Mark Kosoglow [00:00:00]:
The current condition of putting a sales leader in charge of a post-sales process is completely broken. In my career, I’ve met with a thousand revenue leaders. If I ask them of their truthful truth, how well they feel like they understand post sales revenue, I guarantee you less than 1% would say they really understand it.
Heather Cole [00:00:24]:
This is Go-To-Market Magic.
Steve Watt [00:00:26]:
The show where we talk to go to market leaders and visionaries about the “aha!” moments they’ve experienced.
Heather Cole [00:00:32]:
And the pivotal decisions they’ve made.
Steve Watt [00:00:34]
All in the name of growth.
Heather Cole [00:00:38]
Steve, who are we talking to today?
Steve Watt [00:00:40]:
Oh, this is going to be a good one, Heather. Our guest is Mark Kosoglow. He’s CRO at Catalyst. Previously, he was SVP of Sales at Outreach. Now, neither of those titles mention customer success, but I promise you he has got a very strong perspective and a whole lot of really compelling experience in how we elevate the customer success function to really maximize the revenue opportunities for our firms.
Heather Cole [00:01:08]:
This is going to be a great conversation. Let’s jump in. Mark, welcome to Go-To-Market Magic.
Mark Kosoglow [00:01:18]:
What’s up? Let’s go.
Steve Watt [00:01:21]:
Mark, I’m really glad you joined us. I’ve been a big fan of yours for a long time now. I’m always picking up what you’re putting down on LinkedIn. In my humble opinion, you are, like, top five LinkedIn people out there that I learn from every day. And I know we all have our own little bubbles, and other people might not see your posts as much as I do, but I think they’re really great. I’ve learned a lot. You’ve challenged my thinking in a lot of areas, so I wanted to start by just quickly thanking you for all you do there. And then I want to dive into some of the things that we’ve learned from you through those posts and get you to expand on them.
Steve Watt [00:02:00]:
And I want to start with what you said recently. You said you spoke at SaaStr for the first time, and you said you blew it. And when I read the whole post, I realized you didn’t blow it, but there was a disconnect between you and the audience, and you were frustrated. Tell us about that.
Mark Kosoglow [00:02:31]:
Yeah, so the whole point of the talk was to share three things that I had learned at my time at Outreach, where I was employee one grew and led the sales team to about $250,000,000. So lots of learning. Super honored to be able to do that trip. And what are three things I learned there that worked at Catalyst? And what are the three things I learned there that didn’t work at Catalyst? And I really tried to emphasize the things that didn’t work because I think that they’re stronger market trends and there’s more lessons to be learned. The stuff that worked is I wouldn’t say rote because I have my own little slant on things, but I think that the stuff that didn’t work were common misconceptions that aren’t working for anyone right now. And I spent a bunch of time emphasizing that. And one of those was about why people need to get out of investing in top of funnel as much as they do.
Mark Kosoglow [00:03:26]:
So I spent a lot of time developing that topic. I think I made some really clear points. But guess what? Every question was for the first ten or 20 minutes of the Q&A, how do you write cold emails? What should SDRs be doing? And I literally on the stage said, hey listen, after this next the question ended, I was like, before I take the next question, here’s the deal. You guys are proving my point of my talk. All you want to do is talk about top of funnel, and I just told you it sucks. And I told you there’s so much low hanging fruit on the backside of after we sign the customer. If you want to look at that bow tie model on the right hand side of the bow tie, there’s so much low-hanging fruit and you still just want to talk to me about what SDR should be doing in emails. Like wake up and somebody asked me a post sales question and we changed the conversation.
Mark Kosoglow [00:04:12]:
Now, I did have 2 hours of questions after that because I stood next to the stage, they had to kick me off the stage and I had a bunch of great conversations after that. So I think that spurred some thinking and challenging. But yeah, people are addicted to new logo acquisition and it is at the expense of where 92% of the lifetime value of customer revenue comes from, which is after the signature, did they get it?
Steve Watt [00:04:37]:
Once you gave them that little bit of a smackdown, did the nature of the questions fundamentally change? Or is this thinking so deep rooted that even with that they still didn’t quite get in there?
