The Customer Success Playbook
Welcome to “The Customer Success Playbook,” a fresh podcast initiative spearheaded by Kevin Metzger and Roman Trebon. Immerse yourself with us in the dynamic realm of customer success, where we unravel the latest insights, inspirations, and wisdom from recognized leaders in the Customer Success domain.
Our journey began with a simple yet profound belief: that meaningful conversations can significantly impact our professional trajectory. With this ethos, we’ve embarked on a mission to bring to you the voices of seasoned and revered professionals in the field. Our episodes have seen the likes of Sue Nabeth Moore, Greg Daines, Jeff Heclker, James Scott, David Ellin, and David Jackson, who have generously shared their expertise on a variety of pertinent topics.
We’ve delved into the intricacies of Profit and Loss Statements in Customer Success with Dave Jacksson, explored the potential of Customer Success Platforms with Dave Ellin, and unravelled the role of AI in Customer Success with all guests. With Sue, we navigated the waters of Organizational Alignment, while Greg brought to light strategies for Reducing Churn. Not to be missed is James insightful discourse on the Current Trends in Customer Success and Jeff’s thoughts on Service Delivery in CS.
Each episode is crafted with the intention to ignite curiosity and foster a culture of continuous learning and improvement among customer success professionals. Our discussions transcend the conventional, probing into the proactive approach, and the evolving landscape of customer success.
Whether you’re a seasoned veteran or a newcomer to the industry, our goal is to propel your customer success prowess to greater heights. The rich tapestry of topics we cover ensures there’s something for everyone, from the fundamentals to the advanced strategies that shape the modern customer success playbook.
Our upcoming episodes promise a wealth of knowledge with topics like CS Math, Training, AI, Getting hired in CS, and CS Tool reviews, ensuring our listeners stay ahead of the curve in this fast-evolving field. The roadmap ahead is laden with engaging dialogues with yet more industry mavens, aimed at equipping you with the acumen to excel in your customer success journey.
At “The Customer Success Playbook,” our zeal for aiding others and disseminating our expertise to the community fuels our endeavor. Embark on this enlightening voyage with us, and escalate your customer success game to unparalleled levels.
Join us on this quest for knowledge, engage with a community of like-minded professionals, and elevate your customer success game to the next level. Your journey towards mastering customer success begins here, at “The Customer Success Playbook.” Keep On Playing!!
The Customer Success Playbook
CSP S3 E14 - Mike Sabat Twilio - The Merger of CSM and AE
Summary
In this thought-provoking discussion, Mike Sabat from Twilio shares his perspective on the potential convergence of Customer Success Management (CSM) and Account Executive (AE) roles in enterprise technology. The conversation delves into how consumption-based pricing models and increasing product complexity are driving this transformation, with particular emphasis on revenue responsibility and customer relationship management in the modern tech landscape.
Detailed Analysis
The episode explores the shifting dynamics of customer-facing roles in enterprise technology, highlighting several key trends and implications:
Consumption-Based Evolution
The discussion begins with an examination of how enterprise software is moving from seat-based to consumption-based pricing models, similar to those employed by major players like AWS, Google Cloud, and OpenAI. This fundamental shift is reshaping how companies structure their customer-facing teams and responsibilities.
Role Convergence Drivers
Sabat presents compelling arguments for the merger of CSM and AE roles, particularly in growth-oriented companies. The traditional model of AEs making promises and CSMs cleaning up afterward is becoming obsolete, replaced by a more integrated approach where responsibility for both sales and delivery rests with the same individual.
Revenue Responsibility
A crucial point emerged regarding revenue responsibility in customer success roles. The panel agrees that CSM teams must evolve beyond being cost centers to become revenue generators, either through direct sales responsibility or through packaged services offerings.
Specialized Models
The discussion acknowledges that while convergence is likely in some areas, specialization will continue to exist. The "hunter" role focused on new logo acquisition will remain distinct, while the "farmer" role may see the most convergence between AE and CSM functions.
Future Implications
The conversation concludes with insights into how this evolution might affect organizational structure, skill requirements, and customer relationship management in the coming years, particularly in enterprises with complex, consumption-based products.
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Hello, and welcome back to the customer success playbook podcast. I'm your host, Kevin Metzger, alongside my cohost, Robin Treba. This is our Wednesday show, the one big question, deep dive edition. And we're again, joined by our guest Mike Sabat of Twilio.
Roman Trebon:Yeah, Mike, welcome back. You did the Monday show. You came back for the Wednesday show. Thanks for doing that, man. We appreciate it. So Mike, before we get into the one big question, which I'm excited to hear your thoughts on. Let's break the ice a little bit, right? I want our audience to get to know you a little bit, right? So, alright, so buckle up. What's one place, Mike, you'd love to visit that you've never been before? Venice, Italy. Oh, Venice. Why? Why Venice, Mike?
