to do it, but there is kind of a split at our leadership level about if we want more than a two- year contract or not. We can’t really then add new fees or increase prices, but it does save a lot of the kind of overhead and headache. Something we’ve seen a lot of is sales sells, and then the first renewal is always the most painful because, and my boss who is the CRO was like, never say this word again, but oversold, sales tends to oversell.

And it’s really that the client, they had to agree to it, obviously, but they were told like, oh, no problem, you would consume this much. And so what ends up happening upon first renewal is we almost always have a downgrade, which then doesn’t look great on CS, even though it just wasn’t scoped probably correctly in the long- term. We find if we can right- size them and get them to renew the first time at a more reasonable number, then we see growth, and so that’s been a little bit of a constant struggle.

And then, interestingly enough, you mentioned something about like renewing them where they’re at, not where they renewed last time, which I totally agree with. I just did a fairly large negotiation for a contract back in October, and they had exceeded their commitment to us. And so we said, okay, we want to renew you at what you actually use, right, going in, and they were like, no, our procurement won’t let us do that. So they ended up having to renew like 2 million transactions short of what they actually did.

We were like, do you expect your volume to decrease with us? Do you expect this not to happen? And they were like, no, we just can’t commit to that, even if you could offer us a lower price. So we’ve seen that as kind of an interesting approach with a larger procurement team where they don’t want to commit because they would owe us the money if they didn’t use them, but they end up actually paying more if they don’t commit to the lower or the higher transaction, so.

Interesting. Yeah, that idea of the multi- year renewal and then the drawbacks of that, right? You’re securing longer runway of ARR, but then the risk is that they’re not using the same amount after that time, especially with contractions in staffing and headcount within tech. If it’s a true B2B play in that regard and you’re serving other tech companies, it’s pretty tricky.

We’ve also gotten in trouble with payment terms. So we had a couple where we split their contract straight up, like just quarterly payments. And what we’ve seen is some clients are actually outrunning what they would have done in a quarter. So we’re actually giving them transactions on credit where they haven’t paid for them up front. So we’ve learned from that and have had to include some additional clauses in our transactions if they want something like a quarterly payment.

Interesting. There’s some ways that we got around that. We actually staffed a couple of people. We just called it, I think, member services. And we ran a routine at engineering. I had to buy the guys a bunch of beer because this was like night weekend work for them. But they were able to run a routine for me where the system every night would look for any overages and then send an email alert to this member services person. And then they would do a proration charge until that next payment. And so, yeah, we just didn’t put that in our contracts.

And nor do we have maybe the headcount to do that. But some of the work, yeah, I’m trying to work out. It took a long time to get to the point where I was like, look, we are literally leaving $ 1. 3 million on the table on average. For the last three years, I just did a regression to prove the point. I was like, this is going to far outweigh the cost.

And it did.

We then got to the point where we were forecasting what we called user expansions, midterm user expansions, where they’re not predictable. They’re just like randomly someone would go in and add two more users or do this or do that, where our run rate was an extra almost an extra $ 550, 000 per quarter that we were able to add into the forecast. And so that’s the other piece, too, is forecasting.

If you have the runway and you think that a customer may be contracting because of, especially with large contract negotiations, if you know significantly in advance that there might be some risk, then where can you make up for it somewhere else? So on the whole, you’re still moving in the right direction. It’s not easy to do. But that’s where some of these renewal conversations come into play. Do your team members have the right data at the right place?

Or do they know where to go to get the information, especially if they’re new, especially if accounts have been transitioned a lot? Maybe that there’s going to be a moment in time where there’s that shadow effect of sales. Whatever they sold a year ago, February of 2023, those are annualized contracts coming up now. Or two years ago or three years ago, what’s happening, what happened at that time in the business? What was the onboarding experience like for them then? How is that going to influence the renewal now?

As opposed to looking at it through the lens of, oh, well, we run renewals this way now. Or, oh, new customers are joining. And we’re taking them through this process today. Those are completely different cohorts. And so getting your team to think about cohorts of customers and what was the messaging for marketing at the time? What was the user experience like at that time? And it’s going to be different. And it’s hard to do. But I think making sure that your team has that right information.

And if they don’t, slowly start to pull that together and giving someone on your team the opportunity to work on a special project and talk to their peers and say, OK, if we can only pick one or two key metrics that we want to start to track and be savvy on, what might those be? And then it gives them an opportunity maybe to present to leadership what they did over the course of a quarter, fuels them in their career development, and also actually helps you get some key things. For the sake of time, I’m going to skip ahead here.

