Episode 151: The Membership Mindset – Robbie Kellman Baxter

Predictable Prospecting
Episode 151: The Membership Mindset - Robbie Kellman Baxter
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Over the years, it’s become more and more obvious that the subscription model is a viable business model for any number of products and services. How can you develop a membership mindset? What can successful subscription models teach you about sales? Today’s guest is the expert on the subject. Listen in to hear from Robbie Kellman Baxter, author of The Membership Economy and the new book The Forever Transaction. In today’s episode, Robbie discusses her background and qualification, what she knows about cultivating good customers, and what listeners can do to get started on a membership mindset. 

Episode Highlights:

  • How Robbie came to be an expert in her subject
  • Parallels to the SAAS world in Robbie’s process
  • B to C companies vs B to B companies
  • How Robbie decided to write her book
  • Where to get started with a membership mindset
  • Indicators of good customers
  • Putting customers on a path to success
  • Whether surveys important at looking at where clients are
  • Top three things listeners can do to get started
  • The difference between customer support and customer success


Robbie Kellman Baxter

The Forever Transaction


Marylou: This book of yours is so interesting. It’s interesting for a number of reasons. Before we get into introducing you and all the good stuff, you said you’re a subject matter expert. How did this all come about for you? This is really interesting.

Robbie: Up until that 20 years ago, I was a strategy consultant, and then I was a product marketing person. I got laid off when I was on maternity leave with my second child. I said, okay, I’m a good consultant. I liked being a consultant better than a product person. I was like, okay, I’m going to go back to consulting, at least until my kids are out of diapers and make a living that is with control over my career. 

As I was doing that, I thought, actually I want to keep doing this. I don’t think I want to go back to being a product manager or as a product director at that time. If you want to be an independent consultant, you have to either grow into a real firm or you have to become a subject matter expert. Otherwise, in my opinion, you’re just arms and legs. You’re just a trainer. You’re just a fill-in for somebody on leave, but you’re not really a consultant. Once I realized that I was like, okay well, I need an expertise. I need an area of expertise. 

My fifth client as an independent consultant was Netflix. In the back of my head, I’m thinking, I need something that is big enough and juicy enough that I can focus on it for—in my mind, at the time—at least five years. It also needs to be known enough that it’s memorable and plausible that I can be an expert. 

If I said I’m an expert on strategy, you would say, yeah, you and everybody else. If I said I’m an expert on marketing, hard to believe. If I said I’m an expert on marketing financial services digitally, maybe that’s more credible, but that’s not that interesting. At least not for me. 

I’m working with Netflix. I’m starting to get calls from people that said, oh, we heard you worked at Netflix. We want to be the Netflix of our business—news, music, software, video games, whatever. At the same time, I started doubling down on it. I was writing about it. 

Eventually, I stopped taking work where I felt like the company didn’t have a membership mindset. I was doing a lot of work with SaaS companies. I was doing a lot of work with consumer software, professional services. If you came in and said something like, we have these hardware servers, and we need somebody to create some marketing copy or a product roadmap, I’d just say no to that work. 

Then, 10 years later, I finally wrote The Membership Economy and really claimed my space, but I’d been working in that space for 20 years of just doing subscription stuff. 

Marylou: Okay. The terminology you use in your world, there are some parallels to the SaaS world. That’s why I was like, I don’t think she’s in the SaaS world.

Robbie: I was. I grew up there. 

Marylou: Yeah, you’re in Palo Alto, you’re definitely in that area. It’s all SaaS. What was interesting though is how there are some parallels in this whole process that you could easily go back and forth, ebb and flow.

Robbie: I do. All the time. My experience has been that in most SaaS companies, marketing is not the key area for them. They tend to invest more heavily in engineering and sales. It’s really valuable when they take a step back and say, how can we use our marketing lever to support our excellent sales and our excellent technology? Consumer businesses start with marketing. 

