Totango CEO Guy Nirpaz shares his vision for customer success

Media Inquiries: Contact Karen Budell, CMO

Media Inquiries: Contact Karen Budell, CMO

We sat down with the CEO of Totango, Guy Nirpaz, to learn more about their platform and the importance and future of Customer Success.

What’s the Founding story of Totango?

GN: Our name, Totango, is derived from the saying, “it takes two to tango,” referring to you and your customers. Our story began when we started thinking about the amazing phenomenon of Cloud and SaaS, and how digital distribution has led to a model where your relationship with customers is often more remote and it is easy for them to leave. We became very intrigued with helping companies retain and grow their customer base.

What’s your approach to customer success?

GN: In the digital subscription model, you don’t have the same customer relationship as in the on-premise days, so the question becomes how do you know if they are finding success with your product? It starts with usage stats to know if your customers are using the product in the right way. You need to know what motivates them and if they are seeing value.

We built our product to understand the value a customer is getting and built a feedback loop so that the company can understand what is and isn’t working. We see five categories of information that help you assess customer value:

  1. Product utilization and adoption engagement – how much do your customers use your product; how frequently; who uses it; how deeply and widely are features used?
  2. Capacity utilization – of the capacity sold (e.g. seats, storage), how much is actually utilized?
  3. Business outcome – is the service leading to my success? For example, if I buy a marketing system to capture leads, am I successful in capturing leads and what’s the trend?
  4. Customer/ call feedback – hearing the customer voice
  5. Support and payment collections

Every category has more than one metric. The first three categories are the leading indicators. They are objective and cover 100% of the customer base. The last two metrics are important, but in many cases, they are lagging, subjective, and opinion based. Also, they don’t have 100% coverage of customers. Often just 10-20% in the case of open support cases.  Additionally, opening a support case is not necessarily a bad thing. In fact, it could be a good thing. Industry response rates to satisfaction surveys are generally 10%, maybe 20% at tops.  Plus, you can only collect such feedback infrequently.

By monitoring event streams, you get critical information at the point something is happening. You can be more proactive and know more about your customers. You can take an event, and turn it into an engagement model with your customers that drives value, opportunities, retention and growth.

How do you position yourselves?

Our mission is to help our customers help their customers to be successful. We are driven by our customer success manifesto.

  1. Value over customer management
  2. Actions over words
  3. Contextual engagement
  4. Real-time sensors
  5. Focus on all customers
  6. Focus on all users

When we build technology, best practices, and thought leadership, we do so around these six core beliefs.

How does that manifest in your product?

There are 4 key capabilities:

  1. Early warning system – which tells you which customers need your attention and why?
  2. Customer success process and team management – which provides the ability to scale your team and activities.
  3. Campaign management – the ability to communicate in a scalable way.
  4. Customer analytics – why do customers churn? What features are working for them? Who are your top customers? Who is lagging and why? It helps you answer the discovery questions you’re trying to understand.

These four pillars are common among products. What’s unique about our approach, is that it’s built on a customer monitoring platform. The way we provide these elements is all dependent on our technology that monitors the stream of events from customers and their systems and builds the customer insights.

What’s unique about your customer monitoring platform?

I’ll give you an example. I was watching a streaming movie on Amazon and had issues. That event that triggered Amazon to email a refund. Companies can create experiences for customers by seeing events they are going through with your service, and driving a business process as a result of it. Events can also be project based such as a renewal. We think that all these things have some sort of truth in them – it’s important to think from a customer journey perspective. The customer monitoring capability monitors the current situation or state of the customer at a specific point in their journey and alerts you if something isn’t right.

Another example, is if you’re a salesperson using a service like Webex and have poor call quality, how does that impact churn? Well the first thing that the salesperson will probably do is switch to using another provider, but there would not be an immediate churn event, just a small decline in usage, that over time could result in a churn. Our goal is to ID the situation and to resolve it by giving our customers the right data to proactively engage with their customers. Without monitoring capabilities you can’t have deep customer knowledge and context.

Who is your ideal customer?

We have a variety of customers, including SaaS (Software as a Service) companies like Zendesk, a Telco that sells internet services to business, companies that sell data as a service, a company that sells work as a service or crowdsourcing, and various infrastructure as a service company. Any company that is focused on maximizing customer lifetime value is an ideal customer.

Are the majority of your customers SaaS?

Yes, it is still mostly SaaS. For the first few years it was all about SaaS — younger organizations who were more inclined to use technology to solve the problem. Now, we’re seeing adoption beyond SaaS, and we’re seeing more things become SaaS like – after all, “software is taking over the world”.

How has CSM industry changed?

It’s still a very young industry. I’m very proud of being one of the pioneers in the industry. We pioneered the Customer Success Summit, the first industry event that started in 2013. We’ve seen 10x growth in attendance from the first year to this year. The conversation has changed as well, from what is customer success and why is it important to how do you sell it and think about it, to now a more practical conversation around how do I build a customer success machine including who do I hire, compensation etc. It’s moving from theory to practice. It’s moved from being “support plus” to a function reporting to the CEO with clear responsibility, metrics and growth goals.

What are the factors affecting your product roadmap?

Our customers. We have come a long way from how you solve the problem, to what should a CSM be doing, to what should a team lead be doing, to what does a day, week, month, quarter, and year look like. We are building all the dimensions. Had we known everything we do today, we would have defined the architecture of a solution differently two years ago. We’ve learned a lot from working with our 200+ customers.

Additionally, bigger enterprise companies are starting to adopt and they have additional requirements with a larger scale of operation. Their needs are also influencing our roadmap.

How do you balance being prescriptive with business model variances by company?

There’s been a lot of debate between protocols and strategy. We don’t build our product based on protocols. It’s not hard wired. We try to help our customers with principles. We build capabilities to enable customers to build their own protocols. It’s not rigid. The product has all the components you need, but you don’t have to use everything.

There’s a lot of variance between companies, for example, large companies versus small, by type of product, etc. The principles are similar – onboarding, driving stickiness, communication and engagement. The tools are there. The best practices are there. The question is what is the right level of execution?

To what degree is consulting required?

Our customer success team, and indeed all companies that create great and intuitive products, have a focus on driving best practices to their customers. It’s not about product usage and getting started anymore. The UIs are becoming easier and easier to use. The question is how do I take advantage of this product. A great example is Slack. They have a great UI, it is easy to onboard, but at the end of the day, the value delivered is based upon how they improve communication and productivity.  Our customer success team gives frameworks to help our customers think in that way. It’s more around coaching than prescribing.

Is there anything else you’d like to express?

I think there’s a lot of noise in the Customer Success space right now. It’s just the beginning. It’s hard to see who is knowledgeable versus jumping on the bandwagon. People need to be focused on the goal. If you build a customer success team with the mindset of support or account management, it will be very hard to achieve the desired result. You cannot just change the title of the person. There’s still a lot of terminology we need to work through.

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