Masha
Great. So maybe, Dutta, if you could help us kick-start with a little bit of context just on yourself, your role, but also your background and how you got into Customer Success, and also your role at ActiveCampaign, obviously.
Dutta
Sure, sure, why don't I start with the role at ActiveCampaign and then go from there. So at ActiveCampaign, as the Chief Customer Officer of the company, I'm really responsible for ensuring that our customers are getting consistent customer experience—whether when they ask a question, or whether we identify opportunities to help them get the maximum ROI from their product, right, because after all, they're paying us and, you know, sometimes they are proactive opportunities. So it covers all of that spectrum. And our goal as ActiveCampaign is very simple—it's to help small businesses really grow their business, and make sure that they are using personalized communication, and personalized tactics to drive up customer engagement, and the category that we play in is called Customer Experience Automation, but at the heart of it, what we want to help every business do, is to grow their business by leveraging personalized communications.
Masha
Very cool. Tell me a little bit about how you got into Customer Success, if you don't mind sharing, because the paths for folks have been very, very different, it seems.
Dutta
Yeah. So I actually have a background in software development, that's where I started my career, and then over the course of years, have done almost every kind of role, I think, barring pure-finance and pure-HR.
Masha
Wow!
Dutta
So I had an opportunity at Google to lead and transform their customer experience, which gave me my first kind of like, taste of what this is. And then since then, I've just taken additional roles at Pinterest, to scale operations for, you know, large customers, creators, everything else. And then coming to ActiveCampaign, where, you know, again, it's over 150,000 customers globally in 170 countries. So we want to make sure all of these businesses are really engaging and seeing the best value for the product, for the functionality that they've effectively paid for.
Masha
Right, absolutely. And so, of course, Customer Success is clearly, you know, an extremely important function at ActiveCampaign, as is spoken to by the fact that you folks have a Chief Customer Officer, because we see that as kind of a new role that's coming up a little bit more now. How do you see—maybe this is my first controversial question—how do you see the best way—and maybe actually start, I guess, with how it's organized at ActiveCampaign—but how do you see the best way to organize the function of Customer Success in a company? What's the best way to kind of structure the reporting structure? And what is the worst way?
Dutta
So, I will answer this first, like, let's kind of talk about ActiveCampaign—I work with the CEO and all functions, like everything from Support to Customer Success to Onboarding, Education, anything that touches a customer effectively that is non-sales, reports to me, right? Now, most Chief Customer Officers have some remit that are relatively similar to this. The question is, where do they sit? You know, some of them obviously sit directly as their own line with the CEO, which I think makes a lot of sense for companies who are in the subscription business, right? And that's simply because at the end of the day, it costs almost between 5 and 10x more to acquire than to retain. Right, so the economics of the business would suggest it's a strategic lever, and it needs to be managed at that C-level, right? Now, there are many other businesses where this is not the strategic lever. This is a supporting lever to something else, right? Think about sort of like one-time sales businesses, right, at the end of the day, yes, of course, they can go back and sell them again, but they're signing large contracts. So it's not unusual to see somebody with sort of Customer Success or like some version of this, reporting to a revenue-centric function, right, Revenue Officer, because really what their business is optimizing for is large contracts, large deals, and that's just how that works. So I don't think there is a good or a bad—it depends. And then there are sort of like, purely product companies, right? Where they're literally selling everything direct-to-customer, there are no sales, right? And then where do you put that in? And then in a lot of those cases, when it is truly, truly about, let's say, the online experience, it is not unusual to have like all of these functions report up to somewhere in the tech product, kind of like, reporting structure. So it depends on what the company's business is, what their revenue model is, and how does experience drive that?
Masha
Yeah, that's a great, thank you for sharing that. That's a great perspective. I'm really curious if I could dig in a little bit more. Do you see, sort of, so if we take revenue as the lever, does revenue kind of mean the same thing as value to you? Or is it different?
Dutta
At the end of the day, a business exists because they need to create shareholder value.
Masha
Right.
Dutta
It's a difference between a nonprofit and a for-profit organization. And any company that's in the market, whether it's private or public, the first metric everybody will ask you is, "Did you make money?" How you make money is by providing value to customers. So if you're really providing value, you should be making money.
Masha
Right. So it's kind of a follow—it's a lagging metric, right?
Dutta
So it is something that everybody will look at one way or the other. This is not a more moral, philosophical question. It's the fundamentals of business. And, hey, if you want to value your company, they are going to ask you about your growth rates.
Masha
Yep.
