Janis Zech: Hey, Haden. How are you?

Haden Kossmann: I'm good. How are y'all?

Janis Zech: Fantastic. Good. Great. Excited about having you here. I mean, maybe you can give the audience a quick introduction. Who are you? What do you do? How did you get to where you are today?

Haden Kossmann: Yeah. More than happy to and excited to be here as well and chat with you all today. So I'm Haden Kossmann. I am a senior RevOps manager at SoSafe, which is a cybersecurity awareness platform. So the softer side of cybersecurity focusing on the human track. I'm the business partner to the VP of CS. So I cover all the post sale side of RevOps — the often forgotten redheaded stepchild of go to market, so to speak. And I've been for all my SaaS career in CS or in post sales. So before that, I was at LeanIX, which is an HR tech company there. Saw a lot of scaling, was employee number forty or so, helped build out the CS ops department there and left to join SoSafe around six months ago. By the time of my departure, LeanIX was around a hundred and eighty, two hundred employees. So saw a lot of growth over that period, and SoSafe right now is around four hundred employees. So sort of that scale sweet spot, so to speak. And before that, I had a brief tenure as a PhD candidate, but decided that the ivory tower of academia was not for me. Before that, I worked as a CSM at LeanIX, which recently got acquired by SAP, one of the German unicorns of the enterprise architecture space, which sort of falls in the IT strategy category of business transformation. Before that, did a bit of management consulting. Originally grew up in New York. Been in Germany for around seven years, but come from a German American background. So it's sort of the best of the worst of both worlds, so to speak.

Janis Zech: Yeah. I mean, awesome. So you got recommended by a friend who runs CS, and today we wanna talk about — you know, start off with the financial metrics that matter in RevOps and then what that actually means for CS ops. So, I mean, let's kick off. Right? Like, what are the financial metrics you actually care about?

Haden Kossmann: Yeah. I mean, so maybe just a bit of context and why I think it's sort of so fascinating is that, you know, RevOps at SoSafe is part of the finance function. So we roll up to the CFO. So it's a bit — it was a bit new to me. I sort of more come from a process operations background. I think that often the FP&A top line planning side of things is a bit — not always forgotten, but at least in smaller orgs, to a large degree, sort of more focused on processes and automation efficiency. And so really what I focus on or understanding is how do we service our customers with the correct gross margin that aligns with basically efficient growth. Are we spending money efficiently to retain customers in the direct segment or category? How do we allocate our resources from a personnel standpoint as well as from other aspects — operations, etcetera? So I would say gross margin is super important and also understanding NRR, net revenue retention, is super important. I'm definitely a fan of the cohort based model, not of the so called lazy NRR — to quote Dave Kellogg. He has a great blog about all things SaaS financial metrics and how you can spoof your numbers if you want to and all of that jazz. That's super, super relevant. NRR, gross margin, as well as the split of CS costs between COGS — so cost of goods sold — and OpEx. Right? So how much of CS is focused on commercial aspects and how much is focused on making the customer successful? That I think is generally reflected in the financial reporting of the company and how CS is viewed internally. In addition to that, I think something that is often forgotten and not something you can hoard on, but customer retention costs or average cost to serve is something that is not talked about as much, but I think it's one of the most valuable metrics in understanding go to market efficiency. Not only looking at CS personnel costs or tech stack costs, but how much does it cost for us to service a customer across the org? That could be looking at G&A, how much of G&A resources are dedicated to customers, how often the product engineering team is focused on resolving customer issues. So those are costs that are allocated towards fixing customer problems that could be invested in improving the product or other aspects. I think those are the ones that I would highlight, but as well as of course gross retention, churn rate, obviously — all those are standard ones. But I think those first four that I mentioned are the key ones, or how we think about how those metrics steer our strategy in CS at SoSafe.

Janis Zech: And I mean, one thing a lot of people in the audience will now ask themselves — okay, how do you actually get to a model where you track those things properly and then you can attribute them, right, especially service costs, and then what's the gross margin of a specific customer? Do you think this is only possible for the enterprise model or mid market to enterprise? Is that a general approach? Do you look at it by customer cohort or how do you attribute it correctly?

Haden Kossmann: Yeah. So I mean, for us, at least the gross margin aspect — we basically, so we have a wide customer base. So we have a large long tail and we have enterprise customers as well. So obviously the needs are different, the costs associated with serving those customers and maximizing customer lifetime value is different. So we do it by segment for those high level metrics. So we understand for our at scale, sort of low touch segment, our personnel costs, how many tickets from those segments are being worked on by engineers. And so we're able at least to get a segment or tier level understanding of those costs. I mean, again, it's a model. Right? I mean, any investment banker or corporate finance person will tell you garbage in garbage out, but I think it's important to understand at least how we use data to inform our strategy or approach without being overly reliant on data, if that makes sense.

