Another CRM won’t fix your revenue problem

Firaas Rashid, Founder & CEO @ Hook

When I started leading Customer Success at AppDynamics, a $3.7bn Cisco acquisition, I was surprised at the gap between how Sales and CS used data. The sales team measured every individual task they did using data. In CS , at best we had surveys and at worst we were randomly approaching customers to ask them if they would renew or expand.

We used empirical data to sell to new customers, but relied on gut feel to renew and expand existing customers. Yet, the vast majority of our revenue and all of our profit came from those very expansions and renewals; our best customers spent 7x more with us in lifetime value than their initial investment.

Our profits, and the majority of our revenue were being left to chance.

The data problem

What I found in speaking to hundreds of revenue leaders since then is that they universally suffer from the same challenges that I did:

1. Accessing data is hard, requiring dozens of browser tabs across CRMs, BI dashboards, your product, & spreadsheets

2. Product teams de-prioritise data requests from CS in favour of new product work

3. Data science teams are disconnected from CS business outcomes making data hard to make sense of and difficult to action

4. All of this frequently leads to “the failed health score project” where companies that try to build a health score fail because it’s disconnected from any real revenue outcome

The tail wagging the dog

At AppDynamics, our first approach to solving our data problem was to buy a product for CS people to sit in — the so-called “CS Platform”. The hypothesis was that if we had somewhere which the CS teams felt was theirs, they would use it more to input data, and we could use that data to derive the actions they should be taking.

This was a huge failure. We ended up creating a large collection of theoretical and untested playbooks, and collecting more gut feel than ever before. We were collecting data in a structured fashion but it was subjective data and we had no idea how this related to customer value or revenue.

Worse still, we now had a second CRM. All of our revenue teams (Sales, Marketing, Renewals, Partnerships) sat in Salesforce, but CS sat in an entirely different product to enter their version of what was happening.

We ended up creating a large collection of theoretical and untested playbooks, and collecting more gut feel than ever before.

In trying to make ourselves more relevant to revenue, we had managed to isolate ourselves even further.

Starting out all over again

After spending hundreds of thousands of dollars on buying a CS platform, our second attempt at fixing this problem started in a spreadsheet. We analysed the customer behaviours leading up to renewal, finding strong leading indicators around adoption.

Using that prototype as our investment thesis, we hired a data science team that used customer behaviour to predict which customers would renew and upsell. We scrapped our playbooks and asked the CS team to use their autonomy to move the needle on these numbers, and only build playbooks after they knew they worked. Our playbooks moved from being long-winded untested training manuals to being data-backed techniques that drove revenue.

Our playbooks moved from being long-winded untested training manuals to being data-backed techniques that drove revenue

The results of our work were instant. In the first year alone, we didn’t churn a single CS account, we generated $300m in expansion revenue and and we increased our NRR by 10%.

Why all of this matters

In recent years, the explosive growth of CS has resulted in a proliferation of products trying to solve the problem of tracking CSM opinion and activities. There often tends to be an assumption that CS teams should use a single product for their job, and that such a system should be different to the core CRM because that belongs to the sales team.

There are two flawed assumptions here. Firstly, no revenue team works out of a single product; more mature functions which have been around for longer like marketing and sales use dozens of tech products for individual jobs and centralise in the CRM.

No revenue team works out of a single product; more mature functions which have been around for longer like marketing and sales use dozens of tech products for individual jobs and centralise in the CRM

Secondly, tracking activities, opinion and what’s happening in an account outside of the revenue CRM into a separate platform designed for CS drives a bigger divide between CS and the rest of the revenue teams. After all, CRMs were built exactly to track activities, opinions and provide reporting capabilities.

The right approach

I believe strongly that CS is part of a continuous sales motion and therefore needs to be aligned with the rest of the go-to-market teams. Activities and tasks should be tracked in the same place that marketing and sales work, and reporting should be as well.

In building Hook, our vision has been to enrich revenue teams with the post-sales intelligence they need in order to add value to the existing revenue stack — alongside products like Salesforce, Hubspot, 6Sense, Gong and Salesloft. We automatically calculate the likelihood of a customer renewing or upselling using product behaviour and customer interactions, and enrich your existing CRM with these revenue predictions.

Integrating CS into your revenue stack

I built Hook with the mission to make CS teams more data-driven after feeling first-hand the pain of building this from scratch using the wrong tech. Within the emerging software economy, CS is uniquely positioned to become the most important revenue team in the company. Hook helps teams do that within 28 days and with proven accuracy — without the expense of data science teams or long failed CS platform implementations.

Don’t buy another CRM and remove yourself from revenue — if your problem is understanding how to prioritise customers and what action to take, speak to my team at Hook about how we can empower your revenue stack.

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CEO @ Hook

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