1. The ROI of
Customer Success
Management
Solutions
Febrary
2014
2014 Gainsight, Inc. All rights reserved.
2. Housekeeping
Q&A panel on your right
Recording for colleagues who couldn’t make it
All attendees will receive slides
Stick around til the end for a chance to win a CSM
ROI Value Assessment
• Twitter hashtag #customersuccess
•
•
•
•
2014 Gainsight, Inc. All rights reserved.
3. Today’s Panelists
Anthony
Kennada
Head of Marketing Gainsight
Craig LeGrande
Managing Director & Cofounder –
Mainstay Company
L. Venkatraman
VP Consulting, Mainstay
Company
2014 Gainsight, Inc. All rights reserved.
11. ROI Research
Data Collection
Information
Gathering
Week 1
Draft/Finalize White Paper
Content
Value Tree Development/
Summary PPT Development
Week 2-3
Graphics/Final
Production
Week 6-7
Week 4-5
Kickoff Meeting
Scope Interview
Candidate List
with HS
Conduct Interviews
Request/Collect
Existing Materials
Develop
Interview Guide
Review/Approve
Messaging with
Stakeholders
Draft Value Tree/ Summary PPT
Draft
Whitepaper
Review with
Stakeholders
A
Refine/Adjust
based on
Feedback
Refine/Adjust
based on
Feedback
PDF/
Graphics
Creation
14. Gainsight improved Retention and Cross-Sell Revenues by
over $11M over a 3-year time frame
•
Gainsight clients interviewed had a
customer base of between 1400 and
4500 customers
•
They reported that churn rates
reduced to less than 2-3%, a 5-10X
reduction from before Gainsight.
•
The average revenues for these
Gainsight clients was about $4K per
month per customer
• This represents a $11M
revenue lift over a 3-year
timeframe
15. Gainsight customers also realized $1M-$5M annual savings in
operational expenses
•
Gainsight clients interviewed had a customer base
of between 1400 and 4500 customers
•
On an average, they prepare 2 reports per
customer, twice a month
•
For a customer base of 1400, that means 2800
person hours per month, which would require about
17-20 CS resources, or about $1M investment in
staff per year. For a larger customer base or for
companies that do more outreaches, these savings
can be as high as $5M
• This represents a $1M annual
savings in operational expenses
16. Gainsight drove more valuable relationships
3X customer outreaches and 3X richer reports
17. Gainsight customers reduced risk of churn with
proactive intervention in the first 90 days
• Newly acquired customers (<90 days)
are most at-risk but expensive to
monitor manually since their revenues
may be small / still growing compared to
larger more mature accounts.
• Gainsight made it cost-effective for its
clients to do this critical piece.
18. Customers are creating the scalability to handle
customer base growth
For every 1,000 customers added, Gainsight
clients will need 15–20 fewer CSMs, or $1M less
annually.
20. The Customer Success Management Journey
Reduce
churn & drive
up-sell
revenue
Scale
customer
success
team
Strengthen
customer
engagement
21. We understand our customers in
more ways than just the old segments
– households, small and large
enterprises. Gainsight has helped us
segment customers in different ways
Without any CSM, customer
churn would have been in
double digits, but Gainsight
can reduce churn by over
50% to just a few %
Gainsight saves us 3000
person hours every month
in data preparation time
for customer retention
meetings. That’s about
$1M per year avoidance
Before Gainsight, it was
always 'the hot customer
of the week', now it is ARR
and customer-health
based
For CSM
automation,
SFDC cannot
become
Gainsight
Gainsight also helps with
cross-sell by tracking out of
compliance customers,
which has resulted in
hundreds of thousands of
dollars of revenue per
quarter additional revenue
The general assumption is that large
customers need attention. However, in our
case there is a huge # of new customers
(<90 days) that are still adopting the
product and therefore high risk for churn.
It is expensive to service these customers
and this is where Gainsight automation
helps
We were able to
cross-sell / upsell
10% more thanks to
Gainsight
Before Gainsight, CSM reports
were pieced together in SFDC
and we only had 1/2 the
number of reports and much of
the information required going
to multiple places.
