“I would say that customer success is not just a department and it’s rather a mindset. So break down those silos you have in your organization, collaborate with each other. Don’t compete with them, collaborate because that’s how you bring more value to the customer.”
Lucas Martinak is the VP of customer success at Kentico software. Lukas is an innovative Customer Success professional who’s passionate about customer success, he believes that Customer Success is more than just a department. It’s a mindset. It’s a way of working. It’s an approach to business.
Here are some of the highlights from this episode:
- Evolution of customer success organization
- Customer Journey
- Customer Retention
- Customer Health Score
- Scaling Customer Success Team
Transcript
Hello and welcome to the show. Our guest for today’s episode is Lucas Martinak. He’s the VP of customer success at Kentico software, and he joins us today from the Czech Republic.
Lucas, welcome to the show. Hi, glad to be here. Thanks for having me. absolutely. It’s a pleasure to have you on the show, Lucas.
And tell us a little bit about yourself.
Well, I’m a proud father to my one-year-old daughter. I love all kinds of sports, especially team sports, like ice hockey, because when you can celebrate together with a lot of people, right. And professionally, I have a technical background with a master’s degree in information technology.
And I started with software testing and moved my way up through, quality assurance and I had been leading quality assurance for five years or so, but then I realized that I need to shift my focus from technology to people. So eventually like six years ago, I transitioned to customer success.
I took on the challenge and the established customer success here at Kentico. that’s outstanding. And I love that career navigation path, of yours. So that’s impressive. and tell us a little bit about Kentico and, it seems like you guys play in the content management space. we try to provide the best way to work with content.
Helping customers like Anna plan BMW, Lando lays, PBG to organize their global and regional content. They use it for their mobile apps, websites, documentation. E-learning you name it? We are a software company with two products. One is Kentico experience, which is a digital experience platform, combining content management, digital marketing, and e-commerce for upper mid market.
And then we have Kentico content, which is a headless content management system, a cloud-native software as a service kind of solution, and for enterprises. very nice. So, so that’s interesting, you know, so your customer base is. Some of that is enterprise. It sounds like. And some of that is mid-market.
Do you also serve SMB or is it fairly enterprise, mid-market for you guys as well? Yeah, it’s been a ride and it has changed a lot over the past 13 years since I started with Kentico. Yeah. We’ve grown from a 20 people company, serving those small customers that wanting to build a website to actually helping fortune 500 companies with our content strategy, online marketing, and digital transformation in general.
So it, it changed over time. Oh, that’s super fascinating. And that happens with a lot of companies. As you know, companies evolve their products, it hits maturity and it finds a, you know, a better models of serving customers in different segments. you know, one of those, one of the things that’s intriguing about you and your profile is.
You’ve been, working in QA and other areas, and then you got into customer success and, you know, one of the things that’s always interesting for, all of us in the customer success world is how customer success play well with, you know, marketing and sales and finance and the complete leadership and all of that.
So how do you guys manage your customer success team and how do you guys align across all of these functions in the company? Well, it started with technical support, which was like reactive tickets solving, team. And, we also had a consulting team going deep dive on the technical stuff with our, with our customers and partners.
But there was really, it’s like six years ago and we needed to be more proactive. To be able to help our clients avoid those mistakes in the implementation, et cetera. So, we needed to establish customer success management and be a bit more proactive with training materials, e-learning, and stuff. So we created that one Cohesive customer success, team, customer success department, consisting of their technical support consulting services, customer education, customer success management. And we also have a developer relations team because, our product, is very technical or technical people use. Yeah. I do have a quick question for you on that because.
Where did this concept come from? So you’ve been a company that’s been around for awhile. You’re bootstrapped. And you guys have been, doing customer success for a while. And before that you were in a different organization. So where did this concept have come from for customer success that, Hey, now we need to build this integrated function in the company called customer success.
It all came from one single question and that was. How are we not helping our clients succeed, where the value gets lost? And the answer to that was in the project implementation. You can have the best product in the world, but if it’s used differently than it’s supposed to be used, Yeah, that’s the project implementation part and we are not doing the implementation ourselves.
