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Transcription
Mike: And now that you started recording, I want to say for the record, I didn’t offer to be a TikTok Star I just think it’s part of my destiny
MK: And what are you doing to manifest this destiny?
Mike: Talking to you about it.
MK: Well, everybody, thank you for joining us for another episode of office hours. I am so stoked for today’s guest. Mike Redbord, who incidentally was my former boss. So I’m going to mind my PS and QS keeps myself nice and tight here. it, Mike, every episode that we do have office hours, The first thing we do is do intros of your five to nine, not just your nine to five.
And before we dialed into today’s call, you told me all about the shelf right over your shoulder, which I thought was just like a really cool industrial chic shelf, but there’s so much more to what meets the eye of that shelf.
Mike: So I’ve been reading in 2020 as our lives change about, you know, the way work from home is changed.
And this, as I learned is called and identity shelf. It is a shelf of objects that represent your identity. This one is organic. We source from, you know, various places and like, you know, artisanally crafted by moi. but as it turns out, you can buy identity shelves from people that will like talk to you, learn about you and both of their identity shelf.
So for me, you know, a cat owner, I got married this year. and I wish I was traveling a lot more. That’s what my identity assumptions about me is.
MK: So, but I’ll be like fabrication of the identity shelf. Is it the like Heights of the shelf, the distances? Like what, what specifically are they manufacturing for you?
Do you know?
Mike: I think they just like learn about you and then buy you objects that represent your personality. And then you like, it’s like identity. It’s like identity bookshelves as zoom backgrounds have emerged.
MK: Really they’re just going to home goods and they’re just selecting items for like $15 in charging you through the nose for it.
Cool. Sweet.
Mike: I mean the bargain bin at home goods is like a really strong place to start. If, if anybody listening really wants to build a home for themselves. Yeah.
MK: Solid, solid, awesome. Like, okay. So that’s your five to nine? What are you up to in your nine to five?
Mike: Yeah. So, I, you know, I love scaling companies, especially ones that really love their customers.
And so I spent a decade at HubSpot with you in a former life doing some of that and now have started a much smaller company, as companies start trying to do the same and really perfect the art of account management for scaling subscription businesses. So yeah, we got this company called SasS works where we’re trying to do that.
And through that journey, you know, we’re, we’re learning a lot. So the same things. I think y’all at Alyce are learning about personal over personalized, and you know, when the right type of touch really matters to get both the customer experience and the business outcomes you want. So that’s the middle of the day
MK: You’ve hit on one of the most important pieces of the puzzle.
When it comes to companies who are like scratching their head, they’re contemplate, I think we’re already being personal and we spend a lot of time getting them to understand that there is a big stark difference between personalization and being personalized and being. Personal. How does SasS works hink about the differentiation between the two?
Mike: Yeah, I think we share a lot with the way you guys think just by happenstance. it really evolved organically for us to do for you, but it turns out there’s a lot in common. you know, I, I think when you’re running a scaling subscription business, you know, and you’re, you’re an early team member on a founding team, or you’re a founder, you know, all those early customers so intimately.
And those, those relationships tend to be deeply personal. You know, those initial customers or people get first degree connections with the way you service them and help them through the experience of using your product is, is deeply personal in a variety of ways. That word personal means a lot in that context.
As you scale up though, one day you wake up and, you know, you’ve got 10 account managers, 20 account managers, and a bunch of process. And now you’re sending Watts. Emails or who knows what, and you’ve gone from personal to something else. Right. And I think our observation is that along the way, things can get lost in the, in the pursuit of scale efficiency and growth.
You know, you sometimes lose what made you, you and reclaiming that is through the way you manage your accounts and work with your customers and something we’re trying to help scale and subscription businesses with. And so we, we aim to kind of just. Harness that kernel of personal, that helped you grow the business and, you know, do that at scale.
MK: It’s interesting that, that you think through this as a, it’s just a process of maturation that every company has to go through and going back to your roots and understanding what made you successful in the first place is actually right. It’s going to help you grow and scale from here. And that like trigger words, scale, especially in the startup world is like, Oh, the scale, how do we manage the scale, how to manage this scale?
How, how does SasS works think about like,regressing companies back to understand what differentiated in the beginning of their existence and help them use that as their scale lever.
Mike: Hmm. So I think when you, when you work with any company and you adopt an owner mindset, right, you have to meet the company where it is.
