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Josh Schachter 0:00
Hi everybody, and welcome to this episode of [Un]churned. I’m Josh Schachter, your host, founder and CEO of UpdateAI. We are here today with Jeff Ernst and Kellie basket. They come from slap five, one of my favorite companies in Boston, one of my favorite SAS companies, one of my favorite customer marketing and advocacy companies. And I’m really excited about today’s episode because we haven’t covered this topic yet. And we’re going to be talking about customer led growth. So without further ado, Jeff Kellie, welcome to the show.

Jeff Ernst 0:36
All right. Thank you. Thank you for having us today, Josh.

Josh Schachter 0:39
Yeah, my pleasure. I want to name of our show uninsured. We want to get raw, we want to get to know you guys. So let’s start with a little fun, rapid fire. Jeff, first, go for it. Jeff, what’s your favorite Boston based movie? Before you answer, I’m gonna interrupt you cannot be a mob that based film, a love based film because when I think of Boston films, I can only think of departed and whatever the one was with Aflac, and all that stuff. So what’s your favorite non mafia based mob based

Jeff Ernst 1:11
boss? Well, well, that’s what Boston’s known for. So we really don’t get much else that in Super Bowls. Say, I would say this probably wasn’t my basement was that was the name of the movie Spectacle Island, or the one that was actually filmed on one of the Boston islands that had, you know, a mental illness institution. And

Josh Schachter 1:35
you were just saying that was one of your favorites, too, right? Yeah. Of course. Like, no, no, that one.

Jeff Ernst 1:42
Was that spectacle, Ireland, or was it what was the name of it?

Josh Schachter 1:46
Shutter Island DiCaprio? Yes, yes. Okay, I that’s actually on my list. So now I’ll have to check it out.

Jeff Ernst 1:53
But just a fun fact, there is actually a spectacle island out there on in Boston Harbor. And, and you can actually see the buildings on Long Island where that movie was filmed. And I spent a lot of time out there voting. So it’s very interesting to see.

Josh Schachter 2:09
Oh, wonderful, wonderful. Your favorite Boston sports rivalry.

Jeff Ernst 2:15
Oh, Boston sports rivalry. Well, if you go back to my childhood, it’s Red Sox, Yankees. And you know a great for any route for the Red Sox and anybody playing against the Yankees. So I guess that’s still the case. Even though I’m not as emotional about it as I used to be ever since. Ever since the Red Sox came back from being three games down in 2004. I got over that.

Josh Schachter 2:41
You’re not bitter anymore. I don’t know your age. But are we talking like Stravinsky, Jackson?

Jeff Ernst 2:46
Yes. Is Stravinsky Fred Lynn Jim rice? Rico. Petruzzelli. Dwayne Evans, you name it.

Josh Schachter 2:54
Kelly. You live in Corpus Christi, Texas. What’s your favorite Texan food?

Kellie Baskett 3:03
I don’t know if this counts but tacos. That’s what came to mind. No, actually, I would have to say Texas barbecue brisket. It’s all about the the brisket. Gotta control that smoke.

Josh Schachter 3:18
Love it. Love it. And you just got a dog I know in the past year. What’s your dog’s name? Clark. Clark, named after our Kendrick Grizzle Oh, there we go. That’s Chicago bass. But that’s a good film as well. Alright, last rapid fire, then we’ll get into the meat of things. Jeff, was your favorite employee in slot five? Oh,

Jeff Ernst 3:40
I would have to be my my employee in Corpus Christi, Texas. But I don’t remember her name

Kellie Baskett 3:49
is a bit of a contractor. So

Jeff Ernst 3:54
that’s an unfair question, because we only hire the cream of the crop. So they’re just all wonderful. I have to like Correct.

