In a company’s early days as a lean, mean, business machine, it’s fairly easy for leadership to stay in sync with their users. You might say it’s one of the strongest advantages a startup has.
But as the business becomes more successful – and there are resources to build a support team – additional layers begin to separate executives from their customers. It becomes harder for the folks running things to make time to be inside their customers’ minds.
Michael Redbord has an answer for that. If you’re a leader, he says, don’t try to scale your job. Even as the company begins to expand, it’s important to prioritize these one-to-one conversations because understanding how your users interact with your product is actually the key to healthy growth.
As the General Manager for HubSpot’s Service Hub, Michael knows a thing or two about keeping customers close. Since 2010, he’s helped the company grow to more than 40,000 customers and helped scale the support team to more than 500 employees to assist those users.
He joined me on one his regular visits to Dublin for a chat that ranged from seeing customer support as a model for growth to how to stay focused on your customer in an automated world.
Short on time? Here are five quick takeaways:
- Most sales and support teams talk about their jobs as a funnel. Move away from this concept and toward the idea of a flywheel instead: feeding energy back into the system instead of success rates diminishing over time.
- Speak the customer’s language. If you’re a company that can be really customer-centric and can have your entire executive team talking to and understanding the voice of the customer, you will thrive.
- As automation becomes increasingly popular, it’s essential to stay uncompromisingly focused on the customer. The more you can replace repetitive support tasks with bots, the more time you free up for your human reps to operate at a higher and more intimate level with users who truly need them.
- Support and success are siblings. The more you can keep them together so the customer experience is contiguous across the two, the better it is for your company.
- The first key pivot point for a startup’s growing support team is transitioning from reactively solving problems to proactively helping your customers experience the product in new and better ways.
If you enjoy our conversation, check out more episodes of our podcast. You can subscribe on iTunes, stream on Spotify or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.
Kaitlin: Michael, welcome to the show. It’s great to have you in Dublin. What brings you over here, and what have you and your team been up to recently?
Michael: Thanks, Kaitlin. So I’m actually here to talk at The Next Web over in Amsterdam later in the week, but I’m pretty excited to be here with you guys today with Intercom. We’re almost halfway through the year, and we’re trying to make sure we’re going at the right pace and delivering for our customers. It’s been a cool week and I’m really excited for The Next Web in a couple of days.
Kaitlin: You’re the General Manager HubSpot’s Service Hub. Could you give me a bit of background on why HubSpot built Service Hub in the first place and the philosophy behind it?
Michael: Most people listening probably think of HubSpot as this inbound marketing company. We coined the term way back in 2006 when we founded the company, and a lot of our story, historically speaking, has been around marketing. We really popularized content marketing and how to generate traffic and leads and turn that into customers. That was really the beginning of our story. Then a few years back we started building a CRM, which has done really well in the market. Once you start moving from building marketing software just for marketers – which is the tip of the spear in your go-to market – and you begin getting a CRM and then more salespeople involved, all of a sudden you realize: “Man, there’s a lot more that we could be doing for our customers. And they’re actually starting to demand it from us.”
So it was a combination of continued growth and customer demand. We said, “Oh, we could build a service component in here,” and now we have a marketing hub, a sales hub and a service hub. Those three together really comprise the entirety of the front office for the SMB. We’re pretty happy with the way that it’s been going, and our customers have enjoyed us being able to offer them more across the entirety of the customer experience.
Customer service as a model for growth
Kaitlin: It makes a ton of sense. What’s interesting to me about Service Hub is that it seems to be less about, say, ticket deflection or resolution and more about using customer service as an untapped revenue or growth opportunity. Why do you think customer service is an effective model for growth?