Marylou: Yeah, they do. I had the opportunity a while back to work with the Gartner Group. They were an IT firm, now they do marketing. We were interviewing this part of a project. We listened to some interviews with B2B marketing people and B2C marketing people. Target was one of them. I’ll never forget the Target guy. 

It was just B2B people reminding me of our government. They’ve been there forever. Stuff doesn’t change—sort of like McGraw-Hill. The B2C people were on top of the latest everything. It was amazing that they obviously all had the same education in college or whatever to become a marketing person. They’re some kind of MBA or something that they got. But then when they branched off in two different areas, wow. I would love to learn from a B2C marketer than a B2B marketer any day. 

Robbie: Totally. There’s this book that I love called Power by Jeff Pfeffer. One of the pieces of advice that he gives to young people is whatever discipline you want to be in, go to a company where that’s where the power is. 

If you want to be in marketing, don’t go to a B2B company, don’t go to a SaaS company. If you want to be in sales, SaaS is a pretty great place to be. It’s much more strategic. It’s much more important. The best salespeople gravitate there because there’s more money, more interesting work, and more challenge. For me, as a marketer—I love marketing and strategy, so I have ended up more on the consumer side. Also, consumer stories are more easily grabbable than SaaS case studies. 

Marylou: Well, they’re real-world and people can relate because we are all consumers at the end of the day. 

Robbie: Yeah. Exactly.

Marylou: What really struck me—the word forever is a big word in SaaS. It’s a word that implies lifetime value and reducing churn. We need to get better at the forever part in maintaining our client base so that we can get the multiples we’re trying to get when we’re moving to IPO, getting bought out, or whatever. When COVID started, everything on this crazy train was trying to figure out how companies evaluated. The evaluation of companies is just interesting.

Marylou: Hey, everyone. It’s Marylou Tyler. This week’s guest—you guys are going to love this show because when I first was introduced to Robbie’s work, I had my SaaS hat on. Some of the terminology that she was mentioning was very appealing to me because it was all about (I thought) customer attention, loyalty, making sure that we would use our churn. But it turns out there’s even more stuff that she has to tell us about. 

I’ll let her get into that, but the word subscription was the word that was coming bouncing back and forth. She’s a subject matter expert in all things subscription. She has her own firm called Peninsula Strategies out in California. Right now, as we are having this podcast, California’s under fire, literally.

Robbie: California is on fire.

Marylou: On fire, under fire, hopefully, you’re breathing okay. She’s also the author of this amazing book called The Forever Transaction. We’re going to talk about that, and we’re also going to talk about her experiences. I’m going to ask her—and I know she does this already. I’m sure she bounces back and forth between subscriptions, which like in Netflix, think of membership when you think of subscription. And then a subscription for us, which is how we keep these people happy, retain them as clients, and get the penetration and usage and loyalty that we’re looking for. Without further ado, welcome to the podcast. 

Robbie: Thanks so much for having me, Marylou.

Marylou: Wonderful. Tell me, how did the book come about? Oh, she’s also published by McGraw-Hill, which is one of my favorite publishers since my book is already there. She’s had the McGraw-Hill experience, so we are kindred in that as well. Tell me about the book and how you decided to do this at this point in your career. 

Robbie: I wrote another book—The Membership Economy—five years ago. I wrote that book because I felt like after many, many years in Silicon Valley working with SaaS companies—working with consumer subscription companies, working with professional services firms, and associations—that there was tremendous power in this long-term focus and reorienting and organization around a long-term value proposition, instead of a short-term or episodic one. 

I had come to believe that any business could do this—B2B, B2C, digital, print, old-fashioned physical product, you name it. I was having trouble conveying this idea to a lot of executives. They would say, it doesn’t work for me. I don’t understand. We tried subscription once and it didn’t work, therefore it would never work. I wrote my first book to say, hey, membership economy is a real thing. It’s happening now. It could help you—better predictive revenue, a better understanding of who your customers are, and how they use your products. And of course, that wonderful better multiple when you go to sell in the public markets. 

