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How Customer Success Can Drive Revenue From Existing Customers

In our discussion we learn how AppsFlyer’s customer-obsessed approach to product and revenue has driven over $300 million from existing customers in less than four years.

Career Progression in Customer Success Management

Barry: Thanks again for being on, I wanted to discuss your career in depth. Ziv started in 2013, as he just mentioned as number seven, as a senior customer success manager, then six months later, the head of customer success, 11 months later, head of client services. I think 11 months later, after that VP client services, you were there for a year and a half in that position. VP global client services, then VP global client services and product. For the past two and a half years you’ve been the Chief Customer Officer.

It’s cool to see someone who has been at a company since they joined as number seven and has seen the company grow to 1300 people. And since you are a customer success manager, there was probably a team of one when you were seven or everyone was doing customer success, and now your team has grown to 300. Maybe you could talk a bit more about that and give advice to someone that wants to stay at a company or if they are interested in career progression?

Ziv: Yeah. So we could speak the entire 30 minutes about that. So first of all, I think a journey and probably there’s a lot of people that are now starting a journey in a company that is pre-seed, pre-A. When I joined, it was pre-A and I think that the journey is so interesting and if you pick the right product, the right company, the right market, you can even get a journey like that. And there’s so many things that you learn in that journey, the company that understands the product market, fits the company, that understands how mission critical their value is. And then I think that also finding your niche, finding your place. And I think one of the greatest things that I believe I got to experience in my journey, is the global aspect of things.

So I think not a lot of startups grow in Israel and stay managed from Israel in the global aspect and I think that’s super important and anyone that wants to grow to be a leader and maybe even an executive in a more mature company needs to think about the global aspect. And we see more and more successful startups in Israel that are not being sold, that are not being acquired, that provide that global aspect. I think that global aspect is fascinating.

I believe that what really ticks for me, what makes me super passionate in AppsFlyer is that we’re providing the same product, the same set of features to all our customers in all verticals across the marketing teams in all the regions in the world. Probably today, close to 40 markets where we operate, everyone gets that same value and it’s critical value to all these companies. And I think that if you are a customer success manager, working with some of these companies, it cannot get more exciting than that.

The Evolution of Pricing

Barry: That’s great. And maybe we’ll have to make another podcast just to talk about more of your journey. Thanks for sharing about that. So I think for our listeners, and the reason we don’t want to go more into that is because for our listeners, there are a lot of revenue operations professionals, a lot of CROs. And I think to speak with you as a Chief Customer Officer, it’d be really cool to learn more about the renewals, a lot about your pricing and how your team works with that. So maybe first to begin off with, introduce us so we can understand better about the pricing model at AppsFlyer. On the pricing plans and the model.

Ziv: In the end, I think we can speak about the evolution of pricing. So I think, first of all, AppsFlyer is the leader in the market where around 70% of the market in mobile attribution and marketing analytics, and then in the marketing measurement analytics as we evolve, I think that what’s really interesting is that I believe we won the leadership in that market because of our business model, because of how we try to build the equation to be the most, the simplest and the most fair model in the market back then, back in 2013, 2014, 2015. And that one, the market, both in the growing customers, the upper tier that we had, first small then medium, then more and more enterprise customers. And at the same time, it also brought us the small customers that were easy for them to install AppsFlyer, not to sign the contract for 12 months.

And then when those companies grew, that was the net revenue, the net churn for the growth parameter. And if you look at that from a longer term perspective, that’s the very small investment, very small cap investment back then 2014, 2015, that would cost probably in 2017, 2018. If we were not acquiring these customers, it would cost us 100 to maybe 10,000x more on the cap. So I think that in the language, this is now the CRO language or even in the boardroom language, this was nothing but revolutionary.

And again, for us, some of these things happened planned, some of these things happened as destiny. And I think that when we speak maybe further towards that, I think that around 2017, 2018, we started to produce more and more features. Again, most by destiny. And then we also bucket those features around seven features in the premium side and all the rest in the non-premium side, which was evident for both the customer success and the sales teams, for the revenue stream, as we started to sign more and more contracts, more and more customers on the main package, on the main value of the measurement.

And then we already had five to seven premium features that we could upsell. It was never about seats at AppsFlyer. It was always by what we measure for you, that’s the core package. And then in the early days it was paper use and you could sign a month contract. And then we started to shift our customers to a contracted yearly, and then packages. So as you grow, you get a better package that gives you a better unit economic cost.

Barry: That makes sense. I actually remember, I think it was 2014 or 2015, playing with the toggle on the AppsFlyer pricing page, it became cheaper the more you grew. But, as you mentioned, it was very affordable for the smaller companies. I think now for this audience, a lot of people are creating startups or are focusing on product led growth.

And that would be, it seems the best example of something that is free or close to free that people can self-service and start themselves as much as possible. And then grow the net dollar retention and grow the lifetime value. As they grow, you grow. And then charge even less for them. So it’s a cool business model.