Dutta
They're going to ask for retention rates, they're also going to ask for retention rates, but they are going to ask you, how much money did you actually make? And if you don't make any money, there is nothing to retain. You know? That's the other side of the equation. Right? [Laughs]
Masha
It's gotta be both.
Dutta
It's got to be both, right? So if you have five customers and retain all of them, it's not a viable company.
Masha
Right. Fair.
Dutta
Right. So I think revenue is absolutely important. And every company and as a business, everybody will optimize for revenue growth in some form or the other, because every investor—including Wall Street, right—will want to see revenue growth, otherwise, that stock is not worth much.
Masha
Not that interesting.
Anwar
Yeah, that is true. Given that point, what does Customer Success mean to you? And how do you know it's working? Is that solely revenue?
Dutta
So to me, like I said, first, you need to have customers, which is what revenue is. Then, again, depending on what type of business it is, do you expect them to do repeat businesses? Now some of them are, you provide a service—I'll give you an example, right? There are many companies, smaller companies that do launch events, parties, things like that. Very, very successful businesses that do it. They may not have repeat business, because there's only going to be one launch, there's not going to be like 20 launches of the company. Right? Does that mean it's not a bad business? No, it's a great business to be in. Right? Their measure of retention would be something like referrals, right? How many people are being referred? So that would be like an NPS score, like, would you want to refer somebody else? Now, NPS score is a very good sort of way, tangible way to measure are people talking about you? And would they recommend your product elsewhere? But there are other businesses where you would expect people to stay on and maintain trajectory, right? Think about any kind of b2c consumer business—you're paying $10 for Netflix or $14, I don't know, they keep raising their prices, right?
Masha
That's true. [Laughs]
Dutta
Like every other month, there seems to be a new raise, right? Like whatever the price is right now, let's say you're paying it, you're not probably actively upgrading it. But you probably are continuing to stay there. And, I don't know about other folks, Apple gave me a subscription when I bought my phone, and then eventually, I never renewed it. So in that case, if the product line is continued revenue, you would want to see your kind of like retention rates, right? But then there will be products where you would say, "Hey, if you're really seeing value, you should be using more." And in some cases, that would mean, using more features like jumping from one tier to another tier, or many companies like us have a comp component of both pure upgrades, but also some kind of consumption model built in. Right? "Hey, if you're using it, that's great. But are you using it for more number of people?" And that's very similar, like AWS also has, like, of course, you're using AWS, but are you using it for more—are you using it to transfer more data in and out, right? Like, there's a component of usage that this gets metered into it. So if that's the case, then I would look at both retention rates, as well as expansion rates to understand, you know, what is going on. But at the end of the day, a combination of NPS, CSAT, churn slash retention rate, and expansion rate will give you a pretty good sense across the spectrum about how people are feeling. Rarely, you know, it's like one metric is the silver bullet. But I think a combination of these factors, typically lets you dial in on where things are working, and where things are not working.
Masha
I'm really curious to dig in on, you mentioned the consumption model, and we've had another conversation with another leader from a company and, you know, how do you feel about the role of Customer Success in a consumption based model from a revenue perspective? Do you think it is a useful part of it? Or do you think it goes away? How does that, you know, how does that play?
Dutta
I think it's an integral part of it, because most consumption models mean, you have to see some real value, right? And here's sort of like a typical journey of any customer. And the journey is, number one, the customer sees a value proposition, has a vision in their mind, right? I mean, what they want to do with the product, software—or even if you buy like any kind of like product, right? You have, "Oh, I'm gonna do X," then like reality kicks in, right? It's like, "Oh, I don't have time, I don't have this. Let me just get this going, because this is what I really, really need." Right? And what ends up happening for most people is, then companies, people, businesses, you move on to the next fire, you move on to the next thing that really desperately needs attention. Now time elapses, either you don't do anything with the product, because it's sort of working, or the company has actually released several features, functionality to actually bolster and make it much more useful. But the customer is still stuck on like minus six months, minus one year. So the reason Customer Success plays such an important role in all of this stuff is, how do you make sure that you have the means to communicate, engage, and help them adopt? Now, of course, people is one of those levers. But a lot of times many customers don't even actually signal and do anything to specifically say, "You should be doing something different." One of the things, one of the reasons our customers use ActiveCampaign is, it's not always possible for every company to put people to do follow ups. But you can write an automation sequence that says, "Hey, the customer seems to be reaching out with issues over and over again. Would you want to, if you have four issues, would you want to book a call with us? And give a Calendly link to talk to someone and engage?" Right? Something super simple—which by the way, happens a lot, right? Why do people leave? They don't know or they're running into multiple issues. And then eventually they're like, "Eh, not worth it, don't have the time, moving on." So that's how I would sort of think about it and this is where like Customer Success really comes in, is finding the balance between identifying and then that call that I'm talking about is would be hopefully with somebody on Customer Success, who can then help them understand how they can accomplish those goals and hopefully get better product adoption. And if you get good product adoption, then you ultimately get better usage and the potential of that consumption going up is significantly higher.