Janis Zech: And curiously, you just mentioned tickets that the engineers are working on. So that means the actual customer success manager and support — that's something that you don't directly attribute? You just check as a general value or how does that work?

Haden Kossmann: So support costs are — on segment, right, so we have tiers of support, right? So if it's a simple support ticket, we reassign sort of a base numerical or euro amount to a level of a ticket, right? And that's something I'll touch on a bit later when it comes to customer retention costs on a per customer level. So that's built into the segments and then how many of those tickets get escalated to engineers as bugs and where they're coming from. So that's how we try to at least approximate the cost of them. Obviously, some bugs will affect all of our customers irrespective of segments, so that becomes a bit tricky. So that's something which we're not perfect at, but I think at least the thought exercise of thinking about that — and that retaining customers is not just something that is limited to CS, but those costs are reflected across the entire org. Right? And those costs not only cost us money, but there's also significant opportunity costs associated with it. Fixing problems, bug chasing, etcetera — a CSM doing that means you can't engage in commercial activities, upselling, more strategic discussions, which then takes away the value that you could be providing the customers, reflected in NRR as well as customer lifetime value and retention.

Janis Zech: Just a quick question. Like, the service model at SoSafe — does that include upsells, cross sells, and renewals, or what is included in CS? Just to give some context here.

Haden Kossmann: So CS is responsible for all flat renewals. So if a customer comes in with a one year contract at X ARR and they wanna renew at X ARR, the CSM is responsible for closing that renewal. For expansion, CSMs are responsible for pipeline generation. So we're based on that customer success qualified lead model and then AEs are responsible for closing those deals. There's pros and cons to both. I think that, you know, we're just scaling, figuring it out, and things will change as we grow. But right now, we at least wanna have a clear delineation that CSMs are focused on renewal, but also have an eye on upsell and expansion, but making sure that they clearly communicate to the customer that they're not a purely commercial person, that they're not an account manager, but they're also there to make the customer successful with the product. Which I think is always a difficult thing when it comes to having credibility as a CSM, because I find oftentimes, especially with older or enterprise customers, they see CSMs as account managers or commercially based. And really communicating to them that, no, your goal is to make them successful — you're not primarily driven by those commercial targets. So you're not gonna sell them anything that they don't need, so to speak.

Janis Zech: So with what you just mentioned — like, the level of conversations I would imagine that you then have, right, with the different segments — they are quite top level, thinking about, like, hey, what's the ideal customer profile? Who do we want to target more heavily from the marketing side? What kind of campaigns and so on? And then how do you tie that back to more specific customers and that question of, okay, how should we actually deal with that specific customer — like a fifty k mid tier sort of deal that has quite a few tickets, is very tough to negotiate with, probably not gonna be able to expand the deal more — sort of, yeah. How do you tie that back?

Haden Kossmann: Yeah. I mean, that's always the — maybe a billion euro question. Right? Is that not all revenue is good revenue. And generally I've found — and I don't have any data to back this up, this is purely gut feeling — but there tends to be an inverse relationship between the ARR and the level of support and competency of the POC on the other end of the relationship. So oftentimes larger enterprise deals will have a lot of resources internally, will have more competent and experienced people and want to do things independently, and smaller customers will be more reliant or for whatever reason have higher expectations of the service level that they're going to get from a CSM. That's something that's tricky. So one thing that we're building out right now is you want to make sure that CSMs' focus time is being aware of opportunity cost — the cost to serve a customer. So we're building out something which we have a metric, which is a customer's ARR and how much they cost us in meetings. So we have a cost assigned to every meeting, every ticket depending on priority. We have a rolling metric of when that becomes inverted — then maybe it's time — it's not regrettable churn, it's good churn, because that means that customer goes away and that CSM or whoever can then focus their time on customers that are basically making us money, so to speak, and that are also right for expansion or have a valuable logo. I would even say, I mean it sounds very granular, but I think that's a helpful steering mechanism for CSMs, especially when our average sale price isn't huge. I mean, we have a very large diverse customer base. So they have a lot of things on their plate that they need to be able to prioritize, right, and to understand that, hey, you know what, this customer is gone. We're losing money on this customer. It's okay to let them churn. And it's good for the company because at the end of the day, that time and that money can be invested in more value added activities, and in the end will result in healthy revenue growth instead of just sort of the 2018 grab-everything-you-can-get, money's-free type of go to market motions that we saw. And there is an angle — for better or for worse, we've returned to reality, which I think is a good thing.

