This article is based on Akash Singh's appearance on the CS School podcast.

Do you ever wonder how the intricate elements of customer success impact your go-to-market (GTM) strategy? Understanding this relationship is crucial for businesses aiming to enhance customer engagement and drive growth. 

With the software-as-a-service (SaaS) business model, there are a number of complexities that can arise, which is why aligning customer success (CS) with your GTM efforts can significantly influence your renewal rates and expansion opportunities.

In this article, we'll explore:

  • How customer success strategies enhance GTM goals
  • Innovative methods for driving product adoption amidst compliance and privacy challenges
  • The critical role of telemetry and adoption metrics in understanding true customer engagement
  • Aligning customer success compensation with GTM objectives for cohesive team performance

So, let's delve into these aspects from the firsthand experiences at Software AG, where practical strategies and real-world applications make all the difference in forging a path to remarkable customer success.

Driving adoption and overcoming GTM challenges

In customer success, driving adoption is a fundamental aspect of our strategy at Software AG, particularly as it pertains to achieving our GTM goals. 

We've faced numerous challenges, notably with our mature customer base, the complexity of managing multiple products with varied use cases and adhering to compliance requirements that obscure how customers are utilizing our products. 

Our approach to overcoming these hurdles involves a combination of innovative strategies and proactive measures.

Leveraging technology to enhance customer insight

One of the key strategies we've implemented is the use of Gainsight, our customer success management platform. This tool is crucial for us, especially when direct usage data isn't available due to compliance restrictions. 

By developing capability adoption scores within Gainsight, we can effectively assess and drive adoption based on the licensed capabilities of our customers, ensuring we meet their specific needs.

Source: Software AG

Additionally, we've integrated telemetry data through our own platform. This integration enables us to track transaction counts and understand where customers are in their usage journey —whether it's development, testing, or production environments. This level of detail helps us measure true adoption beyond mere usage spikes, which can often be misleading.

Proactive risk management and expansion opportunities

Another significant area of focus has been the improvement of our risk identification processes. We've established formal procedures within Gainsight to track and manage risks early. This proactive approach allows us to escalate issues promptly, ensuring that we can provide the necessary support to our customers before small challenges become major problems.

In terms of growing our business, we have enhanced the way we qualify expansion opportunities by incorporating them at the customer success level. We call these “customer success qualified leads” (CSQL). Through using success plans and health scores, we can better identify and nurture potential expansion opportunities.

Source: Software AG

Fostering a unified customer success culture

Perhaps one of the most crucial shifts has been in aligning our customer success culture with our overall go-to-market strategy. Previously, the lack of alignment led to working in silos, redundancies, and missed opportunities. By aligning compensation and targets across our go-to-market teams, we have fostered a unified approach, ensuring that everyone is working towards the same goals.

These strategies have collectively enhanced our ability to not only meet but exceed our go-to-market objectives, improving our retention rates and expanding our business effectively.

Dealing with compliance and privacy issues presents a significant challenge in the field of customer success, particularly when it comes to understanding and enhancing product adoption while respecting user privacy. 

At Software AG, we've developed a methodical approach to navigate these obstacles effectively.

Utilizing capability adoption scores

Our main strategy involves the use of capability adoption scores, which we manage through our Gainsight platform. These scores are instrumental in allowing us to engage with customers about their product usage without compromising their privacy. This method is especially useful when direct user activity data is unavailable due to compliance restrictions.

The way we utilize capability adoption scores is quite strategic. For instance, if a customer is licensed for a particular capability, we automatically set their initial score to “50” using a rule in Gainsight. This score serves as a baseline that facilitates discussions between our Customer Success Managers (CSM) and the customers to tailor the support and resources needed.

