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Interview with Rob Castaneda and Lincoln Murphy: Customer Training and Customer Success

Written by Sarah E. Brown

Published on February 19, 2015

We're pleased to share an interview with ServiceRocket's CEO Rob Castaneda and Gainsight's Customer Success Evangelist Lincoln Murphy. Rob and Lincoln discussed best practices for training and customer success, as well as their visions for the future of training and learning software.
customer success with software training customer success with lincoln murphy
Rob Castaneda
Founder and CEO
servicerocket logo
Lincoln Murphy
Customer Success Evangelist
gainsight logo

Learndot: Why Is Customer Training such an important part of a customer success program for software teams?


Rob: Training has traditionally been seen as something you give to customers that want it after they’ve been sold a product. As the software model has changed to be subscription-based, when is the right time to give them training? Training is important because Customer Success is about growth and retention and adoption of software. Training helps customers eat more software and helps them grow.


Lincoln: Where does training start? You have to break it down into a couple types of training. There’s functional training on your product, of actually how to use the product to achieve your desired outcome, but then in some cases, and certainly at Gainsight we run into this, a brand new product category called Customer Success management. That’s still something people don't understand.

We have to educate people on not just how to use our product, but quite frankly, that they need the product. And what they’d even do without a product. How do they even get those best practices around customer success management? Certainly for new category companies, there’s an opportunity to do that broader, non-product focused training. You see that in a lot of different ways, something like Customer Success university or a drip campaign of eight weeks of emails that educate. We’re seeing this in a lot of different ways. People are using this as lead generation and a way to get people to pay attention to them. What do you think of that as a broader idea for education as marketing?


Rob: You hit the nail on the head. The traditional training department was underneath the VP of professional services or maybe in its own group and was focused on teaching and learning and had more of a university type arrangement to it. Curriculum developers, course management and so forth. The old adage that ‘everything starts with a sale’ with cloud-based software and software-as-a-service, now everything starts with learning. You have to educate customers that a) the space exists b) they need something in the space c) educating them about different ways they might go about doing something to the point where the customer feels empowered to do a trial and take on a small license deal - a small subscription to begin with the software which in turn leads to a larger enterprise deal down the track.

Definitely you couldn’t get away with doing five days of training to get to that stage, and you’re also training people if you asked straight up, “do you need a training course on this?”, they’d probably say “no”. You’re really walking this fine line between educating somebody. You don't want it to be an informercial. You're not giving away steak knives and things like that, but you're actually giving them pieces of knowledge in a structured way, tying it into your marketing automation and the other systems that your company has is the way to do it.


Lincoln: It’s all about, depending upon where your market is in the maturity standpoint, educating them that they need this thing, and doing it in a way that’s congruent with what they're looking for or what expectations are.  It’s not, “hey sign up for this big education thing,” but ‘hey, how would you like to improve churn or keep customers longer?”

You can't always pitch the training, but very often it’s the training that gets them to know and trust you so that they’ll want to do business with you. It’s the training that in some cases will get people to stick around. I’ve seen it several times where literally some companies’ education and community and content provided exclusively to customers keeps them around even more so than their core product, which is a bit of an ego hit to those that are product-focused. It can be very powerful to the bottom line.


Rob: Knowledge is everything. Employees in today’s market always want to feel like they’re advancing their careers. They’re learning along the way and feeling like adding to the repertoire of what they know, and that’s a good thing. There’s a fine line between a marketing webinar and a training webinar. From the outset they may look like the same thing, though there are small differences in how that’s done and the outcomes. For training, the goals are not getting a lead ready for sales team to close, but to get everyone educated into the next step of their learning and to have them feel empowered.


Lincoln: Yes, walking the fine line between education and marketing and sales; it really is a fine line, and it goes back to trust. It’s my experience with our Gainsight Customer Success University 101 course out for six months. We’re working on a 201 course coming out soon. The fact that Gainsight is the company behind it, there’s that potential for conflict of interest, but we do our best to say other than, “It’s Lincoln Murphy from Gainsight,” that’s the only time you’ll hear about the product, so someone going into it a little skeptical will come out knowing this was all about elevating their knowledge of customer success. It had nothing to do with Gainsight.

That said, as a marketing channel, we're putting that in front of them. We’re not trying to pull wool over anyone’s eyes or be subversive, but we’re not trying to be overt in the promotion of the product. It’s very much a fine line and we have to say, “are we doing things that are completely transparent?” “Yes, cool, that will build trust and move forward with it.” As long as the vendor is involved with something, there’s always going to be that initial question mark. The fact that we have so much visibility in so many different companies doing Customer Success and so much Customer Success expertise in the company, we really are in great position to educate and bring that knowledge to the market in that university product.