Janis Zech: Yeah. It's a lot more healthy than some of the things we saw in 2020, 2021 for sure. But I mean, I'm super curious. The service model you outlined is segment based, and then you essentially tie costs to pretty much every touchpoint, it sounds. But there's a big trend towards the idea of, okay, the onboarding phase and then the implementation phase is where actually the renewal is won, right? So really starting a lot earlier, being a lot more proactive on the CS side and driving success that was promised originally on the sales side and actually delivering on that promise. If you measure everything and if every meeting has a value attached to it, right — like, how do you balance that? Because that's obviously then contradicting itself potentially. Right? Curious what you think about that.

Haden Kossmann: No. I mean, it's more that I think a lot of people get obsessed with data and just only take that as something which is gonna — I'm gonna base my decision purely on data. Right? I mean, data is here to inform us and to be a complementary thing to our qualitative gut instinct, right? And so for example, I totally agree onboarding is the most important thing — and not only time to go live, but then also time to first value. Right? So I think oftentimes that gets conflated with, okay, they're live, but some people think that go live is time to value. And that's not really what it is — you have to be able to demonstrate ROI and arm your point of contact at that respective customer with proving that your solution is generating value. So what I would say is that we over index on onboarding and we have a large implementation team even for our average sale price, which is not that high, but because we want to make the customer successful because we know that's tied to renewal. So in addition to that, we track time to expansion opportunity creation. So after the go live, which customers — looking at those cohorts — are being expanded on the quickest, and understanding also the win rates of those and looking at any common variables that we have there. And one thing you also mentioned — about the support tickets — is that oftentimes people think the amount of support tickets is a negative sign. I would say that that's not always the case because a lot of support tickets, if they're good support tickets — not just, hey, I can't log in or I lost my password — is a sign of engagement, and they're using the platform and getting value out of it. And ultimately good customers and customers that are gonna use your platform wanna be independent. They're gonna be demanding. They're gonna probably submit a lot of support tickets, but I think you have to distinguish between lazy support tickets and support tickets that are actually a good sign. Right? And that's a bit tricky, and I don't have the answer to how you figure that out. I'm sure there's a bunch of companies using old school machine learning — not ChatGPT — to sort of build out those models and all of that, but that's sort of how I'm thinking about that, if that makes sense.

Janis Zech: Yeah. I mean, I think the level of engagement, right — you often in SaaS see it in product metrics, and they are extremely valuable and can be good proxies for churn or renewal. But then I think the level of engagement — this can be another data point to inform the level of engagement. I would assume that there's a higher correlation between poor product metrics and also low engagement tickets because they basically already accepted the fact that they'll never see the value that was originally promised, and then they just kind of churn. We see that a lot, I think, especially in sales technology — talking to customers where they bought something for two years and the sales people didn't adopt it because it's typically something they don't like to adopt. Then basically they've made the decision already three, six months in, and they're gone. It would be very costly or impossible to rescue them.

Haden Kossmann: Yeah. No, I totally agree. I think that's something which I learned at LeanIX and working with IT strategy people — is that you're going to have the best solution in the world, the best software, but if people don't use it, it doesn't matter. They're going to churn. And I think something that is very clear — or needs to be made clear also to POCs if they're engaged at least at the very beginning — is that, you know, there's work for you to also do internally in terms of change management, getting resources and all that stuff. And how do you — as a CSM, this is sort of more enterprise-y — I would even say, not even focus on the ROI for the company, but the ROI for the individual, your point of contact. Right? How can I help you get promoted internally with the success of this product? Right? And then — humans are inherently selfish. I mean, people can disagree and perhaps have a bit of a gloomy outlook on the state of humanity given the current state of the world, but I think that oftentimes you need — it needs to be clear to customers that there's also work to do on their end. Right? I'm sure everybody who's listening to this podcast has seen a terrible Salesforce instance where somebody bought something and didn't hire the people that they needed from the outset to make implementation work and then adoption isn't there, the data is a mess, etcetera. So software can't be seen as a standalone investment — change in behavior needs to be driven internally. And I think that often — a lot of times in sales technology — people buy a solution and they think it's going to solve them. But it's really maybe fifty percent of the answer, sometimes less. I think that it can be a bit challenging to really communicate that and make sure that you're helping your POC internally get the resources that they need to make your product successful. Because ultimately, if your POC is successful internally, your product's successful, right? And they're going to expand or stay with you for a long time, and that's ultimately the goal of every SaaS company — to have great customer lifetime value.