Differentiating customer engagement

We categorize customer engagement with our products into several key statuses, each with a specific score that indicates their usage level:

  • Score of 0: Indicates the product is a shelfware—no usage and no plans to use, highlighting a significant risk.
  • Score of 25: Used for customers not currently using the capability but planning to in the future. This is an opportunity to introduce demos, tutorials, and training.
  • Score of 75: Applies when customers are using a capability but not to its full potential. Here, we might engage a product evangelist or offer consulting services to enhance their usage.
  • Score of 200: The ideal scenario where a customer is fully utilizing a capability as intended.

These scores are not just numbers; they are a conversation starter and a roadmap for both CSMs and customers to understand and maximize the product's value.

Broader applications and impacts

The versatility of the scorecard extends beyond individual customer interactions. For example, it has also proven valuable in identifying candidates for beta testing or speaking at events. In one instance, when preparing for an API management event, we used the scorecard to identify and recommend top users for API management capabilities as potential speakers.

Additionally, for clients without a dedicated CSM, we can still capture adoption levels by incorporating the scoring system into surveys. This approach ensures that we maintain a consistent measure of product engagement across our customer base, regardless of individual circumstances.

By applying the same scoring framework across different product lines and business units, we've managed to create a unified and holistic health score for our customers. This consistent approach helps us effectively manage and drive adoption across our diverse product suite, ensuring compliance and privacy while still gathering crucial adoption data.

A holistic approach to measuring customer adoption

Understanding customer adoption involves more than just looking at usage data. Traditional metrics such as usage spikes or geographical variations provide a partial picture but often miss the nuances of how and why the usage is occurring. To address this, at Software AG, we have taken a more holistic approach by incorporating telemetry data into our analysis.

Utilizing telemetry data for deeper insights

Our strategy shifts the focus from mere usage metrics to telemetry data, which offers a deeper, more meaningful analysis of customer interactions with our products. 

Through our integration platform, we capture transaction metering data, which is then pushed into Gainsight. This process allows us to track a variety of transactions, such as API calls, messages, and document exchanges, across different environments – SaaS and on-premise.

The telemetry data helps us see not just the volume of usage but where and how the products are being used. For example, our system differentiates between development (dev), testing (test), and production (prod) environments:

  • Dev (light blue): Where users log in and write code.
  • Test (pink): Where users test the code.
  • Prod (dark blue): The live environment where the code is in actual use.

Interpreting the data to drive customer success

By analyzing this layered data, we can observe meaningful trends. A rise in activity in the dev environment could signal the start of a new project or use case, while a spike in prod suggests an increase in value delivery to the customer. 

These insights allow us to better understand the customer's journey and to tailor our support to enhance their experience and outcomes.

Furthermore, this approach helps us avoid false alarms that might arise from misinterpreting downward trends in traditional usage data. For instance, a decrease in logins might initially seem like a reduction in product engagement, but telemetry data might show increased activity in the prod environment, indicating successful deployment and utilization of the solution.

Respecting privacy while providing value

One of the advantages of using transaction counts is that it respects user privacy —customers disclose only the number of transactions, which aligns with our contractual obligations. 

Interestingly, we sometimes face the opposite issue, with customers requesting more detailed data, such as the names of the longest-running APIs or the transactions with the highest counts. 

While we do not collect this level of detail to maintain privacy, the data we do provide is immensely valuable for both understanding and driving adoption.

This telemetry-based approach ensures that our customer success efforts are based on a comprehensive understanding of how our products are used in real-world scenarios. It allows us to effectively guide our customers towards maximizing their ROI and achieving the desired outcomes, making our customer success initiatives more impactful and aligned with our clients' needs.

Evaluating the effectiveness of our CS team in achieving GTM objectives

Our primary objective in customer success at Software AG is to drive product adoption and improve our customers' maturity on our platforms. This objective directly aligns with our GTM strategies and helps in achieving higher renewal rates and incremental business growth.

Automating processes for efficiency and engagement

To enhance the effectiveness of our CSMs, we leverage Gainsight to automate various processes. This automation allows our CSMs to focus more on personalized interactions with customers. 

