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Josh Schachter
Hi, everybody, welcome to [Un]churned. And I’m Josh Schachter, founder and CEO of UpdateAI. We are taking you behind the scenes of the movement into customer led growth. I’m really excited about today’s episode. This is a special edition, if you will, because we’re going to drop this episode right at the beginning of pulse week in San Francisco. And so with that my special guest today is Kellie Capote. Kelly is the Chief Customer Officer of Gainsight. Who is of course, the organizer behind pulse. Kellie, thank you so much for being on the episode today.

Kellie Capote
Absolutely. So excited to be here.

Josh Schachter
Yeah. And like I said, we’re really excited to have you this is a really, there’s so much excitement I can sense about polls coming up. I’m getting LinkedIn messages. I’m getting emails from people wanting to do dinner wanting to go to a Giants game, who were wanting to attend this happy hour versus that happy hour. The buzz is really in the air. And I know it’s going to continue over into the actual course of the week. So really cool to have you on this episode. Let’s get started here at Let’s warm up the bus a little bit. And I wanted you know the title of our our podcast is unturned. Yes. Obviously in reference to churn retention, you know what we do in the customer led world of keeping customers and growing customers. It also unfund also means raw and uncut. And let’s meet Kelly Capote. raw and uncut. So, if you will, a couple of rapid fire questions. I don’t think I prepped you for this, but they’ll be softballs for the most part. Where are you from? And where do you live now?

Kellie Capote
Yeah, great question. So I grew up in Pennsylvania suburbs of Philadelphia. If any of you have heard Kennett square, I’ll give you a special reward because it’s a tiny little town in the suburbs outside of Philadelphia. I have lived in Austin, Texas now for about 12 years and that’s where I currently reside.

Josh Schachter
So I know you’re you’re a Penn State alumnus to Lyon, Lions versus Longhorns who’s who’s who’s winning that one.

Kellie Capote
Lions of course, but I have you know, taken a love for the Longhorns. They’re like my number two college team but certainly in the lions all the way he has.

Josh Schachter
What was your first job?

Kellie Capote
First job I was I like to always say I was the hostess with the mostest. So funny enough, I think that maybe I learned some of my customer service customer success skills of listening to people taking care of them. But yeah, I mean, this was like pre obviously post college, but I was a hostess I was a waitress and I loved it. Like I still joke like, I could go do it today. I just love talking with people and interacting and honestly making them happy. So that was my my original stomping grounds, I think into customer success.

Josh Schachter
That was my first job, too. I was the host with the most you were the hostess with the most I was the host of the most California Pizza Kitchen. In my hometown in Connecticut. Yeah, right near right near ESPN Studios, where they record so used to get all the ESPN anchor guys all the sports celebrities for lunch at California Pizza Kitchen. Yeah, it was pretty cool. And even a couple of the guys took dates there, which was, which was interesting. And it was I used to dump them to the head of the line well, on a Friday night. They love you for it. But it’s funny, because I asked a lot of people this question, and it’s always the same. It’s, you know, and I think there’s a reason behind that, too.

Kellie Capote
I agree. I agree. There’s a common thread there, no doubt.

Josh Schachter
Totally. As CCO of Gainsight, what’s the most important metric to you? Oh, that’s

Kellie Capote
a good question. So I would say NRR net revenue retention. You know, it’s split between I look at gross revenue retention and net revenue retention. But what I love about NRR is it’s it’s anchored in the notion of growth, not just that our sole responsibility in customer success is to like, plug or stop the leaky bucket, like our impact expands much more broadly beyond that. So I think it’s a great articulation of the broader holistic impact that the customer success organization and the company as a whole, as it becomes a company wide mindset really embraces the philosophy of customer success.

Josh Schachter
The operative word I think in that is revenue, it has that word revenue. On that side, right, we want to be helping customers with their issues and helping them learn about the product, but we also want to be growing the business together.

Kellie Capote
Yeah, it has that strategic nature to it, as well. Yeah.

Josh Schachter
What are you most looking forward to that pulse this year?

Kellie Capote
Yeah, so Well, first of all, like I’m just excited to get back in person with people. I think we all this pent up energy of just like seeing each other and connecting and not doing it over zoom meetings. So I’m excited just to get out and see that Unity in person. You know, I’m have lots of customer meetings, I’m doing a session, I’ll be at the keynote. But I’m really excited just for the topics and the themes that we’re going to be putting out there. You know, I think that we’ve talked about a lot of the same things for several years. And I think the industry as a whole has really matured. And we’re on this next sort of iteration of customer success. So leading into digital lead, customer success, and product, lead growth, all these things that organizationally, we’re all trying to figure out. And it’s like the next frontier of customer success. So I’m excited for us to learn together grow together tons of good speakers, but most importantly, it’s a sense of community that I’m looking forward to looking forward to the most.

