249: Fireside with Mike Redbord

Charlotte Ward: 0:13

Hello and welcome to episode 249 of the Customer Support Leaders Podcast. I'm Charlotte Ward. Today, Mike Redboard talks about the importance of supporting your free users. I'd like to welcome to the podcast today, Mike Redboard. Mike, it's been a little while. I'm gonna give you an opportunity to catch us all up on where you are and what you're doing nowadays. But thanks so much for joining me and welcome back.

Mike Redbord: 0:46

Thank you, Charlotte. Thrilled to be back here. Uh hi everyone. Mike Redboard, uh running customer success at regal.io, uh building out support, CSM, account management, and the whole thing. Excited to be here today.

Charlotte Ward: 0:59

Nice, nice. Thanks so much, Mike. Um I uh caught up with you just a few weeks ago at Support Driven uh in Las Vegas, and you gave a very, very interesting presentation there, uh which I think will capture the imagination of a lot of support people. Uh you very kindly agreed to come and tell me a bit more about it and let us um let everyone, everyone else uh learn from your wisdom on this topic, right? So, what are we talking about today?

Mike Redbord: 1:29

Yeah, we're talking about the ways that if you work with your free users and offer support to folks who are maybe not yet customers, your support team can really become an interesting piece of a growth engine and really a revenue driver. And you know, the impetus for this, the reason why I thought it was a timely topic was as we go into next year and we've kind of experienced a you know huge amount of economic uncertainty in this year, and it doesn't look like it's going to end anytime soon, the more that support teams can demonstrate their own value, the more the support teams can leverage their capabilities for company success, I think the better everybody does. And so, you know, this was one mechanism by which support teams can really help drive growth.

Charlotte Ward: 2:12

Yeah, I I really love that because one of the um one of the ways I've I've often found uh the the whole narrative around support contributing to revenue is just it's quite an internal view, I think. I think there's this kind of feeling that support wants to kind of break out of this bag, this box, this corner, whatever it is that we're in where we're seen as a cost center. But but that always seems like, and it's it's great to be seen as a revenue driver, but I've always felt that narrative is much more about the perception rather than the actual act of contributing to revenue and driving your business forward, driving the organization forward for the benefit of everyone. We almost always just talk about it in terms of benefit to support, don't we? But but we should be contributing to revenue. It shouldn't be a nice to have. We should be finding ways to help our companies grow.

Mike Redbord: 3:05

Yeah, I think fundamentally support teams provide like tremendous value to their businesses, right? Like obviously, that's why they exist. And I think to your point, a lot of times when support leaders talk about that value, it's an oh, well, look, without us, our customers wouldn't retain as much. Without us, our customers wouldn't be able to use our product. Without us, you know, XYZ would happen. And so like the the concept I'm trying to add in is like, yes, you're right. Support provides a tremendous service. Like if you think about the product of support in a box, right? Like that thing is very valuable. So let's ask ourselves the question: what else can we do with that support product, if you will? And I think if you start to look at it that way, of like, oh, we actually built a very interesting thing here that we could articulate in other ways, then to your point, support can begin to use that capability. You can sort of um articulate that product in new ways. And one of the ways that I think is really valuable and really measurable is supporting your free users and helping them become customers.

Charlotte Ward: 4:08

Mm-hmm. Let's start with a little bit of a definition then. What would you say is a free user?

Mike Redbord: 4:14

Yeah. So for a lot of um, let's just take SaaS businesses, you know, that are um like you're able to start a trial, or if the business is sort of using product-led growth as a way to, you know, drive new accounts, then you know you have folks coming on your site, starting an instance of your software, logging in, there's a zero state or a you know, setup kind of thing that they're going through. And you know, it's a choice for the company providing that software. Are we going to support these free users who just kind of came to our site and are checking things out and we don't know if they're serious or not yet? But are we going to provide them support or not? And when I'm when I'm talking about a free user, I'm talking about somebody who's using your product or service, but is not yet paying you money.

Charlotte Ward: 5:01

Is that distinct from um because I think the SaaS model is a really uh really straightforward one to define there? Um, but I think there are other examples of people making use of our software, making use of our product in other in other ways. Open source is one that strikes me as an obvious, like uh, you know, a user out there will take our product, go and do something quite separate from us as an organization, actually, as well. Just just for because it's a landscape that I operate in, how how do you see open source users sitting inside what we're about to talk about?

