BLOG

Josh Schachter:

Hey, everybody, and welcome to this episode of Unchurned. I’m really excited to be here today. I’m Josh Schachter, by the way, founder and CEO of UpdateAI. And I’m here with Ed Powers. Ed is a principal consultant at service excellence. where they help improve the performance of subscription SaaS based companies. Ed has a lot of experience at leadership levels working with customer facing groups and has been an inspiration to, the building of our own product at UpdateAI. Ed, thank you so much for being on the show. Great to be with you. Absolutely. So let’s jump right in, and I wanna talk about something that I know is is very kind of true to your heart, which is the psychology behind, you know, working with customers. I I know you you’ve passed the articles in the past that are just about behavioral triggers and and about the psyche. And So let’s start there. How how do our brains make decisions when we’re thinking about what products to buy, what products to keep, what products to churn, and let go,

Ed Powers:

and then let’s and then let’s dive in from that. Yeah. You know, and and the reason I I look at this and, the reason I’m curious about it, Josh, is you know, I spent a number of years in sales and then going over an operations and customer success. You know, it struck me that it’s all about right? It’s all about, the initial decision, to purchase a solution to solve a problem. And then the next decision, the next big one is do I renew or do I cancel? Do I buy less? Or do I buy more? And so the at the end of the day, it’s all about those decisions. So the psychology, I find really interesting. And, I’ve been studying that for about the last 10 years or so. Just trying to understand how to how do brains work? How do they tick? And individually and collectively, because as we know in B2B, right? It’s not just one person. There’s usually a group of people that come together make a decision. So how exactly does that work? What are the factors that go into that? What are the criteria? What are the dynamics that, that gone. It’s not always logical and rational. It’s, it’s actually more emotional in how that works. So, in my the more we can

Josh Schachter:

influence that, and that’s what we’re after is how do we influence the decisions that we want our customers to make. So so when you talk to your clients and you’re advising them on this, what are some of your recommendations? Like, what are the practices that you’re preaching, to get to that understanding of how the brain works? Well, I always think it’s, it’s,

Ed Powers:

good to walk through what is the process, right? So starting with, and just beginning with, customer success, right? Just thinking about that, that point in time where an account makes a decision, we’re gonna buy UpdateAI. Right? Let’s just start with that. We’re gonna buy this thing. What happens at that point in time? Well, you have a group of people who have a perception who have a set of expectations about an outcome, right? You’ve been talking to them, you’ve been selling to them, you’ve been talking about the value and the benefits and what could that, that future state look like? Well, as soon as they make that decision, whether they have expressed it or it’s implicit, they each one of those individuals in that group has an expectation about an outcome. what’s typically, an oversight by most people I work with, most accounts, is that, they don’t really get that clarified. It turns out that all of our perceptions or evaluations, are always compared to expectations. Right? We always, we always know, you know, you gotta manage expectations. Well, what does that mean? And why is that important? Well, subconsciously, anytime we make a decision, whether we state it or it’s implicit, there’s an expectation there. And those in the very beginning, if you’re talking about something that’s brand new, never worked with UpdateAI before, you know, have no idea what this is, have some vague notions. those expectations are all over the map, right? And if I’m a customer success operation, I wanna know, how does that customer actually define value? What are what are those expectations? And guess what? It’s gonna vary by everybody that made that decision. They all view it from a different perspective.

Josh Schachter:

How often do you see how often do you see that that companies just expect that the customer knows has the right expectation because, like, oh, they came they came in through the sales team. They came in through the growth marketing funnel. They saw the copy on the website. They signed up. They we they went through the contractual terms, they must know what it is, the value that they’re gonna get from this and and and the key pain point that we’re solving. Is there this presumption of that that you generally see?

Ed Powers:

and it’s a it’s a very dangerous presumption because we think we know. And I was just reading a study. I’m gonna write a little blog about it. even the language that we use, we think everybody understands when we use a word or a term, we just assume everybody knows what we’re talking about. And surprisingly, we don’t. You know, the, the semantics the, the meaning that we associate towards varies tremendously by people. So even the language we use can be very confusing, right? I call something one thing you call it the same thing, but we mean 2 totally different things. And getting that clarity and the expectation is incredibly valuable because of those expectations are wrong when I start seeing evidence, and I’m, I’m now comparing that outcome to my expectations. If my expectations all over the map, how can I possibly be successful, right? If it doesn’t meet my expectations, I’m not gonna be happy about if it exceeds those expectations, I’m gonna be very happy about that, right? And in the very, very beginning, when you’re dealing with something brand new new technology, you really don’t know what to expect. And so, yes, it there’s a lot of ambiguity in the very beginning that works against us. we have to be crystal clear about what does success look like? How do we measure that? How does an executive measure that and understand it versus a user versus a manager and those are all different answers. And then we have to be aligned ourselves internally around that expectation. Exactly. And for example, when you’re selling something, And I’ve done it. You know, I spent, a big part of my career selling. You know, you you’re gonna talk about a lot of different, benefits. in a lot of different, you know, value in a lot of different ways. And you’re kind of hoping that something’s gonna resonate that people will see what you’re talking about and give you the benefit of the doubt, and then you leave it there. You don’t necessarily drill it down to what how do we measure that? And what exactly does that look like? Like, you need that specificity and that clarity because if you don’t know what that is, you can’t deliver it. And you don’t care about that until you’re you’re in that position to have to deliver. up. So what’s the best way to level set expectations?