Josh Schachter
Yeah. So the, if I go to the pulse, homepage, the h1 is together, we are unstoppable. I think better together. It’s also something that I heard previously, which, which is in spirit of what you just said. You sound very optimistic about customer success. This next leveling up of CES, I don’t know if it’s the 2.0 or 3.0, whatever, whatever. Versioning we’re at right now for the world of CES. But why? Why should you be optimistic? Why should we be optimistic? We’re in this time, like, aren’t we in this time of doom and gloom? tech stocks are 50% down this year? There’s an impending recession. There’s wars around the world, there’s supply chain crises, like rubbed the smile off your face? What? Why, why why should we not be so gloomy about what’s going on in the world and, and how it’s affecting CES?

Kellie Capote
Yeah, listen, you’re spot on. There’s lots of stuff that we can get caught up in. I think, you know, when we all walked into 2022, in the start of this year, we were all like, you know, super excited. And in that growth at all costs mode where, you know, investing was happening left and right. And then I think it caught us all by surprise a little bit in terms of the economic shift that we saw happen in such a short time period, right? Like you rewind three or four months ago. Everyone’s like, oh, great, like repression or numbers and everything’s great. And and then all this doom and gloom appeared. But I think we have to look for the positive in the doom and gloom. And so what we’re thinking about a Gainsight, and you’ll hear a lot about this at Pulse two is this is a, this is a time where you can really embrace and find your like unique advantage, so to speak, and really show up for your customers, and be the differentiator and separate yourself from the competition. So yes, maybe market conditions aren’t as ideal as we all would love them to be. But the reality is the world that we were sort of operating in the past 12 to 1824 months, I would think of it as a little bit of an anomaly. Like we’re kind of stabilizing to old times where profitability also matters, like growth is still important, and NRR still gonna be one of the core metrics that organizations rally around. But as businesses, like, we’re supposed to make money and you’re supposed to be profitable. So the reason I think it’s not all doom and gloom is in these times, I think it forces businesses to take a hard look at their operating rhythms and their organizational structures and make some of the right decisions that will actually set them up for long term, sustainable success. Because at the end of the day, if you’re optimizing for both levers of growth and profitability, you’re gonna be well positioned to ride the highs ride the lows, and it’s what we call like, durable growth. So growth is still important, but is it durable, so that as you know, we kind of have these ebbs and flows, especially from a market conditions perspective, you’re able to ride the tide, you know, and come out, low position regardless. So we’re introducing what we call adorable growth playbook at polls. I can’t wait to share it with you all. But what this is really about is embracing that a there’s going to be a ton of appreciation on the customer base. I feel like I’m in a little bit of deja vu to when COVID first happened. And that was a really big catalyst for customer success, not just the function of customer success. Yes, I lead a customer success organization. But what energize me more was that there was broader appreciation and company wide alignment of a customer centric mindset and strategy to really put customers at the center of everything you do.

Josh Schachter
Right? Why did that happen? So let’s go. Let’s go back to Tacoma for a second. So what were some of the the forces in play that that ushered in that appreciation for CES and COVID? For

Kellie Capote
Yeah, and I think I think there’s a lot of parallels to what we’re seeing that happen right now. Right? So when COVID first happened, everyone kind of freaked out a little bit like we didn’t know what That was gonna mean, especially in the tech world, right? Where’s how much softening? Were we going to see in new pipeline? Like how much? You know how much were we going to miss our numbers. So the the, the natural reaction to that was, oh my goodness, we need to preserve the revenue that we have in place today. I mean, at the end of the day, sometimes your customer base that is much higher than even your your bookings, quote or target for the year. So there was this, and there’s this universal understanding of, Oh, my goodness, wow, we really need to a be delivering value to our customers, because they do have power and they do have alternatives. So how do we make sure that we’re all speaking this language of outcomes, and finding ways to lean into this to maybe even broaden our footprint? So it’s organizations may be looking at tech stack, consolidation, etc. So I think it was just this natural reaction, given that there was fear and probably like an understanding that sales were kind of slow for a little bit in terms of new logo acquisition, how do we lean in our customer base, make sure that we’re not losing any revenue there and find ways you know, to drive expansion through through through the base. So I think it was a huge catalyst for customer success. That’s really when I started to see it show up more like boring conversations, and folks really leaning into additional metrics around the customer base. And I think we’re gonna see that trend continue, especially now more than ever.