You can’t just be sort of philosophical. And, you know, say, Oh, you ought to do this. There’s a business reality that needs to happen. And when you put on an owner mindset, you adopt the incentives of the owner and you sort of need to mind-meld with the business. So it’s a process because if a business is in a place where, you know, they really need to work on like up-sale as a part of net revenue retention to improve TLV so they can raise the next round and like, okay, that’s what must get done.
And the question is, can we just do that? Can we run a play? In there to improve upsell and TLV that as a customer actually feels personal and good, or do you just, you know, begin like bombarding folks with messaging and get your outcome that way? Cause there’s, there’s more than one ways to get the same goal.
And I think the, the mission that we’re on and that I think is, you know, really personal effect to me is we want to do it in a way that actually feels good as a customer. cause that’s just the right thing to do. And as a by-product of that, the downstream effects of that tend to be positive on the long run.
You produce more customer advocacy or things like NPS go up. And the more personal you can be, the more relationships you develop. And that just has a very durable kind of long arc of benefit to it. Mm. And the compounding effect of that is obviously the flywheel effect as well, too, as you’re creating those experiences, you’re creating something that is repeatable for those to advocate on behalf of your business, generate new business.
You know, et cetera, et cetera.
MK: Yep. Got it. Okay. So part of what now we’re circling on is understanding what processes are going to help a business scale, the behaviors that got them into their initial growth phase and using those, process and behaviors is really just about people management, process management and using, holding people accountable to those original core tenants of what made your business successful in the first place.
So as you’re thinking about coaching and building the business that they’re talking to, how do you help them first off identify the behaviors that they need to be focused on, and then identify the moments to deploy those behaviors, to be personal, and then be personalized?
Mike: Cool. I love this question because it enables us to talk in terms of structure and framework and, I’m the kind of person that enjoys that.
MK: If there’s one thing I know about Mike Redbord it’s that two by two framework. That’s where we’re at.
Mike: Oh, I love a good frame work. So I think when you think about, you know, if you’re a founder or an operator, And you’re, and you’re looking to, you know, scale a business in a way that’s more personal and produces the kind of outcomes you were just talking about in terms of customer love and flywheel and advocacy and all that.
I think, you know, part of what probably got you to where you are, is having a good understanding of, okay. Which accounts are the ones that I should really spend time with who should I prioritize? And when you think about prioritization, probably think about it on two different axes. One is okay, who are the accounts that are really in need of my help to get value out of my service.
Who’s healthy and who’s not. And the ones that are healthy, you probably don’t need to go and like, you know, redo their implementation or re-explain to them, how everything works. Cause like they’re getting good value too. They’ve been successful in the past. Those that are unhealthy. They’re the ones that need some remediation.
You just sit down with them and perhaps go all the way back to the beginning in terms of value prop, or perhaps they just have a couple of support tickets that need a little push to, to get done and kind of put a bow on the thing. So I like to think in terms of prioritization first, in terms of account health, those are your customers and you need to serve them, make them happy.
And some of them need that more than others. So on one axis, let’s think about health in terms of kind of low health and high health. And then on the other axis, perhaps on the vertical axis, right? For the health and the horizontal, we can think on the vertical, you can think about, okay, what is going to help grow my business.
And what’s going to help us stay in business for longer so we can make more successful customers down the road. So on this, I think you’d apply a similar kind of framework. Like what is the like level of opportunity. In this account, is this an account that if it goes well, could become a case study that gets me 10 more customers, right?
Is this an account that, is a really, really big company that I can land and expand with? Is this an account that bought a little bit and running a pilot and is going to buy a lot more later so we can combine the concepts on the customer health and the horizontal of, you know, are, is this a, a customer that’s getting the value that they bargained for?
We can combine that with a little bit of capitalism on the vertical. Of is this an account that has growth, potential and leverageable potential in terms of case study, land and expand all that. So I like to think of it first health and then account potential. And then you kind of get four different quadrants that we could, we could dive into individually.
MK: I like that. And I think a lot of revenue generating businesses already understand at least some of their markers of, of opportunity, but one that I think most customers need a little bit more help with is account health and some of the markers of account health. so you mentioned a few there’s, including net promoter score, even notice like how many open support tickets you have as well, too.
How might you coach a business? Through identifying account health score, and keeping that as simplistic and scalable as possible.
Mike: Yeah. I think keeping it simple is actually the key here. you know, you can spend a lot of time building, neural nets and doing lots of cool stuff with really advanced math, but if you can operationalize it and use it and the people in your business don’t understand it, it’s not going to get adopted.
And then you’ve thrown a lot of math at a problem that you didn’t actually solve from a business standpoint. So when it comes to account health, I think for. Especially, you know, smaller subscription businesses, you know, under a hundred million in ARR say typically have, you know, a reasonably tight value prop that you’ve managed to scale from product market fit into a, whatever it is, 30, 50, $75 million business.