Mike Redbord: 5:40

Yeah, I I guess my view on open source would be that it's a more of a community-driven approach, right? And and it shares certain facets with other kind of community elements. And there's a variety of types of communities out there which open sources want. And so there's a world in which you know you can understand the value of those folks in the open source community in in some way, right? In some you know, roughly an economic way to be specific, right? And then understand, okay, if we're providing this level of help, that's going to cost us X on one end, but the return on that investment on the other end is going to be 2x, 3x, or 0.5x. And if you can begin to sort of pull apart those numbers, then I think you can make a good economic case for um providing that type of support. I think it's harder when the when the um the reason for doing it is you know more fluffy and more community driven. And there are benefits there, um, but I think it's important to translate those benefits into something economic, especially in these times when we're trying to be just a little bit more hard-nosed and clear-eyed about the um, you know, sort of dollars and cents of of uh the money the businesses are spending everywhere, including in support.

Charlotte Ward: 7:01

Yeah, the the model is quite different, isn't it, for community support. But if you are interacting with those users, if you can find parallels to your standard support experience, then then that's worth doing for all of the reasons we're about to talk about. So so now we've defined some types of free users and sometimes some types of ways in which those users or free customers can interact with support. What's next? What should we be doing?

Mike Redbord: 7:27

Yeah. The the the trick here with this whole conversation is to define your inputs and your outputs. I'm I mentioned return on investment earlier. There's the investment and there's a return, right? There's the inputs and the outputs. So what you want to do is think about this really on like a unit basis, right? For each free user that comes in, you know, how often are they going to be potentially interacting with your support team? What's the rough cost of that interaction to you? What's the investment that you're making in that free user? And so if you know your average support ticket costs you $10, and you know, on average you interact with 10% of free users, then your average cost per free user is going to be $1, right? And I think you want to start thinking in this way. And it's it's a what I'm what I'm kind of talking about right now is something that I think a lot of support leaders don't tend to naturally think of and naturally want to do this math. Um, because it's just it's a very kind of you know salesy or economic, like, you know, focused way of thinking about support.

Charlotte Ward: 8:30

Yeah, it's interesting, isn't it? I bet almost every support leader listening to this could say how long a ticket takes to serve. But the the very next step is just putting that salary to it, isn't it? Like just do it, take a blended simplest model, take a blended salary across your team and and do the division for that number of minutes.

Mike Redbord: 8:50

Precisely. And I think the the trick here is to create inputs and outputs to start with um dollar signs that are currency, right? And if you can do that, now you can speak a language that is the language of your finance team, is the language of your CFO, is the language of your VP of sales. And by speaking that language, you gain entree into a different conversation that a lot of support teams don't naturally find themselves in. But you get a seat at that revenue table and you get to, you know, discuss how support can be a revenue driver, but only if you can begin to quantify these things. So, yeah, to your point, Charlotte, the easiest way to do it is yep, a ticket takes, you know, this amount of time, a person makes this amount of money in a year or a month, and then we do the simple division to define the cost for that ticket. And that's really what on the input side, that's that's that's the primary input that goes into this equation.

Charlotte Ward: 9:40

Yeah, exactly. Salary is nearly always the biggest cost, isn't it? You might have a Zen desk bill or whatever, but but against all of the people you're very likely paying, that's likely to be a small component of it. So concentrating primarily on salary, but if there's other big costs, bring them in and do the same division. And then what?

Mike Redbord: 10:01

Yeah. So if you can understand your inputs, and I think to your point, it's almost all human costs, right? Um, then the the trick here is to understand then your outputs. So recall this is about return on investment, it's about inputs and outputs. So on the output side, we also want things to start with dollar signs. If you think back to your grade school math, you want to keep your units on either side of the equation the same. So we we want currency on one side and currency on the other. And so, you know, on one side of the equation, the input side, we have how much it costs to do a ticket. On the output side, we need to understand the kind of how do I say this, the way in which support is going to help those free users to grow into paying customers and like is going to accelerate and facilitate the customer journey toward payment. And a lot of times support teams are not closing those customers, right? Perhaps the customer even needs to talk to a salesperson to close. So it's not as if the support team is going to be taking the money, sitting at the cash register and ringing it. That's not the point. The point here is to identify some of the key actions that support can help free users with that are indicative that happened prior to actually ringing the cash register. So, as an example, you know, if I'm a free user of your product as a service, let's imagine it's just a SaaS product for simplicity's sake, and you know, I've started an account, but I'm stuck and I can't figure out how to activate it or hook it up to my site. If I work with support and there's a certain cost to that interaction, but then I become, you know, an activated user, that activated user has a higher likelihood of then converting into a paying customer. These are the kinds of metrics, like those, those likelihoods that marketing teams and sales teams are obsessed with. They're very, very concerned with kind of the shape of the funnel, like the the pace at which users are going to move through the funnel. And so identifying some of those key moments pre-sales and then understanding what support can help with there are kind of the the is the first step to figuring out what the return on the investment is going to be, what the output is going to be.