Five years later, I don’t have to explain to anybody anymore that subscriptions are powerful. What I’m finding is people are struggling with the execution of the model. I wrote this book as a how. If the first book was a why and a what, this is how to do it, how to launch a subscription business, how to scale it, and then how to maintain your relationships and your leadership status over time without growing long in the tooth and not relevant for tomorrow’s members.

Marylou: Okay. I’m sitting here thinking, we all know that we put big offices on sales. And marketing for us is a little bit of an afterthought. We love marketing from the standpoint of top-of-funnel, inbound leads, but as soon as it becomes close to one, we lose track of it from that point. You’re here to help us understand that we don’t want to lose sight of it because of these things, these multiples that you’re talking about. The ability to get your company either bought out, go public, or even if you just want to grow and stay healthy within the family (so to speak).

The understanding of lifetime value for us is a term we all know, but you’re right, we don’t necessarily know how to execute or execute well. You’re here to tell us that we can learn from the B2C environment—business-to-consumer environment—or environments like that where there’s a place to non-membership that’s highly coveted and maintaining those memberships. Versus us who were used to that new wheel. 

Robbie: New logos. All about the logo chart. That slide with all the new logos and you’re bored saying, hey, show me the new logos. What do you have? What’s new and sexy? I want to say, let’s make retention sexy. That’s the t-shirt I want to wear. 

Marylou: I am loving this talk. I could think of two clients off the top of my head. One of them is 95-5—95% base, 5% net new. It’s a big company, gigantic. They’re lucky right now that they have the 95% who are pretty consistent. They want to get better at that. A great way to start. How does this all work?

Robbie: For any business that wants to enjoy all these benefits of a membership mindset, you want to start by saying, what’s the long-term value that I’m creating for my customer? And then build everything around the long term value instead of the short term episode. That has a bunch of implications for salespeople. 

The first one is that you only want to sell to somebody who’s going to stay for a long time because you might even lose money if you acquire a customer and lose them too quickly. The cost of acquisition—your time, the time to onboard them, the time the customer’s success team is spending—that’s all wasted if you don’t deepen and expand the relationship over time. That’s a starting point that your marketing funnel becomes a little bit narrower. 

The qualification process becomes more important. It’s like if I’m just dating to have a good time—I don’t really care if the person’s attractive, interesting, funny, or anything. Maybe I’ll go out with them once or twice. But if I’m thinking about marriage and I’m thinking about having to spend the rest of my life with this person, I’m going to be a lot more particular about who I want to date. 

This is the core idea of a member mindset is if you want to enjoy that predictable, recurring revenue—that huge lifetime value—it starts at the very beginning. It starts with how you market. It starts with how you choose who to have a transaction with at all. And then it continues after that point of sale—like you said we’re all about to close. How does your customer success team onboard that new subscriber to maximize the likelihood of them making your products and services part of their new normal, part of their habits? 

It becomes really important, for example, that the sales team and the customer success team are working really closely just like the marketing and sales team on the other side so that you’re all working together to have this long-term relationship. 

Marylou: There are so many areas of opportunity in that last statement you made about sales working with customer service because it’s not a common bond between the two areas as well.

Robbie: I have a funny story for you. I was working with a SaaS company, and we were working with their new customer success organization. Customer success as opposed to customer support where the emphasis is more on making your customers really happy, deepening, and strengthening the relationship, as opposed to just waiting for them to call with the problem. We’re looking at this new customer success organization, and we’re trying to figure out how to optimize customer success for engagement retention and expansion. 

We did this exercise where we said, okay, let’s look at all of our customers that we have—these were all going to be B2B customers—and let’s make two groups. I asked the sales team. The ones that are valuable that have really been great and you want more of, and the ones that have flamed out, not been valuable, or have been more trouble than they’re worth. We made the two lists, and I asked the customer success person to tell me what she noticed about the two groups. 

She looked at the list of the good ones and she said, oh, those are my difficult clients. Those are the ones who are the pain in the neck. She said, those are the ones that on day one are like, I thought we were going to have this feature? How come we don’t have this feature? I’m trying to bring in my finance team and they don’t understand how they’re supposed to use it. I need you to talk to them. You said it worked this way, but I see it working that way, and I need you to fix that. They’re really difficult and demanding. 