Mark Kosoglow [00:04:48]:
No, I think it changed. The next person had a post sales related question and then most of the stuff afterwards were post sales professionals that had really strong questions about like, how do I get my leaders to think like you? How do we get the mindsets to shift? How do we get behavior and investment to shift? Why do they keep cutting my team but expecting higher retention and higher expansion rates and they keep investing in the other team when top of funnel and close rates are declining? That’s a great question to ask, but that’s the kind of weird behavior a lot of companies are doing right now.
Steve Watt [00:05:23]:
That is a great question to ask. That’s actually a lot in line with what we wanted to ask you today. So let’s go right there. How do you push back if perhaps you’re the CS leader or someone like yourself as a CRO and you’re facing that underinvestment in the right hand side of the bow tie, how do you push back on that with the CEO, with the board? How do you change minds?
Mark Kosoglow [00:05:46]:
So first of all, you start with that stat. 92% of customer lifetime value happens after the signature. People acknowledge that, but you have to kind of work it through them for I think it to get into their head. So if I sign $100,000 customer but then they renew for four years and every year they grow, you start to understand how much revenue is at stake post signature versus just that one thing. Now people are like, well, none of that happens without the first thing. I’m not saying kill acquisition and don’t do it. I’m just saying maybe that we have spent so much time optimizing top of funnel SDR behavior that maybe there’s not much juice left in the squeeze when we got a whole basket full of oranges that are ready to make 18 gallons of orange juice if somebody would just start squeezing over there. So that’s the first thing is get them to aligned and understanding the nature of the numbers.
Mark Kosoglow [00:06:41]:
The second thing, Steve, is and I took this from Jacco van der Kooij who is the founder of Winning by Design. I think it’s like one of these things that’s like once you hear it, you’re like, oh my God, what’s going on? Everybody’s nuts is think about 1960. That’s the first time a B2B business application was launched. IBM created something called Saber for American Airlines. It was a reservation system. And in 1999, almost 40 years later, salesforce develops the first sales cloud based application. So what do you think what post sales professionals did for 40 years, they did support, right? That’s all they did because that license model is called the perpetual software license model. I sell you a DVD with Office on it.
Mark Kosoglow [00:07:30]:
You’re not going to get anything else for five years. That DVD cost a truckload of money. So who’s all the onus on for value creation on the buyer? I’m going to sell you this and for five years you’re stuck with it. You better figure it out. All right. Salesforce introduced in 1999 the SaaS based business model subscription software as a service. The subscription recurring revenue model. And they said, you know what, less upfront cost, but we’re going to charge you every year to keep using the software.
Mark Kosoglow [00:08:03]:
Now who’s the onus on for value creation? It’s on the seller. But most revenue leaders grew up in the perpetual software license model or were mentored or taught by people that grew up in that model. And they brought that model to the SaaS model. And it looks like this grow at all costs. That’s what we just left for the last ten years. Send more money. Top of funnel get demand. To get more leads, I need more SDRs, send more emails, get me more deals.
Mark Kosoglow [00:08:34]:
That is a perpetual license software mentality. Those are the rules of perpetual license software. The rules of SaaS are very different. If you give recurring impact, you get recurring revenue. And we suck at getting recurring impact because we spend all of our time as revenue leaders talking about the top of funnel and not the right side of the bow tie post sales. So once you help people explain that that’s what’s going on, that’s a problem. In 1999 was the very first CSM and guess what? CSMs were used to doing support. Guess what? Most CSMs still do support reactive.
Steve Watt [00:09:13]:
Got to change active inbound support.
Mark Kosoglow [00:09:16]:
That’s exactly right. We got to change it. So that’s like some of the arguments that I can put in front of a revenue leader that I think other people need to put in front of revenue leaders and be like, listen, we need to stop being crazy and putting money and time into something that’s over optimized. There’s not much value in spending time with it. You’re not going to increase it by 10% anymore. You’re going to increase it by 0.1%, a 10th of a percent, versus you can get a 10% increase in your retention rates by doing small little fixes because the fruit is just so low hanging and those CSMs are running around with their hair on fire most of the time.
Heather Cole [00:09:51]:
Yeah. So, Mark, I know having lived this with high growth companies and as an analyst at Forrester, and a lot of the mindset shift when we said you need to start looking back here because first of all, it’s cheaper to get the business. There’s more business to be had, and the sales cycles tend to be shorter. So how do you think about that piece of it? And what we kept coming up with, especially in high growth industry, is that we were seeing PE and VC firms pushing the mentality that top of the funnel is still where it’s at and over pivoting and over obsessing on those numbers. Do you see that changing? And is that still a challenge?