So right now it seems that AppsFlyer is at the stage where they’re more mature and they dominate the market with 70%. That’s not very common to see in any market. So congrats on that. You’re able to not just pay a charge per action, but you’re also able to estimate how many actions they’ll have for the year and you charge per year. Is that correct? I want to get that correct.

Ziv: Right. So yeah, so definitely we have packages where you even pay prepaid for the year and you get something, carrot and a stick there. And then you also get the ability to pay for contracts yearly and pay monthly. There’s a lot of flexibility there.

Creating Customer Support Qualified Opportunities

Ziv: In 2018, I started to push and we didn’t speak a lot about customer success yet, but customer success for me was always about being the trusted advisor, being the non-commercial person in the room, being part of the team, pushing the value, and building the relationship. And then later on think more strategically about revenue, but from the value realization and from achieving the success outcome of the customer. So that was always a kind of this focus.

Now, what I can definitely share, in 2018 we started driving the customer success managers to open customer support qualified leads that turn to customer support qualified opportunities to the sales team, to the growth team and created lots of opportunities. I can say that since we started, we have driven over 300 million dollars from existing customers in less than four years, only from that approach.

Barry: So right now your customer success team is still not talking about payment with them? They move them to a different team.

Ziv: Yeah. And I can speak a lot about that. I’m sure that VP sales, CROs, COOs, even CEOs think that, oh, why should we invest so much in customer success? I have a team of 230 people including leadership and, and ops. Why shouldn’t we use them to generate money? I think that we are longer term and we are focused on that value and relationship on one side, having said that, I think we should definitely drive the CS qualified opportunities that then drives that net revenue retention.

At the same time, and again, this is for AppsFlyer I say, when we work with the customer, we work with the marketing team, with the campaign manager, with the user acquisition director, with the CMO, and then the renewal or the upsell or the expansion. We get the opinions and maybe some of those people that I just mentioned are the decision makers, but a growth manager, account manager or sales manager will then need to close that deal with procurement, with the CFO, to run security again, to do the legal negotiation.

And that’s, in our case, that’s another line. That’s another relationship that if the CSM were to do it, then they would have less capacity to speak about endangering trust and relationships.

Customer Success’s Focus on Relationship and Value

Barry: And then I guess the third aspect would be, then you would have to also train your customer success team on how to be salespeople in essence. Were there tough decisions that had to be made in 2018? Was it a debate in the office about this model?

Ziv: Absolutely not. Lots of the vision I built in AppsFlyer was with Oren, the CEO and me. We understand the value. We understood the value back then, back in the day, even in 2014. We understood where we were building that customer-obsessed approach. And we then understood also what we’re scaling here. And in the end, it’s a customer-obsessed approach, it’s customer experience. But if you look at our customers that have been using AppsFlyer for three, four or five years, it’s a lot more than that. It’s both the main pillars that I’m saying again and again in this podcast, value and relationship.

But if you think about marketers, marketers usually work in a company over 24 to 36 months. Now, I think even in COVID, even less. So let’s say 24 months. If we are shipping great value, if we are helping you get the value that you need, those success outcomes, value realization, if you are getting great service and then even I develop a relationship with you, probably when you are going to the next company, you will want to work with me again.

You will need that up square value again, this is 70%. 70% comes from adding all those components. You cannot have a great product and no service, no experience. So the greatest product that works, either the entire service is the product like Slack, for example. You don’t need a customer success manager at Slack. But if your product is more complex and you use it every day, and it’s not plug and play. Yeah, it’s self serve. But then you have very deep things like in measurement, in marketing measurement, in attribution, there’s different models.

You run with multiple networks sometimes with dozens, you really need to deeply understand how to measure, how to take that data and incorporate it with your backend data, with your proprietary data, how to use it, how to use it in real time. And that’s one of the main values that the customer success managers deliver. And when you get that, then you absolutely grow with us. You absolutely use more and more of AppsFlyer and more and more of that service. Customer success manager over the years is, it’s also solution architects, it’s also support, it’s many things.

Barry: Right. So that $300 million does that include the customers that move to new companies or that’s just upselling what they have?

Ziv: No, this is just upselling. So when someone goes to another customer, that’s actually a new term in sales, it’s called earned customer. If you think about that, when you go and you buy a customer, you go and you run marketing and you bring those MQLs, MQOs, and then SQLs and SQOs, you are then paid dollars for those leads. Sometimes it takes nine months to bring a customer so in the end, your cap will be, let’s say $50,000. Let’s say in the very big enterprise customers, it might even go to that. Maybe let’s say 15K. Okay. And then end customers coming from advocacy or recommendation are customers that you are not paying for and they already have higher intent.

Customer Relationship Management

Barry: People could literally build business models just off earned. I think that’s super interesting and a really good viewpoint to think about as a CRO or an operations professional to mark those things. Is there a customer relationship management process that you guys have internally when you see customer churn? Do you reach out to the sales team saying, oh, this person moved or you just wait till they reach out when they’re ready?