Josh Schachter
I’m going to continue to drag you down here. So I love your cheery optimism, right? I’m going to counterbalance that a little bit. So you’re the CCO of Gainsight, you’re in this incredible position to be the CCO of the leading company to provide services to CCOs. Right. That’s so meta. And I’m not going to make a pun about your CEOs last name with that. But like, I would not be the first right or last but like, so you’re in this great place with that. What are the headwinds, you must you must hear headwinds from from heads of CES and CCOs that you talked to?

Kellie Capote
For sure. So I think the the headwinds are a few things. Number one, I think in these times, everyone’s going to be squeezed to do more with less, right, so the luxury that we had of, you know, maybe the the expenditures to get the headcount and things like that and just throw more bodies right at the situation is probably going to look look quite differently for many organizations, especially as they get into back half planning and fiscal planning for the next calendar year. So what that means is, we’re really going to see organizations double down, in my opinion on what I call digital lead customer success. So the world in which, you know, everyone’s kind of figured out for the most part how to do customer success with a human led approach, I think leaning into technology and automation to find ways to augment what human led CSMs can do, but at scale, is going to be one of the key strategies that ces professionals are going to need to figure out if they haven’t already implemented something in their success organization. So there’s going to be tweaks right and in different evolvement of strategies. So that’s going to be one challenge. And then the other headwind, in my opinion, is going to be around the bar for value realization. Like, you know, when when everyone’s spending and spendings, loose, like, it’s easier to get some of those renewals across the finish line where maybe the options, okay, it’s not great. But this is gonna force organizations to really have a unified approach around you know, outcomes or value delivery, and have hard, you know, quantifiable ROI so that they’re above the line, so to speak, when they’re, you know, when everyone’s pulling out their budget seeds and figuring out where they, you know, might need to decrease tech spend, we’re really going to need to lean into outcomes and you’re not just going to get by on relationships, you know, in these type of these times. Now, with that being said, I think we do have the opportunity to lead into being human first, right and being like being there for our customers and bringing empathy to the situation and that will show up in terms of long term relationships. But that also has to be paired with some measurable amount of value so that they can justify the spend because we’ve only have so many dollars and they’re going to pick up you know peanut butter spread it in the areas that are going to drive the most impact for the business

Josh Schachter
peanut butters read it. I like that one down. I never heard that term used before. That’s cool. It helps me to go back to the digital lead. Cs that you mentioned. It interests me in a self serving way or self curious way because my company is a platform to enable better meetings between customer success teams and their their clientele. And yep, so what I hear in the background You know, as you’re saying, Well, Kelly Capote is telling me now, there’s gonna be less meetings less human touch. Maybe maybe not. I don’t know. But But tell me like one way that that might manifest this this trend into digital lead? And does that necessarily mean lower touch? You know, how maybe is that that that manifesting itself again at Gainsight?

Kellie Capote
Yeah, this is a great question. And I actually, I published an article on this recently on Forbes. And it talks about human led customer success and digital lead customer success are not at odds with one another. So the biggest shift that I’ve seen folks, I think, in the early days of digital lead, or people used to call it tech touch, it was much more of like a segment a targeted segmentation strategy for like, their low tier of customers, right, that they just couldn’t like the cost to serve model didn’t get like the unit economics just didn’t make sense. But what started to happen, we did something similar, really about a year and a half two years ago is I’m seeing Customer Success organ and organizations embrace like a digital lead Customer Success Program. And it’s not the intention is not just to serve a subset of lower spend customers, but it’s a strategy and a program that will benefit you know, your customers up and down the segmentation, you know, pyramid, so to speak. So the way we do it at Gainsight is, we will often do nurturing programs or one to many things, and we will experiments like I always think of your lower spend customers, as like the experimentation ground, we will experiment those programs in the you know, the the low end of customers. And then once we have that experiment, we do some A B testing, we then roll it out to all of the segments, as long as it’s net positive or net neutral, meaning like, there’s no reason that we shouldn’t roll to a certain segment of customers. And then phase three of that is then we then, like, operationalize it as a systematic part of the customer lifecycle and journey moving forward. So I don’t think that there will necessarily be less meetings. But I think we’re going to really have to look at what are those highest value meetings? Like how can we make our our CSM as strategic as they can possibly be? To be above the line to be driving towards value conversations? I like to think of it as like a value journey than like a customer journey. And then what aspects of that? Can we make more self serve or personalized via, you know, Omni channel journeys and things like that. So it’ll be just, it’ll be more of a approach of how can I blend the two together to get the best experience for the customers and leverage my human resources, where they’re making the most impact?

