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Demystifying Zendesk's PLG Levers

Session Overview

In this episode, Despina Exadaktylou, Founder at Product-Led Growth Hub sits down with  Teresa Anania VP of Global Customer Success & Renewals at Zendesk, to discuss how PLG helps the customer support leader internally to accelerate its growth levers.

Main Points of Analysis


 – Despina Exad. Hi, everybody.  I am Despina from Product-Led Growth Hub and I’m here today with a returning speaker and a person I truly admire.  Teresa Anania, VP of Global Customer Success and Renewals at Zendesk, to discuss how Customer Success has been involved via Product-Led Growth practices in 2021 and beyond. Teresa welcome, we are so happy to have you.

– Teresa Anania Thank you. It’s always great to talk with you about important topics like this

 – Despina Exad. Before we start the interview process. I think our audience would like to hear a bit about your background, where you come from and how you ended up in Zendesk, or why you think PLG it’s such an emerging topic.

– Teresa Anania Sure, so my journey has been one that many, I think, Customer Success leaders have probably had, but I really grew up on the software side of the business pretty early on and just got so excited about solving customers’ problems.

I was spending a lot of my time at Autodesk prior to Zendesk in the sales capacity. Certainly Product-Led groups such as product marketing. I drove our simulation business and I ended up in marketing. So when you really put all three of those functions together, I mean, customer success is really at the epicenter because I love the customer-facing part. When Autodesk decided to go on its journey to a subscription business, it became so clear that we needed to earn customers’ business.

We needed to earn the right. Show the value in the software solution different from the on-prem software business, where much of what they invested in was upfront. So once we realized at Autodesk, the importance of combining all of those cross-organizational functions, I took one of the lead roles there in customer success. And frankly, ever since it’s been great. 

Zendesk was an opportunity for me to really become that thought leader in customer experience. As you may know, we developed a platform as a SaaS solution for customers to deliver the best customer experience ever. And so being able to deliver on a solution and actually talk with my customers who do the same job I do every day has been a complete, probably best job ever because I can actually feel their pain. I know the pain points. I know how to build a great CX environment for our customers and I love sharing that with them when they invest in our solutions.

– Despina Exad. Fantastic, and thank you so much for that. My next question would be what PLG means for you as a Customer Success leader. Because even Customer Success is new for many companies. So I imagine that PLG is even newer. And if it has affected your leadership so far, if it has other elements to how you align with your team or with internal and external stakeholders.

– Teresa Anania Yeah, I think leading customer success has been very eye-opening because it really requires empathy, so much empathy for the customer, understanding the problems they’re trying to solve, becoming that trusted advisor. It’s the same leadership skills that you need in order to inspire a team. 

So when you’re developing an organization that’s going to serve customers, I think one of the biggest leadership principles is to ensure that they love doing their job every day. That they feel empowered, enabled, you know they have all of the content, the skills, the expertise to actually, again, empathize with that customer, understand what their needs are, the business problems they’re trying to solve, and then really just have that delivery be something that is frictionless, something where customers feel like that engagement is truly differentiated and value add.

And I think it also brings into the concept the importance of scale. We all know when the customer success world that we absolutely cannot just continue to apply human capital to every customer’s needs. So we’re certainly advocating our customers in delivering CX and the way I build our Customer Success organization to really focus on a lot of that self serve a lot of that, how do we ensure customers understand how to best master and grow their capabilities in achieving their outcomes?  And then where do we want to put that human capital? So I think those skills and leadership are ones that we apply in driving that customer engagement and the ones that I inspire my team with.

 Despina Exad. And do you think the CSM so far is starting to be aware of Product-Led Growth tactics? Are starting you know to see tech-touch to be a more scalable, effective way to achieve a personalized experience? Or are they just you know taking a step at a time, inclined to the high touch techniques? Because obviously, they’re safer at the end of the day they are not scalable enough.

Teresa Anania That’s exactly right. Now, I think I think customer success leaders all feel our biggest challenge is scale. And I do think the Product-Led Growth strategies, the ways that we inspire customers in our products to actually fully onboard understand how to achieve fast time to value, learn from others in a community experience, have the right insights, the right content curated for them so that they are not feeling like we’re just sending them an irrelevant set of information, but rather very tailored to their needs and their experiences.

I think customer success leaders require this now. We are dependent on other parts of the organization, though, to achieve it. As I mentioned in my background, the importance of cross-functional collaboration with the product group and the learning teams that are baked inside of how we build the product to ensure that our customers are adopting it is frictionless, requires very little difficulty, and becomes intuitive. 

