Why happy customers aren’t enough: mastering CS for SaaS business growth

Today, meet Kristi Faltorusso, who will shed light on the importance of both customer happiness and customer success, how they differ, and why companies should prioritize both in their customer experience strategy.

Kristi’s Bio

In another episode of our SaaS and Tech interviews, our guest is Kristi Faltorusso. Kristi is an absolute star when it comes to customer success management. She was in the top 25 Customer Success influencers for the last three years. She's also a founder of the Keep CS Simple company, where she daily helps hyper-growth B2B SaaS companies. Among Kristi's experience, you'll also find leading customer success and customer experience teams at companies like BrightEdge, Sisense, BetterCloud, and IntelliShift.

Questions

Nat: Could you say some words about what you're doing and the companies you're serving?

Kristi: I've had the immense pleasure of spending the past decade in customer success leadership capacities. Usually, those are in the B2B hyper-growth SaaS companies where I'm building, scaling, or transforming Customer Success (CS) teams. I'm often building a CS team from scratch, transitioning a team of account managers to customer success, or getting to the point of scaling all of the initiatives.

So far, I've had the pleasure of doing this at five different companies. ClientSuccess is the most current one where I am working today.  

Keeping CS Simple is our customer success management solution. Our software helps other customer success teams have the same success we had. We're really thrilled to have the opportunity to work with many fantastic brands and businesses and help their customers achieve their outcomes.

Nat: Does happiness equal customer success? What is the balance between making customers happy, if it has anything to do with customer success, and achieving your business goals?

Kristi: There are still a ton of companies that are fixated on happiness as a barometer of success. And it's not that there isn't a correlation there. But happiness itself is not the goal either.

The goal is to make your customer successful by achieving their goals. And, if they listen to your recommendation and see an ROI as a result, they will, in turn, be happy.

There's also the idea of happiness, where it's not being measured or quantified through the lens of ROI. You can say that customer happiness is your goal if your clients are successful, and because of that, they are happy.  

Unfortunately, most companies aren't thinking that way. They're thinking about it from a relationship standpoint: "Bob over at XYZ software really likes us, and he's really happy." But if Bob's company isn't successful, it doesn't matter how happy he is. He's not going to stay no matter what kind of relationships you've built.

So from a business standpoint, happiness is okay. Of course, you want people to enjoy working with you and have a delightful experience. But that’s neither the primary focus nor the objective.

So, I think the issue is just in the way that people think of the term “customer happiness.” The maniacal focus of the companies needs to be on the outcomes, not on pure happiness.

Nat: Is it possible to measure the emotional side of customer satisfaction, and how?

Kristi: I feel like it's difficult to fully capture it because not everyone is willing to share such information. You can send all the surveys out in the world, but you might not have a 100% completion rate from those.

There are a couple of ways I believe can help you collect such feedback – any voice of the customer (VOC) program. For example, a VOC program where you are either soliciting information via survey or trying to capture customers at different points in their lifecycle with your business, e.g., having a one-on-one conversation.

For example, my customer success managers do a great job of not only capturing the health of the partnership through the lens of success. They also capture the pulse of the relationship, which is more of a satisfaction barometer. “How is the customer feeling about the partnership and the outcomes that they're driving towards?”

So, that could be another way to capture the emotional side of customer satisfaction.

However, I'd say that my favorite way to understand if my customers are truly satisfied is through advocacy programs. If your customers are willing to stand at the top of a mountain and scream how much they love you, there's no better way to measure that they have been satisfied at all levels. This way, they say that working with your company checks all their boxes. They are getting value, and they love the partnership, the product, the business, and the brand.

So, for me, the biggest way to measure the emotional side of advocacy is knowing that you've won somebody over so much that they're gonna go and tell their friends and their peers and their colleagues who you are. That’s the number one benchmark.

Nat: In one of your interviews, you mentioned that employee success equals customer success. How do you deal with the resistance when you come into the company to implement changes as a CS expert? How do you deal with the fact that people normally like to stick to their habits and hate change?