Philipp Stelzer: Yeah, I think I certainly have been there — like buying software and then lacking the resources internally to really execute on it. Just last night, I actually remembered such a scenario. Bought it. It was like a twenty k deal, and I was responsible for buying the software, and then it failed. And honestly, just last night, under the shower, I realized, oh, that was me. It was my fault that those twenty k got totally burnt. But that's not what I wanted to actually share or ask you. One thing I think is also really important about measuring metrics is — if you measure metrics, everybody has a very clear understanding of what these metrics are and how they are measured and why they are measured. I think this can help quite a lot in actually driving culture, driving behavior, and also creating great transparency. I'm just curious how that is used at SoSafe — so where does it start? Where does this conversation around what metrics matter start and how it flows through the organization, I guess, in this particular case, customer success.

Haden Kossmann: Yeah. I mean, so we're definitely a very metrics driven org and analysis heavy, which is very good. I think right now we have a long way to go for sure throughout the entire org. I think on the middle management and executive level, it's definitely there — that everybody is understanding these are the metrics that are driving revenue growth or whatever that may be, and then how does that inform our decision making when it comes to resource allocation or strategy or whatnot. I think that ultimately the issue is everybody's working with not super clean data. I mean, if I see a clean CRM, I'd say it's a unicorn. It doesn't exist. Maybe it does, but if it does, I would love to talk to that person.

Philipp Stelzer: Just talk to — just talk to Weflow. Sure.

Haden Kossmann: Yeah. Exactly. Yeah. They have very, very clean CRMs. Yeah. No, it's definitely something which — no, don't get me wrong. I mean, Salesforce was designed in 1999, so you see the aspects of the very legacy systems architecture they have and the weird systems, and it's not very user friendly. And I think HubSpot has made great grounds there in a lot of innovations, but I think at the end of the day, it's a platform, and you need to treat that product — I know that one of your past podcasts talked about RevOps as sort of a product org, and I think that's sort of the way that at least business systems or go to market needs to go — and that we treat everything like an internal software product and that there's a product owner or a product manager of these systems who understands the overarching systems architecture and is not afraid to say no or that we'll do it later, because tech debt is a very real thing in business systems and then that affects everything. And having a solution which makes it easy for sales reps to enter the data correctly and to take those notes and to make their lives easier — so that they spend time selling or doing the things that they're paid to do and also that they like to do, hopefully — is definitely something that pays off on the whole for sure.

Philipp Stelzer: Now we'd totally lost track. Where do we go from here?

Janis Zech: No. But I have a question. Never run out of questions. But so okay. So I mean, there's the financial metrics. I'm sure there's many other metrics — NPS, he said. You probably measure product metrics. Let's assume everybody has all these metrics and they are well presented. People trust them. People understand them. From your experience, what are the key drivers to really drive CS efficiency? What are the things that really have big impacts? Let's say maybe efficiency and effectiveness — we talk a lot about efficiency, but it's not all about efficiency. Right? It's about, like, how does the customer stay forever? Right? That's what we want. And expand. Right? That's essentially the goal. Like, that's the vision. So yeah, super curious what you've learned there.

Haden Kossmann: Yeah. I mean, I think efficiency is one metric, but also efficacy — or effectiveness — of the various activities is at the end of the day the most important thing. And I think that it depends on your go to market motion. I think that, you know, if you're enterprise, you don't have a single deal under a hundred k, all that stuff — it's much more high touch, staying close to your customers, understanding their needs, really being a partner in that way. So there I think that enablement is really key in making sure that you're hiring the right profiles for those CSMs. And oftentimes at LeanIX, it was often ex IT consultants which really fit it super well because they understand the pain points, what they're going through, they can be a sparring partner for how do we model this, how do we fit this into the product. I think that for effectiveness at a company like SoSafe that has a large long tail as well as enterprise customers, on the smaller end of things it's how do we use data — and really use product data and event data in addition to qualitative data — to identify those customers that are really ready to expand to the next bracket and whatnot. It looks very different. I would almost say that scaled CS or long tail CS is almost like a marketing operations role at this point in my opinion, depending on the model. Then enterprise enablement — right? I think that oftentimes people focus on sales enablement, but CS enablement is super important and it often gets forgotten, I think, because there's the product side of it as well. And I guess I'm rambling a bit, but in addition to that, I think one of the biggest things — if you want customers to stay with you forever — product needs to also deliver the goods. And that's something which you need to have a tight feedback loop between CS and product. And I think that one thing you need to distinguish is that big strategic bets — if you're going to be a category creator — that's not going to be something driven by CS or sales feedback. But I think those marginal improvements on the product that really drive the value for specific operational stuff is super important, especially because the customer feels like they're being heard. So if they submit a feature request and they get to see it implemented, they don't feel like they're shouting into the ether. I'm sure everybody's dealt with Salesforce customer support and knows how frustrating that is. And everybody just wants to be heard, and that's something which I think is also super important.