That’s all part of the collaboration with our product teams. And then in marketing, the same thing. What content we’re serving up, what additional insights we’re using to trigger the right content to the right customer has to be thought about across the entire customer lifecycle, not just in the traditional way to build demand for the product, but once that customer invests in your solution, how do we want to create a frictionless experience for them to keep scaling out their use of that software with all their end-users? 

And then certainly the CSM? The human responsibility for proactive outreach can best be informed if we have all of these insights about that Product-Led Growth approach, those tech touch moments, those critical pieces of content, whether they engage with it or not. That can all inform, like not just the right time to reach out with that human capital that is so precious, but also that the conversation is robust.

It’s one where the customer feels like it truly took the relationship to the next level. And that’s when I think that we have created the best blend of digital and human to achieve those outcomes.

Despina Exad. And I want to take this question one step further and actually say that so far we have Product which is the team, the department that is supposed to be the orchestrator in Product-Led Growth, to make the transition. However, this is hardly the truth. Because Product is one of the main departments that need to get their organization there, but Customer Success however is the voice of the customer.

So in which ways do you think CSMs can help organizations come closer to their Product-Led Growth business goals and how can they better align with Product in order to achieve that?

Teresa Anania You’re absolutely correct. I think the CS organization, certainly, at Zendesk, we are the voice of the customer. We love to have various listening posts, different ways that customers can share with us, both in the high touch mode of our top enterprise accounts being at the table kind of in a new form of a customer advisory board we’re doing now through Zoom and getting that direct feedback from our top customers. But also use that to help inform and actually prioritize what are the needs of our customers across the landscape.

So not just the largest, even our smallest customers, what are they looking for? Surfacing those insights to our product team has been one of the best ways to collaborate. So we not only bring data to the product organization around what customers are using, why they’re using those capabilities to augment some of the great data that product teams collect through instrumentation. But we’re also adding that color of the story that the business outcome that customer is achieving and what more they need.

So helping them define some of the critical roadmap priorities for the next wave of what development is going to be working on and sharing that feedback with our customers. So we do things in the community to provide more scale to our smaller customers. 

In having a voice in the product development roadmap, we also, as I said, share from the enterprise side more white glove with our product teams about what’s most impactful. I think by doing that, our product teams have become just really, again, empathic to the customer.

They recognize the importance of how to build very intuitive software to allow them to kind of self serve, create more needs and use it in their end-user community. That doesn’t require a heavy-handed sales motion. It’s very easy, for instance, to just click on the product and add more seats or add more capabilities to move up the stack. Those frictionless experiences and a learning path that is created based on that voice of the customer I think creates that entire company putting the customer at the center.

Despina Exad.  Thank you so much for that. I want to move a bit deeper, make it bigger and ask if it’s possible for you to mention some KPIs that are critical for Customer Success managers’ success when Product-Led Growth is in place. That could be there from the knowledge you have from the industry, the community or from KPIs you use internally. If you have altered them? If you continue to monitor them, in order to better reflect the customers’ needs and the results the product brings of course.

Teresa Anania Υes. I mean, metrics are so critical and I like to segment them into two categories. You have your lagging indicators. We all know the ultimate business outcomes we need to achieve based on customers achieving their outcomes. And for success leaders, that is typically an attrition budget like reducing churn and contraction, growing the renewal rate.  And also some of us are starting to look at the net retention rate. This is really looking period over period at account growth, which really factors in both the churn and contraction and the expansion.

 So when you think that those are your outcomes in the business that need be achieved by customer success and Product-Led Growth initiatives, what are the leading indicators that help, you know, if you’re really on track? So for the Product-Led Growth ones, I can tell you that we do look at both the self-serve digital experience cohort and then those that have maybe both digital and human engagement. And we’re looking for onboarding success really by day 30, day 45, that would most represent that fast time to value that we care about at Zendesk. So we’re looking at when is the activations, the provisioning of the agent. So we can very specifically see if they have, let’s say, 50 agents that they are deploying our technology to. How many have started using by that day, 30 that day 45. 

That’s all instrumented in the software and allows the CSMs to engage when customers look like they’re not fully deployed. So what went wrong? How might either our self serve content, help get them faster, time to value, or we might need an outreach for certain because the customer is a bit stuck? So that’s one key moment of truth, is that onboarding. And then we look during the period of their life cycle, well before the renewal date, how are they adopting some of the critical features in the software that most indicate is a proxy for customers achieving their CX or I.T. goals? 