Masha
This is such a great point. Consumption doesn't happen if the person doesn't know that there's something that would be valuable to consume. [Laughs] Like, duh! Great point. How have you seen the role of Customer Success, I guess, evolve, let's say over the last two years, or if you want to take a longer horizon, just with COVID, right.
Dutta
Really, really, really, really good question. Because I think Customer Success has really, and continues to evolve, right? I'll go back to five years, six years, because there wasn't even really a term called Customer Success, except in some marketing-speak with some vendors. In reality, it wasn't happening. I think, the first iteration of Customer Success, I feel happened because companies were moving from kind of licensed software to software as a service, right? I think that was the genesis of this. And they were like, "Oh, gee, now they can basically hit Cancel after a year, they don't have to sign a five year contract, and woops, something needs to happen." So that is the original genesis. And because it came from that, for the most part, that's one of the areas that came from, there was a lot of emphasis on relationships, and using relationships all the time. Now that works, if you have like 5000, 7000 customers. You can come up with some "1 is to X" mapping model or some segmentation and deploy it. What the industry then has quickly realized is, well, you really can deploy and be friends with your customers. There is a breakeven point, like I said, it's a business, right? Like there is a breakeven point. So you have to employ other tactics. And you have to go on a journey of scale. Now for a lot of people, their journey of scale, meaning give it to Support. Well, Support is not Success. Right? Support is a transactional thing that happens when you have a problem, they answer a question. They close it, and they say, sayonara. Right?
Masha
And it's retroactive anyway, right?
Dutta
And it's like solving for problems that they're having at the moment. Right? It's the timeliness involved, it's not really helping people—it's definitely helping people realize the value, because you solved the problem, they got some value, but it's not probably helping realize the vision, the potential that they had. So some of the evolution points that have happened in the last two years is, how do you scale customer engagement? How do you identify who needs attention? How do you use personalized communication to further this? As an example, let's think about a simple engagement of engaging somebody. You know, even if you say it's good for you, it really doesn't mean they're gonna book the time with you. What needs to happen? Follow ups. Right?
Masha
Always.
Dutta
Now, a human can do the follow ups. I mean, we've all like, you know, like, "Hey, when is the next appointment?"
Masha
"Ask me and Jennifer."
Dutta
Right? "Oh, you're not gonna be able to make it? When's the next time? Oh, you canceled the meeting you're supposed to have like two minutes before?" Right? Like all of these things are real life things, right? Everybody deals with this. Now, you can have a system where a human being has looking at all of this stuff and responding. More and more companies, including us, have figured out we can actually automate this stuff out, right? 48 hours before, send a reminder, let them confirm. If they don't confirm, if they confirm, great, appointment states. If they engage, if they sort of missed the appointment, send them another thing. People don't have to do this manually, you know the meeting was cancelled. There's a very clear event that occurred. So investing in automation has been one of the ways to talk about this. But the downside of investing in automation is it cannot look generic. Because if you see it came from somebody that is like non... you know, like it looks like it was written by a robot, it will obviously not get any engagement. So this is where you need to collect data signals from other places. And as the data aspect of it is, what do you use so that the customer knows that email was really for them? And you have some understanding of the issue. Even if it was sent by a system, at least it is relevant, they are much more likely to talk to you, engage with you, and so on and so forth. So the evolution that I've seen is, it's gone from a balance from all about the relationships to thinking more scale, from using everything in your head, to starting to use data, right? And the data is then really being used to drive personalization and automation. So hopefully that gives a little bit of sort of like a spectrum of what I'm seeing.
Masha
Yeah, that's a great trajectory. So like, let me hand you a crystal ball and you continue the trajectory for me, what does it look like going forward in the next five years, let's say?