What we realized was that the ones who were the most difficult and demanding were the ones who were trying to make this a habit. They were the ones who were to take this new product that they bought and actually use it really hard and get a lot of value out of it. They were taking it really seriously. They were the best customers. The ones that had a really, really easy onboarding process where they’re like, we got it. We’re on it. Thank you. We don’t need any more help—those guys were the ones that canceled, never demanded, or flamed out. 

It’s funny, but when you look at it that way, your customer success colleagues, they’re going to find the most valuable customers may be the most difficult. It’s important to keep that in mind. 

Marylou: That is important. I wouldn’t have thought of it that way. My brain is always looking at usage and penetration within the account. My brain says if we have a lot of usage of whatever it is—your service or product—and you found pockets within the new logo that you can deploy this thing—you have a lot of people, a lot of seats, a lot of however you’re selling your units of the software service, you have a large number of those. 

Those by definition would be loyal, but I didn’t overlay the fact that they’re also engaging because they want to learn more. They want to know more. They’re challenging where they are right now along their success path, and they want to grow to become super successful, which as you’ve pointed out, then starts to become new normal for them. 

Robbie: Yeah. Exactly. That engagement is a leading indicator of what you’re talking about. In order for the seats to be used and the expansion to happen, the employees, the users have to be engaged. Often, a good signal that someone is engaging is that they’re having questions, problems, and challenges because they’re diving in. They’re exploring. A lot of times, software companies find that we have 152 different features, and our customers are only using one feature.

Marylou: Yeah, one or two.

Robbie: One of the key metrics that are really important in onboarding is usually a company wants to see if they use two, three, or five features in the first X period, that’s a really good indicator that they’re going to be a good customer. One piece of advice for people listening is to try to backward analyze and think back into what are those features that when you see a new customer using these features you say, oh, that’s going to be a good expanding account for me. 

And then you could go to your customer success team and say, look, when you have a new customer, really focus on these three features because that’s going to lead to them really getting the value out of this. Which is going to lead to them coming back to me and wanting to subscribe to the next level up, access more features, and so on. 

Marylou: This is a big thing for me coming because I’m trained as an engineer by trade. I’m a computer programmer. One of the biggest things that I think is important is to be able to suggest a path to success. We start here, then we master this, then we had this thing on, and then put a little salt on it. Once we get that going, we get this thing. It gives them a progression path. It’s like training for Ironman or something. First, you’re running a mile, then all of a sudden you’re at five. It’s just like that. 

I think we’re missing that. We’re like, be free. We send people on their way. We don’t have the right metrics either. I heard the cost of acquisition metric. We do have that. What happens for usage and penetration and where they are on the glide path to success metric—I wouldn’t even know what those are called. I couldn’t even tell you how we’re tracking those. I have no idea of lifetime value. That’s what’s amazing in your world is you’re starting with that. You’re starting with the end in mind that they are loyal clients for life, and you’re working backward for that. That’s interesting. 

Robbie: You’re bringing up such a great point about this path to success or you called it the glide path to success. I love that. 

Marylou: I’m sitting with my husband, by the way. He’s a retirement person. He’s gliding towards retirement. 

Robbie: I’d like to be running toward retirement. Like any business, you should be thinking about once you bring somebody in, you want to put them on that glide path to success. You know from your past customers what the best customers do. 

Marylou: The behavior and the timeline. There are some concrete chunks that you can put together. You may not be 100% right, but at least you got a baseline.

Robbie: Exactly. Your customer success team or your onboarding team can say, our best customers often do this when they get started. They bring in these people and usually they do this exercise and we can facilitate that. Or you actually build that into the product itself so that it’s self-service. You get guided to the right features. 