Mark Kosoglow [00:10:30]:
Yeah, I think it’s a huge challenge. So we’re in uncertain times. Do we all agree on that? It’s harder right now to sell software than it has been for a decade. All right, so what do people do when they’re uncomfortable and things get hard? They revert to what they know. And what do most revenue leaders know? What is most of their background? Sales. So what they do is they go into their little sales mindset, their sales compound, and they come out with a bunch of sales strategies and they spend weeks deploying them dollars, investing in them time, executing on it, and they get maybe a little lift. And guess what? They did all that at the expense of the CS side. That’s what’s the problem when you’re confronted with the data of how much revenue comes there, how much shorter sales cycles are, how much greater of a win rate you get, how much revenue there is to have.
Mark Kosoglow [00:11:29]:
That’s where I think, like, okay, if all those are true, then this is like a thing in my personal life. This is one reason why I don’t like social media. But think for a second. If I am standing outside your house and I look through your window all day, every day, I get a sense about what your family and your life is like. And no matter what you tell me, I can see what I think based on what’s going on in your house. That’s how most revenue leaders are. They need somebody sitting outside their house being like, you’re nuts. Like, you’re spending all your time on new logo, and you got all of these other reasons.
Mark Kosoglow [00:12:04]:
I don’t care how you tell me your customer matters. You don’t do anything to create value for your customer after onboarding. You just hope they get it. And that’s the exact opposite of what the SaaS best business model says, is value creation is on the seller, not on the buyer. The buyer can leave. They can leave easily. The switching costs are so much lower than they were in the perpetual license model, but we haven’t caught up to the sophistication there. And I can share some examples of different ways of thinking.
Steve Watt [00:12:32]:
Yeah, I do want to go there, but I want to sort of move from the philosophical to the operational. So if I’m in a position where, okay, leadership now agrees with what you’re saying, we need to do a much better job over there operationally. What does that mean? Does it mean that CSMs need to be upskilled and they need to own those retention and expansion numbers? Or do you start overlaying account managers, or do you start overlaying sales into those accounts? How do I take that vision and make it.
Mark Kosoglow [00:13:06]:
Get I don’t want to avoid the tactical thing that you asked me for, Steve, but it does require some framework thinking. And so I have this little catchphrase plateau. Stairs and elephants. Oh, my. And this, I think, encapsulates the problem of what you need to do tactically different. So what I see in most software companies is you have this onboarding process. There’s nobody in there. You’re building.
Mark Kosoglow [00:13:35]:
You’re doing integrations. There’s little value. Then all of a sudden, we’re ready to adopt, and we’re ready to deploy. Boom. We get to see this massive value upswing, right? Users are coming in. Everybody’s pumped the value potential. Oh, my God, my job is so much easier now. Blah, blah, blah.
Mark Kosoglow [00:13:52]:
Then that starts to tail off over time, and we reach this plateau, because guess what? The company said we got them deployed. Thank God. Let’s move on to the next acquisition that we just got or the next project that we just have users are kind of using it. But then you start to get to this battle where users are they still engaged, the excitement starts to wane because this is now just a common part of their boring job and that initial value starts to fade from their memory. And all of a sudden you get into this place where you’re renewing, where the value is actually declining and people are just like, this is just another tool. What have you done for me lately? And now we’re having to fight these really tough fights for renewal when we didn’t really do any expansion because people don’t expand when value stays flat. Right? Now this aligns very closely to a human behavioral thing called Variable Ratio Reinforcement schedule. And what that says is, Steve and Heather, you as humans will accept less total reward as long as I give you unpredictable, frequent and small rewards.
Mark Kosoglow [00:14:59]:
If I give you large infrequent and very predictable rewards, you actually need to have more reward for the same level of effort. And so what that says is, look at this. This goes against human behavior. One large predictable reward that’s infrequent. Like I feel like I’m getting cheaped on this software versus what if you went from a plateau to a stairstep and the stairstep says, let me do little bitty chunks of value, rather than trying to shove an elephant down the throat of my buyers? Because you know how to eat an elephant one bite at a time, right? And what we’re doing is we’re shoving a whole platform, we’re doing all of this stuff in this huge deployment with all these solutions versus let’s just chunk it out a little bit over time. Now, this does create a problem. You think? The problem is I have this huge delta in value that I’ve created for the customer. Over time that starts to diminish and eventually it goes in another direction.