Kristi: Usually, every leader that comes into an organization wants to put their branding on things. They want to make some meaningful changes and feel like they're having an impact.

I will tell you that the number one mistake that I've ever made as a leader is coming into an organization hot and trying to make big changes right away. You're right in saying that change makes people uncomfortable. The unknown makes people uncomfortable.  

“Employees that feel rewarded, appreciated, heard, enabled, supported, and safe will do the best work they can. And their best work is going to help your customers be wildly successful”

And when you come as a new leader, who hasn't yet established trust, hasn’t built any relationships with current employees, hasn’t helped educate and communicate, doesn’t know what their focus is or what their priorities are, hasn’t learned how they're going to go about driving change, it leaves discomfort and ambiguity that allows these employees to create their own narrative.

They will think: "She wants to make all these changes. I know that for a fact, I'm gonna get fired." So, now you've got anxiety, tension, and other negative emotions running wild.

So now, when I come into an organization, the last thing I do is try to make a change. First, I come in and learn, listen, observe, and spend time connecting with people. I always take time to understand how they view my role as an asset and benefit to complement the work they're doing.

At the end of the day, we're all working alongside each other to achieve the same business objectives. We have a common business goal, and we're all doing our part to achieve that. So, it's much more valuable to spend time nurturing relationships with colleagues and establishing trust and credibility among them.

One of my favorite things to do as a new leader. Let's say you've learned about high performers at the company based on feedback from other people. The next step would be bringing them into the fold and allowing them behind the scenes to see what I'm doing and get their opinion on the changes. They've been here longer, and they've got more visibility, especially in things that are broken or not working at this company. Bringing them along for the ride helps establish a relationship there. It helps get that needed trust. It's empowering.

If you could do those things as a new leader, you'd develop strong employees. And their happiness will translate into doing great work for your customers.

That's where this direct correlation between employee success and customer success comes from! Employees that feel rewarded, appreciated, heard, enabled, supported, and safe will do the best work they can. And their best work is going to help your customers be wildly successful.

That's my leadership approach – I'm a servant leader. I believe that my role exists only to support my team in their work really well. For me, my job exists to empower and enable employees to be successful in what they were hired to do.

“Employee success = Customer success”

Nat: What are the three most common mistakes that companies make when it comes to customer success?

Kristi:

1. Designing the programs inside out.

They're not taking into consideration the customers' needs. It's designed fully internally, based on their own systems and processes as well as their own understanding of customers’ needs and wants. By designing and executing a life cycle or customer journey that way, you're almost guaranteed to fail to meet your customers where they are.

That’s why the first thing that I always do is interview my customers. I learn who they are, what they want, and how they see success. So, flip it on its head, and instead of designing a program inside out, design it outside in. Design it for your customers with your customers in mind. And, quite frankly, design it literally together with customers! You'll have a lot more success that way.

2. Preaching to be customer-centric but not actually behaving like customer-centric organizations.

It means poor communication and unrealistic goals. Having an expectation that the customer success team is responsible for delivering successes and outcomes is a company-wide objective, right? But my customers cannot be successful on the backs of CSMs alone. It requires a good product, marketing, support, and payment processes.

All of the things that impact your customers expand well beyond your customer success organization. We are our conduit to achieving outcomes, but we are not the team solely responsible for that. As a customer success team, we only help ensure it can be a reality.

So, companies fail when they talk about being customer-centric but then rely solely on the execution of this task on the backs of customer success teams.

3. Chasing the lagging indicators.

People want retention, high NRR, low churn, a big logo retention rate, etc. These are great, though they are lagging indicators. They don't allow companies to focus upstream on the leading indicators that help ensure customer success. When you put too much emphasis on lagging indicators, you are on a hamster wheel. You're maniacally focused on things that you cannot change. Because the mentioned change always happens upstream!

So, in my opinion, companies that are not focused on leading indicators will inevitably fail. Or they're not going actually to fix the problem.