For example, you talked about how I’ve worked with a lot of consumer companies. Companies like Netflix, HBO, or any of the streaming content companies, one of the things they want you to do—they know you’re probably coming in for one piece of content. You came to Disney+ because you want to watch Hamilton. You have no intention of the princesses. You’re like, I’m going to sign up. I’m going to watch Hamilton, and I’m going to get out of there. 

The job of Disney in onboarding you—which of course they do through the product itself, not through customer success people—is to help you discover other content that you’re going to enjoy before you cancel. They’re trying to help you reach other features before your month is over. It might be the princesses, but it might be, oh, I didn’t even know that National Geographic titles were available for Disney, or I didn’t even know that you have these adventure titles. That’s one way of expanding the relationship. 

Another one is they know from past experience that people who are enjoying their content on a tiny little phone are more likely to cancel than people who are enjoying the content on their great, big Smart TV. It becomes really important to build that into the product. To say welcome to Disney+. Here are the steps you can use so that you can enjoy our content on your big screen. They walk you through that because they know that if they help you get the best experience that their best customers enjoy, you’re much more likely to make this a habit, and you’re likely to stay for a long time and be really profitable. The same principles apply to onboard a new SaaS client. 

Marylou: Right. The word friction. If you make it easy so that we don’t have to think, then it’s natural to be like, oh my gosh, I didn’t know that. All of us now—I can’t speak for all the audience, but since I’m not traveling, I am a Netflix junkie now. I like crime shows. I’m constantly looking for crime shows and things that I can watch in the wee hours of the night. I’m usually at a hotel or doing something else, and now I’m home. The house can only get so clean. There’s so much stuff I can do, so many hostas I can plant. It’s been really interesting. 

I have been watching how they keep me engaged. The word frictionless really comes up. I can use that app, and I’m one of those crazy people who actually use my phone. My kids just chide me on that because they’re like, how could you watch a movie on the phone? I am that kind of person. I don’t care how big the screen is, but I do care about what’s next after I finish this? All of a sudden, there is this, what’s the next thing, or if you like that, then you’ll love this. 

It’s like the Amazon thing. If you like this, then you may like this. Or people who bought this also like that. We can do similar things with our product. If you like the feature, this is the next step. We give you this kind of output, or you could use it for this type of scenario if you’re working in this area. We don’t do that. We’re really bad at that. 

Robbie: Even in the prospecting phase, you can start to bring some of these elements into your conversation to say, our best customers don’t usually sign up for one feature. They usually sign up for two or three. These are the three features for companies like you. Usually what happens is… You could tell them their own story. I always think about, for salespeople, really understanding the customer journey. It’s not the customer journey with your product. It’s the customer journey that drove them to buy your product. 

For example, let’s say you provide financial advice. You help people with their taxes and managing their budgets and with their investments and things. You could say, these are the points where they engage with me, but you could start by saying what would make somebody want to invest time and resources into their finances? Maybe they graduated from college, and their parents told them it’s time to be an adult. That happens. We’re both parents of young adults. Maybe it’s because they want to buy a house. Maybe it’s because they just got their first real jobs, they have real money, and they’re like, oh, man, I got to be careful. 

We know, as the company, anybody who just graduated from college—probably, they’re going to want to get a credit card. They want to get to start thinking about their credit. They’re going to, maybe in a few years, want to buy a home. They’re going to maybe get married and combine resources. They’re maybe going to have a child and want to plan for that. They’re going to want to think about retirement. 

Those are all the steps in being a responsible adult. You can explain that to your customer. Here, I see the path that you’re on, and our product helps you at every stage. You lead with their journey. You lead with this understanding that this is what I know you’re going to go through. I know what the problems are that you’re going to face, and our product moves along with you and your journey and solves those problems as they arise.

Marylou: Plus, while you’re telling those stories of current clients or people who have put their faith and trust in you, you’re delivering social proof. The decision process and that trust and rapport, it starts to build internally. That oh my gosh, they’ve worked with such and such, this type of university or whatever it is. They have proof points that resonate with me. They know me, so they know where I’m going to be going through. 

