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Josh Schachter 0:00
Hi everybody and welcome to this episode of [Un]churned. I’m Josh Schachter, founder and CEO of UpdateAI. And joining me today I’m very excited to introduce Jeremy Evans. Jeremy is the Senior Vice President of customer success and renewals at Zuora. Jeremy spent over a decade leading CS teams globally. He’s had several senior leadership executive roles at Publix and pre IPO companies, New Relic marine software others, and he lives out in Colorado with his family. Jeremy, thank you so much for being on this episode.

Jeremy Evans 0:40
Yeah, great spirit. Thanks a lot, Josh.

Josh Schachter 0:43
So I think you know, most folks out there I think in the SAS world, our listeners are familiar with Zora. You guys are powering more than 1000 companies around the world you’ve got major enterprise clients and then also a long tail of customers as well. Over 1200 employees tell us though I kind of hate you know, describing companies myself and and botching the descriptions. But tell us a little bit about about Zara and what you do at Zara.

Jeremy Evans 1:12
Yeah, the simple answer is, you know, as a society, we are buying less stuff we are, we are subscribing to things. So when you think about all the different machinations and things that need to happen when you subscribe, it’s not just that you, you know, agree to a subscription. But we also need to provision things, we need to make sure that you have your subscription and you want to cancel, you want to modify it. And Zorro really does all of that infrastructure for companies. So everybody from zoom to Caterpillar, we touch 1000s of different companies at different businesses all in different parts of their subscription journey. And we really focus in on making sure that that experience for the customer is the best that that company wants, and making sure that our software can provide that to them.

Josh Schachter 1:54
So you guys are a SASS company helping to build the infrastructure and foundation of SAS. Exactly, yep. Before we kind of get into some of the meat of your relationships with customers and building the team at Zuora. I want to get unchained. If you’ll allow me in this segment here, just get to know you a little bit. So I believe you live in Denver, is that correct?

Jeremy Evans 2:19
That’s right in the south of Denver, a town called Highlands Ranch.

Josh Schachter 2:22
And where were you from? Where you from originally?

Jeremy Evans 2:26
Originally, I grew up in Canada. So I came down to the Bay Area in about 2010. And I just got lucky I picked a startup that that did incredibly well. I got to have the whole journey of you know, the pre IPO portion raising funds, IPO and then stay for post IPO. So I’ve been in customer success for about a dozen years now.

Josh Schachter 2:44
Awesome, awesome. What’s something that would surprise people to know about you? Perhaps the folks that work underneath you at Zuora?

Jeremy Evans 2:55
work related are you talking non work related?

Josh Schachter 2:56
Oh, whatever, whatever is the best Golden Nugget man, whatever is going to be the most abstract or edge case here.

Jeremy Evans 3:04
Something we were just talking about before the podcasts that say my my bachelor party made the national news in Canada. Unfortunately, I woke up to my wife saying why are you on the front page of the national news for nothing nefarious just happened to be in a picture with a famous person in Canada. So it was an interesting thing that that happened to me. And yeah, I love scuba diving. That’s another big thing. It’s probably one of my most passionate things that I’m interested in. And yeah, I’d love to do it all over the world.

Josh Schachter 3:31
It would be a much better story, by the way, if it was for something nefarious that you’re bad at the national news in Canada. Exactly. Yeah. But that’s okay. At least it made the headlines. So then, on that topic, though, of a scuba eventually, yeah, you live out in Denver with your family, your wife and two kids. What’s one of your favorite pastimes to do their kids out there.

Jeremy Evans 3:53
With my kids, I’m actually teaching my son to ski. So that’s been a big focus for the last couple of weeks is we have an indoor ski hill here that he can actually learn to ski and next couple of weeks, we’ll get them up to Breckenridge or copper or one of the bigger ski hills. And really, he’s four by the way, so he’s just learning to ski. That’s, that’s going to be really fun for the next you know, 1020 years and the rest of our lives.

Josh Schachter 4:15
French fries and pizza. Where do you got to

Jeremy Evans 4:17
go? That’s exactly what we talked about. That’s all we talked about.

Josh Schachter 4:21
Yeah, exactly. Alright, let’s jump into let’s get into customer success renewals. Or maybe you can paint a picture for us first, before we get into some some specifics about the company or about your organization. What does How is how is your group constituted? What’s the makeup of it?

