Living Up to the Customer Code

By JD Sherman, president & COO of HubSpot

Back when HubSpot started in 2006, we set out on a mission to help customers match their go-to-market strategies with the way modern customers live, work, shop and buy. Sounds simple, but back then a lot of companies were running “ye olde” playbook that just didn’t work anymore. Today, that’s table stakes. But there’s a new opportunity emerging, which is about optimizing the entire customer experience from beginning to end, and it’s enabling up-and-comers to disrupt market incumbents. As our co-founder and CEO, Brian Halligan likes to say, “how you sell is why you win.”

In the the past few years we’ve doubled-down on improvements to our own total customer experience; now we believe it’s a compelling differentiator for why customers choose and stick with us. To do it, we’ve taken time to study the “experience disrupters” we admire as well as scrutinize our own processes — and we’ve uncovered some huge (and sometimes painful) lessons along the way.

A Cautionary Tale

One of our secret weapons at HubSpot is the front-line customer success managers (CSMs) who work closely with our customers to help them achieve results with HubSpot. These folks know our products inside and out, but they also get to know our customers and build strong working relationships with them.

HubSpot is a data-driven company, so naturally we have metrics and goals that most employees are measured against. For CSMs that metric was what we call “dollar retention.” That means, how many dollars are our customers paying us at the beginning of a month and how many are they paying us at the end of it? When we implemented it, it made sense — it’s a nice, hard metric that can be consistently measured and equates to company value rather than employee activity (e.g., calls made, meetings held, etc).

But a while back, one of our best CSMs told me a story that had caused her a lot of emotional distress and made me question whether our measurements were driving the right behavior. She told me about how one of her customers had been in a tight financial squeeze. They wanted to stick with HubSpot but asked if they could downgrade their subscription until they were back on their feet. Unfortunately that request came after the downgrade deadline had passed some weeks earlier. Technically the customer had to stick with their current plan and this CSM didn’t want her metrics negatively impacted by a downgrade. After some negotiation, the customer accepted the situation and remained on their existing plan, but told the CSM “I’ll stick with HubSpot, but after this experience I want a new customer service manager.”

Ouch. That interaction wasn’t really the CSM’s fault — it was our fault for setting up an incentive that was misaligned with our customer’s goals. The result was a poor experience for both our customer and our employee.

We Operationalized the Customer Experience

In that particular instance, we reviewed our policies and made two changes.

  1. We updated the renewal policy so that customers like this wouldn’t get “caught” by a downgrade deadline.
  2. We also changed our CSM incentive plan to measure them on customer retention, so they could focus on keeping their customer healthy and not just the dollar value of that customer’s account.

And I think it worked! A few months later, we asked a customer speaking to our employees at a company meeting what he liked about HubSpot. One thing he said was “I like that your customer success managers’ goals are perfectly in line with mine.” That felt good to hear.

More broadly, this incident prompted us to take a hard look at all of our business processes.

We became more attuned to what we call “Sharp Edges” in our customer experience.

Those Sharp Edges were interactions or oversights that weren’t show-stoppers but which, to our customers, felt like paper cuts or scraped knuckles. In the process, we began to identify categories and themes which eventually became our Customer Code — tenets that help establish guardrails for policy formation and decision-making.

Our co-founder Dharmesh Shah unveiled the Customer Code at our annual event, INBOUND, in 2018. Since then, we’ve employed it as a set of principles that guides every decision. It’s how we determine if a new process puts our customers first and what existing processes need to be improved and revised.

Reflecting on 2019, there were a few impactful improvements that the Customer Code really shined a light on and helped us focus where it mattered most.

Ask For Feedback, and Act On It

HubSpot loves to ask customers for feedback. We ask for it a lot — maybe too much! We have over a dozen feedback channels, from in-product NPS surveys to feature requests on idea forums. And though we do act on feedback, we needed to improve both how we absorb the myriad of feedback we get as well as how we close the loop with our customers.

As a first step, we dedicated one of our staff meetings each month to customer feedback; we call it the Customer-First Staff Meeting. We invite customers to join us and give their perspectives, and while data is important, there’s nothing like getting feedback face-to-face to help us really understand the pain points for our customers.

We also created a Voice of the Customer team, whose mission is to “bring the customer to life within HubSpot.” They focus on internal customer evangelism, collecting customer feedback, distilling the feedback into insights and sharing them with the business, and ensuring we take action.

One technique they’ve used is to boil down all the feedback into a list of issues or “roadblocks” that we hear from our customers over and over through various channels. This list helps us prioritize what our teams work on. Last year we identified 60 top roadblocks, and cleared 21 of them by year’s end. To complete the feedback loop when a roadblock is cleared, the CSMs handle one of their favorite tasks — letting their customer know we’ve responded to their concerns! We hear quite a few hallelujahs from customers on those calls.