We rely on partners and digital agencies all around the world to deliver that to clients. But there is where the most value is lost. And, we had been thinking about how to change that. And we did reactive support and deep-dive consulting. We were not able to do anything. So we needed something new. Like back then.
We didn’t know that customer success is a thing as, it was like, okay, it’s another buzzword, like customer experience, customer this and that they’re customer-centric, whatever. But it was a thing. Even back then in 2015, I had gone to some conferences, read a ton of articles and I was like, this is it.
This is what we need to change. And, luckily I had support from our CEO and COO directly from the get-go. Yeah. So that’s enabled us to build that. Oh, that’s awesome. And I very smartly moved us away from the original questions. So let’s why don’t we go back to the original questions.
How do you guys work with each other with sales, with finance, and other teams?
That was another step, another level. Yeah. As opposed to getting organized within the customer success department. But then it was about how to make even more impact because I believe when you work together with, with sales, with marketing, with the product and product development, you can have a much higher impact on your customers.
So. They are huge overlaps with other teams like customer success management and with sales and renewables and up. So CSM has been product managers and UX guys and product roadmap, research, prototypes, user testing, the per like feedback. CSM some consultants on a content model, hanging integration guys, but best practices, etc.
When marketing, we work on success stories, case studies, promotion stuff like speaking at events, you know, we are launching a new event in a month. So we have our customers speaking for us instead of us speaking about them. So there are great overlaps, and once. You have buy-in from the executive team and your peers in the executive team that, Hey, let’s go do things together.
everything is better now. And we use, OKR’s like Google and objectives and key results may sound obvious, but this thing really helped us align and work together. So, that we have joined objective joined, key results, and now we can aggregate it together as a team. Oh, that’s brilliant.
And I love the way you guys are weaving in OKR is so that you’re aligning those goals and those metrics across different teams into a, something that creates value for the customer. you know, one thing you mentioned, in that conversation was the fact that you guys have a professional services, support, customer success, all of those things integrated into a single organization and a lot of times support and professional services, I would say most of the times they are monetized.
I E. The customer pays, additional on top of the product for those services customer success, the industry’s kind of divided whether to charge for customer success or not charged for customer success. so where are you guys? Are you, as an, now as an integrated team, do you guys charge, for any offerings around customer success, and or PS or support.
Well, in the past, we have been giving way so much for free. we thought about it. Hey, this is an investment. And investment from our side, towards customers that we are in it together. We have our skin in the game. We have our consultants available for you. you have, your dedicated CSM here and you can always turn to our support for help.
And, we thought that. This is the right thing to do. Yeah. To do invest something so that we can take something from that relationship. And once we help our customers succeed, they would stay longer. They will pay more, they would advocate for us. Now we realize that you can have all those positive effects and yet charge for those services.
Yeah, so we are now it appointed, we started, charging for CSMs for consultants. we, started offering premium support and, we are doing that in form of subscription just as we do it, with the product. And it’s a, it’s a sauce. You usually prepaid it for six or 12 months. but you are, you are paying your subscription.
We did that for our services as well, because it’s really a never ending optimization. It’s not just about the first onboarding. The first 90 days is not about the first milestone on first go live event. Yeah, it’s the constant optimization. Throughout the lifecycle of the customer. And so it makes sense to, to make it a subscription, as well.
And did wait, when you guys introduced this offering on top of the product as a subscription, what was the reaction from customers? What are they like? Oh yeah, absolutely. That makes sense. We want to go for it or where they’re like. I’m not sure if I should be adding a subscription on top of a subscription or like what was sort of the feedback from customers.
I was so afraid of it and I was so afraid of it. but in the end, especially those big enterprise clients, they just expect it. And they just expected that we would have the professional services offering on top of everything because we, Mean it seriously. And that’s even a proof of that maturity. So I would, now I would say that they actually appreciate it and they count with that in their budget.
And so I would say, go for it. And, you know, Lucas, what’s interesting. This model is, you know, there’s also partners that play a role in your overall ecosystem. And as you. provide the product. And on top of that, you provide customer success and professional services and premium support. do the partners feel like they also have an opportunity to serve the customer?