And when those six or seven key capabilities have not yet been leveraged in the customer journey again, the digital content could basically trigger a very tailored outreach, providing them easy access to learning content online that is fully free or reaching out to a CSM if they need help. So we’re looking at that particular set of key functionality to determine are they truly mastering? Not just that they have our support platform, let’s say but are they getting the key capabilities out of that support platform. Such as reporting and A.I., also some of the SLAs that they expect to achieve, are they achieving them? And then the final thing we’re looking at is utilization. So I think with the pandemic and a lot that’s changed in the macroeconomic factors, customers need to see not just that they’re getting the full potential out of the capabilities, but that they’re getting the full potential out of the licenses that maybe they’re starting to buy online across the organization and giving a lot of decentralized budget to departments to add more seats.

They want to know they’re getting utilization at that I.T. budget level. They want to make sure that they’re not over licensed or under licensed. So some of the capabilities we’re looking for would be the utilization factor, the monthly average users, if you will, in helping even the I.T. group knows you’re getting well over 75- 80% percent utilization and sometimes a 100%. That kind of data helps determine what is going to lie ahead in that renewal period. So those are some of the key metrics we look at, both leading and lagging indicators.

Despina Exad. That gives me the opportunity to actually ask if due to that transition, have you also altered some methods. If you have altered for example the toolstack you use internally in order to gather that data. To assess the user experience, to assess adoption, if you have any toolstack for audience, for Customer Success managers to look into to be more proactive? And the second scale would be if that feedback, sorry toolstack is able to gather feedback and also align it in both a qualitative and quantitative form. I don’t know if I made the question complicated, to be honest.

Teresa Anania No, I think the tools that were, of course, were like any great SaaS company. There’s always a stack of tools that are essential in developing the right insights. Obviously, Zendesk is on Zendesk, so a lot of what I’m referring to comes right from our very own platform because we can identify where utilization is and so can our customers using our tools.  We have great reporting in Explorer that helps determine insights about where potentially our tickets or other channels of servicing customers might be getting stuck.

So handoffs, think about workflows where various people in the organization need to serve our customers and our customers’ customers. So we’re looking at the whole SLA. How would a customer from beginning coming in the door needing help to the end period, really get not only CSAT satisfaction, some of those sentiments that are both qualitative and quantitative, but how long did that take? Where did it get stuck? What are some of the ways that we can improve that workflow to make it more streamlined, to serve up content at the right time so that the people helping the customers actually have the right things at their fingertips?

So a lot of our instrumentation is through our own tool of Zendesk. And I mean, there are obviously great survey systems out there that we’re using, like Survey Monkey and Qualtrics. And we’re leveraging really the best in breed of some of the best software out there to surface. As you said, these key insights and most importantly, not just share it as data, but have it be actionable. I think that is really key.

Despina Exad.  Yes, of course, it always is a matter under consideration. What about feedback thought? I mean, we have feedback via the product itself and we have feedback, qualitative feedback. In Product-Led Growth, we need to align both of them. I know that usage, product usage is so new.  So how do you start? Do you continuously improve it by aligning with Product or with Product Marketing? Anything that would make sense there.

– Teresa Anania Yeah. So some of the things that we’re doing to incorporate feedback into the touchpoint plan, if you will, whether it be tech touch and digital or even the human outreach is really informed by, I think, a few key moments of truth.  First of all, certainly, the engagement with any human, whether they be in or support organization, whether they be with CSMs, there is always a survey asking the customer how that experience was for them. That’s critical because if we’re starting to show up in a way where that human involvement was not highly effective and frictionless and help the customer with achieving whatever they expected in that engagement, we need to course-correct.

And we have action plans when customers potentially have been dissatisfied with that engagement. The other thing is NPS, that’s another key source of input. Would they recommend our company? It’s interesting because a lot of CS leaders really focus on those that are demoters like they’re saying. I would not support your company in a recommendation. So obviously there needs to be an outreach. 

Why is that? How can we get back on track? But I find the ones not engaging with those surveys to even be more concerning. So I feel like feedback loops are both from those engaged, but those disengaged. What does that tell you about the customer? They could absolutely be dissatisfied, but just not so much. So they’re not even taking the time to share that dissatisfaction. 

And then I think some of the other qualitative information is claimed from community, sentiment, other listening posts that help you understand, you know what are the things on our customers’ minds where we could be doing better. So all of that feeds into not only the strategy of how we design out the customer journey and ensuring that things, where they’re getting stuck, are incorporated into the digital engagement and or the human, but also helps us understand in that moment of engagement how we might want to circle back and make sure that we course correct and we literally understand from the customer better where did we fall down?

So I think the qualitative and quantitative information helps at the management level and building strategy. And we see patterns and help us inform that intentional ideal customer journey. But it also helps at the moment if you make it actionable. 