Mike Sabat:I don't know. Italy just seems like great food. I suspect they have great weather. Um, I like all of Italy, but the boats, the gondolas, just seems like interesting. Like, how does this work? Wait, I kind of don't understand. Did you build it underwater? Or did you build it and then it flooded? Like, what happened? I'm guessing, uh, someone there can answer that question.
Kevin Metzger:Very nice. You're talking about Italy and with Italy comes the thoughts of food. What's your favorite food to cook or to eat or go out and get? Top of mind right now is
Mike Sabat:ribs. There's a chain restaurant, it's called Houston's, sometimes Hillstone. In Washington D. C. it's called the Woodmont Grill, all the same owners. They're ribs. The first time I had them, I dreamt about them that night. They are so good. And then yesterday I'm I'm here in Vegas and I went to Carbone and ordered the ribs there and they were. Almost as good, but there was three times as much as what you get at Hillstone. So, top of mind, I can still taste, um, uh, I did dream about these ribs as well. So, um, you know, it's going to be a long, uh, decision to make which ones are better. And hopefully,
Roman Trebon:yeah, I smoked some ribs yesterday, Mike, for those, uh, those AFC and NFC championship football games. I'm sure they weren't carbone quality, but they did the job yesterday for me for sure. All right. Final question, Mike. You didn't even invite me over. I know I was trying to get them down, right. Trying to get the recipe right before the big game. I didn't play Tuesday too. Yeah, exactly. Yeah. I'm screwing up the way we record the show behind the scenes. Like the, the Oz curtains lifted up. That's right. All right. Final question. Mike, you got a book recommendation, either a business book or personal book you'd recommend to the audience. Something you've read lately.
Mike Sabat:Yeah. Business book. Crossing the Chasm. Has come back over and over again. The first time I read it, I was like blown away because it reminded me of a startup I worked at. And I called, I was, it was way after I left the startup and the startup sold. It was all good, but called one of the co founders and I was like, we should have followed this roadmap. Processing the chasm when we were working at it's the company's called mobile commons and that guy was like, oh yeah, our investor gave that to us. We should have read it. You're telling me. Yeah, and I was talking to somebody a few maybe a week or two ago and he just a networking thing and he he said. He read this book, Crossing the Chasm, and he sort of modeled his career after it, and it's been a successful ending for him.
Roman Trebon:Oh yeah, I'm adding it to the, uh, to my Kindle wishlist as we speak, so it's, it's, it's making its way on there. Awesome. Alright, Mike, uh, we are ready. Are you ready? I think we're all ready now for our one big question. So you, you would, you have a thought on, you know, how the customer success management rule in the enterprise strategic AA rule, you think, you think there's a chance that these merge in the next five years? So for our big, one big question today, why do you think that's the case? And, and give us a little insight in what that may look like in practice down the road.
Mike Sabat:Yeah. So one of the points I made on, on the last podcast was at least with my career, I've gone from. Selling software and seats and the primary product being software to moving into more complex and bigger companies where the sale is about usage and consumption and and that's how it works at Twilio, but I'm not speaking specifically of Twilio here. I am sure it's how it works at Salesforce at some level and that I'm You know, AWS and cloud and Google cloud and, and all the AI companies, open AI, right? You're sort of likely as you get bigger and into the enterprise, you're paying for how much you're using on a bit or whatever basis versus how many seats you have. And this is the scuttlebutt I'm hearing as, you know, AI is taking over. It's going to move from software to more consumption. A lot of times, I guess the point is. When what we have and what it seems like a lot of enterprise business and enterprise teams have is teams that are supporting big customers. It just seems like both an AE and a CSM would be doing a lot of the same things in terms of serving the customer, helping them understand what they're currently using, helping them understand, you know, what they might want to use in the future and also being responsible for revenue and upsell at some level. That's at least how it's sort of gone in my career. And I think the days of, you know, the sales rep, the AE coming in, making a whole bunch of promises, what the software does, getting a contract signed, getting paid, and then saying adios and, and letting the success team. Or the account management team sort of take it over and correct all the things that the salesperson said, Hey, sorry, we know our sales guy said it, but it doesn't really do that. Or that was on road map, but it's going to push whatever it is, right? I think those days are like, um, maybe a vestige of the past somewhat. And, and the person that's making the promises is also sticking around to fulfill those promises. And so when that happens, it sort of becomes, okay, who's in charge of it. You know, who's responsible for the revenue? Is it? Is it the salesperson? Is it the CSM? Is it a combination? And how do you divide that up? And so it does seem like there will be more roles where the salesperson is responsible for ultimately delivering the revenue, not just the contract signature. And at the same time, the CSM Is responsible for growing the customer. And so that's where I see things sort of overlapping and I'm not speaking about Trillio at all. But you know, friends I have in the business that might be looking for CSM jobs are also saying, well, a lot of the postings they're seeing are responsible for sales are a titles as well and responsible for helping. So just a feeling I'm getting. I don't know if you guys see that at all.