“If you can make your customers rabidly happy, they turn into your best marketers”
Michael: When we started HubSpot, we had this metaphor of a funnel, right? Everybody in marketing and sales and probably even customer service uses the concept of a funnel. You bring folks in at the top, and they have certain rates as they move through some process. So if you bring folks into your website, you have a conversion rate. If you bring folks into support, they have a rate at which they maybe close their case the first time or open a case a second time or something. There’s a funnel concept. That concept was really, really powerful for us. But we’re moving away from that funnel concept and toward what we call the flywheel, which involves feeding back energy into the system as opposed to a funnel where your rates of success diminish as you go on.
What we’re seeing with Service Hub is that it’s really a way for folks to take their customers and turn them into their best marketers. It flips where we came from, which is nice just from a company genetics perspective and messaging. But more importantly it also happens to be real and true. And in fact, if you can make your customers rabidly happy, they do turn into your best marketers. So the aim of this product is to enable that virtuous cycle, where your customers become your best marketers. So far, we’re seeing that for small and medium size businesses, that’s actually really, really powerful to help them compete with the bigger players in their space.
A tight handshake between support and success
Kaitlin: I think that makes a lot of sense. There’s so much out in the market about this, and we talk about customer delight and net promoter, and it’s really interesting to get HubSpot’s view on all that. If customer support can be an efficient driver for revenue, do you think that sales and support should actually sit under the same umbrella from an organizational standpoint? I’ve seen other companies package these all together.
“The thing that matters most is customer-centricity and how well our executive team speaks the customer’s language”
Michael: It’s super interesting because you see all sorts of different models and org charts. And actually I would include a third thing: cultures out in the world, right? I think the culture is actually the most important thing. If you’re a company that can be really customer-centric and can actually have your entire executive team talking to customers, understanding the voice of the customer, there are a lot of ways to do that. Some folks will organize support in a product function, and then they’ll have CSM over in a sales function.
You could also group support and success together under one person. That’s actually my preference, because I think the functions are so intertwined that you really need a very, very tight handshake between the support (as the reactive function) and success (the proactive function). Then the sales function, depending on the kind of company, could even sit with it if it’s a relationship where the salesperson is intimately involved in the customer lifecycle and customer experience. Or it could sit a little farther away if your sales are more transactional. There are a lot of ways to organize the org chart. I’m a fan of putting support and success together as a first-order principle. But the thing I’ve seen actually matter the most is customer-centricity and how well our executive team “speaks customer”. If they really, really are great at that, then a lot of it matters less, because the whole organization becomes really customer-centric.
Kaitlin: “Speak customer.” I love that. I’ve not heard it articulated that way, and it makes a ton of sense. One big challenge for a lot of support leaders today is this concept that customer service is a cost center. Even at customer-centric companies like Intercom and HubSpot, there’s always pressure – maybe not to keep costs down – but to be responsible with how you’re scaling your customer support experience. How do you guys think about communicating the ROI of customer support?
“Companies are fundamentally misunderstanding where their growth comes from”
Michael: This is a really tricky conversation, because it works differently for different companies and different types of customers. Taking HubSpot or maybe Intercom even for example: relatively well funded companies with a relatively happy history when it comes to financing and stuff like that. You get less pressure then. But when things start going less well, and your CFO starts looking for places to cut, they typically will go to support first and not to sales, because sales is the growth engine. But if things continue going poorly, then they’ll go to sales, and the pressure will come for everybody. So I view it as the fact that everybody’s subject to the same pressure: sales, marketing, service, support, whatever.
And support tends to be the first one to get cut. What that tells me is that they believe sales is what defines growth because they produce a quota every month or every quarter or every year. Of course, in a certain way on a spreadsheet, that’s true. But again, it’s a fundamental misunderstanding, because where the engine that drives your business – and where your success actually comes from – is your customers. When you think about it and flip the script a little bit, you start to break down the customer experience in terms of what’s important, right? You’d map out their experiences, and you’d do journey mapping or empathy sessions, and you’d understand what customers value.