Introducing that up at the top-of-funnel where you mentioned prospecting is the best place to start talking about this because we’re trying to get people emotionally engaged. That’s the duty dating part. We’re trying to get them to go on a date with us. We’re trying to get them to a point where they already know, love, and trust us even though they just met us. That is where we can bring in those stories. They’re so important. 

Let me ask you this. Are surveys a part or important in learning more about where your clients are or are we looking at data to help us make these decisions to see how they’re using the product or service? What would you say?

Robbie: That’s such a good question, first of all. A lot of people will say to me, oh, Steve Jobs. People don’t even know what they want. Steve Jobs never asked people what they wanted. He just knew. I think that is oversimplifying the magic of Apple. What I think you need to tease apart and what Apple is really good at is the difference between what people say they want. 

People are really good at telling you what their problems are. They’re experts on that. They’re good at telling you what’s hard. They’re good at telling you what’s frustrating. They’re good at telling you how they spend their time and their money. What they’re not good at telling you is how they should solve those problems.

Marylou: Right. 

Robbie: When you’re doing market research, you don’t want to ask them how they would solve the problem, but you can ask them what the problem is. And then, in terms of understanding how they use a product—we always joke in our family—people lie. They’re not going to tell you the truth. They’re going to say they’re going to use this feature or that feature, that they need it, or that it’ll be really important to them, but they’re not trustworthy. If you have behavioral data, if you can actually see how they use the product, that’s going to be much more valuable than what they tell you they’re going to do. Oh, if I have a Peloton, I’m going to ride it five days a week. And then you’re like, oh no, it turns out it’s more like twice a week. 

Marylou: […] with that.

Robbie: Exactly. There’s so much aspiration, hopefulness. Also, when you do market research, people want to be nice to you. People are going to usually be much more positive in their answers. One thing that I’ve done with market research is if you tell them, if I had this product, tell me about your problems. Okay. Is this one of your problems? The thing that my product solves. Yes. Okay, if that’s one of your problems, do you think that this would solve it? Yes. Great. If I offered you a 10% discount right now, would you buy it? And then they’re like, well, no. I got to talk to my colleagues. 

But if they’re pulling up their checkbook and saying, I want first dibs, then you know you’re on to something because they’re ready to put their money where their mouth is. Whereas a lot of times people will say, oh that’s really interesting. What a great product. And then they say, no, it’s not really for me. Whenever a prospect says, I’m sure there are other people out there that would love this, but I don’t really need it for these reasons. You know that you have not found a product-market then.

Marylou: Right. And really what we’re looking for the quality of product-market fit, and let all the other ones find their own path. That’s another very difficult thing for us as SaaS companies because, like you said, the board is always looking for net new and what have you done for me lately? 

This whole nurturing of the base—we hear it’s more expensive to get a new client than to maintain a current client. We hear that, we know that, but we don’t necessarily have a systematic approach or methodology that we feel would be more predictable for us so that we could take the time and put it in. It is always seemingly the afterthought. Now, as we are maturing—all of us in the SaaS world—it’s becoming more important. When I saw your book, I was like, oh. It’s the how, even. How to do it?

Robbie: Yeah. I think the good news is that a lot of investors, a lot of board directors are becoming more sophisticated about understanding the power of subscription. They’re interested in ARR—Annual Recurring Revenue, and Monthly Recurring Revenue metrics. They’re understanding churn more. 

Marylou: It’s the key.

Robbie: It’s really the responsibility of the company to educate its board on what the leading metrics are and what is important. To say, look, we have some logos, but we’re not going to show them to you because that’s not where you should be focusing. We’re going to talk to you about retention, engagement, and expansion. Our increasing understanding of the journey that our customers go on, and our ability to predict—I know predict is your word—when a new prospect becomes a customer. We have confidence in predicting what their lifetime value is going to be, and that’s what you should be excited about. Not that we have a new customer, but that we know the value of that customer on day one. 