And that reasonably tight value proposition probably has reasonably few. Leading indicators of whether somebody’s seeing success with it or not. And so when it comes to building a health score, I really like to keep it simple. You need to think very kind of reductionistly- if that’s a word – and say, all right, this is the value prop.
These are the things that folks will do. These are the things folks would do along the way. And then. Yeah, you don’t need to use the world’s most complicated math to figure it out. You don’t necessarily need to use machine learning and AI can use a little bit of stats or just, you know, a little bit of like, looking at charts of distributions of customers over time, based off of a couple of simple metrics.
and I think if you over-complicate it that much more than that for your first kind of, customer health, you’re actually not on the path of truth and justice, cause you’re gonna end up. Something so complicated that it’s going to be tricky to edit it over time, and it’s going to be tricky for your team to actually use it, believe in it and deploy it with their customers.
MK: Hm. Interesting. I’m tempted to think too, as a marketer that I would also like to hear the same level of account health when it comes to pre-sale and post-sale, but that could be a different, that can be a different episode of office hours a little later on.
So as I’m hearing you kind of think through the quadrants, and I’m thinking about, you know, high opportunity, low health, I’m thinking about high opportunity, sorry. ow opportunity, high health.
Now this is where we’re starting to get to that phase of like personalization and personal. and there’s also another angle here to think about who owns what in the relationship at what given phase. So can you walk us through that as well?
Mike: Yeah. So let me start with, I guess, a statement on personal versus personalized, right?
So if we could, right. If we had the capability and the, you know, the frankly, the margin to do it, we would want to be personal with every one of our customers all the time, clearly that’s the best state for our customer experience standpoint, the spectrum of fully personal, through personalized, to never talking to your customers, right?
That’s a function forced by the economic of business where there’s just, you know, there’s certain kind of goals that we want to hit and benchmarks we want to achieve in order to be successful. So. If you had your druthers, you’d be personal with every customer. The question is, how do you use some framework like this based off of health and opportunity to choose where that personal touch is going to have the highest leverage for your customers and for your business, because you need to balance both.
And so. And I think about this and terms to apply this framework and like answer your question of where on ITB personal. Like it’s very easy to be like, Oh, everywhere. I think that’s too hard. So you do need to prioritize and that’s what we’re going to do. So if you have this kind of two by two, right with low opportunity, high opportunity low health high health.
You get those four quadrants, right? Well, when high of, of either one and the places that are really, I think, perhaps easiest to answer are. Those customers who are in, you know, somewhere like low health and low opportunity. It’s not an account. That’s going to grow a ton, but they’re not seeing a ton of success with you.
For whatever reason. That’s a place where if you apply personal touch, which is going to be expensive. And therefore at the expense of another account, you’re not going to get an incredible amount of leverage out of it. Right? So if you have an account that’s low health doesn’t pay you that much, and doesn’t have a lot of opportunity, that’s probably a place to be more personalized than personal, unless you have the bandwidth to be personal with more customers, just because there’s not that much fruit on the vine there, nor is it going to grow in terms of account opportunity.
That’s kind of that lower left quadrant of low and Whoa. Right? If you have somebody who similarly is, you know, really high health, so of kind of one to the right on this, but low opportunity, right? So there, they bought something they’re very happy with it and that might be it, right? Maybe they’re a small business and they’re, they’re experiencing value from you, but your, the way your price scaling works, the way your price book works, the way your skews work, there’s just not going to be something else for them to buy.
I think that’s actually another place where being personal might not have as much like. Either for the customer to feel good, but they certainly don’t need it. They’re already getting good value and definitely not for your business because there’s no fruit on the vine there. So the places where it gets interesting, and I think applying a personal touch become really, I think potentially a leverageable opportunity and a place where it’s worth spending all the time, money, and effort to do so is when you have folks that are in the high account opportunity kind of bucket on the, on the top end of this little two by two, right?
And say are high opportunity, but low health. This is somebody where maybe you sold into a division of a big global company. You’re hoping are betting on landing and expanding that. but for whatever reason, things are not going well. Right. And they’re in the low health kind of bucket, even though you know, that there’s fruit on the vine from an opportunity standpoint.
So the question there is how can we invest the calories necessary by pulling out all the stops? Being as personal as we can. And trying to get that account to the point where it’s high health, high opportunity, and you’re starting to realize sort of the fruits of your labor. I’ll keep using the fruit tree analogy here, and you’re starting to land and expand.