Other customers prefer to share their requests in a more public fashion to get other users’ input or to generate support and enthusiasm for their suggestion or pet peeve. On our forum, hundreds of folks submit ideas; particularly good ideas can be upvoted by other forum members. But the challenge with this channel is that there was no “closed loop,” that is, no way for customers to know the status of their ideas. To combat this, we put someone in charge of the ideas forum to regularly update it with accurate information on what is being worked on and what isn’t. This degree of transparency has gone a long way in avoiding those sharp edges.

Solve for My Success, Not Your Systems

It’s always a great day when we resolve a roadblock, deliver a new feature, or enhance an existing one. And we (and hopefully our customers) are thrilled when we release an entirely new product or major upgrade. A few years ago, we released a whole bunch of new software — shipping major updates on Marketing Hub and Sales Hub, new functionality for Video, GDPR compliance, dozens of new features, and a brand new product line called Service Hub. It was more new product in one year than we had released in our entire history.

But, as we heard from our partners and customers, sometimes there can be too much of a good thing. All that new functionality takes time to absorb. We began to hear the word “changiness” from our customers — the product was changing faster than they could adapt to it.

Though it’s great to deliver and launch new products, it also matters how we launch them so customers can be successful.

This led us to create a Product Rollout Team in 2019 that focuses on better quality assurance and communication of product changes for new releases. This team puts themselves in the shoes of the customer and thinks about how product rollouts will be received. They unified the process for how teams release new features with particular focus on an internal calendar for product releases, created guidelines for multi-channel notifications of new updates, and enabled flexibility for customers to opt-in for product releases.

Treat Me Like a Person, Not a Persona

There are two tenets in the Customer Code that reflect a customer’s desire to interact with a company based on their own preferences. The first is “Treat me like a person, not a persona.” While a company might have a “persona” they’re marketing to, customers expect to be treated like an individual. A company should be prepared to interact with a customer how, where, and when they want.

Last year, it became really clear that chat was surpassing phone calls as our customers’ most popular support channel. So we’ve shifted resources in that direction and worked to increase the availability of chat for our customers. And, on the “good problem to have” list, as customers have been growing and scaling we have many more power-users and “superadmins” who need a more specialized relationship with support. For our more demanding, high growth customers, we implemented a new “Right Ticket, Right Person” routing logic. Instead of handling support tickets only on a first-come, first served basis, we route support tickets to a rep specialized in a particular area.

Help Me Help You, By Helping Myself

Along the same lines, the Customer Code has another tenet — “Help me help you, by helping myself.” Not every customer wants to contact Support with every call for help. Many just want to be able to figure it out for themselves! I can relate to this — for me there’s nothing worse than having to talk to a company on the phone; as my wife likes to say, I’m not a “phone talker.” We of course had a Knowledge Base with this in mind, and it worked great — if you needed answers in English. So last year we localized the entire HubSpot Knowledge Base into all our supported languages — English, Spanish, French, German, Portuguese, and Japanese. This is a major win for our customers who previously couldn’t access help documentation in their native language.

Own Your Screw-ups

It would be impossible to talk about the Customer Code and not reflect on the software issues we had in March of 2019. To make a long story short, with all the new software we delivered early 2019, we lost a bit of focus on reliability which resulted in a product outage. One thing we learned from that outage was just how much our customers relied on HubSpot — we’re a critical system and many of our customers run their entire business on HubSpot. It was painful for our customers.

We learned that we need to pay much closer attention to the reliability and security of our infrastructure as we scale So we launched a new framework to guide our product teams on how to balance new software development with system stability, reliability, security, performance, and usability. We call this framework the “Mainsail” — we love to use nautical analogies at HubSpot — because it’s fundamental to our development process. With this framework, we make sure each of our teams meets specific service level agreements for their product areas before they release any net new features. Initially this probably slowed us down, but longer-term I think it’s going to pay off. We’ve already seen our reliability metrics improve dramatically and our net promoter scores are at an all-time high. I actually think this framework will help us develop better products, and deliver our software even faster than before.

Building a Customer-First Organization

Overall, we’re excited about the customer-first momentum we built last year; our Customer Code really inspired us to look for ways to improve the customer experience.

In fact, we took a major organizational step to institutionalize our customer-first orientation. In January 2020, Yamini Rangan joined HubSpot as our first ever Chief Customer Officer to lead the marketing, sales, and service organizations. By aligning these teams under a single leader, our customer experience will be more seamless, their outcomes will hopefully improve, and as a result we will grow better as our customers do.

We made a deliberate choice to call the role Chief Customer Officer, not Chief Revenue Officer. The CRO role often oversees the same teams a CCO would, but that title doesn’t accurately represent the role’s real purpose. Growing revenue is obviously critical, but revenue by itself can’t be the end goal.

If you want to grow revenue, great customer experience and strong word-of-mouth are what will get you there — and that only happens when you get the entire company focused on the customer.

We’ve defined our mission as: “Help millions of organizations grow better.” I’m pleased with the progress we made in 2019, but we have a lot more work to do — both with our own “flywheel” and with helping our customers achieve their goals by becoming “experience disruptors” for their own customers. It’s an exciting mission!

Check out HubSpot’s Customer Code here.




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