Lincoln Murphy is the founder of Sixteen Ventures which is a customer success driven growth consulting company. He has previously worked with customer success management software company Gainsight for a couple of years. He likes helping companies grow instead of being a founder of a startup. He had the realization early in his career that he is not willing to do certain things which one has to do as a startup founder. He has been helping companies grow and has helped more than 400 startups so far.
He is proud that his contribution has a tiny effect towards adding value to the world with all the startups that he has helped. He has also authored a popular book on customer success called “Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue”. His current focus is to grow his consulting practice.
His consulting company Sixteen Ventures has an interesting story behind its name. People sometimes ask him how did he come up with the name because it does not make any sense as a consulting company. He says that he was doing the consulting practice and for tax and business structure purposes he wanted to have some name. However, he could not think of a name before the deadline and he had to formalize this company urgently. At that point of time, he thought that this was his sixteenth venture and somehow the name stuck and he called it sixteen ventures. Over time, this name has helped him reach out to places which he would never have gotten into if his business were called some consulting practice.
“So that was something I didn’t think about, didn’t do on purpose but you know when people think you have their money in your pocket, they open doors for you. So it is kind of an interesting side effect of calling it sixteen ventures.”
At Sixteen Venture, his primary focus is growth irrespective of the size and stage of the business. One of the core areas for which Lincoln is known worldwide is customer success.
I recognized very early on that a customer will not buy more from you if they have not gotten something from you. So if they are not successful, they are not going to buy from you
What is Customer Success?
As per Lincoln, Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.
There are two key elements of Customer Success.
• Desired Outcome – It essentially describes what the customer needs to achieve
(Required Outcome) and how they need to achieve it (Appropriate Experience)
• Interactions with your company – Rather than saying “with your product,” the focus is on all of the interactions your customer has with your company; starting at the earliest touch points of marketing and sales, moving through closing and on boarding, and continuing through their entire life cycle with you.
Lincoln further shares that to really understand the desired outcomes of customer means you understand your customer, means that you understand that there are different customer segments that you work with. It also means that each of those customer segments is going to have a different desired outcome, even though they might share a required outcome but the appropriate experience is going to be different. The companies that have customer success as their operating philosophy if not their operating model are the companies that have 120-130% net revenue retention. Some companies have 150% and he has seen some companies with 200-300% net revenue retention.
Workday, Slack, Marketo, Salesforce, Box, are some of the companies that understood customer success from the beginning. The Box is a very interesting story as they understand it very well which resulted in their massive growth over time. They have one of the most advanced customer success practices in the world and if we think about this, they have to because they have everything from an individual unknown Gmail free user, all the way up to massive six-seven-eight figure enterprise customers. That’s a pretty wide type of users and customers, so they had to figure out, how to operationalize it and they have done a great job.
One of the thing that they have done was being able to take those anonymous Gmail users and figure out that thousands of those actually all work for the same company. So that probably means they are using their individual accounts for company business so being able to take that and now go back to the company and say let’s put you on enterprise plan. That is incredible from a growth standpoint and tying customer success into that is difficult and they have done a great job of that.
He presses the need to adopt customer success by companies of all sizes. Companies like HP, Cisco, and other big companies have recognized that they can’t continue to exist doing things what they were doing so customer success is everyone needs to focus on.