Josh Schachter 4:02
Where we go. I suppose that’s a good segue actually reminded me I don’t think I introduced your role. So Jeff is the co founder and CEO of slack five. And Kaylee is the director of revenue growth. It’s Jeff Why don’t you tell us quickly about slot five says that context for this conversation on customers

Jeff Ernst 4:19
are well slept five. The idea for slot five came from work I was doing years ago, Forrester Research where I was both an analyst covering the space of customer marketing, customer engagement and customer experience for b2b companies as well as they asked me to run marketing for Forrester and I created this phenomenally successful customer engagement program that I was using to drive customer led growth. But there was no technology out in the market to help automate that. So it was very labor intensive. And so that was what gave me the idea to create an end to end customer marketing and advocacy platform that could automate all the key workflows that customer marketers have to worry about whether it’s customer content, customer program management, customer advocacy, customer reference management as well as customer insights. And so that’s what some five has done over the last six years is create that end to end platform.

Josh Schachter 5:14
And it’s such an important part, your product and the service you’re providing is such an important part of customer led growth, which, to me, customer lead, this is just a term that I recently started applying. I think I’m late in the game. And for me, the rationale was, you know, there’s all this buzz about product led growth. I was at Sastra last year, and all you hear from Jason Lemkin, and everybody is product lead growth, plg. And we just slap product lead growth on on the sticker, you know, on your, your slide deck, you get a 10x valuation from the VCs, right? I worked very closely in the Customer Success field. And we’re trying to rise the tide of CES, right, and we get more influence and, and other domains, like customer marketing, as well. And so I think we have to label it somewhere. And for me, it came from Spencer, let’s just label it and instead of plg, let’s label it CLG. But honestly, I’m a little bit of an impostor, because I don’t really know what what customer led growth is, I think you’re much more educated on this. And I want to hear your definition, what is something I’ve started to hear a little bit more now, what is customer led growth? Sure, so

Jeff Ernst 6:25
So customer led growth, and I’ve been using it for three or four years now. And in fact, we created the customer led initiative four years ago, to really do some research in this space. And so So I define it as anything you do that mobilizes your customers to help drive the strategic growth initiatives of your company. And so that’s a little bit broader than what some folks are using. So they’re, I would say that a lot of people coming from the customer success side, are using the term customer led growth, primarily and narrowly to describe the things you do to ensure retention and renewal. And you probably know, you know, Gainsight uses it to describe their customer success platform. But they also have a product platform that they call product led growth. And they also have a customer community that one product that they call community led growth. And so but but we consider that all to be customer led growth, and then just take, for example, an initiative, the strategic growth initiative might be that we’ve been selling into a point products now best of breed point products, but we’re trying to sell now go to market with a broader solution. And so now, how do we be known as a company that has a broader solution? Will you do that by mobilizing your customers and showcasing customers that have that are using multiple of your products in a combined way, getting some mutual value out of that, to start to position in their voice, the fact that you are now a platform player? So that’s just one example. But I’ve got hundreds?

Josh Schachter 7:58
And we’ll talk about some of those examples. So is customer led growth right now being under appreciated? And under served? are executives doing everything that they should be already to mobilize as you say their customers?

Jeff Ernst 8:15
Well, that’s a great question, because I don’t think they are. And because I have that hypothesis, Kayo Kaylee and I decided to do some research on that. So she’s got some data that she can give you. But the general statement there is that they’re not i We believe, and we’ve experienced from conversations that I have from CEOs and other executives, that they’re not recognizing the full potential that customers have to help them drive growth, they tend to think about customer marketing. And what can customers do for us is primarily case studies, customer references and happy quotes. But that’s, we call those the keep the lights on activities. And so it’s a really get into what customer led growth is, the way you know, if you’re doing customer led growth or not, is if you are, what you’re doing is you’re having conversations with your C level executives about what are the most important strategic growth initiatives that they have that they’re mandating for the company, and then you’re coming up with programs that align and mobilize your customers in very creative ways to help address those initiatives to help streamline them to help accelerate them in the market, and to help overcome any obstacles or objections that you’re experiencing in the market when you’re trying to pursue those strategic growth initiatives.