Charlotte Ward: 12:03

How do you draw the line then between a customer who ha who can now log in, say? Um how do you how do you understand what percentage of those customers become paying customers?

Mike Redbord: 12:15

Yeah. So typically your marketing team, your growth team, your sales team, like this is their full-time job. I think as support professionals, what we're trying to do, once again, is like earn a seat at the table, speak this slightly different language, right? But make no mistake about it. Like there are people at your company that do this full time. And so if you talk to your head of marketing or your head of growth and you are a product-led growth type company that's doing this thing we're talking about, then like they will have a big spreadsheet, they will have a bunch of slides, like they will know this stuff cold. And if they're if they don't already, it's going to be the thing they're working on today. So I would encourage, you know, support folks that are listening to this podcast. Like, don't go reinvent the wheel, like partner here, partner with your revenue leaders and like tell them what you're trying to do. Say, hey, we're trying to figure out the incremental impact of a support interaction on the free user funnel. That whole sentence has a bunch of jargon in it, but that is the lingua franca of your growth team, of your marketing team, of your sales team. And if you can sort of get in there and understand their metrics, to your point, Charlotte, then you begin to be able to articulate in dollars and cents the value of those free support interactions and the inputs on the investment side that you're making and you're free users.

Charlotte Ward: 13:35

Yeah, yeah. So we're looking to build that funnel then. It's a progression, isn't it? You take a customer through a successful login. What's the next stage for your product? You really are, as the support person, as the person who understands the product and the customer journey through the product, you're beginning to understand what typical progressions and steps are through there.

Mike Redbord: 13:56

Yeah. And I think the one of the natural advantages that support has here is that we tend to understand that user journey quite instinctually, right? Like we know what the steps are. First do this, then do this. And if you don't do this thing, then you're never going to be able to do this other thing, right? And I think that that instinct paired with the marketing team or the growth team's empirics is a very, very powerful combination. They will have the funnel studied and broken down into a bunch of, you know, percentage movements from step to step. And I think when support says, oh yeah, that's that step that I know just in my heart is the important thing, then you have a very powerful combination. The trick is to wrap the empirical data of the funnel around the instinct that yes, this is the right thing to be doing with our customers. And if you can do that, then you can end up doing this type of math. We can say, okay, for each person that comes in who we can help activate, like on the, you know, during the ticket, before we started the ticket, they were not activated or the thing wasn't hooked up to their site, and now it is, then okay, there's some incremental value to moving people from the bucket in which they are not yet activated to the bucket in which they're activated. And the marketing team can help to put a dollar sign to that. Each one of those might be worth $20 or $30. And each one of the tickets you're doing might only cost you $10. That's a pretty good deal. You put $10 into the machine, get 20 or 30 out. It's a good deal. You take that deal all day.

Charlotte Ward: 15:25

So, what you're looking to do then is to find those tipping points from one step to the next down that funnel, down that funnel to becoming a paid user. Um, sort of tying it in, as you said, with your support instincts about which are the crucial points in terms of activation. Um, and and that's how you build your funnel. You have to then tie each of those two. You have to be able to identify the tickets essentially. So login problems are going to be a ticket type. Other problems on your user journey are going to be ticket types and and and understanding working with the marketing team, the growth team, to understand each step down that funnel and how many of the things you're doing for how many customers and and the the growth team then helping you translate that into into a into a positive cost for the business, a positive uh revenue for the business.

