May. 11, 2022
We had the pleasure to sit down with Shreesha Ramdas, the SVP and GM for Strikedeck at Medallia in a new series we're calling "That Escalated Quickly". In our first episode, we focus on customer support's role in customer churn, and ways support leaders and organizations can be proactive and more strategic around support organizations.
You can watch the episode on YouTube here. We've also included the transcript below, which has been slightly edited for clarity. Enjoy!
Aakrit: Hi everyone. My name is Aakrit and I'm the CEO of AptEdge, a venture-backed company that focuses on enhancing the efficiency of support teams. And today we'll be talking about how customer support plays the role in churn, and how that gets compounded with secular trends, like product-led growth.
We're going to talk about this with Shreesha Ramdas. Shreesha is the SVP and GM of Strikedeck at Medallia. Shreesha was also the Founder and CEO of Strikedeck before they were acquired by Medallia. Thank you so much for joining us, Shreesha. I'll give you maybe a couple of minutes to introduce yourself.
Shreesha: Yeah, thanks for having me here. I've done a few startups before Strikedeck, that got acquired by Medallia. And before that, LeadFormix that got acquired by Callidus SAP. And I was also part of the lead team at Yodlee. So I've been around a few startups.
Aakrit: So, one of the things that I wanted to connect with you on was, in your experience over the many years, like driving industries of customer support and success, there's been many trends that have played out and over the past year or past decade or so, one of the trends that we've seen is that customer support teams are getting hit with more tickets than they ever were before. And there's a report recently that Zendesk published that talked about how the average support team is now seeing 30% more tickets than they did before the pandemic. So the pandemic kind of accelerated the role of support and the number of tickets that these teams have to now handle.
In addition to that, what we're also seeing is that customers are becoming more impatient when they file tickets. They want responses faster and they want the right response faster. And so the volume is increasing. Tickets are increasing customer expectations are increasing, but support teams are not obviously being staffed at the same proportion.
So with some of these changing landscapes right, how do you feel customer support is going to play into churn and revenue protection of a business?
Shreesha: I feel like support teams have never been under this much pressure ever before. What has contributed to that pressure is basically two trends.
One is the whole motion of self-service where now you don't have that much handholding. So when a new customer or a new user comes on board, they're not given a walkthrough by a person, highlighting the features and how it should be used. The expectation is that the user or the customer will look at the knowledge base and that the product will be intuitive enough that they can go in and start leveraging the system.
But we all know that the script does not play on those lines and the user, when they get into the product may not understand certain features and may not go and, and hit the knowledge base, but would rather file a ticket. And we get the response that way. Or they intuitively does not feel like the feature should work that way.
And so we'll go in, again, file a ticket saying “I was expecting this behavior, but I'm not seeing that.” That's one trend that's contributing to escalations, more escalations, and support tickets happening. On the other hand, I've also seen engineering teams now emphasize velocity or speed to hit production.
So the common philosophy there is that we will have a beta tag on the product. We'll push it out in the production, let users and customers file tickets, and then the engineering will address those issues. That again has resulted in the support tickets going up.
Aakrit: Absolutely. It's a trend that we continue to find in almost every organization and company that we speak with, every team that we've spoken with within our journey.
So far as a company, that folks in customer support are teams or leadership are constantly looking for ways to make their teams more efficient because their ticket volumes are growing. But one of the things that we're also noticing is that one of the top drivers of churn is starting to become a poor customer support experience.
There were a couple of reports that were published recently where if a customer has a bad experience, the first time there's a 50% probability they may churn. If they have two bad experiences, there's an 80% probability they may churn.
So what suggestions do you have around how support teams can transform the way they work to be more mindful of making sure that churn doesn't become a bigger factor as their teams are getting hit with more tickets, escalations and volumes?
Shreesha: I definitely feel like support has a big impact on retention. Support teams need to think about two things.
One is the customer experience. Remember that every touch point with the customer, every interaction with the customer, the experience needs to be of the highest order. The Highest quality. Otherwise they are contributing to churn, in some ways.
The second is, basically the value in every interaction. Customer support needs to understand how they can contribute to the value for the customer. So this is where support is supposed to be “reactive”, but I often say this, that support now needs to think proactively. Experience… If the customer, in some engagement feels that the experience has been of poor quality, the customer starts thinking about, other products, other competitors, and how the other products can be more exciting.
And second is value. As I mentioned, the customer needs to feel that with every engagement, every interaction, every touch point, they are getting more value from the system.
And it's not just the ticket, a direct ticket response. What is the outcome that the, particular response will lead to? The customer outcome? Is the customer, by filing that ticket or by engaging in that activity customer thinking about achieving something, and is the support person thinking about not only just that ticket response, but about how they can push the customer towards that, outcome and the value?
Aakrit: Absolutely. And that's something that you shared earlier around where Product-Led Growth (PLG) is becoming a bigger trend in the market. I think further catalyzes this direction that when a free customer is using a product and they got into the product through a PLG motion where they might've read a blog or a content from marketing, and they went to the website and they hit sign up and then they got into the product and they're using it for free.
And now they're running into an issue and they file a support ticket. First interaction that they have now with the company! The support team members now have to be equipped to handle and speak to customers that have never connected with this company before.
Not through sales or any other channel before. And that’s continued to be a bigger and bigger trend that we keep seeing. And a of support teams are now trying to think of a strategy where you have all these free customers, then you have your paid customers, and how do you provide a really great support to both?
What are your thoughts on how this is shaping and support leaders looking to invest in providing a great experience for the free accounts while making sure the paid accounts continue to get a great experience through kind of the PLG direction companies are heading? What are some great tips that support leaders can keep in mind and scaling PLG customers?