Josh Schachter 9:34
That sounds a lot more interesting than thin, thin case studies and testimonials that, that lets truth be told, like we right, not the actual customer, right. So. So what are what are some like, what’s an example and Kaylee, I want to get to that research and maybe you can chime in on this one. But what’s an example of some of those strategic initiatives that align with the executives top priorities that you can create?

Jeff Ernst 9:56
Right, so So think about top priorities in a lot of companies? In the SAS world where we all play, nobody’s got the retention rate that they believe. And it might be a lot of reasons. One, it might be because of poor adoption and usage, one might be because of poor value realization. One, there could be a lot of reasons for it. And so usually a companies that are struggling with poor retention, they will would have diagnosed what’s causing the problem. And I’ll give you a great example, when I was at Forrester, this was one of our challenges, people were renewing fewer seats each year. And so we knew that the way that we were going to increase wallet share at renewal time is we needed to get our users our subscribers using more of the services that they had been purchasing from Forrester. So we ran a customer led growth initiative to capture the stories of the power users of Forrester services, people doing inquiries, that were really helping them with their initiatives, people that were using our research products, people that were coming to our events, and we would have them talk about how the different forester services were helping them catapult their careers further. And then we would use those and push those out to the public, we would push those out to the laggards, the people in our installed base, which we could see from our records were not adopting and using the services that they subscribe to. And lo and behold, we started doing that with one customer, I can’t name them. But we ended up tripling the size of the annual contract value with that customer, because of the fact that we had the champions within that account, showcase what they were doing to, to their peers across all the other business units and functional areas of that company.

Josh Schachter 11:36
It just clicked for me. So I had a conversation last week with a friend of mine, I’m just going to say Ryan seems he’s the head of customer success at Mixpanel. And if you know anything about Mixpanel, when you think about it, it’s like an enterprise sales, which it is company in many ways for you sell the analytics solution. But he views it as a plg company, where you have lots of individual users that are each going into Mixpanel for their self service type of analytics. And he’s looking for he said, Josh, if you can solve this problem, you know, this, this is why I want to buy this in a heartbeat. If you can find for me, the current power users and predict the other power users of our product. Because I know that they’re they’re the central node. And they’re the ones that get called over when we were all working in the same room, they get called over to the desk to ask, Hey, how do I do this? Teach me What do you think about this, this this solution? And then they spread that out from within the organization. And I think that’s what you’re talking about. That’s one example, right? Find those internal power users, those champions, and get them to just infiltrate and spread out, you know that that expansion. So that just clicked for me. I’ve never actually thought about customer marketing as being something internal for a company that’s already, you know, that’s already using your product I think about it just says like, again, like the case study, you slap on the website.

Jeff Ernst 13:10
Yeah, but one of the biggest challenges or roadblocks that customer marketers hit is all the permission hoops that they have to go through with their enterprise accounts to get permission to use their voice. Well, that here’s a perfect case where you don’t need their permission to use it publicly. You just say, Hey, can I have permission to use this content within your own company. And I’m gonna do it by making you look like a rock star. And so you can brag about your success. And you know, you’re helping yourself as much as you’re helping us. Yeah. So that’s, that’s a great example. But again, in customer led growth, that can apply to initiatives around adoption, around usage around expansion, around retention, or renewal around new customer acquisition, it could help with all those things that can also help with innovation. And so I’ll give you one more example. Earlier in my career, I was at a company called open market, a pioneer in the E commerce space. In fact, we have the patents on the shopping cart. And so we we were I was charged with taking a portfolio of products and packaging them up into a solution for b2b e commerce. And so in order to do that, we were only we had only sold to consumer companies before the whole product was built for consumer companies. We didn’t have a lot of knowledge within the company about what’s needed. And so I convened a steering committee of some of our most important and strategic companies that were in the manufacturing space to help have them tell us hey, you already using our content management and product catalog product, we now want you to use our E commerce product, tell us what it would have to do to meet your needs. And that was phenomenally successful on the innovation side, but we never would have been able to define this build the missing pieces, build the connective tissue to bring all these components together and then launch it in the market with any kind of credibility if we hadn’t brought those people together to help us innovate and and discover what it really needed to do. And I,

Josh Schachter 15:09
Kelly, what are you seeing?