Mark Kosoglow [00:15:59]:
But the thing that we can rely on is that humans want small infrequent, unpredictable rewards. So actually the perceived value is higher. And I can go through some other tactical things, but this is the big “aha!”
Steve Watt [00:16:15]:
So you’re talking about continuous incremental, product enhancements or other kinds of value?
Mark Kosoglow [00:16:21]:
No, I think I got to go back to this to explain it. So how do you build stairs? All right, first of all, we sell to a business initiative. That’s what we want to do. The business initiative is to achieve an outcome that the business needs. You map a business initiative to a job to be done in your product. If you don’t have a job to be done that matches that business initiative, you shouldn’t sell the deal. All right? Now, a job to be done might have several solutions inside of it. Solutions are the features and functionalities that we use to deliver the outcomes that the job is supposed to deliver, that the business initiatives dictate and prioritize.
Mark Kosoglow [00:16:54]:
Underneath each solution we have multiple what we call moments of impact. That’s the experience that a customer feels when a solution delivers the outcome of the job that marries to the business initiative. All right, so we take down why do people buy based on emotion and they justify with reason. So what I’ve done is at Catalyst is I’ve created a bunch of emotional moments of impact that affect the business, that create small buying windows that we can take advantage of very frequently. So like, listen, I can do this little moment of impact here. I deploy my first solution based on what job is most important based on the business initiative. And I got four or five little moments of impact that I just bleed out along the way. And so what I’ve done is I’ve chunked the value down from here’s three solutions that solve three huge problems and shove it down everybody’s throat and hope that you can do it to here’s the first solution that you’re saying the most important here’s a little chunk of value that you can experience if you do it.
Mark Kosoglow [00:17:54]:
Let me get you to experience that, then acknowledge that you’ve experienced it. And then want to guess what I do? I then ask you for more stuff to do and that might involve spending more money. And I just do that over and over and over and over again. And we create the expectation that we will increase value. And when we do, we’re going to ask you for ways to increase your spend.
Heather Cole [00:18:14]:
So Mark, that makes total sense and it makes like rationally. And having done this not only with onboarding clients and implementing software, but also with there’s correlations to onboarding reps and how you train them. There’s so many correlations here and it’s great. The question that I have is you’re going to get pushback on that one, I got to think because people the expectations that sales builds in that selling process is that you’re going to get immediate and quick value. And by the way, the analysts, when they look at software and they judge your software, they actually talk to your clients about time to value. So how do you change that mindset?
Mark Kosoglow [00:18:57]:
All right, so this is so awesome. So first of all, time to value is conditional. Is it time to massive value or just time to value? Because guess what? I just got my first G two thing that said we fully implemented somebody in eleven days when our competitors can’t get ROI for 18 months. All right, so what is the value that you’re getting time to so the way that you help your customers understand that is I own the entire customer journey. I believe that one person at a company must be the owner and steward of the customer journey. And what the main job of that person is, is to create a thread that you pull all the way through. So guess what? My marketing people market moments of impact, my sellers sell “Moments of Impact,” my SEs demo “Moments of Impact,” my onboarders onboard “Moments of Impact,” and my CSMs continually drive new “Moments of Impact.” So we set the entire expectation that this is how we deliver value, and we use it as a differentiator.
Mark Kosoglow [00:20:02]:
And everybody’s like, oh, that makes perfect sense. And I can’t tell you how many of our customers are like, how do we do this? And we’re like, well, our software helps you, right? And so we’re showing people how to do it, using our own software to help them do it, and then they use our software to do it with their customers. But the way to answer your question, Heather, is you set the expectations. So the left side of the funnel is pre sales. Those are promise makers. The right side of the funnel is post sales. Those are Promise Keepers. Your Promise Makers and your Promise Keepers need to be fully aligned, and most companies are not.