I think the worst thing is when customers feel like it’s a one-way survey or the feedback loop, even the voice of the customer is without a closed-loop back to them. So we’re trying super hard to make sure customers feel like they have a full closed-loop and they understand that we heard them and that they’re going to be, frankly, even as big as our company has gotten, every customer matters and we want them to feel that way.

Despina Exad. And my next question would be. The voice of the customer is always a matter, as you said, under consideration. We always try to make the customers feel as engaged as humanly possible. And this is only one challenge, no matter what framework or practices are in place. However, which would make another kind of challenge you may face internally or currently face or you think that may arise in the future that is related with Product-Led Growth per see. And that could be ways to convince the team to alter their ways. That would be to inject some new KPIs alongside churn or renewals or expansion. It could be pretty much anything that is injected into your workflow overall. So any insight would be very interesting for us.

– Teresa Anania Yeah. So I think that you know, expansion is on the mind of almost every Customer Success professional because I think we’ve all come to realize that we can’t sustain a viable Customer Success organization if it’s just based on retention and trying to mitigate any contraction or churn. It’s just not a growth model. So I think many of us have either resorted to monetizing customer success, which some have done. We do not do that at Zendesk. We believe all of our customers should be entitled to Customer Success as part of their subscription.

So the alternative is a way to start thinking about how we grow the upsell cross-sell opportunities with our customers, whether in product or with human-led activities. And really the balance of those two is so critical. So I know in our customer success arena at Zendesk, we build playbooks around when customers have a propensity score that looks like they’re ready for more. So the way I think about it is when I talk about fast time to value, they look healthy. During that adoption journey, they’re mastering all the capabilities that are within the solution of what they already purchased from Zendesk. But then how do we take them along that maturity curve to achieve even better outcomes and better ROI? And that’s where the expansion conversation comes in. So it is a challenge because of course, in success, we always want to protect and insulate our Success managers from being a commercial type of resource for our customers because it might erode that trusted advisor status. But how might we engage in the conversations that help the customer realize for themselves inside the product they are ready for more?

So making that self-serve digital, very frictionless experience available to them has really led to a lot of Product-Led Growth. But it’s kind of nudged along by that CSM helping the customer unlock maybe some of the capabilities that help them achieve that CX gold standard that they didn’t know existed outside of the current platform they’ve invested in already.

 – Despina Exad. That is, I couldn’t agree more. Actually, that is very insightful, thank you. And honestly, yes, that is the goal. I mean, we should not actually face CSMs as the persons that drive us to renewals or upsells.  They are there to advise us, to improve the customer experience. Are going to do this or else they are there to advise us to improve the customer experience and I think that Product-Led Growth embraces that rather than confuses down the line.

– Teresa Anania That’s exactly right. I think CS folks are in the best natural position to unlock some of that Product-Led growth. If customers are not seeing it for themselves, the CS professional talking through customers’ business outcomes and how they best achieve them, I think we’re in a great position to have those conversations.

Despina Exad. And that gives me the opportunity to say that onboarding, which some call it tech touch, some call it onboarding, which is education essentially, for the end-user. It’s only that imperative in order to achieve PLG. And my next question could not be more relevant. If you have implemented any kind of experiments so far in regards to onboarding slash tech touch slash in product experience or whatever you want to call it. And you’ve seen that altered the path to value the time to value or actually brought insights to alter the customer journey, for example, in retention from scratch.

– Teresa Anania We actually do a lot of A/B testing and we do a lot of pilots where we’re looking at what is the key moment of truth when customers should feel like they have achieved at least onboarding activation first time-to-value experience. And by the way, we found in that testing that it differs by company size. It differs by company use case. So if they are a smaller shop with a CX use case, you can imagine they expect instant time to value like two, three, four days. Maybe in our enterprise customers where deployment is a lot more complicated in that they have third-party tools that they need to integrate with the fast time to value

there might be, let’s say, 30 days or 45 days or even six weeks. So that is the key case is when you’re testing your onboarding experience, think of your segmentation, think about what might vary the outcome for the customer, where our touchpoint plan now is directly informed by those different cohorts. So instead of serving up the same content on the same touchpoint plan, we’re varying it based on customer size, customer use case. And then some of the feedback that we’re getting all through

that pilot indicated that it was high value to have a self-serve experience. Less valuable to have an outreach by a CSM. So what we’re offering instead now in our digital tech touch experience is an inbound opportunity to reach out to someone. So we introduce the CSM, but we ask if you need help, here’s your person to go to. So I think those were some of our key findings. We found timing matters. We found digital self-serve was preferred by our customers.

