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Bursts of Color - Building Your CX Team (Guest Interview)

Bursts of Color - Building Your CX Team (Guest Interview)
By Geoff Donaker • Issue #73 • View online
Jami Zakem built Yelp’s Customer Success team from 2-300 over a great eight-year run. Now she works with a bunch of startups on their CX teams, and this week she kindly joined me to provide an overview of her starter recommendations.

Jami: dropping knowledge with a smile, as usual
Jami: dropping knowledge with a smile, as usual
What should I call this team?
JZ: The department names have evolved. Here’s how I think about what they mean today:
Customer Experience (CX): This is the umbrella term for all post-sales, customer-facing activity.
Customer Success: The proactive portions of CX that tend to include:
  • Onboarding & Implementation
  • Adoption & Engagement
  • Renewals & Upsells (sometimes aka Account Management)
Customer Support: The reactive motions that handle customer requests. This includes your Help Center, Chat, Phone Support, etc.
How should I think about growing a CX team from 0-10?
JZ: Almost every company starts with one generalist CSM who does a little of everything. You’ll know a second CSM is needed when the first person starts to cry, often literally. The next question to ask is “what are they crying about?” because the solutions are different if they are getting crushed with onboarding vs support or something else. Beyond two CSMs, it’s time to start specializing into some of the functions listed above, rather than just hiring more generalists.
It’s also important that this CX team reports to whoever oversees sales, which usually means the CEO or CRO. By contrast, if Sales reports to the CEO and CX reports to Product, you often get misaligned incentives and both teams just blame one another.
As the company grows, the people from CX often get picked off by other departments, because they have become product experts and also have people skills. This is a high class problem, but it does require you to plan headcount accordingly.
When should we hire an experienced Head of CX?
JZ: Typically the first team leader is a CSM promoted from within. This can be a good answer until you have 5+ people on the team… but at some point you’ll realize the blind are leading the blind. The first CX exec hire often comes around a new round of funding, when you know what specific motion you want to lean into. There’s often also a next-level exec hire that comes when the team is 30-50. Don’t wait too long at any of these steps, especially if you’re sitting on a pile of revenue, since recruiting takes 6+ months.
What KPIs should we use to measure the CX teams?
JZ: It depends on the specific sub-team; common ones are:
  • Onboarding: time to value
  • CSMs: customer health scores or usage of key features
  • AMs: renewals & upgrade revenue
  • Support: customer satisfaction or response times
What does the CX tech stack look like?
JZ: Just as the sales team needs a good CRM solution, so the CX team also needs integrated tools including:
  • Support - ticketing, support metrics - e.g., Zendesk, Intercom
  • Customer Success - customer usage data, creating tasks and actions for CSMs - e.g., Gainsight, ChurnZero, Planhat
  • Customer Lifecycle Marketing - e.g., Hubspot,
Get demos of these products far before you’re ready to buy, as this will open up your thinking.
Any parting thoughts or other rules of thumb?
JZ: Inbound customer support should almost always be “round robin” rather than matched to dedicated CSMs.
For outbound customer success, dedicated reps can make sense above a certain price point (e.g., $25k ACV) or if there is a special situation (e.g. high potential customer).
At scale, enterprise companies tend to hire about one customer success rep for every $2m book of business.
Outsourced customer support can be helpful, particularly if you have volatile demand or wide timezone needs.
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Geoff Donaker

Bursts of Color is a newsletter for start-up leaders who work with Burst Capital. It's meant to include products, people and ideas that I think are interesting and maybe relevant for you.

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