A notable feature we use is sponsor tracking, which helps us monitor key customer contacts. For instance, if a contact updates their job title on LinkedIn, the corresponding CSM is automatically notified. This proactive approach ensures that we stay updated with significant changes that might impact the customer relationship, thereby allowing us to manage risks more effectively.

Proactive risk management

Another critical aspect of our strategy involves proactive risk identification and mitigation. We use "click-to-action" features in Gainsight to flag potential churn risks and document recommended steps for mitigation. 

This process involves not only identifying the risk but also detailing a clear mitigation strategy that may include escalating the issue to executive management or involving other departments like product or sales.

Sentiment tracking for customer health

We place significant importance on tracking the 'sentiment score', which reflects the CSM’s assessment of a customer's adoption health. This score is akin to a "gut feel" and is continuously updated based on interactions and observations. 

Changes in the sentiment score are tracked and communicated regularly to the renewal team, ensuring that any potential risks are addressed well ahead of contract renewals.

Success plans as a tool for engagement and expansion

Success plans are another vital tool in our strategy. Stored and managed in Gainsight, these plans are tailored to the specific goals and use cases of each customer. They include a series of activities designed to keep the customer engaged and aligned with their desired outcomes. 

By linking these activities to customer data, we can identify and capitalize on opportunities for expansion. In essence, expansion is not simply sold; it is earned through continuous engagement and the delivery of value.

Driving incremental business through CSQLs

The culmination of our efforts in proactive engagement, risk management, and success planning allows us to identify opportunities for incremental business. These opportunities, CSQLs, are identified through detailed reports and analyses within Gainsight, showcasing potential areas for product expansion, additional services, or increased transaction volumes.

Our approach to evaluating the performance of our customer success team involves a blend of strategic automation, proactive risk management, detailed sentiment tracking, and the continuous development of success plans. 

These elements work together to not only meet but exceed our go-to-market goals, ultimately enhancing our renewal rates and driving business growth.

Aligning customer success compensation with GTM objectives

At Software AG, aligning compensation across the entire GTM team is a crucial strategy that fosters a unified approach to customer success. This alignment ensures that all teams, including sales, pre-sales, renewals, and CSMs, work towards common goals that drive the company's overarching objectives.

Choosing the right KPI

To effectively align our efforts, we chose net revenue retention (NRR) as the key performance indicator (KPI). 

NRR is not only easy to measure but also significantly impacts our top-line growth. It's well understood that there's a strong correlation between NRR and the valuation of many public companies; as NRR improves, so does the company's valuation. This metric ensures that every member of the team is motivated by and invested in the same outcome.

Implementing unified compensation metrics

In our approach, it's not about assigning a specific split in compensation, such as 70/30 or 80/20, but rather ensuring that the entire customer success organization has "skin in the game." 

We use a unified compensation metric for the whole GTM team, continuously monitoring its effectiveness and making adjustments as necessary. This strategy ensures that our compensation incentives are directly tied to our overall business goals.

Outcomes of a unified compensation approach

The results of this strategy have been overwhelmingly positive. By aligning compensation:

  • Enhanced team cohesion: There's improved camaraderie and a stronger sense of unity within the team. Everyone works towards the same objectives, which fosters a more collaborative environment.
  • Consistent messaging and culture building: Our teams deliver consistent messages to customers and prospects. This consistency helps in building a robust company culture that permeates through every customer interaction.
  • Seamless communication: Communication within the GTM team has become seamless, enabling quicker identification of new opportunities for demos, services, and more.
  • Effective risk management: We can flag risks more efficiently, motivate team members appropriately, and avoid redundancies in our processes.

Aligning compensation with GTM objectives not only motivates individual team members but also significantly enhances overall customer satisfaction. This approach ensures that every action taken by our team members is aimed at not just fulfilling individual metrics but also advancing the company's broader strategic goals.

Want to level up as a customer success leader?

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