Jeremy Evans 4:40
Yeah, so my group focuses in on we run a value driven or outcome driven customer success team. So their main focus is making sure that customers are getting value out of our software. I have a couple other components of my teams where we focus in on things like our advisory groups. So zoar advisory groups, customer advisory groups, communications And then we also talk about renewals as well. So we have a combination of renewal specialists, as well as the overall sales team that conducts renewals as well.

Josh Schachter 5:10
So sales owns renewals, etc.

Jeremy Evans 5:12
Yeah, and that team tends to fluctuate throughout my career, sometimes it goes to one team, it kind of goes back and forth kind of ebbs and flows with the direction or the model. So ultimately, we have our sales, Team owning renewals, we’re looking at a couple different options to for the next year or three years, you know, how we structure the teams and who ultimately owns renewals? And I’ve seen it fluctuate up at a bunch of different companies and usually tends to change with the modeling and how are our sales teams are going to approach customers?

Josh Schachter 5:39
So that actually gets me to my next question, which is you have a story I would like you to tell, which is the history of customer success at Zara. You You had CES, it was taken away, it was brought back it was its Yo Yo, can you can you share with us? You know, what the deal is? What the What happened with customer success at Zuora?

Jeremy Evans 6:02
Yeah, sure thing. So we are on version three, I like to say of customer success. And a lot of companies kind of bounce back and forth between what version and what modeling who’s going to do what I always tell people, you know, this is the one job in the world. It’s like Baskin Robbins, you can call 31 companies and get 31 different answers to what customer success means and Resort at the time. You know, this is pre my involvement. But, you know, we had a sales leadership group that decided one day just came to the CSM and said, Hey, you all just became account managers wanted to go sell some products. And unfortunately, that led to a lot of really bad behavior, things that were getting sold that maybe customers didn’t need, they didn’t deploy. And also, we just removed the communication with our customers. So unless somebody wanted to buy something in store, it’s really challenging to talk to somebody and get somebody on the phone. So they weren’t looking at, you know, long term value for retaining customers. Long term growth, net retention is really about the point in time sales. And that did a lot of damage to the customer base, you know, we had some really big challenges showed up in our stock price, or NPS, our grocery net retentions, every single customer metric that we had, or that you could measure customers on satisfaction as well started to go down. And it really started to show up in our numbers that we took our eye off the ball on customer success.

Josh Schachter 7:19
Do you know do you recall what any of those numbers? I know you weren’t there at the time. But do you? Do you know what any of those numbers were at that low point for? For customer retention?

Jeremy Evans 7:28
Yeah, our NPS scores they went they went very negative. So I would say they were they were sub one, negative 40, which is not great for a SaaS company. That’s that’s very bad damage. And the other ones I’m, I can share a little bit about they were below 100% for gross retention. So that means that we were sorry, below 90% for gross retention. So we are actually losing every dollar we put into the customers a year later, we were actually 10%. Less in net retention also was around 100%. So it became a bit of a challenge from a company perspective, especially reporting back up to Wall Street that we you know, showing growth in our business became a challenge.

Josh Schachter 8:06
I mean, that’s that’s a precarious situation that you guys were in. How long did you guys go without the CS team? In that case?

Jeremy Evans 8:15
I think it was about a year, year and a half. And, you know, my involvement started. You know, we had a new CRO come in from Adobe. Fantastic gentleman, he told me I think he was on day four in his first week. And he kind of looked around and said, you know, we’re all the post sales teams, people talk to customers, and somebody told him, they don’t have those. And he told me he had a minor heart attack and immediately sort of trying to find somebody to start start up the customer success motion again. And that’s where I got involved. Okay, great.

Josh Schachter 8:42
So So you came on board to lead their customer success, motion. amazing opportunity to bring to bring the function back. What like, walk us through your steps walk us through the genesis of what happened from your first days at sore?