You’re doing the thing that you thought you would do at the beginning of the relationship at the outset there. So I think that low health and high opportunity is a really interesting place to invest in your customer and be more personal. And then similarly, the high health, a high opportunity in the far upper right.
Of this two by two. I think that’s, that’s pretty interesting as well. Those are going to be your case studies. Those are going to be, you know, sources of referrals and advocacy. They’re going to have, you know, more usage due to the amount of opportunity that’s in there. And they’re going to be taking advantage of that morning and their high health.
So they’re happy with what they’ve got and they’re high opportunity night, which means that you’re either getting a lot for them today, or just a lot left to what left to grow. I think those are also really interesting accounts to just push more, pull out all the stops and do whatever you can to, to make them happy.
Keep them happy and advance the relationship. Hmm.
MK: So of these four quadrants, as I’m listening to you speak to this, I’m curious, just based on some of the word choice you’ve you’ve used, which one is one of these quadrants that has been the most under utilized by businesses and the most underserved by businesses?
Mike: Hmm.
MK: Based on the way you phrase some things. I have a gut instinct about which one, but yeah, I’d love to hear your thoughts.
Mike: I think that the, the low health high opportunity bucket, you know, is a bucket that is actually quite generally pretty well-served today because you have an incentive structure in a business where if you’re a sales rep and you’re acquiring a subscription, You know, customer that you know is a lot of opportunity.
The sales rep will tend to create back pressure within the business, on the CS team or the service team or the product team to deliver on that opportunity. So I actually think that quadrant’s reasonably well-served because salespeople are really, really good at this and they’ll create the pressure dynamics necessary to serve the customer.
and so I actually think that upper left question is pretty well-served in terms of underserved. You know, I, I think, what you thought, I sounded like, but I actually think the, the, the it’s the low account opportunity, kind of across the board that tends to be relatively underserved. And I think that’s a place where as a customer, right.
Like, if you’re a small customer, you sometimes don’t feel like customer number one, you’ve you recognize that you’re a small customer and you get underserved. And that really becomes a problem when you’re getting low value and your health is low. So I think that the most underserved is probably actually that lower left quadrant that I addressed first because it’s quote unquote easiest from the business perspective to kind of just put it in a box and say, look, this is, there’s just not a lot of, a lot of goodness in here.
We’re just gonna, you know, kind of make this one go away.
MK: Got it. That was the quadrant that I thought was going to be the most underserved, by the way, just based on your phrasing. I’m also super curious to hear as well, too. So the low opportunity high health, like right there, I think that there is some low hanging fruit for businesses to be able to, scope out other opportunities.
And I will say, one thing that really stood out to me as you were. Talking through this, is that like the way that a product could be priced or the way that a product is actually built can impact the amount of opportunity or the amount of, you know, growth potential within that account. but I’m curious to hear your thoughts, you know, how could a business actually versus self identify of like, what, where have we exhausted ourselves?
And then how can a business actually understand, like, actually there’s a different perception of opportunity that we have here, and that could be.
Bumping it up to the higher tier account, case studies, flywheel effect, all that good stuff.
Mike: Yeah. I think pricing and packaging and the way you go to market, the combination of those three muscle groups of the business have a huge kind of, huge impact on this account opportunity thing, because let’s just be honest.
If you sell one product, you sell one skew at one price, that’s it for? It was always, it’s like a hundred bucks a month for forever. Right? Then there’s just this cop, this whole concept of account opportunity. It just rings a little hollow because you’re thinking yourself, well, I already sold everything I’m going to sell.
So if you know, there are businesses out there that are very successful. The point of the strategy I’m selling, you know, one product at one price. But this framework that we’re talking about probably applies as well to them because there’s just not going to be a concept of, you know, accounts that grow 10 X, right?
Like this just isn’t going to happen because your pricing. The way you price your products, your packaging, the way you chop it up into different additions and position, different positions, different groups against each other. Like those just don’t afford, enough kind of, like opportunity in the account to actually.
Like invest the time and realize, you know, the, the opportunities that are out there. So I think if you have, you know, value based pricing, where your price grows with your customer over time, that tends to be a good way to incentivize yourself, to look at accounts. Potentially having opportunity that you could go after if you have multiple skews and you’re able to figure out, okay, this skew is for this persona.
The skew is for this persona, this solves this problem. You’re able to break them up in a way that is simple, digestible leaves room for some movement between skews. I think that’s a really nice way to also create some, You know, kind of account opportunities. Cause if you don’t have those mechanisms, then the only opportunity you really have is through like advocacy and referrals.