Learndot: A lot of resources are becoming more online and self-serve. How is delivery of customer success training evolving?


Lincoln: As everything is evolving to become self-service and online and self-paced, you have to understand your customers and what they're looking for. You have to be careful that the modality you’re using to deliver training, including if it’s self-guided or self-serve or in a classroom onsite, is congruent with the customers’ needs and expectations. It’s easy to say because these tools are available, we want to use them in the way that makes things easiest for us, but you do need to understand what your customers are looking for. Sometimes what your customers are looking for in aggregate is not even a valid way to look at it because you have different types of customers.

For some customers, self-service training is perfect, but for others, including enterprise customers, you want to take the same exact training to do an onsite half-day or full-day workshop with the customer at their location so everyone goes through at one time and they can all ask questions. The bottom line is you have to understand your customers and you have an opportunity to build your curriculum once and repurpose it in different ways for different customer segments. Self-service is fantastic, it’s just that sometimes we want to push to our customers when that’s not what they’re ready for. We have to be careful.


Rob: I would second that. Self-serve allows many things to happen and the advent of the MOOCs like Coursera and others makes training available to everybody. We as a company have a challenge internally where I’ve told everybody, “please sit as many of these MOOC courses as you can and find the things that keep you interested, involved and engaged.” I find it very hard personally to finish these courses. I managed to get through the end of one, although I didn’t actually finish it. I was getting the emails. It had a 10% completion rate. The instructor was over the moon because 10% of students had actually finished the course, which was free. eLearning and self-paced modality is good, it’s available, although it doesn’t necessarily guarantee you’ll get people finishing.

What we like to do is to not just segregate customer by size of company, but also by the persona of who we’re talking to. This means crossing the chasm of the customer adoption lifecycle, and looking at where the person you're trying to engage with might sit there. If they’re an early adopter, they likely want materials and things they can take in on their own without really talking to anybody. And if they do talk to you, they’ll give you a really hard question that’s probably going straight to engineering.

2015.02_Training_CustomerSuccess_FacebookPostAs you move through that curve, you’re going to be getting the majority of that curve that will need to be spoon-fed and pushed through content and need it to be a little bit more structured because they may not be as personally motivated to get things done or to get through it. Understanding not just the size of company but where they are in that technology curve is crucial.

One of the patterns that we work with is instead of building courses to sell to the early adopters, we create courseware and material and the modality for the early adopter to give to other people within their company. If you enable them to spread the knowledge inside of the company, sometimes they can do a better job at it than you can. We like to focus at a slightly deeper level and get into the dynamics because ultimately you’re going to try to help share knowledge of the software, whether that be the functional or technical layers, and try to ultimately help break down barriers and get things through. With software training, a one-size-fits-all approach isn’t going to work.

One example we also had from another customer of ours went totally the other way. They said, “We’re building five-day developer level training courses.” The obvious question was why with eLearning and self-paced learning would you make people turn up for five days in a course? The rationale was simple: The Training department reports into Customer Success, and the statement was, that they were betting that our software would change the balance sheet and income statement of their customers. They thought if the developers rolled this software out, they couldn’t count on them between 7p and 9p to go through eLearning modules with kids on their laps while eating dinner with their other kids and everything else. They said, “I can’t have the success of this deployment rely on that.”

The second point they made is if they spend five days learning their technology, they wouldn’t spend five days learning competitors’ technology. There’s a wide spectrum depending on what you're trying to achieve from marketing and learning and deployment perspective.

Learndot: How do you align your entire organization with customer success management to address training?


Lincoln: Customer Success management is really the process of orchestrating your customers achieving their desired outcome, whatever that looks like. That’s something that takes your customer where they need to be. It’s the whole reason they bought your product and started doing business with your company. This is a bigger question than just training. What we talk a lot about Customer Success in discussions about higher-level customer success philosophy is, “how do you make sure we’re all working towards that one goal?”

I sometimes have to take a step back and ask, “why are we having this discussion?” Obviously we should all be focused on making our customers successful. That should be the way it is. But it’s not, so we have to have these discussions. When you’re trying to introduce Customer Success into an organization where this isn’t the default way of thinking or status quo, it has to be a top-down initiative where leaders of the organization build it into the DNA of the company. When you do that, you get this thinking around working towards making your customer successful versus in the past when maybe we had different siloed approaches. In the past, the Product Team wanted customers functionally on board, and they would consider success or failure to be the adoption of those features rather than how those features are actually helping their customers to achieve their desired outcome.