How do you make sure that you are taking care of the partner in this case when you’re providing those premium services as well? Yeah, sure. We don’t want to compete with our partners. We are here as one side. We and our partners is helping the client get the most out of the product and the services. So we are, working with them together.
And sometimes yes, it means that, we will, for example, with new partners, we do the onboarding through their first client. So it’s our joint clients and we provide the onboarding for free kind of free for the partner because they learn. To work with the product on their first real world project. So we invest in our partners and then, they are more up to speed and they want to do more projects with us and customers.
don’t look at it from the perspective, should I buy this service or pay this agency for that? It’s like complimentary, it’s not this or that. And you can have both, it’s not mutually exclusive. I would say. Yeah, that makes sense. Sounds like there’s a lot of complimentary set of services that are provided and your teams and the partner teams are working in tandem.
They’re in sync and they’re providing value to the customer. And so that, that makes a ton of sense. And so go ahead. Look us. I was going to say that through our partners, they make our services scalable. This is how we scale how we can deliver it to even more clients. It also changed a lot because we were working with small web development houses in the past, and now we are talking to Pricewaterhouse, Coopers
And so, it has changed a lot, but. Yeah, we, help each other out. Yeah. That makes sense. It provides a scaling engine and becomes a value multiplier, in terms of going to market so that it makes a ton of sense focus. how about, you know, we talk a little bit about how do you run the CX engine?
So yes, you’ve got your work well within the organizations internally work well with partners in delivering value to customers. It got. monetize services as well. How do you guys sort of design a model within yourself that helps us, helps you to scale the customer success that’s acquired? And how do you guys achieve that?
Do you guys do a lot of workflow, a lot of automation internally, training, like what, what is your sort of secret sauce? I would say, not at this point, it may sound a bit counter intuitive. I wanted to start doing things manually as much as possible at first, so that we have really deep dive insight into what’s going on because I will say.
When you’re scaling a mess, you get a bigger mass. we didn’t want to do that. So before we automate and put things in automated workflows and emails, et cetera, we better know what we are doing. Yeah. So we are still in that phase of very manual one-on-one meetings with customers because, we want to really treat them on a human to human level and to have real meaningful relationship between different people from, from Kentico and from our customers.
So, so we rather connect them, as much as we can, rather than automating stuff. Of course there are, there are systems in place we’ve been using choose zero, for quite some time. Yeah. We have their health score and we, we have all the, all the surveys and things. My act together, it is all helping, but, the majority of our work is really that customer success management and consulting of, there.
Content strategy and how we help them achieving the desired outcome. And you cannot automate that. Yeah, that, that makes a ton of sense. So first let’s figure out what’s the experience that the customer wants. Let’s handcrafted. Let’s make sure we’re building those relationships with customers and then figure out what are the pieces that we can actually automate.
And that will help us scale. And that provides a good combination and an, almost like a balance between doing things that are acquired and it’s manually intensive and relationship building versus things that are sort of more iterative. And we can sort of automated that over a period of time. Yeah, absolutely makes a ton of sense to automate e-learning stuff.
Yeah. Because based on those customer needs and based on your solutions and best practices, you can put it all in to create nice videos, educational materials, and then you can use it in an automated way for, you can use it in CSI meetings and how we provide value to our customers as well. Yeah, we share.
Our educational resources with them. That makes sense, to, to make it scalable. This is what makes it scalable. Really? So e-learning education, best practices, content, those eBooks white papers. You name it. Yeah, that makes a ton of sense. And you’re using digital content and a digital library to help with a lot of that scaling.
So it makes sense. So your people can actually record those e-learnings and those can be consumed at any point by the customer that becomes reference material. And then your team is free to drive those strategic relationships and strategic conversations with the customer and with partners. So that makes a ton of sense.
I’m curious too, as to how you guys manage metrics, internally and externally, do you guys look at sort of the, some of the traditional CS metrics like NPS and churn and renewals, how do you guys run your metrics? A work stream? It’s always about the OKR said it depends on what the objective is and how you measure that.