They’re probably going to value your product first – the thing you actually sell, the noun – right? But then they’re going to value the verb: an experience likely marked by key support in human interactions along the way. Often, support gets this bad rap of cost pressure, especially when things get tight. But if you really sit back and think critically, and you’ve used maybe the cost-cutting as just a near-term thing, in the long run things are going to get better, right? If you’re optimistic about the state of the business, then I would say you probably shouldn’t cut support to the bone when things get rough, right? You should spread those kinds of cuts more evenly and try to then invest in your customers, so you can come out of that downturn a little bit better.
Support in its current state often just negotiates the worst. It’s the short end of the stick, and because it’s the longterm play, it gets cut the most in the near-term. That’s disappointing for me to see, because I feel for the people, but I also feel for the customers that have to deal with the results of that action.
Why customer service is worth the investment. Source: HubSpot Research
Staying customer-centric in an automated world
Kaitlin: When thinking about how we’re using those costs in the right way, my mind turns to automation. So often, when we think about investing in a support team, sometimes the conversation becomes about getting the headcount higher, higher, higher. But where else can you be investing outside of headcount to maintain that customer centricity?
Michael: For sure. This debate is not actually a new one, right? When the internet started, somebody took what was formerly a paper manual (“Turn to page 390 for how this part works…”), and they put it on the internet. And that was the world’s first example of self-service in action. There’s just been this explosion in the number of ways that we can automate and the creativity we can have with them. It’s not a new narrative. It’s been going on for forever. And you could have methodologies like knowledge center support and stuff like that.
Today, it’s not fundamentally different, but it puts the importance in a different place. In particular, it puts a lot of weight and a lot of power with the support operations team. In a normal support organization, you’ve got a couple of different groups; in the smaller ones, everybody does everything. But as you start to grow, you end up having some folks that are focused on just knowledge management. And over time, you have the support operations group that’s trying to tune the machine. That team, to me, has gotten a lot more interesting over the last three or four years because of that explosion of automation technology. You now have people whose entire job is to work on the knowledge bot or on a positive way of moving tickets and demand around.
That job didn’t exist three or four years ago, and there’s going to keep being new jobs like that in support operations. It’s super, super exciting, because it diversifies the skillset that’s housed in what we call support. It’s not just this old-style image of an agent on a headset. It’s now the ability to almost growth-hack your entire support experience and fundamentally change the fabric of the way customers work. I get really excited about all this stuff. Maybe interestingly to listeners, I don’t get excited about any one of them in particular. What I get excited about is that trend and the pace at which we’re expanding the number of ways that we can play this game. It’s no longer just taking a manual and putting it on the internet. That was really slow, and companies maybe did it once a year. Now companies can roll out new tools five, six, seven times a year and they can be really, really agile and creative in the way they build their customer experience.
Kaitlin: I couldn’t agree more, particularly with the point about the growth and the emergence of the support operations team. Something that can be great for so many organizations is the career pathing opportunities that present themselves to your team. When you’re able to focus on bringing less new talent in, and instead bringing in the right talent, it makes for an exciting career path.
Michael: I think there’s actually a super cool dynamic here. This also existed for a long time, but again, we’re going to see it happen faster – the replacement effect of some of the more basic work we all do in support, right? Where it’s that same question you get over and over, but it also happens to be the most common question, because that’s just how the math works. The more we can effectively replace that with automation and bots – I just think the career pathing is a really big deal. But also the level of work – and the intellectual interest of the work we do – will just go up. Over time, certain things will get replaced and the support reps will be able to elevate their work.
It’s actually happening a lot faster nowadays than it was a few years ago because of the explosion in tech. It’s really pushing the rep upwards, and that’s forcing companies to do things that maybe they didn’t do before, liking hiring different types of folks and paying them more, building career paths that are actually sustainable because they give people longterm careers and support. None of that really existed 10 years ago. And it’s just really hastening the pace of those kinds of movements from companies in a response to what’s going on with technology.