Kellie Baskett 15:09
Yeah, so I think that’s such an important point that I was hoping that we would bring up, which is, you know, customers are really at the heart of customer led growth. And you know, what actually introduced, Jeff and I was doing customer research. And so, we’re huge believers in the fact that, you know, a bunch of executives sitting in a room cannot come up with the best solution for their clients without actually having some customers involved in those conversations. And so, in terms of you know, how to actually mobilize these customers, and also what they’re looking to do and accomplish themselves, which is a big part of kind of driving some of these advocacy types of activities. All of that really, you know, has to come directly from an old plug, Jeff, your books name? directly from the horse’s mouth? You know, we you have your

Josh Schachter 16:11
own book? Well, ebook, ebook. Okay. We’ll get we’ll get we’ll get, we’ll get to that later.

Kellie Baskett 16:17
But, yeah, I mean, it has to start with conversations with customers about what’s important to them as individuals, and then that can help to, you know, determine how you will align, you know, their goals, to the strategic growth initiatives of the organization. And that’s the starting place for operationalizing. Some of that, you know, customer advocacy, and really creating a program that enables these customers to gain value from the organization, and enough so that they will go out and sing your praises, sometimes without even prompting, and definitely, without needing something like a monetary incentive to do so. Just having evolved with what was that?

Jeff Ernst 17:13
Also known as a bribe?

Kellie Baskett 17:15
Right. Right, right.

Jeff Ernst 17:20
Yeah, kill you got some good data points, that goes back to the point about how executives are not really recognizing the true potential of their customers from from the research that we did around the state of the customer marketing profession.

Kellie Baskett 17:35
We came at at this question from an interesting angle by actually asking customer marketers about their perceptions of their current roles at their organizations. And so what we found was people who are at companies that aren’t empowering their employees to value the customers who aren’t giving resources to departments like customer marketing and customer success, and people who are at companies where they’re not able to align with folks who are in the Customer Success realm, who are trying to do these customer advocacy activities, those folks all want to leave their current jobs, they’re not looking to stick around, because they feel that the executives don’t value their programs. And so even among, you know, companies who clearly slightly understand the importance of customer marketing so much that they have carved out a role or multiple roles with individuals who are working in those fields, you know, even those organizations don’t really have that full alignment between executives around, you know, the value that customer marketing can bring to the table and they instead view you know, these tactical keep the lights on activities as being the, you know, niche of a customer marketer, you know, we want you to create case studies, you know, we heard a lot of people in the research talk about, you know, not being able to work on strategic initiatives that they would like to be doing because they are directed, and sort of forced to keep just producing case study after case study. And so there’s certainly a disconnect in this space, even from companies who kind of talked the talk of being customer centric. There’s certainly a disconnect.

Josh Schachter 19:39
So, couple things there. Are you guys saying that case studies don’t matter? That that like is, obviously customer marketing is so much more than case studies? Do but if you do, check the boxes do those things help what we generally think of as just that those table stakes activity

Jeff Ernst 20:00
Yeah, when you use the right word there table stakes, you have to do them, you have to, you have to be generating the case studies because that gives you proof that you’ve got customers in this segment or this industry. And we strongly believe, though, that the classic case study that is challenged solution results format with a happy quote in the sidebar that’s written by a third party writer who doesn’t know your product or your customers, and it’s full of marketing speak, we don’t believe those are useful to anybody. And all of the buyer research that I’ve done over the last 20 years shows that buyers don’t want to read those, they don’t like those. And plus, they don’t differentiate the company. And so you know, so we believe that a case study needs to be in the first person, customers voice, we prefer video, which is why we’ve built the video capability in slot five to do things like recorded customer references, and what we call a case study to know. And then also, you need to have customers talking about the good, the bad and the ugly about being a customer. Because if you think about it, when a buyer is trying to decide the way they’re evaluating and buying a technology, a big ticket purchase, they’re going to do customer reference calls. And in Josh, can you can you tell me, can you guess what the number one most frequently asked question is on Customer Reference calls across every technology segments?