From a financial standpoint, it’s about acquiring new customers, but as we started learning about churn and about how we’re losing customers and how to keep them longer, magically not only do we get them to stay longer, but they pay us more over time. Then, you think of new ways to make your customers successful. It really has to be something that everybody agrees on. Usually that means that in a company it will be a top down thing from leadership that is the baseline we all work from. Training being a function of Customer Success, something that allows your customers to become successful falls into that category. It then makes it easier to say, we need to do this training that has nothing to do with the functionality of our product but actually helps our customers achieve their desired outcome.

There’s a lot of companies that have products where the desired outcome of the customer is actually beyond the scope of the product. Email marketing is an interesting area that I’ve done a lot of work in. The functional use of the product has the customer loading up contacts and sending an email. That’s it. But the success of that email to the customer is that they get clicks, more sales, whatever it is they’re trying to achieve with that email. I can say as an email marketing company, my customer was successful because they sent an email. Maybe they got some click-thru rate. Or, I can say I understand my customer will only be successful when they achieve more sales. Even though it’s beyond the scope of my product, I can still try to educate them, bring in experts to help you with landing pages, bring in copywriters to give you tips on improving your writing. I can do all of these things that don’t functionally make product or your use of product deeper, but help you achieve those desired outcomes by educating you. But that isn’t something you’d be thinking about if that isn’t your internal dialog. It has to be a top-down thing that gets into the DNA of the company.


Rob: To add to that, I think when you say the word “training” usually everyone takes a deep breath. “Training, I don’t need that,” they say. Especially early adopters. Looking at that, as a software company trying to work out ‘hey, where does training fit,’ the first thing I’d look at is internal onboarding and how many people within the software company itself actually understand their own software.

Your initial training courses are for 101 and background, whether that’s talking about conceptual functional area or basic use of the product. Everyone in the company should know that. Immediately you’re going to be able to speed up onboarding - one of the most frustrating things in fast-growing SaaS companies. The first four to six weeks when someone is there there’s a lot of time wasted where they’re trying to learn what’s happening. There’s immediate leverage that the training team can add by getting customers and team members all on the same page to begin with.

Gainsight’s Customer Success University is a perfect example. Anyone joining Gainsight would be going through that material and understanding it and having a common understanding with their customers. The second thing we look at that goes back to my background. Early in my career, I started out on the help desk and moved into training, and then went back to the help desk. I realized it was the same thing. I was helping people learn something. In Training, I was helping people before they knew that they had a problem, and in support, I was helping people definitely after they knew they had a problem. You can easily align support and training departments if you have that kind of mentality by saying the more people we’re educating through this, the less support tickets we’re going to get.

But it’s not just about reducing support tickets. You have to see it from the perspective of,  “wouldn’t it be great if customers rolled out and used and configured the software the way we wanted them to do it?” And helping them avoid some of those problems. It’s a good way to get buy-in across some of those other departments.

Learndot: How can customer success teams approach training not as a cost center but as a revenue center?


Rob: When software is bought, it is bought at two levels: the first is for the company, and the second is there are humans buying the technology. The people who are buying it and rolling it out and architecting it within the enterprise have their own vested interests of their careers. Wherever they're allowed to learn and innovate and get more credentials, those things are pretty attractive and for this reason. It’s why free training for the sake of being free doesn’t always work. Just like free tickets to a concert or so forth, if everything is free, the business loves it, as in the end customer, but the people inside of that customer rolling out software may not value it as much. “Hey, it’s free training, yeah, well, I’ll just go to the next one because i’m busy, and because something else I’m doing is scarce and is going to finish.”

One of the motivations is that even if you’re going to have a Training program that you don’t necessarily want to make revenue from, if it’s entirely free all the time you’re actually creating no urgency for someone to a) sign up for your offerings b) to even complete it. That’s some of the problem that the massive online open courses (MOOCS) have as well. It’s there, it's free, and they get a lot of signups, but only 10% completion. Having your Training generate revenue also tunes your offerings. If your Training department has to generate some form of revenue even to be cost neutral, a lot more thought goes into the offerings and how they’re servicing the clients and what customer see as valuable. If you get that balance right you can create a very scalable way where customers are paying for their customer success.


Lincoln: I would add to that that this goes back to higher level discussions around whether Customer Success is a cost center or revenue center. There are some companies that do charge for Customer Success. That’s a whole different discussion. I think when you’re looking at Customer Success at any level and complexity, it should also be seen as a profit center or revenue driver if not directly though selling training courses or higher touch professional services, it should be thought of as something that’s going to improve customer lifetime value. It’s going to keep the customer around longer, and will drive second order revenue through customer advocacy and will do all of these things that will absolutely impact revenue generated from customers and profitability in the long term. In terms of high-level understanding, we have to look at that.

