Creating a successful product-led company doesn’t come easy!
But luckily for us, we’ve seen plenty of examples of companies that have led their growth through their product. Zoom, Slack, and Pinterest have all created something that’s been centered around the user’s experience.
While Product-led growth sounds like something owned by the Product team, the reality is that it takes alignment across all teams to create a stickier product.
Typeform is a great Product-led company that leverages its customer-facing teams to drive sustainable growth. In this post, we are recapping an episode from the Build podcast along with David Apple, the former Head of Customer Success over at Typeform.
The details
David Apple studied to become a mechanical engineer and worked in the field for nearly 8 years. He entered the tech arena while completing his MBA and moved from Implementation to Sales and lastly Success. David landed at Typeform to help lead their Sales team and quickly found his footing leading both Sales and Success. Today, David works at Notion as Head of Customer Success.
Build is a Podcast hosted by OpenView, a venture capital company focused on the expansion stage. If you’re in SaaS, this is a newsletter you WANT to sign up for. They go deep into topics about market research, product-led growth and so much more!
Three takeaways
Starting the Success function at a Product-led company
Customer Success team structure
Does every team need a different KPI?
Starting the Success function at a Product-led company
The story of how Typeform decided to implement a Customer Success team demonstrates the importance of founders attending workshops and conferences to continue learning.
The founders of Typeform took a trip to San Francisco to attend a conference where they learned about a new trend called Customer Success. The topic was very relevant to the challenges Typeform was facing because they had grown mainly through virality. If you’re familiar with Typeform, there’s a “powered by Typeform” button at the bottom of a form so when people enjoy the experience of filling out a Typeform, they can sign up. 60% of their business comes from this viral loop and as a result, the challenge wasn’t to generate more signups, it was retaining those people who came through the door, making them successful and keeping them around.
When the founders came back from the conference, they asked David if he’d be interested in moving away from Sales which wasn’t making an impact compared to the viral loop and rather focusing on Success and trying to drive retention. In their case focusing on retention killed two birds with one stone. By making customers more successful, they end up driving virality which ends up driving new business. For Typeform, it was a no brainer to invest in Customer Success.
Customer Success team structure
As they continued to scale, six different teams formed under David. Those teams were:
Customer Support
Customer Education
Customer Experience
Customer Outcomes Managers (similar to CSM)
Sales
Operations
For a while, David was leading all six teams––which is pretty crazy––but luckily two leadership roles formed, the Director of Customer Care took over Support and Education and the Director of Customer Engagement took over Customer Experience and Customer Outcomes Manager.
How did Sales end up under Customer Success
Having Sales under Customer Success happened by coincidence. It was really because David was the only one that had a Sales background and no one else at Typeform did at the time. They thought that having Sales under Success wasn’t going to be sustainable and that at some point, Sales would break out into its organization. But at the moment, it made sense for David to build it, that said, if he were to do it all over again today, he would probably do the same thing.
Another thing that made this structure make sense was that Sales wasn’t commissioned. This removed a lot of that negative incentive of trying to close deals when maybe it’s not right for the customers. Essentially, they’re more focused on keeping customers around for longer. In fact, they only account for the revenue coming from the Sales team if the customer has been around after two months.
The Education team
Education team manages the help center and initially their only goal was to drive self-service & ticket deflection. They did that by analyzing support tickets and gathering feedback from other sources and determining which articles to write/prioritize. But they realized that a lot of their churn was not really due to people being unhappy with the product but rather with people completing a project and not having an idea of what to do next. So the Education Team is also in charge of creating inspirational content to help users do more than the initial use case they came to Typeform for.
The Customer Experience Team
The team’s title, “Customer Experience”, doesn’t describe exactly what they do but they are a hybrid of two things, on one hand, they do all of the research around Voice of Customer by aggregating data from Support, NPS, churn surveys and Sales calls. They then take those insights to create campaigns that proactively help customers achieve their goals. Essentially, they are trying to anticipate when customers are having problems and help them out before the customer even reaches out and says “hey how do I create a quiz?”
Drawing the line between 1:many and 1:1 service
The way Typeform segmented the user base was based on customer revenue. For lower revenue customers you have the Customer Experience team that does 1:many ( or tech touch) and then on the opposite spectrum, for higher revenue, you have the Customer Outcomes Managers which do 1:1.
Of course, things aren’t set in stone, David was constantly looking at the ratio of Annual Recurring Revenue (ARR) to Customer Outcomes Manager to make sure their range was reasonable. Their Average Revenue per Account (ARPA) is relatively low so ARR to Customer Outcome Manager ratio is lower than David hears about at other companies.
Another thing David implemented was having a hybrid group between the Customer Experience and Customer Outcomes team to work on opportunities. For example, if there was an opportunity for expansion with a customer, they may engage that customer in a 1:many approach so that it’s low cost but also give the customer the ability to reply if they need 1:1 engagement.
Does every team need a different KPI?
At first, each team had a different KPI but David soon learned a big lesson around this. He came in with the mindset of owning a KPI like the Sales team owning new business or Customer Success owning retention.
It was very engaging for the team at first but after a while, it did more harm than good because other departments saw “retention” and thought “I don’t have to worry about retention because Customer Success is going to deal with that” and when David tried to bring up projects that required collaboration with other teams like Product and Marketing, it would be hard to get them to prioritize it because retention was not one of their KPIs. But now that has changed to the whole company owning retention, and David is more a champion of retention instead of outright owning it.
Retention, the lagging metric
The fact that churn is a lagging indicator has been tough to explain to some people that have less experience in SaaS because they’ll say things like “what was the impact on your campaign around retention?” And to that, David advises not to look at retention because we won’t know the impact until several months later and that’s only if it’s A/B tested properly.
It’s a bit frustrating for David going from focusing on new business where it’s much quicker to see results than retention where it takes a while to see the outcomes.
However, they’re focusing on leading indicators which is giving them tons of insights around what behaviors are leading people to stick around. they’ve found that the number 1 leading indicator is the number of Typeforms they have created. Also, if customers are paying for features or use integrations, they are less likely to churn.
For the Customer Outcomes team, the leading indicator was a little tricker but what they found was that having a kick-off call was one of the best indicators of whether or not a customer was going to stick around.
Summary
If your virality loops are bringing in customers, you’ll need a Success team to keep those customers
Make use of hybrid teams to give you flexibility between low touch and high touch
Retention shouldn’t be owned by Success only, it should be a company-wide KPI
Shout outs
Thanks to the Build for hosting David on their podcast! You can go follow them on Twitter. And if you want to hear more from David, follow him on Twitter.