We talked about this a little bit, but thinking about what works for customers and what might have worked for them pre- COVID, post- COVID, pre- weird economy till now, and then what might work for them in the future, the more that we work with procurement teams or applications like Vendor, V- E- N- D- R, you start to see software get in the mix with renewals and expansions, it can be a little bit more tricky. And so continually evaluating, at least when you’re doing annual planning or midway through, what trends you’re seeing.

So that way you can pivot accordingly and anticipate, again, across those different cohorts, how much of your contracts today that you have that CPI built in, approximately, and then help use that to forecast. How many of your contracts have more of a multi- year versus they’re notorious for being only one year? The other key thing to look at is payment. Accounts receivable, are they notoriously for being late on their payments? Are they, do you impose late payment fees?

I know that’s more of an accounting finance function, but that still impacts revenue. There’s cash collection and ARR, recurring revenue valuation. Those are both important. They work together. So as you’re forecasting as well, where there’s smoke, there could be fire. They might be delaying payments strategically, or they may be delaying payment because they’re running low on cash. And they may love you, and they may want all the things to do with your business, but they can’t afford you anymore. And that’s also another scenario to try to look for.

Any price increases?

Right, that’s a target.

Yeah.

Sorry, not to interrupt, if you’d mind just going back the slide. We did have a pre- submitted question that seemed relevant here. And I think it was Lou, you submitted this one. What are some best practices on managing clients with multiple contracts with different renewal dates? Ideally, they should be prepared to a single contract, but this could be risky. It can reopen the sales process, trigger an RFP, et cetera.

That’s a great question. Thank you for reminding me of that one. So essentially, the history I’ve had with that, because of that concept of cohorts of customers in the past, everyone’s onboarding, everyone’s contract, everyone’s experience is different. And so if you had, you know, let’s just call it SKU A that they bought originally, and then they added B eight months later, and then now you have different renewal dates, and it’s confusing, and it’s complicated, my best advice is to work hard to create them coterminously and prorate, right?

So when that expansion is coming up, let’s just say on a clean net new basis, if they want to add something new, great, we’re going to add it for six months until your renewal date, or you negotiate an early renewal on everything. That is risky to your point. But I’ve had that work really well, sometimes too. So we’re going to lock you in now. We don’t say that to the customer locking you in, but we will secure today’s rates, right?

So every year, add this new thing, renegotiate your initial, bundle the pricing, maybe we’ll do a stagger start where, okay, after, you know, six months, we’ll allocate this much more usage and da da da da, and work within that capacity. But the more you have differing end dates, it’s administratively complicated, there’s more risk for financial leakage, because of just missing those things. And from a customer perspective, too, you’re one of, on average, any SaaS company typically has 150 to 200 applications in their suite of tools that they’re using.

So you’re just one. So that’s now exponentially, you know, it’s not now two contracts they’re managing with you, two renewal cycles. And that’s frustrating for them as well. Does that help?

It does. Thank you so much. I particularly like the kind of the short term component of it, too, if it’s going to auto renew to a full year upon the anniversary of the previous contract that gets everything in line within one cycle. So that does make a lot of sense to me.

Yeah, I mean, there’s that manual, you know, does that auto renewal reset now and get pushed out? You know, from a executive level perspective, they may say, well, no, no, we’d rather secure the full ARR on that thing. But you’re also then potentially causing a problem down the line. And at the end of the day, if you amortize the gains in the administrative, the risk of errors, it makes sense. There’s usually upside there. Are there any other questions on that concept or add- ons? Okay.

Thank you, Sabina. That was really helpful. Appreciate it.

Yeah, my pleasure. Happy to help you there. I’m going to skip ahead of this, too. We talked about this a little bit, too, you know, payment, if customers aren’t paying and if CSMs have to be involved with that process. That’s a tricky one, too. We talked about does support know when a renewal is happening? Well, does a CSM know if a client isn’t paying?

And getting to, you know, a future state to get to a sophisticated model where you have a customer success health scorecard that’s not just looking at system usage, you can’t just necessarily look at daily active users. Each business’s metrics are going to obviously be different. But the metric that matters for your business, usually it’s not, it can’t just be one dimensional. You need quantitative and then also the qualitative as well.

And over time, my team and I were able to build out, my team at Contata, formerly Mavenlink, we were able to build out a customer success scorecard that had 26 different data points, qualitative and quantitative. And it took us almost two years to do this. So don’t get overwhelmed or feel like it’s something you should have done yesterday. But we got to the point where we had revenue predictability and retention 12 months in advance with an 87% accuracy rate. That included accounts receivable.