And that can be great for certain businesses, but especially for a lot of B2B businesses, that is going to be a piece of the strategy, but not the entirety of the strategy. We’re not all going to be Dropbox.
MK: Yes. Agreed. And I think it’s really interesting for businesses too. If you find yourself with a plethora of low opportunity, high health accounts, would you say that that’s a signal for re-evaluating any of the performance you talked about go to market strategy, your pricing, packaging, and your product as well too.
Mike: I think that’s a really, really good point. If you’re, if you’re doing a terrifically good job at bringing in customers kind of consuming a hundred percent of, the potential account value upfront, and then you’re also really good at making them healthy. Like, congratulations, you’re running a good durable business, but what are the pedals that you could push a little harder either on the acquisition side, expand your ICP a little bit, like push that somewhat so that perhaps there are some customers that are not seeing as much health and, you know, but you get a bite at the Apple and a chance to make them healthy because you’re now going faster.
Or how can you re how can you build more products? You have more stuff to sell these customers that are so happy. And it’s an awesome point that will all right quadrant. It’s actually a bit of a signal to the business that, they could be going faster in a number of different ways.
MK: Hmm, good impress the old boss. I’m cool with that. like, okay, so you’re blowing my mind in so many different ways, as we’re thinking about, you know, 2021 forecasting moving up ahead, starting to look more closely at this. I’m seeing marketers sitting at such an important. Place amongst all of this. Now, as we’re watching marketing, moving, moving, moving further and deeper into the customer experience.
Post-sale customer marketing, starting to become a much more interesting component of demand generation from within, you know, where do marketers find themselves today playing a role in all of this one-to-one versus one to many personalization versus personal.
Mike: Yeah. I mean, everything we’ve been talking about so far touches on all the commercial elements of the business and product too.
Right? So like into the mix, we’re throwing sales, throwing CS. We don’t support product like the whole thing, but I think this is the reality about the way companies tend to come together and the different skills we each bring to the table, marketers are going to be the architects of this customer experience, right?
The CS folks are going to do great work. In some regards, but they’re going to, they’re going to force, limit themselves to a certain kind of patch, same thing in sales. They’re going to be more focused up front CS are going to be more focused on the life cycle. Marketers have this unique opportunity and I think often are uniquely skilled in the way they think to actually architect whole thing together.
And I think as a marketer, you should be asking yourself, how can I produce a better end to end. Customer prospect, the whole damn thing experience, right. And that’s going to involve getting your arms around different pieces of this. And I think marketers that do that are the marketers that in the next decade are really going to sell.
They’re going to use me Xcel. They’re going to be the architects of the way their businesses. Succeed. So part of that means customer marketing. and I think you just need to be judicious in the way you handle customers as a marketer, when you handle prospects for better or for worse, you know, you are allowed to have some broken experiences.
You’re allowed to break a couple eggs on the way to make an omelet. You just don’t get to do that when you do customer marketing, like they’re already up. Customer, you can’t have a funnel that’s really inefficient. You have to produce great experiences every time. But I think really cool for marketers are thinking about that already.
And I think they’re architecting, great antenna experiences. And I think they work really well with their peers at the table in sales, CS support and elsewhere, because they can see end to end. And that’s like a thing that really uniquely qualified to do.
MK: So well-put Mike. I want to thank you so much for your contributions today.
So TLDR, personalization and personal are two very important ingredients to be able to deliver an end to end customer experience. When you look at delivering personalization, you’re want to be looking at. The low health opportunity and the lowest low health of an account and the low opportunity of an account, but also keeping tabs on what opportunities could exist for you to differentiate yourself with the go-to market product strategy and or pricing strategy. As you’re looking as well to get more personnel, you want to look at your high opportunity, low health accounts to get as hands on as possible with them.
And also you want to be looking at your high opportunity, high health accounts, because that becomes your flywheel compounding effect to grow and scale your business.
Awesome. Mike, Hey, you know what TLDR, that’s the, where I’m at right here. Thank you so much for joining me today on office hours. If folks want to learn from you some more, if they want to spend more time picking your brain or build a couple of two by two frameworks with you, where can they reach out to you?
How can they find you?
Mike: I’m a marketer by trade. So, you know, LinkedIn Twitter that works, or just send me an email because in some ways old school’s good. mike@sasworks.com.
MK: Awesome. Thank you again so much for joining us on this episode of office hours. We’ll pick your brain, especially when it comes to pricing and packaging.
I think there’s a cool episode on the horizon about that.
That’d be fun.