Kevin Metzger:And I think I've seen a lot of that as well. Although I do still think that there is a different skillset between the, the Hunter type personality, who's going out and finding and signing new logos versus the account manager, account exec, who's. Farming existing accounts. I think there's still maybe a distinction for like that, that Hunter role, I don't think goes away. I think where you see more mergers is more in account execs who have ownership are supposed to maintain the role who are doing more of that for farming role, having responsibility into where, where you see the CSMs today. I, I mean, what do you think about that? You agree? 1 million.
Mike Sabat:I, yeah, 1000000%. I'm meant to make that point that Hunter role is separated out and, and, yeah. Yeah. Uh, still uniquely out there, and if I had to guess, I'd say. That's like growth companies are more taking eight E's and pushing them towards the account management and CSM. And then there's probably other companies that are less like focused on growth, just bigger and more stable. And in around longer that are taking like CSMs and making them more responsible for revenue growth.
Roman Trebon:Yeah. The key word I think is it's revenue. If you're a CSC, a CSM team today, and you're not responsible for revenue. You're becoming, in my opinion, you're becoming a dinosaur, right? Like you have to be producing revenue because then you're just a cost center. And if you're just a cost center, I just think you're the team is at risk. And so I think to your point earlier, you know, someone that really can align strategically with the account, like you said, these products are complex, right? These, the software is getting complex. You need to know your client. You need to understand what they're trying to get out of by using the solution and your ability to kind of find the right product or solution to help them fit. You know, meet their business needs and then who they turn to when things do it. Having a central point of contact to me is, is huge. And that's where I, I agree with you. I think that blending of AE and CSM is, if it's not already there in a lot of companies, I think it's definitely going to be there. Like you said, three, four or five years from now.
Mike Sabat:Yeah, it's interesting. And I, I guess for a lot of CSMs, there's overlap with support as well too. Right. And sometimes the customer, I mean, you guys have seen it for sure. Customer will ask a question and this really should be a support question. And, um, so all those sort of customer facing roles are, are, are blending a little bit and, um, again, more complexity just means probably a little more friction and more opportunity and things like that.
Kevin Metzger:The one other model that works and it still has a responsibility for revenue, but basically is when you make the CSM a revenue generating role so that you're using the CSM as more as operations management and support management. And then you're separating out the, the account growth and account management on the other side, but then you're charging for the CSM. In that case, you don't have a person sitting there doing that. So then you have revenue that's coming in. It's more of an operations. I'd actually call it more of an operations role than what we consider the general CS role today. But I do think that's another valid kind of model that. I think you'll see more more growth to it's more of a consulting model. It's kind of the way that consulting models work today, especially for organizations that have a lot of services work. I think that makes sort of makes sense.
Mike Sabat:Yeah, I think we're just seeing probably like specialization on different types of businesses, right? Like, um. This consumption models new. So that's where my most recent experiences is noticing all these changes. But then there's, you know, agency CSM. I just don't know much about agencies, but I'm sure they have customer success. That's that's very different from, um, you know, what you might do in an agency and everybody sort of tailoring their operations and their account teams for their specific business.
Roman Trebon:And Mike, you are in Vegas, so you didn't get to these future predictions from like a tarot reader this week, did you? These are your own, right? Oh, no, they're all psychics. Yes, psychics.
Mike Sabat:Tarot's not real, but psychics, yes. Psychics, totally got it. I do want to see one of those mentalists that are, that, you know, like, picks people out and they're like, you were thinking about Roman, your friend, and it's like, how did you know that? You know, and they just like, guess, however they do it.
Roman Trebon:You've got three more days in Vegas, man, or whatever. So you got plenty of time to do this. So we may have to bring you back Friday to see if there's any new future insights that you get from the mentalist, the terror reader, you name it. So anyway, Mike, we love, thanks for having us on. Thanks for coming back on the show and giving us a peek into your thoughts on the future of account executives and, and the CSM role Friday, Kev. Mike's going to be back. It's your favorite episode of the week, right? We're going to wrap up this three part series by talking about the impact of artificial intelligence. Specifically, uh, Mike, you're going to suggest using it like a coworker or assistant in leveraging tools like Google Gemini for, you know, deeper account planning, Kevin, I know you have a lot of stuff on that as well. So I'm looking forward to hearing you guys, uh, on Friday until next time. Audience keep on playing.