But, one of the most important OKR. Out the most important, Key performance indicator for us is the MRR monthly recurring revenue and on the customer success side of things. But it’s really, business-wide thing is the, met dollar retention. When you, look at the expansion as a try to churn from engine, and you have.
That one number that tells you how you’ve been doing with your existing clients, if you are able to retain them, if you are able to, to help them grow with you. So I’ve met dollar retention is a, is a big thing for us. And, obviously now, and we are, trying to monetize our customer success services.
We will also look at it, direct revenue coming from those services. I just realized, I, heard the saying. If the product is for free, you’re the product? so, so when I, when I think about it, this is not what I want to do to our, to our customers. And, there was also this assumption, from, from clients that when it doesn’t cost anything.
There is probably a little value in it. Yeah. So that’s why we are trying to monetize those customer success services. And we are measuring how much direct revenue it generates. Yeah, that makes sense. And it’s interesting that you guys are looking at, MRR, and also net dollar retention. And those are very smart statistics and metrics to follow and look at where sort of how the customer, not only the customer health is, but how the revenue health is for the company.
Have you guys, so as you went through this journey of setting up customer success, setting up, you know, the scalability and CS and doing things manually and then automated. And now you set up metrics. Was there a. Sort of a difficult thing that you had to overcome, like the number one issue that you had to overcome, or maybe it was a challenge.
It was something like, Hey, why don’t the customers understand this? Or why don’t our internal teams get it? Or things like that. That was the number one thing that you had to overcome in this journey. What would that be? Ooh, so many things. So many lessons learned, I would say, but lately, lately, it’s, really changing our mindsets to be more business focused and be focused more on the money side of things.
Yeah, because the monitorization of customer success services is something that we are, we used to do. We always been about value to, to our customers and rate product adoption and, customer advocacy and all this stuff. But, when it comes to our internal costs and how much clients are paying, this is, this is a mindset shift.
And it’s, it’s not so easy to, to build, to build that.
And that was a big challenge for me and still is, and there are still people who are like, Hey, we need to give this customer that for free and they don’t need any, they don’t have any budget for this or that. I mean, needs it. I mean, no. Yeah, this is what we are trying to change now. Oh yeah, that makes sense.
And, it’s interesting. You mentioned that. So how, tell us a little bit about how customer success has really changed the way you are going to market. Are you, for example, are you seeing a lot more customer success teams? I E your folks, your teams. Engaging with sales leaders upfront during the conversations with customers, are there active handoffs?
How has that really changing the equation of how you’re engaging in the overall customer success customer experience cycle? Okay. Absolutely. We have CSMs to be part of the pre-sales calls to get her with solution architects, so that. The handover is really as smooth as possible. And especially during a POC proof of concepts from those big clients, we are trying to get them, use our product for six months or so to build the POC.
And we would help them succeed with that. And together the sales guy, the CSM, the solution architect, maybe there are more people to it, our product managers, et cetera, who are. On the team to, to help them succeed with those first stages, you know, their journey. So, yeah, it’s, it has changed a lot as well because in the past, and especially in, in our former product, it was like, okay, this is pre-sales, this is post-sales.
And then we don’t have that anymore. And it’s. It’s all pre-sales now I would say I love it. Lucas, I love that this has been super valuable and I love how you guys are evolving the customer life cycle and engaging early from a CS architecture standpoint in partnership with sales. as we wrap up, how about we wrap up with this question?
If you were to give. One piece of advice, share one piece of wisdom with the listener on customer success. What would that be? Oh, that that’s a good one. I would say that customer success is not just a department and it’s rather a mindset. So. Break down those silos you have in your organization, collaborate with each other.
Don’t compete with them collaborate because that’s how you bring more value to the customer. Outstanding Lucas, breaking down silos, making customer success, not a team, but a mindset within the company. Outstanding. Outstanding advice. Look as for people to follow you, what’s the best way for them to do that?
Twitter, LinkedIn, where are you at? Everything? So Twitter at Lucas Martinek, LinkedIn Lucas Martin. Just ping me. Awesome. Lucas. It was so valuable to have you on the show. Thank you so much. Thank you very much. My pleasure.