Revenue at a discount | Donnovan Simon

[Dillon] (0:00 - 0:05)

There's a lot of CS pros out there that say, no, it's always just about satisfaction.

[Donnovan] (0:06 - 0:09)

Nah, well, it isn't. So, I mean, they can say it.

[Dillon] (0:09 - 0:09)

I agree.

[Donnovan] (0:11 - 0:25)

Right? Okay. They can say it, but is it really true?

And also, even if it's true, is it recognized when the decisions are being made? Because that's a distinction to be acknowledged.

[Dillon] (0:26 - 0:26)

Yeah.

[Donnovan] (0:26 - 0:32)

If the group making the decision or the individual making the decision doesn't validate what you're saying. It doesn't matter.

[Dillon] (0:41 - 1:11)

What's up, Lifers? And welcome to The Daily Standup Live with Lifetime Value, where we're giving you fresh new customer success ideas every single day. I've got my man Donnovan with us.

Donnovan, can you say hi? Hi, how's it going? Hi, and I'm your host.

My name is Dillon Young. It's just the two of us because we are live here at the Customer Success Collective Summit in New York City. Donnovan, thank you so much for being here.

Can you please introduce yourself?

[Donnovan] (1:11 - 1:39)

My pleasure. Donnovan Simon. I'm the VP for Client Success with a company out of Canada called Blackline Safety.

We make connected safety devices that do gas detection, loan worker support. The cool thing is they're connected to our cloud so people can get data about what's happening with an individual wherever they are all across the world. And the idea is to ensure that people go to work in hazardous circumstances and get home safely.

[Dillon] (1:40 - 2:03)

I like it. I like it. Now, Donnovan, this is a unique scenario in which you may not know what it is that we do, but the only thing we do is ask one simple question of every single guest we have on the show, and that is what is on your mind when it comes to customer success or anything, really?

Yeah. Take it in any direction you want. All right.

What's on my mind?

[Donnovan] (2:03 - 2:22)

The value of customer success in tough times. I'm at a conference, so I'm here to hear and see what others are thinking. But I think there are tough economic times all across the world.

Well, for some people anyway. Wait.

[Dillon] (2:22 - 2:27)

Where are you based? Are you based in Canada? I am based in Canada.

[Donnovan] (2:27 - 2:28)

Okay.

[Dillon] (2:28 - 2:32)

I feel like that was a little bit loaded the way you said that. I'm not going to take the bait.

[Donnovan] (2:32 - 2:54)

Go ahead. It's all over though, right? It's all over.

I mean, my responsibility is revenue for the company on the recurring side all across the world. Okay. So I'm working with accounts in Australia, in South Africa, in Europe, in America, wherever.

Okay. So the loaded comment is really loaded because it's happening everywhere.

[Dillon] (2:54 - 2:57)

It's global. Yeah. Right.

It's not just my country versus your country.

[Donnovan] (2:57 - 3:13)

There you go. No, it's not. And I think anybody who's in our space has to be thinking about that on how do we not just maintain our jobs, but how does the function deliver value for the businesses?

[Dillon] (3:14 - 3:21)

Has to. Do you bring that to the table because it's just obvious that the bar is now higher?

[Donnovan] (3:23 - 3:38)

I don't know that the bar is... I mean, companies want to make money and they want to survive. When I look at my company, I say my job is to ensure that 650 families that are supported by our business can feel a sense of stability.

[Dillon] (3:38 - 3:38)

Yeah.

[Donnovan] (3:38 - 3:39)

Yeah.

[Dillon] (3:39 - 3:41)

So... Yeah. You have a big part of that.

[Donnovan] (3:41 - 3:57)

There you go. And therefore, my role is to ensure that the customer is getting value, which then turns around and provides revenue to keep those 650 families feeling a certain sense of stability and security.

[Dillon] (3:58 - 4:19)

Well, I think that's fair. I guess the lens through which I asked that question was, we're no longer in zero interest rate environment. Money's more expensive.

It's no longer growth at all costs. Now it's sustainable and durable. Yeah.

So was it through that lens that you say that of like, there's a lot more scrutiny for customer success lately? Or is it... I mean, how long have you been doing this?