In a training course, whether you're going to make money from it or not, whether you're going to even charge for it or not, the reality is if you can get people to learn more about your product, the chances of them going and doing the same thing about another product go down. The chances they’ll stick around go up. If you have certified admins or power users or have folks you’ve certified through customer success professionals, when they leave to go to another organization, they’re going to bring your product with them. You’re having that low-level virality even with the most staid B2B type of products. I agree, when you charge for something you put a value on it. If you're going to give it away for free, from a marketing standpoint, you should still put a value on it. You can still have that sense of urgency in the sense that you’re giving it away, or only give 100 seats away for next 2 days, etc. There’s ways tactically to handle that. If you're ever going to give a product away, at least put a value on it.

We charge for Customer Success University because it’s all about value perceptions and getting people to really value not only the work that we put into it, but valuing it from their standpoint, and therefore taking the time to learn this stuff because we created this university and courses and because we actually think they’re pretty helpful. We actually really want people to learn. If you have added incentive that you had to get clearance from your boss to make this purchase, there will be some incentive to show that you’ve learned from it. That’s really important. People don’t value what you don’t pay for, or may just get distracted or it becomes less urgent and important and they don’t do it.

In a software business, if I can negotiate a discount on training versus a discount on the core MRR or ARR generating product, I’d rather throw in training than a lower price on the core product, which gives you a lever you can pull for larger customers. It becomes a significant lever if they have 100 seats for training course; that’s a significant lever you can pull in your negotiations, so it helps from a sales standpoint as well.

Learndot: How do you identify and how do companies measure the relationship between training and revenue outcomes?


Rob: Many training departments are operating still in the old mode where training P&L is standalone. Having a newly integrated system that takes training data and merges it in with marketing automation and other systems you have is vital for that happening. Many learning managements systems - there are over 600 on the market, if you can believe that - are geared on internal HR learning and talent management. A big mistake that a lot of companies make is that they deploy those to customers. Customers are left with a very K-12 academic experience. Then, there’s internal frustration because data lives in that silo. The first step is actually unifying data and having it linked in the same place so things can be measured.

The second part is how programs are designed. There are a number of forward-thinking software companies now that, as part of their enterprise subscription, have a certain number of enterprise subscriptions that customers can use on the training portal to redeem for courses and so forth. Having a program like that with more structure allows you to measure engagement usage and recognition of the revenue and certainly if it’s part of it’s already part of an enterprise-level subscription, you’re trying to ensure that the customer gets some value out of it so you can report back to them.


Lincoln: Data and connecting the dots is absolutely critical. In the early days, if you could update a customer record to say they’d started training and then completed training that was going to be better than nothing. Ultimately, from a Customer Success management standpoint, Training contributes to a customer health score, which is based on a lot of different inputs based on the company and your relationship with your customer. Those inputs give you some idea of what's going on with the customer. Those inputs can include how they’re using product or that thing, but also interactions with help desk and interactions with your training program. So, you know if a customer has purchased training or it was included if they've had a small amount of people go through it or not happening fast enough, you know that that’s a problem that you want to follow up on. Training issues should negatively affect their health score, and should signal that you should proactively reach out and continue that training.

If you have everyone complete that training or a high percentage of folks completing that training, that somehow either drives retention and renewals for the first year, drives landing and expanding, or has some positive impact on your business which then you should be able to quantify into an actual number. If we know that ‘this customer renewed’ we can say it probably had something to do with or at least we can start to connect dots and everyone took training, and we can quantify that. It’s hard to say exactly what the driver of that renewal really was, but if you have enough data that shows companies that don’t complete training churn out in the first year, and companies that do stick around, now you have a trend that you can work with. Having that data and pulling it together in some uniform place in the custom record so you can have some idea of where they’re at, is ultimately really critical.

If you’re going to create a training program for your customers, whether it’s higher-level ideas around what they should be doing, best practices, or functional training on the product itself, part of the effort should be in creating an idea of how you’re going to know whether or not it’s successful. How are you going to quantify, at least to some degree, whether or not this program is successful. Whether that’s required by the CFO or anyone else in the organization isn’t important. If you’re going to do something, you should have an idea of how you’re going to know whether it’s successful or not.

Learndot: What are the top training trends we’re going to see in 2015 and beyond?


Rob: There are over 600 learning management solutions on the market. Ours is the one focused on software companies exclusively. What we’ve been doing is focusing on fast-growing software companies, which are very unique. Having training for internal/HR talent management is very different than customers who need to learn the product and are browsing at pre-sale cycle. We see the emergence of that market and software companies realizing their LMS to train enterprise customers isn't going to cut it.