Marylou: Once we get them and we culture our lists and our outreach based on this ideal profile of this correct customer for us, we’re not just throwing crap at the top-of-funnel. Anything warm will work. We’re actually doing a total addressable market study, but out of that, where do we fit? Where is the total serviceable market? The serviceable market that we know we can retain these clients in our very high lifetime value rate. 

That’s the biggest conversation I have with people right now is the difference between the total addressable market. Yes, great, but what’s the serviceable market? I’m now going to steal some of your stuff because I could never really describe what that meant. It is a lifetime value, but if we could put some beef behind it as to why it’s important, maybe I’ll get people to actually buy into that. I can tell you that I see the eyes go blank when I start talking TSM, Total Serviceable Market. People are looking at me like, what are you talking about?

Robbie: Yeah. It’s very sophisticated. One way to think about it—I always talk about the most basic things—your best customers and your not-best customers. Your not-best customers are the ones that leave too soon before you start making money off of them. Your not-best customers are the ones that are very expensive to service. To start thinking about that and say, look at this. All the best ones are the ones that have stayed a long time. 

Let’s talk about how we get them to stay a long time and why they’re more valuable. Look, in month one, we’re still losing money on them because of everything we spent on our sales team, our onboarding, and acquisition. It’s only on month four that we’re actually making a profit.

Marylou: Right. Let’s actually drill down on that. A lot of us have a handful of clients with whom we could do this type of analysis. If our recordkeeping is decent, we should have some of these data points in our databases. Our CRMs—our customer relationship management systems—and we can start tracking that. 

We have the ability to do so. It’s understanding what a good recipe would be is where we’re still—yeah, I’m not quite sure how this all fits together. I would say “new” because I’ve been doing sales for 35 years now. What’s new is really old, but there is this new concept called the pod a few years old coming out of Silicon Valley actually. Where we’re combining the account manager role inside of the pod with salespeople. 

They’re all sitting now together and they are looking at (holistically) the client. How do we expand them? How do we serve them? What are their usage and penetration? Are there referral sources inside of this client that we can leverage for referrals instead of having to go with outbounding and outreaching every time prospecting that we get referred in? Because getting a warm referral is going to shorten the timeline to get to close. 

Those are the kind of things that are starting to come up now for those companies that have matured in their SaaS world. This is the perfect topic for them now to dive into this part of the funnel, which, frankly, a lot of companies have ignored because there’s this mentality that there’s a big world out there of net new that we can go after. I love the idea of what you put together. 

People are listening here, they’re buying into all this. Where do we start? What are the top three things homework for us to go do to start to compile? Is this right for me to dive into this? Besides reading a book—which everybody, grab a book and do that—what are the things that you see all the time, that you’re like, okay, just do these three things to get started. Give it a go, these three things. Do you have that or what are they?

Robbie: Yeah. For salespeople, if that’s your lever, number one is to focus on who’s your best customer for lifetime value. 

Marylou: The A, B—Best customer, not-best customer, start there.

Robbie: Start there. You’ll find you’re saving a lot of time because you’re not wasting your time talking to the not-best customers. If somebody comes in, you know you’re going to stay. You know you’re going to continue to get revenue from them. You know it’s going to expand. 

Number two, make the people on either side of the customer relationship chain your two best friends. On the one side, marketing, so that they give you the kind of leads that are going to lead to expanding relationships. On the customer success or customer support side, make sure that they know how to onboard new customers to maximize lifetime value.

Marylou: When you say that, the personality type of the customer service people that I have the privilege of working with are very reactive people.

Robbie: I hear you. Yes. This is the difference between customer support—and again, it depends on you know who’s listening and how much leverage they have within their organization. A lot of times, salespeople have a lot of clout.

Marylou: This is the perfect world, the perfect bubble. The COVID is […]

Robbie: Yeah. In the perfect world, you say, I don’t want customer support people. I want customer success people who work as partners with me. The difference between customer support and customer success, as you just said, is customer support is reactive—fix the thing that’s broken, great for the squeaky wheel. 