And that was a pilot, it was just, you know, one of those ideas, I might have had a couple margaritas and I was like, why don’t we try this thing? I know it’s weird, but I want my team to have that visibility. So not only does that help us with predictability and forecasting renewals and the health of the business, but then also it gave us a chance to understand where in their journey there was potential issues and also if we needed to stop services.

So then another favor for my engineering team, I said, hey, I want my team to have the ability to put up a banner in app for the super users or the admin level. It has like literally a persistent banner, you know, you’re 10 days past due, if there’s no payment or the next X amount of days, you know, your licensing would be paused, your access to tools and resources, or if it’s a services, you’re doing services, you know, the team has to pause meetings. So it’s a little bit aggressive.

We had to do that with our really long, our customers that were the smallest ARR, and it was risky. We piloted it with a small group because we didn’t want to have bad will out there in the market, but typically it worked out really well.

Sometimes, the thing that is the biggest risk for renewals is where the person who ultimately was interested and invested in partnering with you and your firm leaves. We saw a lot of that during COVID, right? The great reshuffle, the great resignation, well, now it’s like the great layoff. So that’s also a different component. And that concept of multi- threading, having multiple relationships across different levels within the organization.

So not just the economic buyer, but then also who’s the super user or the main person now owning the day- to- day of your services or platform, and then who are the end users if those are different and what matters to them. And having those relationships across vertically and then also horizontally with other groups or other leaders is really critical in that motion.

And it’s not just, do they know what your software does, but do they know the value that it brings, especially comparative to not having it, a rip and replace, going back to having no software or going to a competitor. So that’s really important. Procurement is a big one. Teams are getting more sophisticated about buying and leveraging procurement teams or third- party resources.

So again, make sure your teams are empowered to ask those questions and that you’ve encountered what that looks like, what a lot of teams are moving to, you know, bill. com or other tools for accounts receivable or, I guess, accounts payable. Do you have the right information about your customer today? Because when they signed with you originally, they may not have had those same teams in place. The initial contract may have not gone through procurement, but now they have a procurement team.

So if you’re not asking, like, what can we expect in this upcoming renewal, then you could be losing time and have unexpected delays. And then also, if you can’t ask your customer how likely are you to renew because you’re afraid to do so, that’s a problem. And also sales, there’s always a mismatch of expectations periodically.

As teams mature and work more closely together, especially if you’re all rolling up to a CRO or really forge those relationships across the aisle, so to speak, so that there’s a feedback loop back to sales in a positive, constructive way about where the mismatches could be happening. And conversely, make sure you’re balancing that with what does work, what is working well, how are you seeing success?

And then establish a narrative internally where there’s a really good, ideal, perfect product market fit and maturity fit of the customer stage where you can advocate internally and say, this is the gold standard. It’s almost like an internal success story, an internal case study where you could tell sales, success, support. Everybody knows, like, I’ll just say Nestle, this Nestle engagement was exactly how we want things to go. Sales did a great job. Onboarding was fantastic. The customer loves us.

Let’s go revisit why that worked really well, and then how do we repeat that formula? And then how do we repeat it on different site versions for different size of customers or different segments? So getting that feedback is really key. Continually asking the customer what matters to them now. Again, what they purchased for in the beginning may be very different now. The business is changing. It’s dynamic for everybody. But if you don’t ask those questions.

And so there’s a methodology that we teach that helps team members ascertain and dig in that detail, thinking about, you know, what is the situation for them in their business? What is the situation in the climate of their industry? What are some key upcoming deadlines? Is there an upcoming board meeting? Maybe they have an opportunity to showcase some key wins, or maybe they know their boards are going to come down on them really hard about something. How can you potentially help make them the hero? How can you empower them?

Maybe it’s, maybe the CSM can create a slide for them that they get to take to their board meeting. There’s little things like that that can go a really long way. And of course, we talked about financial distress, right? We know, for example, I’ve got two customers right now in the trucking industry, their software that serves the trucking industry. And that industry is going to hit really hard right now for all kinds of reasons. And so I’m aware of that.

And there was a third one I was just introduced to, because these things seem to happen in clusters. And I was aware now more about their climate, what’s going on. And I shared that I understand that, and I was sensitive to that. So does your team have Google Alerts set up about their customers? And you can’t do it necessarily for every, I don’t know how many accounts your teams are managing. But let’s just say, let’s pick a top 10.

