How do customer success leaders become strategic partners?

Episode topics

0:00 - Introduction

1:13 - How did a CSM lose a perfect account two weeks before renewal?

2:39 - What's the difference between a transactional relationship and a strategic one?

6:11 - What are the warning signs that a relationship is at risk?

7:12 - How do you shift from vendor to strategic partner?

10:39 - How can CSMs foster strategic client relationships?

11:55 - What changes when you're working with enterprise clients?

14:41 - What questions reveal the health of a customer relationship?

16:10 - How do you navigate executive relationships in customer success?

19:18 - How did one CSM transform a tactical relationship into a strategic partnership?

21:21 - How do you know when you've become a strategic partner?

23:17 - How does TELUS Digital differentiate in a crowded market?

24:15 - What do CSMs need to remember as they build and maintain client relationships?

Transcript

[00:00:00] Robert Zirk: You're a customer success leader at a B2B company. The health score for one of your top clients is fantastic. Adoption metrics are trending in the right direction. CSAT looks solid. Then, just as renewal is approaching, you get an email.

[00:00:17] Business executive: We've decided to go in a different direction...

[00:00:19] Robert Zirk: So what happened — and how can you prevent it from happening?

[00:00:24] You're going to hear two insightful customer success leaders: Kelly McGuire from Everstage...

[00:00:30] Kelly McGuire: If you are not in that room with the leaders in some way, you're not gonna be part of their growth and their evolution.

[00:00:36] Robert Zirk: ...and Tom Pelisson from TELUS Digital:

[00:00:38] Tom Pelisson: You can't do it in your first conversation. It's about building that rapport over time and providing that candor and the results that allows you to start to have a seat at that table.

[00:00:49] Robert Zirk: Today on Questions for now, we ask: How do customer success leaders become strategic partners?

[00:01:03] Welcome to Questions for now, a podcast from TELUS Digital where we ask today's big questions in digital customer experience. I'm Robert Zirk.

[00:01:13] The idea for this episode all started when I saw a scroll-stopping post on LinkedIn that went viral among customer success professionals.

[00:01:23] According to the post, a CSM had just lost a green enterprise account two weeks before renewal. Every metric looked perfect. The CSAT score was 4.7 out of five, NPS was in the highest category and adoption rates were strong. The CSM had built solid relationships with their day-to-day contacts, resolved issues quickly and delivered on every promise.

[00:01:47] But when the client decided to consolidate vendors, their CFO — who'd never interacted with the CSM — made the decision: there was no room in the budget for the company that the CSM represented.

[00:02:00] The post went viral among customer success leaders because it revealed an important truth: you can do everything right at the tactical level and still lose the account if you're not visible to the executives who make the final call.

[00:02:15] The person who shared that story was Kelly McGuire. She's vice president of customer success at Everstage, a sales performance management platform. Kelly has spent nearly 20 years leading teams that partner with Fortune 500 companies and she's developed a framework for identifying when B2B partnerships become truly strategic — and when they're at risk of being merely transactional.

[00:02:39] Kelly McGuire: When an organization purchases something — service, solution, software — they instantly think of you as a vendor, right? That's what you are. You're a vendor providing a service.

[00:02:48] It's a very transactional relationship. When you're a vendor, you're providing a service, but it's not quantifiable. There's no strong value story.

[00:02:57] You are seen as one of many on a shelf, and that's never where a customer success manager should feel sufficient that the relationship is.

[00:03:05] You have to really shift the customer's perspective on where you fit within their org.

[00:03:11] Robert Zirk: According to Deloitte, businesses focusing on customer success experience a 91% boost in year-over-year retention rates over those that don't.

[00:03:21] The shift from vendor to partner requires more than just great metrics. You need to be in the room where decisions are made.

[00:03:29] Kelly McGuire: If you are not in that room with the leaders in some way, you're not gonna be part of their growth and their evolution.

[00:03:34] So making sure that you have that multifaceted, or what I call multi-threaded, relationship within your customer business allows you to be participatory because they see you as a further extension of their team.

[00:03:48] Robert Zirk: And one way of doing that is to work with your customer to create a data-driven narrative around your partnership.

[00:03:55] Kelly McGuire: You as the CSM, you have those facts and stories and you've aligned with the customer to narrate that conversation so that it's a very easy decision to not only make sure we're in the room when those conversations are happening, but that partnership continues to grow and expand and thrive.

[00:04:11] Robert Zirk: If you're only communicating with the people who use your product or service every day, you're not creating that narrative directly with the people who control the budget.

[00:04:20] You might have all the facts and context about performance, but you're not in the room to share them when it matters.