Jeremy Evans 8:58
Yeah, so I started day two of the pandemic lockin. So, you know, my onboarding, in my experience was very different. It actually was I was very fortunate because it was an interesting time to join a company, that’s for sure. You know, we started off by looking at, you know, what type of CES model do we want to have? Do we want these to be account management focus on in commercial aspects? Do we want to continue down a value driven outcome, format and framework? And then how do we want the customers to perceive that so I spent a lot of time talking to customers in my first, I would say 60 to 90 days understanding how they perceive Zuora? What were some of the gaps in our coverage and what they wanted to see long term and their relationship. And then we started to look at what are some of the focus areas for customer success. So we started to focus in on a value driven system, where we could look at having a overarching customer framework as well that touched every prospect of that customer journey. So whether they were a brand new lead into the system, they were about to sign a contract, they were doing implementation, the post sales environment, where we’re delivering value And then ultimately up to renewals, we wanted to make sure that we had a framework which we call journey to usership, which takes some of our expertise and subscriptions. And we apply that to how each of these businesses run. So we’ve spent a lot of time looking at the format and the way that we were going to approach customer success. Then we also started looking at things like our tooling, for example. So we did a huge evaluation across multiple platforms, ultimately ended up picking Gainsight. I’ve used that in a number of different companies, I’ve been a part of I removed those systems, I’ve built them in place as well. But ultimately, you know, it provided the best bang for the buck for us, and a lot of central place to track those customer engagements, especially health scoring, that was a big part. So can we identify which customers were at risk? And then how do we take action against those across Zorah. So I was also fortunate that I also had a lot of executive sponsorship into customers. So the way that we think about customers, and also the engagement, everyone from our Chief Product Officer, Chief Revenue Officer, you know, we had executive sponsorship programs that we ran across our executive committees, and that really helped to instill inside the company that we were a, we are a people first company, because we want to make sure that we have our people and the right people in the jobs to be able to be a customer first company. And we’ve seen a lot of really positive results over the last two and a half years, three years, which is really driven, you know, a lot more value into the customer base and helped us grow as a company.

Josh Schachter 11:26
That was that a movement that people first such that its customer first movement, or value scale? Was, was that a movement you had to create? Or was this just something that would became so apparent from that? One and a half two year gap from CES? That that executives knew that they needed to change the culture, and it really then became just customer? first customer? First customer first?

Jeremy Evans 11:52
Yeah, I think it was part of the lessons learned that they had from that, that, you know, negative outcome over the last couple of years before we started our customer success team, again, was to make sure that, you know, we you know, in our CEO is very frank about this, you know, never again, forget customer success. So when I even when I went for interviews with him, and I, you know, I talked to him about like, how he thinks about customer success, I generally think about, there’s two types of companies in the world, there’s the ones that say they need customer success, and there’s the ones that say they should have customer success. The shoulds are really about, you know, maybe somebody told them, they need customer success at this stage of their company, it would be a nice to have, it’s not really ingrained and instilled into the brand of the company. And then you have the needs. And when I meet a person that that says they need customer success, I don’t have to spend, you know, half my day justifying my team’s existence or what they’re doing on a day to day basis, the needs. As far as companies, they understand the value that Customer Success provides an assassin environment. And that has been really instilled from our CEO on down that we don’t want to go back to those old days. And we want to make sure that our customers have access to somebody that’s going to be working to to make sure that they’re getting the most out of their investment in Zuora.

Josh Schachter 13:03
I mean, that’s sort of a company you want to work for if you’re working in CES, right is the company that needs it. Yeah. Yeah. Not not the one that’s just kind of hearing it in the in the CEO forums. Oh, yeah, we should we should really look into this. And, you know, keep up with the Joneses. Exactly. What were some of the the outputs and outcomes of that work? When you first joined? You know, over the first couple of years, you said, you guys were all the way down to like a negative 40. On your NPS? Can you share any of the stats and, you know, impact that CS was able to bring back?

Jeremy Evans 13:37
Yeah, it was a big, a big success story. And I would say it’s a collaborative effort. So CSMs engagement with customers is one thing. And I think that that moves the needle quite a bit. Right now we’re, we’re hovering around zero. So we’ve made a big improvement over the last two and a half years, anybody that’s tried to move NPS numbers by 40 points. I mean, that’s a pretty monumental feat for any business. But it wasn’t just customer success. It was a focus on listening to our customers through our NPS feedback, Outreach and Engagement at the executive level, as well as the operational teams for all of our customers, making sure that we understood where they sit today and what their goals were and where they wanted to take the product. Even if I go back to those first days, in the pandemic, we had a program we started immediately after I got there called bear hug, which was we have a lot of rich financial data around, you know, we can aggregate together and see directionally where people are going. So as people were getting very nervous at the start of the pandemic. I know, this is a long time ago now. But you know, there was a lot of uncertainty at that point. So we went out with a positive outreach campaign. Here’s what we see in the marketplace. Here’s what we see subscription businesses doing. And that helped reassure a lot of our customers that not only was everything going to be, you know, reasonably okay. Wasn’t from a health perspective. But certainly from a business standpoint, we saw that we could see businesses were improving, some were improving, some are staying static. And then there of course, were some that were not doing well. So that data also provided some reassurance to our customers. And it gave us an opportunity to also introduce the customer success motion to a lot of our top customers and make sure that they understood that they had new people involved in their accounts that were focused on outcomes and value for them, and making sure that they got what they needed out of the software.