If each CSM has Google Alerts set up for the top 10 of their customer profiles, and maybe set them at a weekly cadence, they’re just getting quick pop- ups, let systems do the work for them. It’s like, oh, my client just got an industry award, or there’s an acquisition. Or if I’m connected to them on LinkedIn, they just got promoted, right? There’s little key indicators. Maybe they shared they’re having a baby, or they are making, what do you call it, not just promotion, but taking on more teams internally.

Sending them a quick congratulatory note, and having those bombs are really helpful and key to a lot of these motions, and we forget about them.

Going back to that concept of contractions on renewal, so know your numbers, both on the sales side. Like, does your team managing the renewals understand the high watermark of the ARR? Do they have the right access to see what they signed for, especially if it was multiple years ago, or if it’s a highly monthly transaction? Can they see the history of where they were at?

Do sales know the implication of overselling, right?

Are they educated to say, all right, if we sell XYZ, yes, we’re securing more now, but we’re showing over the last 18 months for deals like this, we’re actually seeing contraction and showing them the data and making sure that they’re aware on that full life cycle. Knowing that impact is essentially what I’m talking about. So do they understand the impact of their decisions, of their contract structures, and then making sure that teams are empowered? So do they have the right skills to have those crucial conversations?

Do they have the confidence sometimes when you have a more junior team member and they’re working with a more senior person on the customer side, they might feel intimidated. They don’t know how to protect the company’s bottom line and still be the advocate and champion for the customer. And that can be done with the right training and enablement. Does the team have concessions? Like, do they have their own toolkit where they can offer a customer and say, you know what, let’s delay this next payment for you. You’re concerned about that.

Or, you know what, let me hop on the phone with you and get a conversation with one of our product managers and they can help answer some questions a little more deeply than I can. There’s different things that you can do there and experiment. Experiment with payment plans, stagger starts, cross- sells. Maybe you have to reallocate services. So, you know, you can’t renew at X amount anymore. But what was the term you used, Lou? I think you said horses. You’re trying to sell a different horse or something. Is that what you said, essentially?

Probably.

Something like that. But the idea of, like, reallocation, right? You can’t continue to persist as they were. And I think, you know, Lauren, you’ve talked about trying different things in that capacity. And I’m a big believer in starting small. It’s a little negative, but, you know, aim small to miss small. Piloting programs is key. And it’s a small sample size, but, like, once you get a couple under your belt that you see work, kind of peel back what worked and when would this work again?

And that at least it’s going to start to get you in that right direction. But there’s a couple of different levers there, but your team has to be empowered with the play to be able to run that and measure that. So those are some of the key things and key ideas there in terms of some, you know, things to keep in mind as we wrap up here. Just the mechanics are really important, even if it’s a spreadsheet. And then I like to say, inspect what you expect.

So it’s one thing to send out, you know, a process flow to your team or an announcement, we’re going to do this. But if you’re not revisiting it with them often, you’re expecting that they’re doing it. But if you’re not bringing it up, they may not necessarily take to it. The change management may not be there. So if you’re regularly revisiting it in a monthly team meeting or analytics data dashboards, that sends a message that it’s not that important, but it really is. The team also has to have a mindset across the company.

You know, we’re all in sales, but we’re all really all in customer success too. So being mindful of the renewal motions that we need to put in place all along the way, and that everyone, there’s a Disney philosophy. Someone always owns the moment. So think about going to a Disney amusement park, that whether you’re taking the tickets or, you know, scanning tickets at the entry, whether you’re serving lemonade, you’re the right operator, all our cast members is what they call them, that everyone is really contributing to the overall experience.

And we have to get our teams to think about that from the end goal, which is keeping them as a customer and getting them to renew. Multi- thread relationships and multi- thread your approach for them. People want to be engaged with differently. Some people are visual learners. Some people like just emails and text messages. Some prefer a phone call and pick up the phone and talk. So think about your customer personas, what matters to them and how they want to be engaged.

And you can do that through a quick survey annually and see some teams just want a live chat, but they don’t care about having a dedicated CSM. And it’s not necessarily a lot of team segment and say our biggest customers need the most dedicated time. Sometimes it’s inverse. The smallest ones are actually the squeakiest wheels and need the most help. The bigger ones are more established, et cetera. So with that, there is a poll that has arisen.

If you could please complete that, it helps OneGuide, Longridge and myself improve and get better for next time. And we have five minutes left. Now I will also stop my share while you complete that and it will take any other questions that you have. Horse trading. Yes, thank you. I’m going to write that down. That was serious. Thank you. And we have a few minutes for questions too. So if anyone has any lingering questions, feel free to pop in.