When Lifesize, an HD video collaboration platform, was spun-out from computer peripheral maker Logitech, it had to make a massive shift of its product offering to a subscription-based cloud service. Which also meant they needed to make a massive shift to becoming a company highly aligned with rapidly changing customer needs and expectations, or else risk losing them almost as fast as they’re able to bring them on.
Amy Downs, Chief Customer Success and Happiness Officer Lifesize, shares with us how the key to the company’s transformation to a subscription business model was changing the corporate culture to be customer-first. And how that change raised their net promoter score (NPS) from negative four to over seventy, increased customer retention rates, and created a customer support team that finally understood their value to the business.
* * * * *
Small Business Trends: Before we jump in there maybe you can give us a little of your personal background.
Amy Downs: Absolutely. I’ve been in the tech space for many years. I started as a coding software as a software engineer early in my career and realized very quickly that I missed working with people and customers and so over time I’ve just really enjoyed creating experiences and working with them with employees happy employees — happy customers and so on. So really have spent the last few years of my career focused in on both. Both growing startups and also this SAP what we’ve done here at Lifesize which is really a bit of a turnaround. And so — really helping companies to understand the importance that customer obsession has to add to the overall bottom line.
Small Business Trends: So tell us about what you guys do over at Lifesize?
Amy Downs: We were the very first creators of HD video conferencing many moons ago. We started as a hardware company and we were acquired. Craig Malloy’s our CEO and started a company manufacturing amazing video conferencing end points and we were acquired by Logitech in 2009 for about $405 million. Then in 2012 the market really started to shift. The on-premises infrastructure videoconferencing market was really declining and at the same time with consumer apps like Facebook and Skype people started to get used to this concept of talking with each other on video. So we noticed a shift in the market where B2B video conferencing was just taking off like crazy and we had to make a decision. Either we rode that trend line down by staying with our on premises solution or we made the shift and take our on premises solution and put that in the cloud and that’s what we did. So we did a complete overhaul of our product offering to a cloud based service.
We completely changed the entire structure of the organization and we knew as a cloud service provider that it’s so easy for customers in a cloud based world to just switch and Lifesize didn’t have a huge focus on customers.
Small Business Trends: Why did they bring you in as Chief Customer Success and Happiness Officer?
Amy Downs: We were a manufacturer of hardware devices in a three tier distribution model so we were very far separated from customers and so we really needed to bring in — what I call slow customer service DNA into the company. And Craig Malloy knew that. So I joined Lifesize back in May of 2014 because like you said there was a little bit of a challenge when it came to customer service.
Small Business Trends: What exactly was the main challenge?
Amy Downs: When we rolled out our on premises infrastructure solution I remember interviewing with Craig and he said we had a few product problems but nothing you can’t solve. And we’re also making this shift to a cloud based solution. And he says we really need a full focus on customer obsession.
I’m a huge believer that customer services does not just sit with customer support. It is a company based initiative. And so — we needed a culture of customer obsession in order to win in this market. And the reason I joined was because he understood the link between a very strong culture and being able to create customers for life.
One of the first things I asked was do we get feedback from our customers, do we have any voice of the customer program here at Lifesize. They said we actually sent out the support surveys. I said, what do we do with them, and they were like, oh really nothing.
So I remember looking through all the surveys and I was like, oh boy. What it really told me was that there were three pillars I think to really fixing any problem, you know. It all starts with the people and usually those folks just need to know a direction; what’s important. They need to know how the work they do connects with the customer, and how important that is to our business. And then they really need processes and systems to be successful.
And so really there were just a couple of what I would say simple things that we did. I needed everyone at Lifesize to know that Craig was like behind us right. That this was what we were building and the changing of our culture was a CEO driven initiative. And I had his full sponsorship and so we educated the entire company.
We brought in net promoter and we educated everybody on the importance of our customers. During our first town hall I asked who pays our paychecks. We got all these different answers from our employees, and no one said our customers. And I said, no, that’s who pays our paychecks. That is who is putting food on our table and that’s who allows us to drive, you know, good cars and have — homes — and go do fun things and so, you know, I said, it’s our jobs and our commitment back to that community and back to our customers.
To do the right thing by them, and every single person at Lifesize plays a role in that. And so we started to put our net promoter program in place and gather that feedback. One of the challenge areas as I mentioned was our customer support department. So we made some really minor adjustments.
We put a couple of tools in place that helped that team to see when help tickets were coming in and how they were aging. We basically educated them on the philosophy and vision for what we wanted customer obsession to look like and ultimately really just built that team up. I would say they were shoved off in a corner and really very disconnected from the business. So my job was really to help them to understand how important they were and what a critical role they played in the success of our company and give them a couple of tools that they needed to be really successful.
And so we actually were recognized by winning a gold Stevie award for customer service team of the year for making the transformation. When we started as I mentioned our net promoter score was a negative four and today it is over 70.
If you set that vision and give the systems and processes they need to be successful — and just believe in them and let them know that they’re making a difference — that’s all it takes. That’s really it. That was the biggest piece of what we did.
Small Business Trends: What kind of impact has the rise in NPS had on retention rates or even revenue?
Amy Downs: We launched our cloud service as I mentioned really in late May of 2014. We are approaching 4,000 new customers. Our retention rates are fantastic. We actually measure customers on all sorts of factors and industry benchmarks on churn and ultimately what we call net positive ARR (Annual Recurring Revenue). And a lot of that again is just changing the culture of our company, not just with the customer support team but with the entire company. And bringing that voice of the customer program so that we continually drive change over time.
That change has helped us with reference customers. We see that 50 percent of the customers we ask to be references on our net promoter surveys say they are absolutely willing to be a reference and do case studies. So — lots of advocates and promoters out there and we actually are approaching 350 percent growth in all of our individual registered users making calls on the system, and 204 percent growth in our minutes call volumes year over year.
Small Business Trends: It sounds like as the business model has changed to being a cloud based subscription, the service model has become central to the overall business model.
Amy Downs: It’s such an important point because it is critical that it’s done in advance. I’ve been in this space for almost 10 years now and what I’ve noticed is I don’t think companies realize that until they’re in year two or three and they start to have a churn problem; and they’re like, oh, my gosh, we have to go address the three things to build a great customer service team or we need to add a customer success function and we need to build out the journey.
And so it’s a super point because if you start with the end in mind you have to build a great experience that should be part of the product offering. And I think if companies think that way and really put a focus on how do we deliver great value and great service. And how do we promote that to our customers.
And ultimately from a customer standpoint if they’re making an investment in a product they want to know that — not only does that product serve their needs but how are you going to ensure that they are getting the value for the money that they spent and that you’re going to take care of them. And continually are providing information on new updates, new features, new things that we think will help our customers reach the goals they had when they first bought, or may provide them with additional value down the road that they weren’t even thinking of.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.
Brent: How did you celebrate International Podcast Day? 😉