[00:04:28] Tom Pelisson is a director of global customer strategy and success at TELUS Digital. He spent more than a decade in strategic account management and he says to cultivate strategic relationships, customer success teams need to devote more time to looking forward at where your customer wants to be — and how your company plays a role in helping them get there.

[00:04:50] Tom Pelisson: It's not to downplay metrics, right? 'Cause we know they're important, but there is so much information that is being put out there whether you're working with publicly traded companies — are you reading their quarterly reports?

[00:05:00] Are you taking all of that analysis and putting it into AI to get summaries to get action points to say, "Okay, customer. I now understand what your company is trying to focus on for the next six months or next year. Let me see how I can help you." Are you looking at what their competitors are doing?

[00:05:17] And so, I think focusing on where the customer wants to go as opposed to the metrics of what's been done already is imperative.

[00:05:27] Robert Zirk: A forward-looking approach requires a different kind of conversation from the generic monthly check-in Kelly describes.

[00:05:34] Kelly McGuire: One of my biggest pet peeves is when a CSM reaches out to a customer once a month and then goes, "Hey, how are things going? Wanted to just check in and see how things are going." That's not valuable to the customer.

[00:05:44] But what is valuable is saying something like "Hey, customer. I noticed that in your space organizations are growing at 20% every year, but it looks like you, last year, had a 35% growth. What are you doing right? I'd love to talk about that." That's much more compelling. Understanding more about their space, right? Creating that actual open dialogue.

[00:06:02] Robert Zirk: When you're not providing value and you're not visible to executives, the relationship is at risk — even when the metrics look good.

[00:06:11] So what are the early warning signs that can alert you to when a relationship is at risk?

[00:06:16] One warning sign Kelly highlighted, is when your day-to-day contact isn't able to facilitate access to decision-making executives.

[00:06:24] Kelly McGuire: That means that either they're not high up enough to make that ask or that introduction, or there's no compelling reason for them to do that.

[00:06:32] Robert Zirk: The other warning sign is a particularly concerning one: when your customers won't vouch for your product or service.

[00:06:40] Kelly McGuire: If customers aren't willing to do that, if they're not willing to speak on your behalf from a referenceability or an advocacy perspective, that's another sign. You've gotta really build that strong cadence with those customers to understand and continue to have visibility into that leadership side, the strategic side, while also making progress on the tactical execution so that you can drive to those original pains at the right level and quantify the value of their original vision.

[00:07:06] Robert Zirk: So how do you get in that room and make the shift from vendor to strategic partner?

[00:07:12] Tom takes us from Kelly's two warning signs and offers up a three-part framework. First, ensure your outcomes align with the customer's goals.

[00:07:22] Tom Pelisson: Start with making sure that quarterly, or at the start of an engagement, you are coming together with the customer and saying, "This is what we care about the most, the steps that we're going to put in place to get there and this is how we're going to measure that."

[00:07:37] Robert Zirk: Let's say your client is an ecommerce company. Big picture, they want to make their social shopping experience more effortless for their customers.

[00:07:46] And so you work with them to define what success looks like — say reducing cart abandonment by 20% this year — and how your product could contribute to achieving that outcome.

[00:07:57] Tom Pelisson: And so, over the course of that engagement or that contract, you're working towards the same thing as opposed to this nebulous "We're working together, the contract is this long, we think we're doing okay, but what does that really mean?"

[00:08:10] Robert Zirk: Which brings us to the second step: providing updates on those outcomes that keep executives informed.

[00:08:17] Tom Pelisson: You could be working daily on those outcomes, but are you providing the executives a high level summary when the time is right about how that program is doing, even if they're not involved in the day-to-day?

[00:08:29] And then, with that summary, how are you making them look good? Because people wanna look good to their bosses. How are you enabling that? Are you making that harder by making the information that you provide not easy to digest? So always having that lens, I think, is very important.

[00:08:47] Robert Zirk: Consider that business professionals receive more than 120 emails a day on average — a figure that's growing every year, according to Campaign Monitor.

[00:08:57] And the average open rate? Between 20 and 40%. That doesn't even factor in chats, texts, Slack messages and DMs. That's the reality your executives are facing. So, when you do get their attention, make it count — like in our next hypothetical.

[00:09:16] Here, your client is a mobile gaming company with a $100 million annual revenue target, and their vice president of product needs to report to the C-suite on player engagement.

[00:09:28] You don't send them raw data. You create a one slide summary with metrics that are clear and tell the story.