Ziv: Customer success and the growth managers and the sales managers, they work in pods in the region. So for example, the CIS team has a very nice pod that they work very, very closely, communicate highly effectively. The US, China, have different teams that work in pods and then work very closely together. And we also identified, so one of the great tools that we developed in the last two and a half years, and one of my obsessions over relationships in the last two and a half years was to build in Salesforce, a new custom object that is to measure these relationships. And when we started to build that, we thought we would use the contact object. But then we saw that the contact object is the worst object in Salesforce, noisiest, dirtiest, and in the end, we’ve built that customer object.

And then another realization that we had was that we need to build one-to-one mapping. So it’s not only that I’m the CSM and I work with HBO, but it’s also that I have my line with Jake, with Steve, with Joe, and then there’s maybe it’s a bigger customer. And then there’s also a solution architect and they also have a line with Jake and Steve, and then there’s a sales manager or growth manager that currently we don’t enforce that, but they also have a line with one of them. So we look at these lines separately and we also mark, what is the type of the customer relationship? So I’m a CSM, and this is on the other side, it’s a champion or decision maker or an executive. And then also we look at the strength of the relationship, how personal that relationship is.

And if that contact is a supporter or an advocate. And then we also measure, when someone leaves, doesn’t matter if it’s the CSM or someone at the customer side, we save those customer relationships in the past relationships. So we have a snapshot of the relationships that we’ve built. So if a CSM leaves and then we do a CSM to CSM end over the account, then the new CSM is a snapshot of what are the relationships that CSM built before. Now, I know where to start from. Now, the best thing that we saw around the relationships of the champion living is that if I built a great relationship with my champion at the company, then they would orchestrate the successor. They would tell us they’re leaving. They, in some cases, told us where they’re leaving too, so they also started to build the opportunity in the new customer or prospect. So making us stronger in a customer or making our positions stronger in the prospect, but then also orchestrating the successor within the current company.

Barry: Yeah. That’s awesome. I love this earned customer thing. I think everyone needs to be on top of it. If you have 230, 300 employees on customer success, there is some churn even with a great chief customer officer. How do you manage customer retention and make sure those handoffs are correct?

Ziv: I think on that part, on the handshakes and those things, so lots of the things, lots of the methodology processes and tools that we’ve built in the last two years, a lot of it were enhancing the process that we already did before. Just making sure that we are doing those in custom objects in Salesforce, and that the information is not in my notes or in my Asana or in my Gmail. No, those notes are in Salesforce. So a red flag, red flag risks of customers leaving are in Salesforce. And the onboarding process is in Salesforce and the success outcomes, the next customer object that wants to be released in Salesforce, the relationships are in Salesforce. The renewal forecasts are in Salesforce, the renewal, we have a strategy group meeting every month. And speaking about the renewals of three months from now, those renewal recommendations are being written in Salesforce.

And we’re trying to cover 100% of these renewal strategies for each and every account, making sure that we have that. And I just mentioned just a few of those. So there’s more and more things that we have now in the custom objects. And I think that the revolutionary part of that is that, when a CSM now leaves or moves to a new role, and then they hand over now that account to a new CSM, then that CSM has all this written in this custom object in Salesforce and even a nice Looker dashboard that encapsulated every piece of information in one page.

You may also be interested in: The Effective Sales CSM Communication Process That Results in Revenue Accuracy

Customer Success When Serving a Global Community

Barry: I wanted to speak a few minutes about customer success when serving the international and global community. It sounded like that was something you’re passionate about when we first started speaking. So you mentioned that from a global perspective, everyone basically has the same pain point. Everyone has the same need. Is there a different way that you manage your global team, even if the user uses Appsflyer the same?

Ziv: Yeah. So first, there’s definitely a lot of value in being close to the market. So we started in Israel, we started from one team and then very early in 2014, we decided that we want to be as close as possible to the customer. And we started to invest in these local offices. First of all, as I said before, I’m sorry it is a generic value, one version to all customers. I think that’s amazing. Having said that, definitely there’s different customers in China, in Japan, in India, in the UK, and then the US, or in Latin that uses different things. Also the focuses always change. So when China was in user acquisition, others just started to think about user acquisition, then China moved to re-engagement. Then other regions started to do user acquisition.

And then when China started to invest a lot more budgets in user acquisition and re-engagements, then the other regions started to invest more budgets in user acquisition and so forth. I think that definitely our success is providing that value and providing that service globally and really hiring amazing local teams to deliver that value in the language, in the time zone, as close as possible. And before COVID, also meeting face-to-face going to the customer offices, not a lot, I would say, I would guess it would be between 10 to 20% and the rest was Zoom even before. But that 10, 20% is definitely the edge. And I think that definitely if you look at the future, I think that Zoom is here to stay, but face-to-face is going to come back. I just came back a month ago from San Francisco. I met eight customers. Those meetings are invaluable. You cannot replace them. That’s exactly the value that we need to provide our customers. I think that going out of COVID, it will definitely be 10 X more appreciated also from the other side.

Barry: I agree. I can’t wait to see more people from across the world. So I definitely agree on that. So cool. I think there’s definitely a lot to take home. I had a great conversation, Ziv. I learned a lot and I’m looking forward to spreading this and to keeping in touch.