Dutta
I think scaled is the way it will ultimately end up, because most of these businesses will grow, they have great products, they have great services, it will grow. So for the businesses, how they think about what drives value, is going to be important. How they do personalized communication is important, how they drive efficiency in the process is going to be important. So I see all of these things. I think things that companies need to think about is, are they collecting enough information that they already have? Not like external stuff, like vertical and blah, blah, blah, right? What are they doing in the product? Are you building your—are you instrumenting your product to what that needs to be? Customers say a lot of things to us, they're captured in calls, they're captured in NPS feedback. Are you systematically able to suss out what are the problems and address that? Right? Because, again, you read an NPS report, it's amazing. That has to actually be actionable. This is an actual product deficiency that needs to be fixed, or this is an actual service deficiency and it exists over here, and what's the best way to mitigate that? So it's just not all about the product, it's about the feedback they give us, it's about all the communications they have with us. What information do we currently have? And how do we make the best use of that information? So when I say data, it's not just like random data, it's like, all of these are like, you know, inputs to giving us data.
Masha
How do you see—I'm really curious maybe to dig in on this a little bit, because you folks at ActiveCampaign must be thinking about this all the time. What are kind of the optimal interactions between the sort of human relationship approach and the pure automation approach? I think you've talked about the personalization piece, but like, give us a glimpse into the future. What's kind of coming down the pipe there?
Dutta
I think for us, a big portion for us, is to identify the moments that matter for the customer. You may have some functionality and that may be good for me, but why now? We have to answer the "why now?" And that's the real evolution. And that really comes from a combination of factors, right? One, as an example, Valentine's Day is coming. Right? What happens in Valentine's Day? People send chocolates, flowers...
Masha
Champagne, yep.
Dutta
Champagne, right? Which means consumer retail as a category, services, some entertainment as a category. Now, I would want to talk about whatever functionality we have around personalization, and start with why it helps their business and why it helps their business grow and why this is the time it matters. Giving it a quick viewpoint into—most people have not planned for Valentine's Day in January. They are, I think it's fair to say, a lot of people figure this out in the last three days.
Masha
You just reminded me, I forgot about Valentine's Day!
Dutta
I'm just saying, right, three days, seven days, like, "Oh, it's coming! I'm seeing it everywhere! I gotta do something." Now thankfully for like, you know, next day shipping, etc. Or in some cases it shows up in like the couple of hours. They're many SD packs, but that were not available to all of us like maybe five years or five years before, but the reality it's a last minute thing. So for any marketer, anybody who is in that space, explaining that and helping them see these are pieces of things you can do to drive that personalized communication, because ultimately it'll get you more customers, or help your existing customers who bought something last year, think about buying something again from you this year. Right? So those are the things that I think we're going to see more and more of happening, not just using the internal data, but helping articulate the "why" and the origin see behind doing something. Like if time was infinite, and everybody learned everything, it would all be great, but it isn't. So that's how I see this evolution.
Masha
I love that. I appreciate it we have only about a minute left. But I really want to ask you this question. What is the most controversial opinion you hold about Customer Success that you wish other folks would just hurry up and catch up to already?
Dutta
I don't think it's controversial. I think it's a hard one. I think everybody wants to use relationships as the only pivot to move things forward. And I think it's a great source of dopamine hits. But it is not something, if you're truly thinking about, "How do I help every single customer and make everyone successful?" is the best approach. I feel like the more we invest in clear ways to understand what is true for everybody. It removes bias from the system, like you know, our personal relationship, maybe there's somebody else who just with a little bit of help, you can really get to better business outcomes. And that's not only going to, that's going to help both parties, because as they grow, you're gonna grow, right? Because you're not quote unquote "friends" with them yet, you don't know what that is, right? So this evolution, it's not an "or" it's an "and" right? Of course you need to have relationships, you of course need to have—but how do we go in the journey of identifying the data, connecting the systems, and so that we can really drive like good, relevant, personalized engagement that helps you reach the maximum number of customers? I think it is something like you said, I wish everybody saw it that way.
Masha
I love it. Thank you so much Dutta, I really appreciate you taking the time with us today. I got to ask maybe super quickly, because you have the background of making the customer a hero. We've heard a lot of Customer Success folks talk about how they love either being the superhero for their customer to save the day or making their customers the superhero. If you could have one Customer Success related superpower, what would yours be?
Dutta
I would like to borrow from, you know, what's it called? In Watchmen, the series, there's a Doctor Manhattan, and he can be in multiple places in the same time, and that's the superpower I would really want. Because I always feel like there's so much to learn from customers. Like I talked about, you know, if you know somebody, you go to them, but what about other people you don't know, right? So that is the superpower I would want to have, because I would want to know what's happening with all the customers, because there's so much opportunity and every customer is unique in many ways. That's not like a persona, like, people are different, businesses are different. So that's the one that I would index on.
Masha
Just omnipresence. Okay, let us work on that. [Laughs] Thank you so much for taking the time. I really love that we made this happen. Thank you. And enjoy the rest of your Friday.