[00:09:35] Vice president of product: Average session time is up by 23% this quarter, which means we're on track towards an eight to $12 million boost in annual revenue from improved retention alone.

[00:09:43] Robert Zirk: By connecting the dots, you've just made that VP look like a rockstar in the boardroom. That attention to detail and clarity can help you build the rapport needed for the third step: focusing on building relationships through sincere, genuine interactions.

[00:10:00] Tom Pelisson: I don't think many relationships have ever been built out of QBRs, right? But they're important to do. But how can you be human and connect with these very busy people? Executives are people too, spoiler alert, right? And so how can you connect with them when the timing is right to build that foundation to help drive those goals and build out the engagement as much as possible.

[00:10:22] Robert Zirk: Let's assume you have a healthcare technology company as a client and their team has just shipped a major feature. You could send a message of congratulations. It's small moments like these that show you're paying attention to their business, not just your own metrics.

[00:10:39] Tom emphasizes that authenticity and proactivity are crucial as you foster strategic client relationships.

[00:10:47] Tom Pelisson: Starting to understand the client's business as much as possible is without a doubt the first step. And it's not gonna happen right away, but it is really important to put yourself in their shoes.

[00:10:57] Can you go and visit their headquarters? Can you go be on site? Can you really soak in that organizational knowledge? That's the first part.

[00:11:04] And then from there, how can you be proactive instead of reactive? How can you say, "Hey, I'm seeing down the field here and we may have an issue," or better yet, "we may have a solution." And that's gonna get them to be very bought in and very excited with working together.

[00:11:22] And then also just trying to elevate your conversations or make it easy for those very busy executives, making sure that you're building trust, too, with as much candor as possible, right?

[00:11:32] I've been doing this for a long time. There's never going to be smooth sailing 100% around, but if you can be honest, provide prompt feedback and let them know the situation and the plans to rectify it, that's gonna go a long way because you've been there in the trenches with them and you haven't wilted and you're there and you have their best interest at hand.

[00:11:55] Robert Zirk: With larger enterprises, the complexity multiplies. There are more stakeholders, lengthier processes and higher stakes.

[00:12:05] Gartner Research estimates that complex B2B purchases typically require alignment between six to 10 key decision makers — and that's just for purchases. Once the relationship progresses past the sale, more and more people are bound to be involved in the partnership.

[00:12:23] Tom asks customer success leaders to consider what that looks like in practice when working with enterprise clients.

[00:12:30] Tom Pelisson: Are you dealing with different departments across different geographies? Are you going on site but you're only gonna see 50% of the team? Are you gonna be navigating hierarchies there that you're not all that aware of, so slowly working through that complexity and understanding the culture as much as possible is really important.

[00:12:50] The bigger the company, the bigger the legal process, the bigger the procurement process. These deals and these renewal stages are just gonna take longer and there's gonna have to be a lot of resilience needed during that time. Depending on their tech stack and what you're trying to bring in the table, that could be very robust as well and so the demands from integration and setting up technical teams to work together, that's definitely a big piece of the puzzle.

[00:13:14] And then also just higher stakes and higher scrutiny, right? The companies are bigger, but the dollar amounts are also bigger as well, so that's gonna get much more eyeballs on it. So you're gonna have to be able to internally and externally take that scrutiny as well.

[00:13:29] Robert Zirk: But scrutiny isn't the only challenge. There's also organizational inertia. The mindset of "this is how we've always done things."

[00:13:38] Tom Pelisson: Being able to work with that change management challenge and float that real impact from making a change is really important.

[00:13:46] Robert Zirk: In Kelly's opinion, the strategies don't change for enterprise, but the execution does.

[00:13:52] Kelly McGuire: With enterprise, it's really about building that strategic partnership and that trusted advisor status through those kind of roll up your sleeves QBRs, building out success plans together, understanding the quantifiable challenges and doing it very hands-on.

[00:14:07] I also think that there's this kind of old school mentality of just talking it out in person, like the handshakes at the dinner table type thing. I think that obviously technology and our ability to modernize has not taken some of that away, but replaced it with more efficient and scalable ways.

[00:14:22] But that piece on an enterprise level, especially for large organizations, Fortune 500s, et cetera, they have traditions in their process. They have things that take either slower to evolve or don't evolve because that's the way their business has been. You, as the CSMs and the team, you need to be adaptable and agile to evolve to your customer and know their audience.

[00:14:41] Robert Zirk: Kelly has her own framework, a gut check process she uses with her teams on an ongoing basis, but especially as the 120 day mark before renewal approaches. The first questions she asks her team are:

[00:14:55] Kelly McGuire: Do you know their business challenge? Do you understand why they're here? Do you understand what brought them here? And is it still the same reason why they need us? Who are you having the conversation with? Are you at the right level?