2014 Gainsight, Inc. All rights reserved.
22. APPENDIX: EXAMPLE OF HOW A GAINSIGHT
CUSTOMER REALIZES VALUE
600
1000
1400
3000
30*
# customers
$48K
# data points reported per report
$90K
$72K
Average annual revenue per customer
1 hour
2 hours
3 hours
4 hours
1
400*
1200 per week**
Number of customer outreaches with CSM reports
>10 % points
$1M
4
# of ’CSM’ conversations per customer per month
10
25-30
# CSMs required per 1000 customers, if done manually
Time spent on CSM reports per report
2-3 % points ($10M)
100
10
25-30
# CSMs required per 1000 customers, if done manually
$2.4M
$100,000 per quarter
$1.2M per year
Churn reduction & Revenue Lift (3 years) Opex Savings (data preparation) per year Additional cross-sell / upsell revenue generat
*(before Gainsight)
23. HOW TO GET STARTED
2014 Gainsight, Inc. All rights reserved.
24. CSM ROI Assessment
• 2 Winners from
Attendees
• 2-3 week study
• Data workshop
• Growth & Churn
Assessment
• Custom ROI Model
2014 Gainsight, Inc. All rights reserved.
Hi everyone and welcome to today’s discussion The ROI of Customer Success Management Solutions. We have some great content and even better speakers. Before we dive in, a few quick items of housekeeping.
With that, please welcome our panelists. Sitting next to me is Anthony Kennada. We’re joined by our guests from Mainstay Company - an independent analyst firm specializes in building ROI stories. As Gainsight customers mature in their Customer Success investments, Mainstay works with them to quantify and share their stories. Craig LeGrande is the managing director and a co-founder of Mainstay Company LLC. He has served as senior advisor to leading companies in the automotive, retail and high technology industries, helping them identify new market opportunities and develop effective capital investment strategies. The author of more than a hundred case studies and research papers for high-technology leaders such as Oracle, SAP, EDS, BearingPoint, EMC, and Network Appliance, Mr. LeGrande is an expert at proving business value by means of objective, quantitative evidence and analysis. L.Venkatraman (LV) is a Vice President of Consulting at Mainstay and works closely with CIOs and CTOs of large hi-tech companies as well as start-ups to help them articulate the value of technology solutions. LV helps Mainstay’s clients combine the power of the ‘economics of IT’ with creative / compelling communication methods. He has served in senior management positions with well-known IT Systems Integrators, leading large global business units that deliver IT solutions to clients. With that, I’ll hand it over to Anthony.
I feel almost silly explaining to CSMs why ROI is important to their jobs. There are clearly a lot of factors that define the customer success role, but ROI really is at the heart of customer success The question to ask yourself in this context is: How much value are you providing your customers? So with that, there really are three things to think about when it comes to customer value creation.
Three R’s of Value Creation for Customer Success Revenue Ex: How much bottom line dollars are you able to drive based on the successful adoption of your solution? Renewing? Buying more products / modules / services? Advocates? You made promises during the sales process on ROI impact and you owe it to your customers to be transparent along the way. Resources Ex. How effective is your team in getting their job done? Efficiency metrics like the number of alerts they’re able to resolve, the time it takes for them to close them out, and the number of incremental customers they’re able to touch as a result. Optimizing efficiency is incredibly important from an operational perspective, but be ready to defend how it impacts your revenue value as a team. This is where a technology solution can be useful in correlating the two data points. Relationship Ex. How can you quantify the intangible aspects of the customer? Brand engagement, champion mobility, number of references they give you. When a sponsor leaves, that’s a huge reason why customers churn. How can you use data that is readily available, although siloed externally, to get ahead of that conversation with the stakeholders still there?
Tie ROI of your product back to the strategic goals for your customer. QBRs, Executive Briefings or Regular Updates Transparency is king
That’s where Gainsight comes in. We help leading businesses in the subscription economy integrate ALL sources of customer data, use data science to score customers and trend their health, and then provide the operational workflow to take action in order to prevent the churn event, get the up-sell done, or otherwise ensure that customers are getting value from your product or service.
We make it simple for you to communicate ROI to your customers in real time, and in that spirit, we want to take some time to show you the ROI that our customers are realizing by using Gainsight to manage their Customer Success efforts. I’m going to hand it over to Craig and LV from Mainstay Company to detail the findings of their study of Gainsight customers.
Thanks Craig and LV. We look forward to having more of our customers share their incredible results as we continue our ongoing assessments.
So for those of you who are either a) looking for a way to get started, or b) not quite ready to buy technology but are looking for ways to quantify its impact as a means of building the business case, we’ve got a great solution to share.