“Companies that are not focused on leading indicators will inevitably fail”

Nat: You mentioned that you’re a “servant leader.” Have you had any situation in your career where you had to reject a project because it wasn't aligned with your ethical standards or principles?

Kristi: Yes. I did resign from a role where I was in a leadership position for over a year. Their executive leadership team and I were not morally and philosophically aligned on customer success. They wanted us to execute some motions that didn't feel organic and appropriate with customers to drive revenue up. And so I took the liberty of having a tough conversation with the executives. And we agreed amicably that I would leave.

It was tough to have this conversation because I didn't want to come off as superior. How that company viewed things and how it wanted to run the business was very different from how I would run my business.

I'll always give my best shot in a project, but I won't compromise who I am and what I believe for money. So that's what it comes down to.

Their company's belief was that customer success is just a growth engine. So, they didn't care about onboarding, adoption, engagement, or relationships. They literally just wanted us to call into these companies and sell more products and drive on.

This just wasn't the role that I signed up for. Those weren't the conversations we had when I joined. That is not how I'd run customer success.

I have hired customer success professionals with decades of experience in doing this the right way. And, if you want to do it the other way, that is alright. This is your business; you are entitled to run it how you see fit. But I cannot support that.

Nat: Are there customer success principles that you also apply to your private life?

Kristi: You know, I probably learned how to be a better wife, a better mother, and a better friend as a result of being in customer success. It probably taught me how to be a better human in general because of learning how to do this in a business capacity.

Right now, I have way better communication than I ever had before. Earlier, having tough conversations used to feel very cringy. Being able to address conflict head-on in a communicative, collaborative way is definitely something that I learned in customer success, especially as a leader.

The other thing I can do now is to translate other people's words which helps in conflict resolution and objection handling. In our house, we always bring respect to conversations, even if we disagree. We address conflict, communicate about what's happening, and then come up with a resolution and then move forward on that.

Now, I'm trying to understand where everyone is coming from. I spent a lot of time trying to understand our customer's goals. Getting to know what they're trying to achieve and what's their vision of getting there. I also apply that to my personal life. I'm trying to understand if my role is just listening or maybe leaning in with advice. So, now I just process things differently, and I think more astutely in all conversations. Understanding what a person you're conversing with is trying to achieve allows me to wear a stronger listening cap than I ever did before.

The last thing I do better, thanks to working on customer success, is accepting feedback and giving feedback.

To sum up, communication, listening, and feedback are three main things that I learned in customer success that I apply to my private life.

Nat: If you met a 10-year-old Christy, what would you tell her?

Kristi: "Stop worrying what other people think." I have spent the bulk of my career professionally and my teenage college years so consumed with how I was perceived in the eyes of others. I did not spend enough time seeing myself for myself and appreciating myself for who I am. I didn't support myself for being who I am – being unique, different, and authentic.

Now, when I look back, I think how I missed out on a lot of years of people really getting to see me for me. And now, I am unapologetically me every single day, fast-talking and all.

It also didn’t come overnight. I had to work on creating my own safe space to feel like I could do all these things. But at the end of the day, if someone doesn't like me for me, then that's not my problem. That's theirs.

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Rapid-fire round

What is your biggest regret?

I try to live life with no regrets. But I'd say – never going abroad. I've been on Long Island in New York my whole life – this is where I was born and lived my whole life. I think when I was in college in my early 20s, I should have lived anywhere else, in another country. Any country!

I think I missed out on getting cultural exposure, learning a different language, just really adapting, and so on.

If I could go back, my biggest regret would probably be not spending a couple of years abroad.

Would you choose one hour in the gym or one hour mentoring somebody on customer success?

I love the customer success community, but I will be in the gym. Sorry, guys.

What are the three main qualities of an outstanding CSM?

Strong communication. Strong moral compass. And the ability to build deep relationships.

I feel like those go a long way, and they are non-tangible. You can always learn about a product or a space.

Get to know Kristi