[00:15:08] So when my CSM and I sit down and go through renewals for the next six to nine months, I ask these questions, right? What is the business challenge? Who are we speaking to? If that CSM cannot answer at least those two fundamental questions, we've got a bigger problem.

[00:15:23] Beyond those two, then it's: What is the vision for our partnership and have we quantified that vision together? Can we surface the narrative on that vision leading up to that renewal well in advance, with the right people, going back to that original business challenge? And if the customer success manager can articulate all of those things and get those right people down and have that open dialogue and you are getting signs and indications from the customer that they have the right reasons to wanna collaborate with you and move forward, you have a lot more confidence in that beyond just, "I think, I hope, I feel" or beyond those fundamental metrics on CSAT, NPS, adoption, usage, et cetera.

[00:16:10] Robert Zirk: Kelly used a body metaphor to explain how to navigate executive relationships.

[00:16:15] Kelly McGuire: The executive sponsor's the head, right? They are the ones that are gonna ultimately sign the contract, decide whether or not they're gonna invest, but your champion is the neck.

[00:16:24] So that neck has to know how to turn the head in the right direction based on where the company needs to go.

[00:16:31] Robert Zirk: So how do you empower that champion?

[00:16:33] Kelly McGuire: As a CSM, questions that you need to be asking your customer, especially early on, and maybe that kickoff call, that initial partnership introduction of the two teams together, 'cause that's when everybody's been sold the dream by sales. Now you're gonna start executing on the reality of that dream.

[00:16:48] And you've got those executive leaders generally on that line starting to talk about what their end goals are. Not just with our partnership, but for their business so that you as a CSM understand where you fit in that. And then in parallel, the CSM nurtures that relationship for those champions so that when they're in the room with them, they're able to really be those strong advocates and know exactly what those executives need to be shown in order to go, "Yes. That ties back to that goal, this goal, and this goal based on what we originally talked about in that start of that partnership."

[00:17:20] Robert Zirk: One of the most important skills for CSMs is active listening — not to respond, but to understand. Instead of reaching out to the customer with a message like

[00:17:31] Kelly McGuire: "Hey, I'm seeing usage is down this month, and here's some ways in which some of our similar customers are driving great adoption."

[00:17:38] Robert Zirk: Kelly recommends a different approach.

[00:17:40] Kelly McGuire: "Usage is down this month. I'd love to understand more about what's going on with your org that has changed the user's behavior. Can you share more about that?"

[00:17:50] And then you sit back and you listen to listen, not to respond, which is hard for humans to do. But it's very integral, especially when you're in customer success, because that is where you learn more about what's going on in their world, what they're up against.

[00:18:05] Robert Zirk: Kelly shared an example of how a customer needed to change timelines and accomplish several outcomes at a more aggressive pace than at the outset of the partnership.

[00:18:15] Kelly McGuire: And while we can always meet our customers and move as fast or as methodically as they need to, the question that I asked the customer was "What's driving this urgency?" Because we've all been in agreement it was gonna take X time. Now we wanna take Y time. Okay. I understand that things change. What changed? And we learned that new finance leaders were coming in, they were creating pressure for the people on the front lines.

[00:18:38] Robert Zirk: That understanding gave Kelly's team insight into the direction of the business as well as the health of the account.

[00:18:45] Kelly McGuire: It gave us a lot more visibility into what one, our customer project team was dealing with so that we could be better advocates internally for what they need, and two, it allowed us to understand much more of the why that gives us insight into where their business is headed.

[00:19:00] And if we know that things are going well there, it gives us better indication to good health. If we know that things aren't going well there, it gives us better indication at risk, and those are other things that a CSM should be able to get in front of if they're having those conversations and having that genuine curiosity to learn about their customer and what's going on in their world.

[00:19:18] Robert Zirk: Kelly followed this up with a transformation story: a customer had purchased Everstage for a basic need and the relationship up to that point was purely tactical. Then a new CSM took over the account.

[00:19:31] Kelly McGuire: And as they were getting an understanding of what was going on in that partnership and what's been accomplished so far tactically and where we are at in terms of strategic visibility, they also did their own homework and started learning — via tools like ChatGPT, let's make it easy on ourselves, right? — learning more about that customer's industry, 'cause it was one that the CSM didn't have a lot of exposure on. Once they recognized and learned some of that, both by having open dialogue and conversations with the customer, right? "Tell me what your challenges are. What is your RevOps strategy gonna look like, and how does that tie into the challenges your business is seeing at the top line?" And they did their own homework because they had a genuine curiosity to learn about the business.