Mark Kosoglow [00:20:37]:
That’s usually labeled as a bad handoff, all right? But really what’s happening is your sales team doesn’t have a thread that they can pass through to somebody, so they’re just doing what it takes to get the deal done, because that’s all they care about. Versus at Catalyst, we’ve made a cultural change. Do you know what the most celebrated thing is? Let’s say you have a customer for ten years. What is the most celebrated moment in that ten year journey? When they sign the contract, right? That’s when everybody pops a champagne. The commission check gets written, everybody congratulates the AE, who, if they’re a good person, talks about the rest of the team. Do you know what we celebrate the most at Catalyst? When we drive our first outcome for our customer of why they bought us. That’s the most important thing, because with that, we are able to create all of this recurring revenue and recurring impact. Signing the contract doesn’t mean jack-squat when they churn.
Mark Kosoglow [00:21:28]:
And so celebrating that is, like, semi important. What’s most important is, hey, we’ve now proven that we were a good Promise Keeper to the promise that we made in the sales cycle. That trust. And that relationship is now deepened and strengthened, and we have a chance now to ask for more money to grow, because don’t get wrong, we build relationships. All right? There’s personal and professional. Do you know what a personal relationships point is? Is love, camaraderie, friendship. Do you know what a professional relationship is supposed to do? Create commercial impact. That’s the whole point of a professional relationship.
Mark Kosoglow [00:22:06]:
So don’t tell me that you, oh, I got a great relationship with this person, but I can’t go sell them. Then it’s not a professional relationship. It’s a personal one. And you should go have the personal one on your personal time. But in the professional one, I need you to have the professional relationship that drives commercial value for both companies.
Heather Cole [00:22:24]:
Yeah, I see a lot of alignment here into obviously you have to change the way that your promisers promise and the way that they sell. And I’m really hearing a lot of echoes of Insight-selling or Challenger based or how do you get them to change the way they’re thinking so that they can change the way the customer is thinking about the value, which is, like you said, could be a total differentiator for many companies. And it also sets you up for success on the back end.
Mark Kosoglow [00:22:54]:
Yeah, we show that little stairstep slide. We’re like, listen, we give you four core solutions in your 1st 30 days which give you access to about 15 moments of impact. And what we’re going to do is we’re going to prioritize which moments of impact that we do first. And that’s how we get immediate time to value and how we also get them to be like, oh wow, this is exactly what they said they do in the sales process and now they’re actually doing it. I feel like I can hand them more now.
Heather Cole [00:23:22]:
Yeah, the trust, the trust is there. So the question then becomes you’ve got this person that they ultimately trust. I’m assuming it’s the CSM that’s in the main role. The driver in that position who now is the one saying it’s a moment of value. By the way, the next moment of value may mean you need to buy something else. Who’s responsible for that? Or does it just depend?
Mark Kosoglow [00:23:44]:
So I think it depends. This is a very complicated question. So it’s two drastically different skill sets of figuring out how to drive value and then doing a commercial conversation. My personal opinion is it’s a little bit tough for one person to master both sides of that coin. So the way I structure teams is my CSMs only job is to drive success. Like to get them to those moments of impact. That’s their only job. Except when they have that, they suggest, hey, maybe there’s some other areas that we might be able to help out with and if there’s interest there, we create a CSQL, we pass that over to our AE and now our AE picks up that part of the conversation of, okay, what else would you like us to do? Oh yeah, we can do that.
Mark Kosoglow [00:24:35]:
This is an add on or this is a cross sell, or this is a partner that we can have do those sorts of things for you. And they handle that commercial conversation while my CSM stays locked on one thing value creation. Because with recurring impact comes recurring revenue. Without it, it doesn’t happen. So I need that function completely focused on the value creation part. I don’t know if that’s right. That’s just what I believe right now.
Steve Watt [00:25:00]:
How do you mitigate the risk of when you bring that AE in, they jeopardize the love and the trust because they’re coming in now potentially with an aggressive hunting mindset and potentially undoing some of the trust that that CSM has worked so hard to build.
Mark Kosoglow [00:25:25]:
I think some of it is expectations. Like, first of all, hey, when we do moments of Impact, the reason that we do that is to drive you value. The reason we want to drive value and create trust is because we want to charge you more for more stuff and you just say it, right? That’s how business works. If somebody gets offended by that, they’re probably not going to be a good customer anyway because their business is going to go under because they don’t understand how business works, right? So that’s the first thing. The second thing is how you do the handoff. And so I think that the CSM also needs to set expectations of, hey, I’m going to get an Ae involved. If it’s something that is commercial, meaning net new or whatever, but if what you want to do new is something that is already in your capabilities, then I’m going to just continue that conversation, right? And eventually what we do at each moment of impact is once we achieve it, we go back to the executive because executives love to tell people what to do and then they love follow up that it got done right? So they love to go to those meetings and we just are like, listen, we just did this. This is what we’re thinking next.