Josh Schachter 21:24
Are you happy with the product?

Jeff Ernst 21:26
No, no, I mean, that’s a common one. That’s a very common one. But the number one most frequently asked question is, what went wrong? Like when? What challenges or pitfalls Have you hit? And how did you get through them? Because every buyer knows that things are going to go wrong, but they want to know that the vendor is going to be there to support them when things do get wrong, go wrong, and they’re going to be able to get through that. And so they want to know that they want to know the gotchas. And but when we when was the last time you saw a case study that talked about what went wrong? Yeah, yeah. And so that’s why you know, what we call a case study tonight. Oh, that’s one of the questions. We asked customers, when we’re interviewing them for this talk. Tell us what what was your implementation process like? And then what went well, and what went wrong? What would you do differently if you were to start over?

Josh Schachter 22:15
I love that. In business school, I took a course on on like persuasion principles and psychology and I forget the name, but it was like, the converted testimonial or something, basically, somebody who used to have a negative view of your brand, but you were able to convert them. An example I think, would be the, the sprint guy, can you hear me now? What was what was he first on Verizon, and then sprint, or sprint, and then Verizon, but like the converted person, right? Who so somebody in this case, maybe that’s not exactly the same example. But But somebody in this case where they had something go wrong, they were upset, but then you saved them. And that’s the hero’s journey. And not only by doing that, not only did you bring them back to level, they should have been out, but you’ve actually probably elevated them to a higher level. And that’s where you actually get and somebody quoted this to me recently, actually, I don’t remember, I don’t recall who but that’s where you get the NPS score of 10, you get the end NPS score of nine, whenever or eight, when everything just goes kind of cool. And smoothly, you get the NPS score of 10, when shit got fucked up, and you were there to help bring it to the next level.

Jeff Ernst 23:24
And those are gonna be your best advocates. And they’re gonna have the best insights for your other buyers. But the classic customer marketer might say, we can’t talk to them, they had a bad experience. I mean, at the end of the day, but what why does customer marketing exist exists to create the trust gap that exists in the market between buyers and sellers. And when I say buyers, I mean both net new logos, as well as existing customers, when they’re deciding whether to expand their usage, buy more products from you or renew what they’ve already bought, they’re in buyer mode. And so you have to overcome that trust gap. That’s what we’re looking to do. And you can only do that with authenticity. And people when they see these brand videos with the a roll and B roll music and the drone footage coming in and everything. They perceive those as advertisements, they’re not authentic. And when they read those case studies that’s all full of these glorious statements written by, you know, a third party writer, that I believe that and I like they’re disappointed because they wanted to hear what your customers have to say.

Josh Schachter 24:28
Yeah, I actually I recently saw some, some advertisements on TV that were being filmed with a iPhone in like the vertical position. And it was very clear that this was like organically filling. And this is like national advertising. They’re paying millions of dollars, and the person who’s selling their widget with an iPhone recording, but it was because the nature of that product is something that like maybe you have disbelief in and they want it to create that authenticity. Kelly What are you saying?

Kellie Baskett 24:53
Yeah, I was gonna say I always love to draw the analogy to the b2c world. I mean, We’re all consumers here. And if you’ve purchased anything online in your lifetime, especially over the last, you know, 10 years, you probably, if you see only five star reviews on something on Amazon, what are you going to think? You’re gonna think it’s fair, it’s a bot. Maybe it’s not even a real product. The there’s just, you know, people are skeptical by nature, no matter who they are and what they’re buying. And I think that’s, you know, what, the gap that we are wanting to bridge is that all buyers are human, even when they’re buying something for their company, that doesn’t change the fact that they’re a skeptical human being. And if you’re only showing perfection and only showing, you know, the, like, number one best case scenario, then that’s just going to draw even more suspicion.