[00:20:13] Robert Zirk: The CSM asked open-ended questions about challenges and strategy.

[00:20:18] That was the gateway to changing not only the conversation, but the perspective their customer had about the partnership.

[00:20:24] Kelly McGuire: We had the CFO attend the QBR and the dinner, which was a great testament to the fact that not only did the teams on the ground and the leaders in the middle of the org really value the partnership, but that CFO wanted to be there to talk about how we were growing together.

[00:20:43] And a year ago, that was not where we were. And it's because that CSM got in and validated or revalidated the business challenge, made sure that we had access at the right levels, and then myself and our CEO, who's a very hands-on CEO and very customer-focused CEO, continued to nurture the relationship with the CFO and some of the other leaders at that org.

[00:21:03] We went on site and that CFO participated in it as well as the rest of the team. And now we're going to grow and evolve together. And that's the shift that we at Everstage have made in the last year and change by continuing to elevate and focus on the customer experience and really double down on that as one of our ethos.

[00:21:21] Robert Zirk: So how do you know when you've become a strategic partner? Tom notes that strategic partnership isn't a title to be earned, but conditions that you can create by being intentional in how you approach your client relationships.

[00:21:35] Tom Pelisson: I like to operate in life that you never fully arrive anywhere, right? No one's gonna award me that title. And I don't know if I wanna feel like I've actually done that. I always wanna be improving, right? But I think you're on the right track of that when you are relentless in trying to improve.

[00:21:51] And then you also have the genuine curiosity of their goals and your direct contacts there or thinking about ideas about how to help them. Like, you're walking your dog in the morning and you're saying, "Oh yeah, maybe this is an idea for this account."

[00:22:03] It becomes second nature. I think that's when you know that you're on the right path.

[00:22:09] Robert Zirk: Kelly shared a moment when she knew one of her partnerships had shifted from transactional to strategic.

[00:22:15] Kelly McGuire: I was on site over the summer. We did a live launch for one of our larger enterprise customers and, after the first session — and everyone was really nervous going into that because there was a lot riding on making sure this went well — the CFO said to her peers as they walked out, "I knew we picked the right tool." And it was like, I got chills. I was so excited, so proud of my team that was there. And that's how you know that you're doing the right thing.

[00:22:41] Robert Zirk: Tom notes that when your client considers you a strategic partner, they feel as though they're talking to a teammate rather than someone at a separate organization.

[00:22:50] Tom Pelisson: When it feels like you're talking to somebody that's on your team in your org that isn't, right? But they're so ingrained with what you're doing that you have their number, you pick up a text and you say, "Hey, got 15 minutes to talk. Let's iron this out."

[00:23:06] And it's not this sort of hard to get to and hard to communicate topic. You're in sync already and you're working through the challenges as a team.

[00:23:17] Robert Zirk: That's how Tom and his team seek to differentiate TELUS Digital as the AI-fueled CX partner of choice — by making proactive recommendations influenced by an understanding of their customers, the customers of their customers, and their desired outcomes.

[00:23:33] Tom Pelisson: I was talking to one of my clients in the last few months and they were saying, "We're being pitched by three to five different AI vendors this week, right? But why we're listening to what you are potentially bringing to the table is that you've talked to us about how this is going to fit into our business, which you know so well, and then where we're heading and what our goals are."

[00:23:54] And so that lets us bring our guard down and actively listen to making this work instead of getting lost in those three to five different pitches a week that they're hearing.

[00:24:05] It's not about the product. That's boring. You're gonna put a lot of people to sleep if you're talking about the product. It's the outcome that you are trying to drive and help that business with. That's the important part.

[00:24:15] Robert Zirk: Looking ahead, Tom reiterated the importance of CSMs bringing a human touch to their business relationships when building and maintaining strategic partnerships.

[00:24:26] Tom Pelisson: The number one quality, especially as more automation comes on, especially as we get busier in our personal lives and work lives, I would say being human and being a good listener to the person that you're trying to help shine in their own job, that is going to help propel you in your own career as well, so being that person that people wanna deal with and they wanna bring more business to is gonna be really important.

[00:25:01] Robert Zirk: Thank you so much to Kelly McGuire and Tom Pelisson for joining me and sharing their insights today. And thank you for listening to Questions for now, a TELUS Digital podcast.

[00:25:13] For more insights on today's big questions in digital customer experience, follow Questions for now on your podcast player of choice.

[00:25:22] I'm Robert Zirk, and until next time, that's all... for now.