Philipp Stelzer: It reminds me so much of my previous company, Fiverr. We served large app and game developers, and what we found out is that the CS role had to change to become extremely knowledgeable in product, extremely quantitative, and almost like a solution consultant and closely linked to the product — as you outlined — so that the iterative improvement to the product makes the product a lot better. This resonates really, really well with me, and I think it's something that some companies do great, but many don't. And yeah, I think the ripple effects are quite tremendous. I personally am also a big believer that product should be in the market a lot. You should talk to customers a lot. It's a lot easier to do that with existing customers than with new potential clients. The new potential clients and product — that's sometimes a lot more challenging, I'd say. But the existing customers, they know the reality. You don't sell them the dream. They see the reality, and so you can have a lot deeper conversations, really inform your product discovery that way and yeah, almost become like one unit to serve them as well.

Haden Kossmann: Yeah. No. Absolutely. And that's something which I think is important too. Something that I did in the past and which we'll build out is tying clear revenue associated with the feature request, right? So how many customers are requesting this? And I think that oftentimes people get obsessed with one big customer and their feature request, but then you just end up being like — you're not a custom software developer for them. Right? And if they wanted that, they could hire somebody to build software for them. So it's also about the amount of customers — and is it reflected across all the segments? So is this something that everybody's asking for? Is this something that only long tail customers are asking for? And then really also — perhaps if you have the time, which RevOps people rarely do, or maybe product management could take a look — understand are there any characteristics in common between the customers that are asking for this, or are these customers we consider to be advocates that are asking for this, right? Who really know our product perhaps even better than some of our solution engineers. I think what you touched on about the sales part — selling the dream can sometimes lead you astray. At the beginning, it makes sense. You've got to get revenue. You sometimes have to build stuff for particular large customers. There are trade offs. Right? But I think that as you scale, feedback in the sales process is important. But as you mentioned, customer feedback — because they know the reality — is more valuable and helps drive the iterative developments that'll also have a benefit for new business as well.

Janis Zech: Yeah, absolutely. I mean, also — now hearing it again — I think selling the dream is always a symptom of something going wrong on the sales side as well, right? Like, it's not what you want. You want them to sell something that you can actually deliver on, but it might be inflated by five percent or ten percent. That often happens. If it's inflated more, then you typically face high churn and a lot of trouble down the line. I think it's something definitely to avoid. But yeah, I think this is great. I think we could continue. Maybe we need to do a part two of this going into pricing, professional services, and all the other fun stuff. I wanna ask you our closing question. I mean, you've been doing a PhD. Right? Like, if you would go back to you as the PhD at the brink of dropout, what would you tell yourself so that you learn faster, grow your career faster — with what you know now?

Haden Kossmann: Yeah. I mean, I think for me — I guess this is probably gonna be a not a great answer, but — I found, because I was one of the only people that had professional experience before starting my PhD — and you know, in Germany, PhDs, especially in business studies, can be a bit overly academic. And in the US, business education is much more practical and applied. And so I think that what helps — and it's been helpful for me — is at least being able to read and understand a lot of different viewpoints and information in a very quick time span and be able to synthesize all that information. But I would say that generally, a lot of people focus on their weaknesses, and this is something that's important. But I think what's important for career growth is — if you're really good at something, there's always a specialist role out there for you, and doubling down on something you're already good at is gonna make you much better at that than somebody who has half the talent in that area. Right? At the end of the day, success — in addition to luck — in careers is simply a function of your raw talent times hard work. Right? And that's obviously not evenly distributed between all your different skills or traits. Change management, documentation — not a strong suit. I tend to be a bit of a bull in a china shop, which is a blessing and a curse, but it tends to serve a bit better in Germany with its more direct culture. But that's sort of what I would say. I know it's not really an answer to your question, but that's sort of my thought.

Janis Zech: That's a great answer. Haden, thank you so much. Really enjoyed this. Thank you for being on the show.

Haden Kossmann: Thanks so much. It was a pleasure coming on and talking to y'all. And yeah, always open to chat about anything and everything RevOps. Happy to be here.

Janis Zech: Thanks for joining. Thank you very much.