Scaling support as you grow
Kaitlin: In 2017 you wrote an article in Harvard Business Review that has been hugely helpful for us in thinking about how we take our support experience to the next stage. In this article you talk about five phases of customer service as a startup grows and what companies should or should not be focusing on at each stage. Can you bring these different stages to life for us?
Michael: That article was a labor of love. I don’t know how many words it was, but it’s long. We’re not going to do the whole thing, but it was really just built off of my experiences in terms of scaling HubSpot support. The observations here are not super complicated, but some of the dos and don’ts are a little more directive. But the observations go like this: At the beginning when you’re two founders and a developer, and you’ve got an idea, and you’re trying to make stuff go, your entire company is your support team, right?
That’s just a necessity, because you don’t have money to hire a support person. And why would you, anyway? You’d probably hire another engineer first. So everybody does support and you end up very, very close to the customer. Small companies tend to be very, very in touch with their customers. It’s part of why they win. It’s part of why they can compete against bigger companies who aren’t – who hired giant teams and can’t do a good job with the customer experience. This is at the beginning.
“At the beginning, everybody’s close to the customer. As you go from a startup to scaling up, people pull away”
And then at the end as you scale up, some of the topics we were talking about earlier come into play. How do we get the entire executive team to talk to customers? How does the CFO understand and speak customer, right? And that’s a spectrum. At the beginning, everybody’s close to the customer. As you go from a startup to scaling up, people pull away. Their jobs become more specialized. It’s a very natural thing.
In the article, I talk about ways to balance that natural tension and stay close to the customer and tweak your operation in critical ways to make that happen. For instance, the more you can think about support and success as siblings and keep them together so the customer experience is contiguous across the two, the better it is for your company. The more you can have your executive team engaged in voice-of-the-customer exercises and use tools like NPS, that also helps to do this stuff. I’ve used small companies as just a very, very special time for the customer. And then the key is: as you grow, don’t lose it.
Michael: I suppose there are two inflection points in the growth of the company that are interesting for this discussion. The first is when you’re that primordial soup of a startup and everything’s super customer-y right? You don’t have that many metrics. What tends to then happen is you do grow, things do go well, and you start hiring people to do certain functions. One of the first functions you tend to hire is somebody to own the customer and own support, right? But even then, they probably don’t have a ton of metrics; they’re just getting the queue under control. And the CEO knows whether customers are roughly as happy to as they were before or more or less. So that becomes a barometer.
At some point, though, you do get to the point where you’re going to start wrapping some metrics around support. Typically, it’s really simple stuff, because at this stage companies aren’t super complicated. It’s response time and maybe quality of resolution, like a CSat score or something like that. Simple stuff.
If we think of speed and quality resolution as a baseline and go from there, a couple of things happen. The first is that those metrics are super operations-focused and not very outcome-focused. As you start building customer success teams or implementation teams or teams that are more focused on customer outcomes as opposed to just getting through a case, you need a different set of metrics. So the first key pivot point for a company is going from just being reactive and measuring the reactive stuff in a very transactional way to really measuring proactive work — in the way you work with customers through different functions and stuff like that. That tends to have metrics that are maybe tied more closely to the product: things like usage, adoption, retention, etc. It’s not dollar retention, but how long people actually keep using the product? You work in things like upgrade numbers, downgrade numbers, customer retention and renewal rates, and you start to get into this world where you’re marrying reactive and proactive at the mid stage of a company. I’m a big fan of that.
That’s actually a pretty sustainable model for quite some time as you scale up. But the next key moment after that in the company’s journey here is to get to the point where multiple functions start to really touch the customer in new ways. Maybe you had to build a big renewal organization, or your product line got big enough that your sales reps are selling back into the base more. There’s some fundamental change in the business process. And at this stage, the customer success team (including of support) can’t just keep measuring only its own stuff. You need to measure the whole thing in some other way. I’m a big fan here of measuring total lifetime value and thinking about churn and upgrade and the net retention of that as a shared metric. You tend to then spread responsibility for that across the business. And that’s a really nice way to drive customer centricity broadly across the organization.