Having clear data integrated into the backend systems is important. Training is becoming an integrated part of a software company, including having customer data integrated with SFDC (Salesforce) or your CRM, and having your marketing automation going to Marketo or HubSpot or whatever system you're using, and having financial data integrated with NetSuite or backend finances that your CFO wants so that training becomes another channel for leads or communication with customers.

The second major trend we see is user experience. Almost every product is now becoming beautified and simplified and user experience is and will continue to be everything going forward. The days of an academic-looking learning management system that doesn’t match your website or (create) a seamless as user experience is going to be behind us.

Lastly, there’s data analytics. It’s no longer just a case of is somebody got certified or sat a course. A lot of that data, the learning pathway, the learning interactions and time students have spent on certain models, that data will now be useful for software companies to understand where they should be focusing efforts on product dev support or other courses or addressing customer demand. Tightly integrated systems, better user experience and improved data analytics are the three trends that will matter most in software training in 2015.

"Tightly integrated systems, better user experience and improved data analytics are the three trends that will matter most in software Training in 2015." -Rob Castaneda

Lincoln: You have your eye on what’s going on. Everything you said hits on what I'd say. In my experience in choosing an LMS for Customer Success University, we saw a lot of tradeoffs. You could have customer data integration, but customer experience was horrible. The really big systems for enterprise training internal might be fine, but they didn’t have the eLearning self-service side of things we maybe needed. We see a lot of different foci of different companies out there. Companies like yours that are really focused on holistic approach under the guise of a better user experience, something that matches the website of the company you're working with but is more familiar and feels more like the type of web properties they’re interacting with today--aka more modern--is crucial. That’s not just a training trend, that’s an enterprise software trend. We see that with companies like Slack that are blowing thing up. Zenefits has a great user experience. Collaboration and chat and HR and benefits isn’t really something where you’d expect UX even matters. You can disrupt a space by giving the customer what they want and need. I’ve said the phrase “desired outcome” a number of times. I’ll give a quick definition of what I mean by that. Desired outcome is the required outcome to do the thing they need to get done but also includes the appropriate experience. If we don’t give someone the appropriate experience to complete the required outcome, they may achieve one thing they needed to, but something will be missing and they won’t feel like they are successful.

It’s hard to quantify some of those feelings, but when you know your customers and build something your customers really want you’ll know whether you hit it the right way because you know what they want and building for that. Desired outcome is required outcome plus appropriate experience and that’s what you’re building, taking into account your customer and their customer and what users really want. It brings together all of the trends you just said. It’s amazing we have to have discussions about helping people achieve their desired outcome - that should be the way it is always done - but that’s not the case. We’re in the age of the customer, and we have to be thinking about them because customers are in a place where they can disrupt us if we don't do the things that will help them achieve the desired outcome.

Learndot: If you wouldn’t mind telling us a bit about the upcoming event hosted by ServiceRocket on February 27th in Palo Alto, ‘Training Is Customer Success’. What is your vision for the event and why should people attend?


Rob: Our background is in training and helping software companies building out great training offerings. We’ve been doing a lot of work with various customer success companies such as Gainsight, and training is one of the pillars of customer success. There are many facets that go into customer success, training being one of them. We wanted to gather some minds in customer success space to think about the topic in a little bit more detail and we’ll have a panel with some vendors and customers and also be showing off some of the newer innovations of our TrainingRocket product. We’ve also made a recent acquisition of another platform called Learndot which was one of our competitors in the self-paced elearning space, so we’re going to show off a bit of the technology that we’re working on and gather feedback on current customers and future customers and others in the space on where this is going. For us, this is an exciting time that we’re bringing all of these things together specifically for software market. Our aim isn’t to become the world’s university for learning everything. We focus on nuances that software companies have with Customer Success challenges that training can help with. For us, it’s a collaborative effort in order to gather feedback.

One of the things that I love about the space having worked in it for 17 years is education departments, even between competitive companies are generally very friendly, and share a lot of techniques and challenges and thoughts on topics together. We’ll have a bit of that type of sharing and hoping people walk away with values and things to take back to their programs. From our point of view we’ll get some good input and confirmation of our direction.


Lincoln: I’m excited to hear from everybody. I’m always learning and looking to learn more information and am happy to share my experience on the customer success panel. Even more so, just learning from everyone and figuring out how we can use customer success management and training to do the thing we’re all trying to do - which is help our customers achieve desired outcome. I’m excited to be there on the 27th.

Originally published Feb 19, 2015 11:38:00 PM, updated Jul 8, 2015