Mark Kosoglow [00:26:27]:
But before we do, what is the most critical business initiative that you have right now? Oh, this. You know what, actually we need to turn a little bit. We need to pivot a little bit. We need to go to this other solution because this is more aligned to that business initiative than what we were currently working on. And it’s that constant reprioritization. And if they bring in a new business initiative that requires new functionality or a crosssell or a partner or whatever, that becomes logical then for the CSM to say, hey, listen, that’s outside of what you currently have, I’m going to bring an Ae in to help you talk through. Is it make sense for us to help you with that or not? And don’t forget, like the last seven moments of Impact, we can keep doing that in this new area too.
Steve Watt [00:27:06]:
On an earlier episode of this podcast, sangram Vajray said that one of the biggest problems he sees in CS teams is that they don’t know how to talk about business impact. They don’t know how to talk about ROI. They just know how to talk about product utilization. It sounds to me that you are upskilling your CSMs to be much more business partners and not just product consumption partners. Am I right about that? And if I am, how do you do that? How do you elevate the mindsets and the skill sets of a profession that has been kind of pointed in a different direction for a couple of decades?
Mark Kosoglow [00:27:47]:
I would say that customers can control conversations. Sometimes that’s good, sometimes that’s bad. Most customers, what they want, what they think they want is functionality. What they really want is business outcome. And so you have to equip your CSM team to understand the difference between the two and attach functionality to business outcomes. All right, so you want some functionality. You want this moment of impact, all right, that’s this solution that we’ve already deployed that is going to help you with this job.
Mark Kosoglow [00:28:16]:
So, like, to use real language, you want to come in on Monday and see that if three companies went at risk, that there’s already a meeting on the books because an automated playbook kicked off, that’s a moment of impact. Like, I came in, bam. I would want that. The solution is a series of dashboards and playbooks that deal with at risk situations. The job is proactive risk management, and the business initiative would be to increase retention by five points or whatever. And so what happens is when you coach the CSM. Now, this is interesting. I talked to 100 CSM professionals in my first two or three months.
Mark Kosoglow [00:28:56]:
In that time, I asked a repeating question. Do you have a meeting where you go through every account, every customer in a CSM’s book of business, their manager in the CSM, and you create a next step for that customer? Guess how many out of a hundred conversations people had a meeting like that? Zero. None. Do you know what I was like? Well, what are you doing? Well, we meet with them and we talk about what customers are in trouble or customer needs. I’m like, okay, I have AES that go through every single opportunity every single week with their manager and have a next step for every single one of them, and they have 30 or 35 opportunities. How come we can’t do that with 30 or 35 customers? And I got a lot of pushback, but once we started doing it, what ended up doing is we took that framework of business initiative, job solution, moment of impact, and now we gave the CSM a structured way of thinking about that conversation. So now when the person is like, hey, I need to use this new booking thing oh, so you want to use a new booking link feature thing, all right, that marries to this moment of impact. It sounds like you want to feel this, is that right? Yeah, I want to experience that.
Mark Kosoglow [00:30:04]:
Great. That solution is already deployed in your thing. So why don’t we do a quick value sprint to get you to feel that and acknowledge that we’re doing it. But don’t forget, I just want to make sure that that’s attached to this business initiative, because the last time you told me what was most important, it was this, and booking links don’t seem to solve that. So is that really what you want, or should we stay on task with what you said the business initiative was that’s all it takes is they just need to understand that tree and how it wraps up. And if they’re not aligned to the most important business initiative, then they’re not aligned to what the customer is going to decide to renew the software.
Steve Watt [00:30:41]:
That’s a higher level function for CSMs, I think, for some, anyways. Is that just about training people and having the right process, or do you actually have to hire a different kind of person to be a CSM in?