Josh Schachter 15:16
And I believe if I’m doing my homework correctly, that that you also shoveled out some bad deals, some customers that maybe you were going to be churn candidates, no matter what, can you talk a little bit about what that looked like?

Jeremy Evans 15:28
Yeah, from a trade perspective, I mean, you know, we spent a bunch of time evaluating, we also looked at evaluating the number of deals that we had in the pipeline, and what was going to renew for the rest of the year, we started to implement a lot of process around our renewals. So instead of looking at like what was going to happen in the next month, we extended that way, way up to now we have a rolling 12 month forecast where I can see at any point during the year, you know, what is our turn look like next year, we just completed actually a full bottoms up forecast that we do. So when I get a number from our finance team, this is what we want your end to be next year, we match that up with where we see all these customers and kind of their health, so I can understand exactly where we’re gonna land next year. So a lot of that was putting in process, we also look, you know, six and nine months out every quarter, we force the teams to get together and talk about these customers, even though those renewals maybe just happened three months ago. And then back to the churn question, you know, yeah, there was a lot of a lot of main, I wouldn’t say necessarily bad deals. But, you know, customers that weren’t implemented customers that were using the software correctly, maybe it wasn’t a good fit, maybe they had a product launch that didn’t work out for them. So in those first six months, we really started to look at are these good customers? Are we really focusing on where our core benefit is going to be? And if it wasn’t a good match, then you know, we we took that opportunity in those first six months to kind of get our house in order and make sure that we had a really solid foundation on renewals. And since that point, it’s been the bedrock of how the company has grown. So that’s, that’s been a big factor.

Josh Schachter 16:56
I’m interested in hearing you say that you have a general forecast for your churn 12 months out, that’s really impressive. And you’re doing that from bottoms up right from the ground ground level from the actual CSM. IC individual contributor level, I would imagine. You kind of mentioned a little bit, your team congregates and talks about customers. But like, what does that program look like? Operationally? How do you execute on that?

Jeremy Evans 17:21
Yeah, great question. So we pull an entire every time every every year about this time, we pull a full year’s forecast, and we look at what does next year gonna look like. So I get a number from finance or CFO says I need to learn to be this number. And I say Okay, that’s great. Let me go back and figure out,

Josh Schachter 17:37
I’m gonna I’m gonna I’m gonna interrupt you there for one second, because I want to I want to break this apart here. So So CFO, what, sorry, what’s your CFO is in first name? Todd. Todd. Okay. So Todd comes to Jeremy says, Hey, I need trained to be x. Right? Like, Todd, you’re a CFO, you’re not a CS. But like, where’s Todd getting these benchmarks? What’s his rubric or heuristics for coming up with that? That benchmark?

Jeremy Evans 17:58
Great question. I mean, a lot of it’s based on, you know, historical run rates, it also is where we want to grow as a company. So as we present our metrics to Wall Street, want to make sure that we’re in line with what the expectations are for where businesses are going to grow. So that’s what drives the financial aspect of you know, what number we’re going to come up for, from a finance standpoint. Now, when I get back down to, you know, boots on the ground, that number might be drastically different. The good news is over the last two, three years, it hasn’t been that different. And, you know, we spend a lot of time going through each and every deal with every customer. And this is a company wide focus. So we look at our product telemetry, we understand are those customers healthy or not? And what are the reasons behind that, and it also gives us a really good runbook to be able to run, what we call retain and grow strategies against these customers to be able to understand if they are in trouble, how are we going to be able to retain that customer and then ultimately have them grow. So it gives us a good roadmap for next year as to where we want to focus. And it really is the devils in the details, there’s no easy way to do this, you got to get into the data, you got to understand your customers, you got to pull the teams together to make sure that everybody’s opinion is heard, both from a sales perspective, go to market teams ces product, we want to make sure that we get a holistic picture of that customer so that we can be accurate with our representation back to find it and ultimately Wall Street to

