This week we launched the first ever magazine for Customer Success. It's titled 2.0. And the inaugural issue explores how successful CS leaders elevate their role by giving customers a seat at the decision making table. 


So for this week’s newsletter, we’re highlighting a section from the magazine—my Q&A with Dione Hedgpeth (Chief Customer Officer at Sumo Logic). Dione has led an incredible career: she ran Support and Services at Mercury Interactive for 10 years, building their first CSM team back in 1999 when, as Dione says, “there was no one to copy but Salesforce.” She led Customer Success at Pano Logic, Precise Software Solutions, and then Apptio before joining Sumo Logic as their Chief Customer Officer.


Dione recognizes how increasingly important Customer Success has become over her career. “20 years ago when we were doing support and services, no one really cared,” she says. “But now in SaaS, customers are the lifeblood of the company. It’s been incredible to see how this role has evolved and grown over time.”


In this interview, Dione shares how Customer Success leaders should think about designing and advocating for their organization and where she sees the function of CS headed. To read the full interview with Dione (+ interviews and advice from CS leaders at Box, GitLab, Gong, and Gainsight), grab a copy of the 2.0 magazine.



Chris: It’s interesting, you really have been doing the equivalent of Customer Success for 20 years even if it wasn’t called that. What are some mistakes you’ve made around team structure that you’ve learned from and wouldn’t repeat?


Dione: One mistake I’ve made and have seen other people make is trying to create the org structure first. Doing this doesn’t make sense—you have to look at the product and the go-to-market motion, then break that down into all the activities needed to drive that motion. Once you have all the activities, you determine what skills are needed to drive those.


And then once you have the skills, look at how often those skills happen. Are they daily activities, or are they activities that happen once a quarter? Because then you can design a team around the core activities, and determine who will own the activities that aren’t happening as often.


We have to break down the work first so the roles and org structure become obvious. But I’ve seen people starting with the org structure and roles first—they decide they’re going to have a CSM or an AE or a CS Engineer before considering the motion and activities that truly need to be filled. It’s backward.


Chris: Can you give other leaders advice on how to advocate for Customer Success as a function within their company, and specifically when advocating for budget?


Dione: My opinion is that the data should speak for itself.

And what I mean by that is, I don’t think there’s some magic percentage of revenue that should go towards existing customers versus new ones. Some CS teams should be at 20% of revenue and some at 5% depending on the complexity of the motion and what it takes to drive the motion.


The work a CS leader needs to do when they first come in is to actually break down the activities and count the hours. The level of investment will vary based on what work needs to be done. The math is obvious to you after you’ve mapped that out. Finance people don’t care about your stories, they don’t care about your feelings or how busy your people are. They want to see a work breakdown structure and a capacity model.


So that’s always the first thing I do when I join a company: I partner with finance and partner with my team to break down the activities, then roles, we need.


I’m also a big believer in doing a journey map because you can’t break down the activities until you get cross-functional alignment on what the desired customer experience is. I’ve brought in a consultant twice now to help us run the journey mapping session with sales and product people, and people really close to the customer. We break down the activities, then we break down the hours, the skills, and the roles. We have finance work with us on the numbers, the capacity plan—and you’re done. Advocating for budget is an exercise around data.


Chris: You’ve seen this industry evolve for 20 years. How do you think the role of Customer Success leadership will evolve in the next five years?


Dione: I have so much I could say about that topic. But speaking broadly, what often frustrates me is how nascent this industry is. With Sales leaders, there’s a methodology that exists. There’s a funnel, there’s velocity in the funnel; the revenue engine is mature in Sales.


Customer Success is no different. It’s just no different. That’s why, for me, doing the journey mapping, breaking down the activities, having phases, measuring the velocity, it’s what’s needed to have a mature CS revenue and retention engine. Customer Success leaders need to be thinking about their funnel. Right now it feels like while it’s evolved a lot over the past 5 years, it’s still so new, people aren’t thinking of it like that. But I believe it’ll look different in the future. 

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Success Happy Hour is a weekly newsletter for Customer Success leaders. Each week we feature one digestible piece of advice or a framework from a top Success leader, along with the best resources from that week. Subscribe here.

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