Mark Kosoglow [00:30:56]:
That took we launched this a few months ago here at Catalyst. Within three weeks, every one of my CSMs got it. It’s not hard. It’s not difficult. It’s just a mindset that gets you out of fighting fires. And guess what started to happen. Guess what? I had a cool conversation with somebody that wasn’t on fire that I’m going to give proactive value to. Guess what? Somebody was sort of upset.
Mark Kosoglow [00:31:20]:
But I got them rejiggered in the right fashion and onto something that they makes a lot of sense. And I have this little value sprint and a little mini project plan to get that done. And all of a sudden, the energy, the tenor, the mindset of that team started to change from constantly being berated by customers. And spending all their time in the negativity to now they feel like that fuel of positivity that a lot of salespeople feel a lot and then they get to use that to power them through all those tough conversations. Which are unavoidable, but they’re more fixable when you have a framework to fix them than they are when you’re just like, okay, sorry that we have some downtime. Let me go take care of that. Oh, this feature doesn’t work. Oh, people aren’t using this.
Mark Kosoglow [00:32:01]:
Okay. Oh, you want to do this? Yeah. And it’s all that responsive. Imagine that in your marriage or your relationship, if everything was just like, I want to go to the movies this week. I want to go out to dinner this week, buy me flowers. I need a new ring. I need some new clothes. And that’s all you were getting all the time.
Mark Kosoglow [00:32:17]:
You would be like, I’m out, right? Versus you never get a chance to be proactive and surprise them with anything because they’re just constantly dogging you for stuff. So that’s what we need to do is we need to get CSMs in a place where they can be the good lover, not the responsive lover.
Steve Watt [00:32:33]:
I love it. Oh, Mark, you have a way with words, my friend.
Heather Cole [00:32:38]:
I don’t know. My husband’s always asking me for rings and flowers. Should I be out of here?
Mark Kosoglow [00:32:44]:
He sounds like a well dressed man.
Heather Cole [00:32:47]:
He is indeed.
Steve Watt [00:32:48]:
Mark, this has been great. I really appreciate you kind of opening up your mind here and your approach, it really is different, and not only does it make a lot of sense, but I got to say, it seems doable when I listen to you talking about these steps and these approaches, there’s nothing there that seems that hard. There’s nothing there that seems like it should be a major roadblock. But I know in a lot of companies are really struggling with this. Do you have any final words of wisdom for someone who maybe they want to be that change agent in their firm? Maybe they’re not at a sea level, but they hear you, they understand you, and they want to bring that kind of cultural and process change into their organization. Any final words of wisdom for that person?
Mark Kosoglow [00:33:44]:
Yeah. I think you have to remember the mindset of executives. Executives know what they know and they’ve gotten where they are based on what they know and who they are and what their area of expertise is. Very few revenue executives have experience making customers successful, creating value, and doing expansions and renewals. That’s just not their wheelhouse. That’s just not where they spent their entire career. Your job as a CS professional, as a CS executive that maybe reports up to a CRO or a CEO, is to help them understand where their gap is. Most executives, if they’re good, are very open to being like, whoa, I don’t know as much as you do.
Mark Kosoglow [00:34:28]:
So become that subject matter expert. Educate them on why their thinking is flawed, and then show them, like, look at their calendar. If you look at the most revenue leaders calendar, you’re going to see 60, 70% of their meetings have to do with presale stuff and not post sales. And it’s eye opening to take an executive to be like, if 90% of our revenue so I remember a couple of companies I’ve worked for in a quarter, 60% to 75% of the revenue came from customers in terms of expansion. And if we add in renewals, like, 95% of all the revenue transactions in a quarter had to do with customers, yet we were spending all this time on acquisition. You have to show them the math and help educate them. And if you have a good executive, they’ll start to understand, and you just have to keep chipping away and be that broken record. Don’t think one conversation changes something.
Mark Kosoglow [00:35:21]:
It’s the repetition, it’s the evidence. And then listen. Quit waiting around, quit asking everybody. Quit getting consensus. Just make some decisions. And I know it’s not always possible in some companies, but make some changes and do it and show people what’s happening and the logic behind it rather than trying to get everybody on board before you do something like that, saying, what is it? It’s better to ask for forgiveness than permission. I think some CS people need to piss some people off and ask for some forgiveness instead of always asking for permission.
Steve Watt [00:35:56]:
Love it. Great place to end things. Mark, thanks again for joining us today.