Customer success is proactive—reach out to the new customer and make sure that they are on that nice glide path to getting tremendous value. I always say a customer success person is about making sure that the customers are getting the value they’re paying for. Because if they’re getting the value they’re paying for, they’re going to be happy, they’re going to want to expand, they’re going to want to be referable, and they’re going to want to do more with you if they’re getting value. The most important thing that happens after they sign the contract is how quickly you can get them to value.

If you have to talk to your customer success lead, your customer support lead, or if you have to go to your CEO and say, we need customer success, not customer support. Or if you have to just go find the best customer support person on the team and say—I don’t want the CEO to hear this, but I know that if I was a salesperson and I had a customer support team supporting me instead of a customer success one, I would be looking for who is the person on the customer support team who is the most proactive, the most sales-oriented, the most results-oriented, and I would give my clients that person’s phone number.

Marylou: Okay. Great advice. Definitely, the reactive versus the pro-active. If I were to interview all my clients right now, I don’t think there’s a pro-active one in the bunch that’s under the support or professional services side of life, no.

Robbie: It sounds like you have clients where you have the power to change that. The first thing that you do is you change their metrics. Most customer support people, their metrics are like shortening the call, getting them off the phone, or tearing up the ticket. What you want it to be is, of course, a net promoter score or some kind of loyalty metric. Maybe, you also want to look at the retention rate. 

Each customer support person has a certain set of accounts they’re supporting. What’s the retention rate and how do they compare with one another? And then, expansion. Are these customers buying more? Are they more seats, more services, new products? Put that into the customer support dashboard. That’ll change the way they behave and that’ll change who gets rewarded and recognized. 

Marylou. That’s great advice. That was two. We have one more from you. You kind of gave us the whole profile of proactive versus reactive. I appreciate that.

Robbie: The last thing I would do is—salespeople are on the frontlines. They’re seeing the customer. They’re hearing the language the customer is using. They’re very aware of what the headline benefit is that’s going to get someone to close. They’re also really good. They also often hear, hey, you promised me this and it didn’t work. 

I know salespeople don’t always like to do this because their time is so precious, but taking the time to give that feedback to your marketing friends and to your product friends. Just say, look, this is the problem they’re coming for. They don’t use 99% of the features. We can expand that, but let’s focus on getting right that journey in order of the features. 

Giving that feedback back to your colleagues is only going to make it easier for you to close the next deal and for that next deal to expand and grow in a way that makes it easier for you to exceed your number and frankly delight your customers, which is the most motivating of things is to have your customer say, you change my life. You made my job so much easier. You help me achieve my goals and get my bonus. All of that as well.

Marylou: Right. I have more time with my family, or whatever the result of protecting your security or advancement that they’re looking for. You were able to deliver that, and that’s just a great feeling all the way around. It’s a good feeling when you know you can do that. 

Well, this has been a lovely discussion, and I very much appreciate your time. We know to go get the book—The Forever Transaction. We know your website. Go ahead and give us your website.

Robbie: Yeah, it’s my name, robbiekellmanbaxter.com. I have lots of resources there, videos, content, and lots of help with all the different parts of how you build this kind of predictable engine for growth and profitability. It’s right-aligned with Marylou’s work. Like peas in a pod.

Marylou: It’s totally. I’m top-of-funnel then. Someone does get in too close—various people—and then you take it from there. The feedback loop is the third advice you gave to us. It’s probably one of the most important things that shame on us, with the technology and everything that we have, it takes 30 seconds to a minute to wrap up the conversation saying it was this product or this feature, this was the issue. And then, trace that back into marketing or to customer success. We’re guilty of not doing that. 

I think that’s a big lesson for us. A little bit of recordkeeping goes a long way in order to further the conversation later, shorten the lag in the pipeline, raise the conversion rates of getting to close. It feels good all way around if we’re good and diligent about doing these. 

Thank you so much for your time. I very much appreciate it. We’ll make sure all of your notes and all of the links are on your page. We very much appreciate you taking the time and sharing this information with us.

Robbie: Such a pleasure to talk to you, Marylou. Thank you so much for having me.

Marylou: Thank you.