Josh Schachter:

Practically,

Ed Powers:

tactically speaking. How do you advise this? Well, I do a lot of work with customer success planning or joint success planning or value planning, and people call them different things, but that there’s this critical point in the relationship, brand new, when you still have that decision making unit intact, when they’ve been engaging with that salesperson, where you do you need to have a very clean, clear handoff, and an understanding among that group, what does this customer success manager all about. What are they supposed to do? How are they gonna help me? And then to capture and to clarify. So there is there’s a very critical window where you can get in there and establish all of that and get some of that clarity and talk about, you know what? I work with customers just like you, and here’s what we’ve learned working with those customers. This is what you’re saying is important and how you’re gonna measure that. This is what we typically see working with customers just like you. And you know what? These are the things that are critically important. And we need to work together and make sure these things happen so that you get those results. And can I count on you to do these things which will ensure that we get there together, and you’re gonna get the results that you need. That is a critical conversation. And Most times people sit back and they kind of like jump into it and they don’t know what to do. You have to take command and you have to get that clarity from the very beginning and get that engagement. Cause if you don’t, then you’re struggling to get people engaged after the fact when you really need them, and they’re gone. Right? So clarity, shared understanding,

Josh Schachter:

and imposing accountability, a shared accountability.

Ed Powers:

Commitment. Right. and they have to want it, right? I mean, holding people accountable, that’s kind of the stick, what you want as the carrot. How do what would appeal to them, what would get them motivated to wanna step into this and to want to contribute and to wanna be part of it. How can can we play this out as a case study with my company up to? Yeah. I’m thinking out loud here. We could talk about kind of what we offer and and our mission. And,

Josh Schachter:

I I’d love your advice on how to create that shared accountability and understanding, and and level setting the expectations. Absolutely. Let’s do it. So our mission is to help put customer success at the heart of every organization. Now that’s a bold mission. And it it it sounds you know, it might sound a little bit ambiguous or broad. and then also, you have to think about, well, how does it relate to our product, which is about currently, it’s about better meetings. Right? with customers. But our our philosophy behind this is that so much of what customer success teams do and customer success teams we believe strongly are the unsung heroes of SAS. And so much of what they do does not get recognized because so much what they do is relationship building. Now we all know that segmentation So it’s not always about relationship building. Right? But in a large part of that bell curve, it’s very important. It’s about relationship building. And it’s fuzzy. some of that relationship building, how do you how do you measure those metrics? And it takes lots of of meetings and the ROI on those meetings can really vary. and a lot of the knowledge from those conversations gets trapped at the front lines, which I’ll refer to as customer success. And so by helping teams, you know, increase the productivity of their conversations, save them time. We’re helping them scale those conversations. by helping them measure and correlate successful outcomes from every conversation, we’re helping them cut down some of the the noisy ones and reduce wasted time. and then helping them distill the key messages and share that out with the organization, we’re helping to multiply the value of your relationships with your customers because you can get that feedback your product team, to your to your marketing team, to your executives, to your heads of CS, etcetera. So that’s how our mission is to place CS at the heart of a SAS organization. I don’t know. What do you recommend? How do I how do I how do I take that that bold broad mission and create make sure that my customer on the same page, make sure that we’re shared have shared accountability, etcetera.

Ed Powers:

Well, I love the term heart because, as it turns out, That is really, really important when you study the brain. We think that we are logical, rational, clear thinking, animals right? In point of fact, we are not. We, actually lead with our emotions and our intuition 60 to 80 percent of the time. and that’s because of how our brain works. We actually have 2 systems that are active in our brain at the same time. We have our system 1, which is our emotional intuitive. It’s ancient. it runs very, very fast. It is incredibly efficient. It’s, it’s below our conscious awareness, but it is is, always on active and it’s driving us forward. Our logical rational, our system too, is much more, recent in our, evolutionary biology. It allows us to think see things in abstraction and to learn quickly and, you know, our, our modern brain is what makes us, you know, the, the Apex predator in the world, right? But right below the surface is the system 1, which is a very, very strong emotional intuitive system, and it’s our motivational system. So all decisions go through our emotional processing, and the heart how we feel about something is way more important and impactful than what we think about something. So that is exactly the right emphasis is is how how do we lead with the heart and we rationalize with the logic, right? That’s exactly the right way of doing it. I think with when I think about your, your technology and where it all fits with customer success, Customer success is really about taking the promise and making it a reality. When you’re in the sales process, you have these expectations in this anticipation. but you’re a long way to get into reality, and you need someone to walk side by side with you and make sure you get what you expect it. And if you leave that to chance, you throw it over the, the, the transom, and you hope somebody, you know, here you go. Self serve that. Good luck. Call us if you need help. Or I’m gonna throw this with this revolving door of people in my organization, and I hope for the best that’s not how you get them there. Right? So being Customer success is being that guide on the side. The people that are they’re taking you every step of the way from the promise to the reality and making sure we are tracking to that. And when they get there, they’re gonna have that emotional response. The heart is going to be very, very happy at that point. So I think it’s exactly the right area of focus And I think in terms of your technology, you know, there’s 2 things. There’s effectiveness and efficiency. Effectiveness is are we achieving the goals? right? How do we know this is effective? Surprisingly, a lot of things we do are not effective at all. What are the things that are Once you know what’s effective, then you get efficient. How do we drive cost out of this? How do we make this more productive for people? How do we take waste out of the system? And what’s great about UpdateAI

Josh Schachter:

is that you’re working both sides of that. I I love I I love the 2 E’s there. Effectiveness and efficiency. we talk about scale, output, and consumption, but I like your alliteration, Ed. I’m gonna steal that one. So all yours. I wanna shift gears a little bit and and talk about a second topic, which is we’re we’re recording this now. We’re in in q 2 of of 2023. The road, the past 6 months has been a little bit bumpy in the industry at large for all tech companies. you have lots of conversations with Lee and customer success and other customer facing functions. What are you seeing hearing as the biggest bottlenecks

Ed Powers:

that heads of customer facing functions are experiencing right now? Well, I think there is definitely a push towards scaling, you know, as, as teams have been, reduced. There’s been a lot of downsizing, but the work doesn’t go away, right? just because you remove the, the people on the process doesn’t mean that the work went away with it. It’s all still there. So how do we get this done? how do we grow that productivity? What I do see is a lot of people are grasping for things like Chad TBT, and how do I, you know, the the the the shiny object is technology. You know, how do I throw some tech more technology at this thing and make make people productive? and a lot of people are doing that, but they’re not starting with what we just talked about. What’s effective? Start with that. You know, what are the what are the critical few things that we do that really make a difference and how do we know that? And then once we know what it is, then let’s look at what, like you say, what are the bottlenecks? What’s what is burning up the time and the effort and the energy and the money and making that thing happen. So first of all, narrow your list down to the things that are effective focus on those and don’t do those other things. So reduce the scope of what you’re trying to do and only focus on those things that produce results that takes a lot of work out of the system right there. And then once you’ve narrowed that down, now how do we do that better more effectively with higher productivity? So bottlenecks, and I’m sure you’ve seen this as well. If you look at the, where CSMs tend to spend their time, some two places. The first is onboarding, right? I have a new customer. I need to get them from point A to point B. They need a lot of help and support and hand holding to get them there. That’s my job. So that is, you know, you have a totally different model with new customers coming on board. The other one is in is in the main is is gonna be on the EBRs and those kinds of things. When you do the math on that, well, if I have so many customers, I’m talking them once a quarter, and takes me an hour to do it, and then an hour to prepare, and then another hour to to follow-up, that is a huge time thing, right? Makes people think about, well, are we really do we need to be doing EBRs for every customer or probably not? Do we have to do it every quarter or probably not? Maybe it makes sense in some cases and maybe not another. So but those are the 2 big time syncs that, that I look at. And what’s exciting about what you guys are doing is you know, just just capturing the information, just making that go faster. If you’re back to back to back on Zoom calls, when do you ever have time to do the basic, you know, documentation to follow-up? And everybody struggles with this. everybody. There’s not enough people walk around with things in their head, and they think they can keep track of it, and forget about the fact that the their colleagues need to know what you know. So they don’t take the time and capture it as not done in a quality fashion. It’s not done effectively or even done at all. So how do we get that? get it efficiently, get it effectively, and then share it with the rest of the team so that they can be more effective, right? So I think you’re you’re touching on things that that are definitely gonna be growing productivity, for sure. I think I’m gonna add an an extra e there. So it’s it’s

Josh Schachter:

effectivity effectiveness, it’s, efficiency and then its exposure. Yes. Exactly. that word out across the rest of your team. Exactly. I think now that now that you’re saying this, I actually think we’re starting in the reverse order, but that’s okay. We’re, you know, we’re we’re starting with the efficiency piece, but but then the next step for us is the effectiveness piece. But as long as you have 2 eventually, I suppose, it’s it’s it’s a win win. Ed, thank you so much. like all of our conversations, I’ve really enjoyed and learned a lot from this one. And, so it was great having you on the program. Always a pleasure, Josh.