[Donnovan] (4:19 - 4:34)

There's always been. I mean, I've been in customer success going on 15 years. Yeah.

So there's always been scrutiny. Yeah. But I think in any organization, functions have to ensure that they are delivering a certain amount of value that is recognized.

[Dillon] (4:34 - 4:36)

Oh, that's interesting. Asterisk there.

[Donnovan] (4:36 - 4:42)

If it isn't recognized, then in the cutting block, you're top of the list. Yeah.

[Dillon] (4:42 - 5:09)

It's very close to the front of the line. Well, okay. I think there's a, whether they want to admit it or not, there's a lot of CS professionals, some of which have been out here for over a decade, who scoff when you say, well, I've always been responsible for a number that I can speak to.

There's a lot of CS pros out there that say, no, it was always just about satisfaction.

[Donnovan] (5:10 - 5:37)

Nah, well, it isn't. So, I mean, they can say it. I agree.

All right. Okay. They can say it, but is it really true?

And also, even if it's true, is it recognized when the decisions are being made? Because that's a distinction to be acknowledged. Yeah.

If the group making the decision or the individual making the decision doesn't validate what you're saying, it doesn't matter.

[Dillon] (5:37 - 5:56)

Yeah, yeah. Well, so then... If I break that down, if I oversimplify it, the CEO has to know what your department does.

The CEO, the board... And understand the value. They can tie that number directly to their valuation, their success, whether they have a job tomorrow.

[Donnovan] (5:56 - 6:07)

Simple as that. So, my business, the NRR number is what shows up. So, we can simplify our conversation to that one metric.

That one metric.

[Dillon] (6:08 - 6:09)

I mean, I agree with everything you're saying.

[Donnovan] (6:09 - 6:10)

You agree.

[Dillon] (6:10 - 6:32)

I do agree. I mean, I'm not of the camp that is going, kicking and screaming into the revenue era of customer success. Maybe it's not even an era.

It sounds like you would push back on that. Like you don't even think... You think it's always been that way.

Have you always owned the number? Or have you lived in a world where you identified opportunities and threw them over the fence?

[Donnovan] (6:32 - 6:53)

Yeah. I mean, it's transition. There's always evolution.

There was a time when it was just about the experience, this intangible, esoteric space. And then there's that knowledge that the cost of acquisition, cost of retention needs to be something to look at, like back to the dollars. So, I've evolved into owning revenue, but it wasn't always that way.

[Dillon] (6:53 - 7:14)

Yeah, it's interesting. I think, what's the statistic? I don't know what timeframe it was, but customer acquisition cost is like 5 or 6x what it was.

I'm just throwing numbers out there, but I know 5 or 6x is right. But I want to say like even a decade ago. Yeah, you're right.

The competition is just so much greater.

[Donnovan] (7:14 - 7:41)

And it's hard. And that's where I talk about the customer retention cost. So, I'm going to compare CAC with my customer retention cost and say to my boss, spend money here.

Because if I can squeeze more dollars, which is why, like I said, NRR is my measure. Here is how much more I can get from this very same guy that costs you X to acquire. But if I can keep that lifetime value at a certain point, you need me.

[Dillon] (7:42 - 7:55)

Have you done the math? If customer acquisition is 100, what is continuing acquisition cost? So, like 30% of that.

70% cheaper.

[Donnovan] (7:56 - 8:03)

Yeah, well, that's how you drive margin. Yeah, I agree. And that's how you spend.

CFO told me many years ago, you spend margin, not revenue.

[Dillon] (8:06 - 8:07)

I like that.

[Donnovan] (8:07 - 8:11)

If I can drive margin, you're going to love me.

[Dillon] (8:11 - 8:28)

Yeah. Well, I feel like that's as good a place as any to stop. That's a big old can of worms I don't want to dig into.

You're going to have to come back. Come back in 20 minutes. We'll make it look like it was a month later.

Sure. Donnovan, pleasure to have you. Thank you so much.

It's a pleasure. And enjoy the conference. Thanks, man.

[VO] (8:35 - 9:11)

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