Shreesha: So PLG is actually adding to the pressure that support teams are facing. The two important things when it comes to the PLG concept, the first is that you're not waiting for the contract to be signed.
Previously, what used to happen? The support teams would only come into the picture when the contract was signed and somebody was tagged as a customer. But now, even the prospects are signing up and support teams are responsible for answering the queries that the prospect may have.
And so the support team needs to be mindful of that fact. Every engagement is going to convince the prospect that they need to become a customer. So here the support is having a big impact on sales.
The second aspect about PLG is the usage-based model that most of the PLG companies are having. When you are solving the support ticket, you need to keep in mind how it is contributing to the usage by the customer. This is where the value that I talked about, right? If the customer sees more value, they are going to use the product more. And if the customer is using the product more, then it results in greater revenue, right?
So that's where support engineers need to keep in mind in the PLG world that they have to think about how the customer is actually using the product and what other hurdles they may be facing that force them to file a ticket. It's not just about answering the ticket, but it's about going beyond the ticket to figure out the actual usage of the customer and encourage the customers to use the product more and solve for the use cases.
Aakrit: Yeah. And there's something that you shared there that I think is like, that really caught my attention and how you're speaking to it, which is when a customer is filing a support ticket, this is an opportunity for an agent to empathetically connect with that customer build a stronger trust and relationship, and that can catapult into that customer not only using the product more, but eventually being a paid consumer of the product.
That's kind of a first touch point from support that could transform this customer to be someone that recognizes how helpful the company is and helping them solve an issue. But unlocking more value and essentially becoming a paid account, having gone through a PLG motion, where support enabled that sort of a success direction for the company.
One of the things that we often hear as PLG continues to become a bigger and bigger trend and more companies adopt this model is you also have a stronger tighter collaboration that happens between support and success teams or product teams.
We talked a bit earlier about a trend where faster product releases and changes, right? Every engineering product team is trying to ship code faster and deploy faster. That is starting to lead to faster changes in the customer experience. And that's leading to sometimes tickets and issues. What are your recommendations or thoughts on how support and this new PLG driven world can start to align better with success and product teams?
Shreesha: First of all, there’s a need to change the mindset, which is you cannot view support as a tactical and more operational. You have to think about support as a more strategic asset that a company has. When you have that mindset, then you're thinking about how do we influence a positive outcome in the customer's world. That that's very key.
If you think about in this new PLG world. You may have a customer who's not spending much value with you right now, but with increase in usage, eventually the customer may become alarge revenue partner for your company, right? So previously you would just roll out a red carpet to a customer who is spending a lot of money with you. But now that needs to change, you have to look at the strategic potential of a prospect or an opportunity. And, and that's where if you, if you don't interact with the customer, and provide more contextual information, not just limit to direct ticket resolution, right? And that by that, encourage the customer to get to their potential. So that's where I feel like the support teams will need to think about how they are approaching their customers problem tickets and how they are structuring each of their engagements. And elevate it to more strategic level than just, just remaining tactical.
Aakrit: Absolutely. And I think that's almost a third trend. That could be a topic for another time, which is related to support historically has been around for decades, but it was an industry that was looked at as more of a cost center. You sold a perpetual license and you package support with it. And so in that case, you had to give support as part of a part of your cost of goods sold and that licensing model. But now as companies move to subscription models and customers can churn, every month, every year. And there's also been 10 times more competitors for them to churn to.
Support needs to become that strategic direction for a company to look at, so that they're able to use support as almost like a weapon, to be able to allow customers to unlock a lot more value with, with their product and not go to a competitor or are be able to proactively upsell and expand value from a really good support experience.
So it’s been very fascinating to see some of these trends. And I guess as we look to wrap up and get some final thoughts, are there any thoughts or recommendations that you have for the support leaders out there? What could they do better as they arm for growing a support organization that's PLG based or just a support organization that's having to work with a product that's iterating much more quickly?
Shreesha: Absolutely. So I think, I'll continue on that theme that I initiated, which is support should be more strategic than tactical and then tactical or operational. This is where the support leaders need to speak for their team. They need to organize trainings, for their supporting members, and their training is not just about how to troubleshoot better.
The training should be about how to engage with the customer better and how to be a strategic partner, while taking care of a ticket operationally. How you can you push them in the direction of driving more value from the product, how to solve a use cases that may not be mentioned in the ticket, but what are something that could be of interest to the customer. That is where more training more education is required to elevate the the support agents and engineers from just being troubleshooting folks, to being more strategic.
Aakrit: Absolutely. And it's exciting to see more transformations in the support space now than we saw probably in the past several decades with these trends, that are moving the industry and moving business models.
So with that, thank you so much Shreesha. I really appreciated your time and your thoughts on where the market is heading and customer support.
Shreesha Ramdas is SVP and GM at Medallia-Strikedeck. Previously he was the CEO and Co-founder of Strikedeck, customer success automation company. Before Strikedeck, Shreesha was the GM of the Marketing Cloud at CallidusCloud, Co-founder at LeadFormix (acquired by CallidusCloud) & OuterJoin, and General Manager at Yodlee. Prior to that, Shreesha led teams in Sales and Marketing at Catalytic Software, MW2 Consulting, and Tata. Shreesha is also active in the startup community as an advisor/investor- Workato, Enact, RevvSales, Elastica (Symantec), DX Continuum (ServiceNow), EmpInfo, Fullcast, ObeoHealth. Find Shreesha on Twitter @Shreesha.