Mark Kosoglow [00:36:02]:
Thanks for having me. See you.
[TAKEAWAYS]
Steve Watt [00:36:06]:
A whole lot of goodness from Mark there, Heather. What jumped out at you the most?
Heather Cole [00:36:10]:
Well, first of all, what a great conversation. He really knows how to spin a tail and educate at the same time, which I just love. One of the things that really jumped out at me is the Promise Maker and the Promise Keeper balance and that stairstep to value because so often we have the big promises being made on the front end with sales and they have to be kept in a certain time period. In that time, to value is inflated to be so big and so quick that they can’t actually consume it all. So his bringing the human psychology into it, those small unexpected rewards, getting to a place of value and giving the value all the way along is a fantastic way to think about it. But it really does involve making changes, not just on the back end, on the customer success side, but keeping the Promise Makers in check to say, we need to think about this differently. If you want to do it right, this is how it works. And make the Promise Keepers be able to hold off, be able to focus, be able to go where they need to go to give those little moments of value.
Steve Watt [00:37:19]:
I agree. That was so central to his point. And I liked when you challenged him a little bit on time to value and you said, but this is a measure that analysts want to see, that customers want to see, that executives want to see time to value, time to value. And I liked his response. He said, well, it needn’t be time to the top line, total value of everything. It’s time to some value. And we’ve all seen those situations. It’s painful to see and it’s painful to be a part of where a company makes a big investment in a software suite of some kind or some other kind of solution, and a year later, they’re still an implementation.
Steve Watt [00:38:00]:
Not only have they not achieved value yet, but this can be very demoralizing across the firm. It can be so complex. And I love the way he breaks down that value delivery so that we get those early wins. As he said, it’s like eating an elephant one bite at a time. I think too often we’re trying to sell the whole elephant all at once and we’re trying to eat the whole elephant all at once. And as a buyer, seeing that value continuing to escalate and getting those small wins would be a lot more satisfying than having to hold the wolves at bay and say, oh, don’t worry, give us another six months, this is going to be great.
Heather Cole [00:38:44]:
Yeah. And we talked about the impact it has to the Promise Makers and the Promise Keepers. Part of that Promise Keeper team is not just CS, it’s P.S. in most cases, when you’re dealing with software for sure on the implementation side, and the big effort that they have to put in to bring the big value immediately. And thinking about that even differently is how do you level that out so that you have these extra resources and extra health over time to bring those moments of value to what’s most important to that customer. And the conversations obviously, are going to change. As he mentioned, for somebody that’s in a CSM role, going from a firefighter to somebody who is hopefully bringing value, like you said, there’s always going to be times you have to fight the fire, have difficult conversations, but it makes the job itself and the profession itself something that is much more aligned with business outcomes, having business conversations. And I would think it will help with turnover and it will help with customer retention, of course.
Steve Watt [00:39:48]:
Absolutely. I mean, it’s absolutely an elevation of the profession that he’s talking about, an elevation of the customer success profession that benefits the firm in terms of revenue, benefits the customer, but also benefits the individual. It creates a more satisfying career experience for people in those roles. And I think that is a critical thing not to lose sight on. This is not just about maximizing the revenue for the firm. It’s also about the human beings on both the buying side and the selling and the support side. And that jumped out at me. And another thing that really jumped out is this idea of taking the discipline that is common practice in sales, about having a next step for every deal, for every opportunity for every customer and bringing that into CS.
Steve Watt [00:40:35]:
Whereas, as he said from his many, many conversations with CS leaders, it’s absent, almost entirely absent. That discipline of where are we today? And what’s the next step is a really important part of this.
Heather Cole [00:40:51]:
Yeah. And it’s the mindset of if you are doing small pieces of value that you’re continuing down this journey. It’s not all that different from a sales cycle where you’re saying what’s next? Instead, you’re saying, what’s the next value I can bring as opposed to what’s the next thing I can sell? And it is a mindset shift, but I think it’s going to do wonders for the profession, it’s going to do wonders for customer success and customer experience overall.
Steve Watt [00:41:19]:
Absolutely. I think we all ought to be paying a lot of attention to what Mark’s talking about and what he’s doing. And I’m really glad he joined us today.
Heather Cole [00:41:27]:
Yeah. Great conversation.
[OUTRO]
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Steve Watt [00:41:36]:
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