Josh Schachter
The other thing you mentioned, was setting a higher bar for value realization. And I think the the most value realization can let me rephrase. I think that the the most value can only be realized when you have your your team really cross functionally working for the customer. So it’s not just customer success, it’s CS sales, marketing, its product, right? It’s leadership. What are you seeing in that realm? How does that that cross functional alignment fit into this idea of higher bars value realization of perhaps digital lead growth, and customer success? And then trends that you’re seeing out there?

Kellie Capote
Yeah, it’s a great question. I think it’s like outside of digital, like customer success that comes up in like 98% of the conversations I’m having with ces executives, this notion of like end to end outcomes. So at Gainsight, we have something called, we call it our framework, like operationalizing outcomes, but it is a unified go to market strategy, I think if there’s like a common language. So a lot of folks are basically coming up with like, what’s our outcomes library or framework like let’s all agree on, these are the top six business goals or challenges or value drivers that we saw for walking that backwards to say, Okay, well, if customers are trying to achieve A, B, or C, here’s the goals or workflows that map to them, and then see how here’s how we’re going to baseline and measure those metrics over time and agree on success criteria to kind of prove that out. So it ideally to get it right, it doesn’t need to start in sales, that you typically, you know, captured in the opportunity object for Gainsight. That all gets fed into a success plan where that we’re then implementing, we’re using the same language, the workflows are tied to the outcomes library, and then that gets handed off to customer success to validate and then it’s a living breathing document, though it’s not a static thing, right? Like you don’t just get to an outcome and you stop. It’s this maturity of outcomes across the journey. So building on that and updating it in a evolving as you go so that you have those continuous ongoing outcomes conversation. So we call it verified outcomes at Gainsight. And it’s actually one of the key metrics that our CSM organization is measured on. So few years back, like we were heavily, you know, looking at adoption, we still measure that. But we got to a point where we put a stake in the ground, and we said, okay, it’s options necessary, but it’s not sufficient. We’ve got to elevate the level, you know, the altitude of conversation, we’re having to make sure that we’re being as prescriptive as possible based on what they’re really trying to do, to lead them to water and be able to help them prove out the impact of the good work that they’re doing. So it’s about bringing your customer along, I think, and using a lot of outside in language, so that they understand that you’re asking these questions, because you want to help them in return, it’s actually going to make them look really good with what they’re able to achieve and share that, you know, back internally to their organs,

Josh Schachter
verified outcomes, peanut butter spreading. Growth, these are these are the key terms I picked up from from Kelly nailed. Nailed it. Durable growth is is a topic that I believe you’re gonna be talking more about Gainsight. And at Pulse and I want the a little bit of a sneak preview on that. Can you walk us through some of that framework?

Kellie Capote
Yeah, absolutely. So the high level here, I think we’ve already talked about it. But the the backdrop for the conversation is so we actually are doing a survey around resiliency, readiness, right? And it’s kind of aligned to the durable growth playbook. The durable growth playbook is how can you make sure that you’re focused on the core, six fundamental tenets of what we believe will set your organization up to thrive now and for long term success. So the first one is, I’ll share more polls, and I could give you the whole sneak preview. But we get into like, no surprises is one of the topics. And that’s all about proactive risk management and having an accurate health score. And it’s all those internal proxies, that you need to have that machine running, you know, week in and week out. And that’ll help you ride the highs and the lows. The second is all about keeping the customer and customer success. So again, this is kind of gets into the outcomes piece and community and making them part of the process. And it’s it’s shared joint responsibility, but it’s all anchored and making sure that they’re successful. The third one is go on offense. So that’s about like, don’t just think about these times as like, how do I save my customers get creative and have that integrated planning with sales and customer success, you’re doing a joint account planning, sending leads over to sales, because in many cases, you have the opportunity to expand your footprint as folks are looking at consolidating spend. The fourth one we talked a ton about So scale through digital. It’s it’s one of the ones that I’m most excited about what we’re gonna be doing tons of webinar series and stuff on that coming up. But just how do you continue to leverage technology and automation to scale your efforts. The next one is like growing through your products. So there’s there’s a flavor of like product lead growth, there’s a flavor of customer success and product collaborating and making sure that you’re actually building what your customers love and care about which in turn will drive growth. And the last one wouldn’t begin say Josh, if we didn’t talk about being human first, and how really how that needs to show up more than ever through these, you know, a little bit more difficult economic time. So we’ll dig into that and unpack that more. Paul’s. I’m going to be doing a whole webinar series literally for each six for every six for every piece of the six key areas and you’ll hear more about that from Gainsight here.

Josh Schachter
It’s something to look forward to for sure. We’ll leave it at that for today. Kelly and we’ll invite everybody to tune into your to your your presentations at Pulse. Thank you so much for being on the show. Really appreciate your time. Thank you for having me.