Josh Schachter 19:14
and what tools are you using? You mentioned Gainsight, but in order to come up with that, that that view that collect telemetry and product information, and maybe some qualitative analysis as well, what are the different toolings that you’re applying to come up with that assessment? Yeah,

Jeremy Evans 19:32
we use a four point scale we look at, you know, customers that we know are are churning, maybe, you know, our software is actually pretty sticky. So it takes some customers a little bit of time to get off of our products. So they may be at that for a year or more. So that’s one classification that we look at low, medium and high risk, high risk being you know, we have a major problem or that the customer has identified that they’re shopping around or that you know, we’re not we’re not stable. So we use that classification system. We pull data from We have a five point health scoring system and get inside Gainsight. A couple of those scores are automated, but we look at things like business health, we look at the technical deployment. Is there a product fit? How’s our executive sponsorship into that customer? So do we have the right executives engaged? And then lastly, the commercials? are they consuming were a subscription platform subscription business? are they consuming the subscription portion? Or are they leveraging the products from everything they have in their contract is the contract sound. So with that health scoring, we can actually identify the risk factors, you know, are they red, yellow, or green in each of those categories. Then we also use sentiment from the CSMs, from our AES product teams, our Global Services teams, anybody who interacts with that customer, are they in a good sound footprint. So some of it is hard data we use from telemetry or products, some comes from Gainsight. And then we also have soft metrics that we pull in data from various human sources as well.

Josh Schachter 20:55
Self metrics, and various human sources, aka anecdotal feedback from a roundtable of people that have interacted with that customer saying, Here’s what I’ve heard. This is this is my belief and my assessment on their health.

Jeremy Evans 21:07
Yep, that’s exactly it. And then we sit down and we go through every book of business, we talk about it, you know, over zoom, or if they’re local teams, but we do this across the globe, everybody from our teams in Japan, Australia, North America, Europe, and then our teams at Chennai, India as well.

Josh Schachter 21:24
The last topic I want to talk to you about is one that I know is very meaningful to you, is very meaningful to me. It’s very underserved, is the operative word here, which is diversity and inclusion. And I know that yeah, it’s a passion of yours. You’ve taken strides to build out that culture. Within your team. Its aura, can you talk a little bit about that, like what you what you’re most proud of as far as diversity and inclusion on your team?

Jeremy Evans 21:51
Yeah, absolutely. I mean, you know, prior to joining Zara, I worked for a small startup called intello, which was a piece of software that helped companies with their DNI strategy. So it helped them identify candidates on LinkedIn or other sources, you know, that would help them improve those diversity metrics that they’re after. That’s where I became a big proponent of it. It’s always been something that I focused in my career. And it’s one of the things that we also focus on absorb. So because we were building this team from scratch, we had an opportunity to also look at, you know, how did we want to build that. And when I think about my teams, I want them to reflect and be part of the way that I want our company to be perceived in the world. So one of the big focuses that we always focus on for our DNI strategy is the pipeline. A lot of times the, it’s not because people lack the effort or the emphasis on that they want to have a DNI strategy that succeeds, but they’re not setting themselves up for success. So we make sure that that funnel is filled with candidates that are going to allow us to hit our DNI goals down at the later stages. So number one, focus making sure that we have a really strong pipeline so that we get down to two or three candidates, when we start making decisions, that we have a higher propensity to be able to have somebody that is, you know, from an underrepresented community, or is part of our diversity inclusion strategy. And we’ve been pretty successful with it across the board for a company, we also look at promoting people from within. So if you look at my management team, huge makeup that is very gender based. So we have a lot of female directors, managers, heads of CES across the globe. And then we also look at, you know, underrepresented communities as well for promotion. So we try and always emphasize that in the recruiting process that at the end result, we want to make sure that we have a good pipeline so that we can get to those goals that we have. And again, we took the team from zero, we have roughly around a 40 50% DNI strategy across the team, and also a lot of gender parity across my team as well.

Josh Schachter 23:51
That’s great. I love love hearing that. Jeremy, this was a great conversation. awesome to hear the story about how you help rebuild, I should say the CES. Org at Zuora. Really, really sounds like an amazing opportunity for you for the team there. And you guys are are off to the races. Thank you so much for being on the program.

Jeremy Evans 24:16
Sounds great. Thanks, Josh. I really appreciate it.