There are two points, right? You have the point where you go from reactive to proactive and change your measurements there. Then you have the point where you go from customers being owned by just the customer team to the customer being owned by everybody. And that fundamentally changes the game and how you measure.
How to check the customer’s pulse
Kaitlin: My last question for you, Mike, is about about inertia. As a company grows and grows, it’s easy for inertia to creep in, particularly for customer support leaders – especially where you’re seeing fast growth, like you’ve seen at HubSpot and here at Intercom. With such a big team and many different organizational layers, you get further and further removed from what’s really important, which is your customers. How does HubSpot check the pulse of the customer on a regular basis?
“As you scale, do you do things that keep you in touch with the customer on a one to one basis?”
Michael: If I can rephrase the question a little bit, as you scale, do you do things that keep you in touch with the customer on a one-to-one basis? And to even then rephrase it one more time, when you’re really small and you’re just a beginning startup, you do a lot of stuff that doesn’t scale, and you have your CEO on the phone with a customer on a Saturday night. The answer we’ve happened upon — and I don’t know if it’s the right one, but it’s what we’ve done at HubSpot — is to get your leadership team to do stuff that doesn’t scale.
For instance, we’ve started what we call a customer-first staff meeting. We do it every four weeks, and we have a customer and we talk to them. And every two weeks, we meet as a whole executive team. In some ways, that’s outrageous that we were handling support requests and stuff like that as a team there. But in other ways, I don’t know how else you would get that whole executive organization involved with the customer. We make sure to have lots of verbatims from our NPS. We make sure to bring in those customers. We’ll have a big Zoom meeting with 10 customers on it where we’re talking about one topic, whether it’s pricing or the way a new product works or whatever.
We haven’t identified a silver bullet in terms of here’s the scalable super slick solution to making this happen. We’ve placed the human beings who make decisions – the executive team – in touch with the human beings who are affected by those decisions, which is the customer. We’ve cut out the middleman, which is the organization, and we just try to do things that don’t scale. We don’t have guilt around it, which is healthy, and that’s kept us pretty close to the customer.
We haven’t always done it, by the way. There were periods of time we didn’t do this, and in those times we really felt that distance. We felt the center of our energy really moving more inwardly toward tweaking the way a team or process works or looking at P&Ls – as opposed to outwardly toward the way that customer experience happened, the way a ticket was resolved or the way a new product onboarding went. The more we can do stuff that doesn’t scale and stay in touch with the customer, the better we grow.
Kaitlin: Because you’re focusing on the service products now – but you have these deep, amazing roots at HubSpot talking to customers and scaling and growing that support team – is there any technology out there in the marketplace you’re particularly excited about or that you think people should be keeping an eye on?
Michael: I’m really excited about the pace of innovation in terms of automation: our ability to bring self-service to customers. It’s been around for a long time. The pace of innovation is way up and to the right, currently. I get really excited about that. That’s number one.
Number two is that with that technology, the fabric of the customer experience has gotten more complicated. Put differently, it’s harder to understand when you get on the phone with a customer, the totality of their prior experiences, because now you’re spread across a bunch of systems, a bunch of channels that are new and sophisticated, but maybe don’t tie together with your old phone system or whatever.
So the tech stack gets more complicated, the topology of the experience gets more complicated, and as a result, understanding the entirety of that customer journey becomes harder, right? Especially when you’ve got four seconds before you get on the phone with the customer to understand who you’re talking to. So I’m a big fan of softwares that solve that problem: customer data platforms giving you a 360-degree view of the customer, a CRM that ties all of those kinds of things together. Those are just like table stakes nowadays for a company that’s trying to leverage everything we’re talking about and trying to really serve their customer the right way.
Kaitlin: Wonderful. Thanks so much for joining us today. It’s been great having you on the podcast, and we look forward to talking to you soon.