Josh Schachter 25:59
Yeah, we’re drifting a little bit. That’s okay. Because I think this is really interesting conversation. So on that note, I actually recently read a newsletter from a marketing psychologist. And she showed two examples of a photo of a hamburger and I forget what establishment it was McDonald’s or Burger King or something. And, you know, she had said, you know, would you guess which one was the highest converting advertisement, one of them, the burger was pristine, it was a perfect circle, it was, you know, beautiful. The other one was a little bit off, the lettuce was a little bit, you know, tilted to the side and tomato and, and, you know, the edges of the burger were a little bit rougher. And the moral of the story was, that was the one that was higher converting, because it felt more authentic. And so I love the approach that you guys are taking in your philosophy there behind that of the high production value stuff. That’s cool. But what really resonates more deeply with customers? are perhaps the lower fidelity, more organic version versions of things. Kelly, what else are you seeing in the world of customer marketing? Is this industry? So you mentioned the survey? Actually, the first thing I want to ask you is, like a survey of one of like the 10, customer marketers that are out there? How big is this universe? Obviously, I’m joking here. But how big is the universe? Is it growing? Is it contracting? Like what are the initiatives that you’re seeing to give it more presence and its proper do?

Kellie Baskett 27:34
Yeah, so there are actually around 4000, customer marketers, and there’s a umbrella term customer marketing and advocacy that has sort of emerged, and so we’ll call them, there are around 4000 of those professionals out in the b2b world. And actually, earlier this year, I believe it was Forbes named customer note, a study was done on LinkedIn, of the fastest growing jobs, and customer marketing was number three on that list. And so it’s certainly starting to get the recognition that we have always thought that it deserves and, you know, the market is sort of catching up to, to what we have been putting out there in terms of our thought leadership. But yet, we still see some gaps, right. So I mean, in the customer marketing space, you know, a really big important piece of becoming successful is making sure that customers are getting value from the program that you’re providing to them. In order to not have to rely on things like bribes, you know, trying to pay people to participate in a video case study or to speak at your conference. You know, instead, we want and help our customers create a two way exchange value with their clients. But there are still some challenges of in doing that. And one of them is collaborating internally with teens like sales, and customer success and marketing and product marketing. And one of the most interesting findings from our survey of customer marketers that we just completed was that of all of the people who are sort of we’ll call it dissatisfied with their current job and are actually looking to move on all of those customer marketers. 92% of them said that they don’t feel connected to customer success.

Josh Schachter 29:50
percent pacifically customer success as opposed to marketing or product or sales or whatever.

Kellie Baskett 29:56
Exactly. Specifically, 92% said they do Don’t feel connected to customer success. And we didn’t see that pattern among, you know, the product marketing or the marketing teams at all. And so I think that highlights the huge need for there to be a lot more collaboration between those two teams. Because I mean, I think this quote that we also gathered from the survey puts it very well, they said, there’s no vision for the entire end to end customer journey, the way our organization is structured, we each own a slide of the journey, which leads to competing priorities and overlapping efforts. That’s a really important, you know, statement. And that was from somebody who had indicated they were looking to leave their job, as well, in the survey, and I think that it really just highlights the need for folks who are in this space to, you know, not only have, you know, those human connections, but also have some type of system of record, so that they know, what all has been done with each customer, you know, how have we interacted with these customers? And how can we make sure that we are a keeping their best interests in mind, you know, not reaching out to folks who aren’t interested in public speaking with those types of opportunities, and then be, you know, ensuring that you’re really aligning to what that customers end goal is. And so we want to help, you know, not only empower these customer marketers to, you know, bridge the gaps internally and start to collaborate more with those teams, but also, hopefully also provide some technology that will facilitate that process