And we also found they love having a person they can connect with. But having a proactive outreach for most of those customers wasn’t value-add.

Despina Exad. Thank you so much. And that makes only sense to me. I want to move forward to the last two questions. And the first would be the qualities you think a modern CSM should have today in order to adjust not only Product-Led Growth. Obviously, PLG has a different set of practices. They need to be a bit more data-driven and have a bit more empathy for the end-user. But in general, to how the industry is evolving with Covid, with the pandemic. Now, everyone has a more advanced toolstack. How can CSMs cope with that? Because we know all of us know here, that their job has become only harder with that pandemic, and not easier.

– Teresa Anania That’s exactly right. You know, the profile of I feel the ideal CSM is someone that does have customer empathy at the top forefront and can also interact and engage with customers remotely and feel comfortable with that kind of environment because we know that even post pandemic, we’re probably going to still have a strong blend of virtual and remote engagement. So being creative about how we build out that experience to make sure every touchpoint, every engagement has a great outcome because executives are busy.

And if you’re bringing them into a session, having something that they really leave with, where that outcome is, something they’ll join back again is key. So we also look for sales experience. I will tell you, even if it’s just, you know, someone fresh out of college, but they did some volunteering and fundraising and had to ask for the order or to invest.  We want people that have an understanding of the sales motion because, again, I think it’s so critical that our collaboration with sales is very, very strong and that we understand the business impacts of a lot of the work we’re doing.

And then I think finally because customers sense of urgency has just grown and they are accelerating their digitization plans and the very things that our CX platform stands for, we need people that are persistent, that are leaning in, that are being the voice of the customer with all of the resources behind them as like the quarterback for that customer engagement.  So they may not have all the answers, but they should have the kind of personality where they will be that single point of contact for the customer. Take ownership and responsibility to be the voice for the customer and then bring in all the resources that are essential to make that customer feel like well, surrounded by all the experts that are needed potentially for their situation. So those are some of the key profiles we’re looking for these days.

Despina Exad. Thank you so much and I will proceed with the last one, which would be the five key learnings you think every organization should have been in mind when putting together a product-driven customer success team. And PLG or not Customer Success should be there and should be there in the best way possible.  However, we see that even that the notions are a bit confused. Some think that the customer support customer success is the same thing. They are not. There are so many things that fall under the customer success agenda. And now with Product-Led Growth, those become even more advanced.  So any advice you could give to any kind of organization, no matter the size of it, even if they’re beginning now. It would be really useful for us.

Teresa Anania OK, well, ok. Here are my lessons learned. I would say the first is to start with the data you have, so don’t worry about perfect data. Frankly, none of us have perfect data. So look at what you know about your customers, how you might think about a differentiated experience for those that are very large, that requires that high touch white-glove treatment and those that are very small, where you won’t be able to afford that kind of a level of human engagement.

 So one is to start with the data you have. Two is I think it’s critical in any size company to align at the top with roles and responsibilities. What will the CS team be responsible for? And what will sales be responsible for? And then you might even have a renewal team, as I do. What are their swim lanes? So engaging and having that like Racey, where you can identify who is in what, who’s leading what, and who is in support of what really helps determine then the playbook.

And that also is the third lesson is about metrics. Extremely important from day one to be measuring impact. So, yes, the renewal rate, the churn, and contraction rate are all the lagging critical business outcomes. You have to measure that. But looking at the key leading indicators that might best correlate to that business outcome is critical to be measured from day one so that you can always be demonstrating the business case. 

Onboarding with our CSM or through the digital tech touch has this impact on fast time-to-value versus those that didn’t get any of that engagement. That comparison, that measurement critical.  

And then I would say finally, I really do believe one of the newest things we’ve done in Zendesk is we have now comp. Compensation that aligns to those metrics. I think it’s been a beautiful way to just really it’s not so much that comp. Drives behavior for customer success, because I think we’re also passionate about the customer. It’s not just about compensation, but it just makes our team really feel invested in what they’re doing. 

They feel ownership. They feel excited when they see their results-driving not only the business result but their own income. So that’s one of the other learnings, is that I would align compensation to those very things that you determine upfront. Customer success is responsible for.

 Despina Exad. Teresa, thank you so much. This was more than insightful. We would like to thank you once again for joining us in this interview series and this would be all for today. Thank you so much for watching. Teresa is always available to connect with you on Linkedin and answer any Customer Success questions. She is driven by this topic anyway in many aspects. So wait in your inbox for the next episode, in data-driven Customer Success, and thank you for watching.

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