Mike Redbord: 16:16

Yeah. And marketers and growth leaders are very, you know, data driven and often very scientific in the way they approach these things. And so a great way to test this without having to do an incredible amount of wiring up of your ticket categories and changing your taxonomy is to say, like, okay, we're gonna work with a subset of our users and we're gonna run a test for you know the next two weeks. We are going to offer this group of users, you know, full access to support, or we're gonna give them the chat channel or whatever it is. And then you compare those users over the course of that period to the other users and you run an A-B test. And that will just give you a you know a good scientific way to measure the impact of support without having necessarily to go through and do a whole bunch of complicated wiring. And I think also, you know, marketers and growth people in particular, again, this is really speaking their language of like tests and experiments and you know, start creating bits of data quickly. Like this is really going to speak to your peers in marketing and growth and sales too. And the finance folks will like it because you're not you're not providing a full-on uh support experience for everybody out of the gate. You're starting small, seeing if it works, running the numbers.

Charlotte Ward: 17:26

I really like that idea. Uh, and and you know, you can run these tests with your existing free user base in a in a SaaS environment or reaching out to a community in terms of like open source units. Hey, we'd love to work with some of your more active open source community, for instance, would be great, wouldn't they? Um, I'm I'm really excited by by uh having having some conversations around that. Um, I'm definitely going to take that back and have a have a long think. Some really, really interesting food for thought there, Mike. Um finally, before we close out, because I know you've got to run in a second, um, once you've built that funnel and you understand the inputs and outputs, what's the what's the final piece of the puzzle? Where does this journey end, would you say?

Mike Redbord: 18:11

Yeah. So the all the work we've just talked about, all the testing and you know, the partnering, right? All of that is in service of providing a pretty simple, you know, look at the value of your support product, if you want to think about it as a product you're providing, value of your support product to create revenue of your free users. And so the way to think about that is in that ROI equation for every dollar that you're putting into that machine, how many are you getting back out the other end? And you know, typically a good ROI will be in the 2x, kind of 3x plus range. Sometimes if you find exactly the right population to work with and exactly the right way, you can even get a 5x or a 10x ROI, which is really exciting and is a very like efficient use of um support resources to drive revenue. But the output here, the the thing that I think as a support reader you are looking to understand is for every dollar that we put into free user support, how many dollars are we getting back out? Partnership with marketing, sales, and growth on the how many dollars we're getting back out, and then understanding your own economics on the dollars we're putting in, and then just saying, yeah, for every dollar put into the machine, we're getting this many dollars back out in terms of free user support. If you can really understand that number in a defensible, clear way, now you can have the like serious financial conversation with your CFO, with your CEO, with your head of sales about is this the right way for us to invest money? Or you know, should we be investing money in a different way? And I think that the ability to have that kind of um you know business driven conversation is a real like important point for support teams who really want to contribute to customer growth and really want to contribute to company.

Charlotte Ward: 20:01

And I I I think I think that's really interesting because I think the other thing that there is a danger of is doing all these calculations and just like leaving it on the table and saying, there you go, look, we look, there's the evidence we do contribute, but it's it's the action that you drive from it that's important, isn't it? Part of which is the conversation. But but it strikes me like that there's there's other things you can do with this. Let's let's say you identify that helping free users log in, you've got a five times return on that interaction. What can we how can we really strengthen that and double down on it? Can we make the interaction cheaper? Can we can we create more volume at that point, right? And and I think there's some really interesting, interesting drivers that you can potentially push there. That's a conversation for another time.

Mike Redbord: 20:43

Those are terrific next steps, and you're right. It's about understanding the math and then you know evangelizing it a little bit, right? Not just holding on to it and keeping it a secret, uh, but actually sharing it and pushing it and driving um support as a value creator and as a revenue creator into the rest of the business.

Charlotte Ward: 21:01

Absolutely. Come back and talk about that a bit more, shall we? Shall we do that again? And uh you can come and we can come and uh think about like what are those next steps, like really actionable. Because I I can I'm yeah, I've got some ideas. Let's let's chew them over another time. Will you come back and have another conversation?

Mike Redbord: 21:17

Let's do it.

Charlotte Ward: 21:18

Awesome. Right, lovely to talk to you again, Mike. Thanks so much for coming.

Mike Redbord: 21:23

Thanks so much, Charlotte.

Charlotte Ward: 21:28

That's it for today. Go to customersupportleaders.com forward slash two four nine for the show notes, and I'll see you next time.