I met with Josh Reeves, the CEO and co-founder of Gusto, and the newest member of the leadership team, Chief Customer Experience Officer Lexi Reese, to discuss what Customer Success means to them.
Lexi immediately drew on one of her first experiences at Gusto. "I met with Anna and Lenore from Three Babes Bakeshop, and asked them to describe a typical day. Lenore listed all the tasks she did, aside from baking pies. They were all administrative, but didn't include payroll. When I asked where payroll fit, she thought about it, laughed, and said, 'payroll doesn't have to be on my (very long!) to-do list because Gusto just takes care of it.' That is Customer Success to us." Josh agrees, "Customer Success means two things. Giving our customers peace of mind, so their to-do lists don't include payroll, and enabling our customers to have more than just a transactional relationship with their employees. Every company is a community and we want to enable businesses to put people first."
Gusto was founded to take the friction out of the day for SMBs and empower them to put people first. An enormous amount of unnecessary time is spent running payroll manually, setting up health insurance, and staying compliant. As Josh explains, "We weren't looking for a problem to solve - it found us since we had experienced this pain point while running our own prior businesses." Today, Gusto is used by more than 25,000 small businesses, which is over 0.5% of all employers in the US, and they have expanded both their product functionality and customer base. Originally called ZenPayroll, the company changed its name to Gusto to more accurately reflect its philosophy that the relationship between employer and employee should be more than a transaction. Employees want to feel proud and fulfilled by what they do. As Josh explains, "Work is such a big part of one's day. It has to be more than just a transaction in a person's bank account."
Gusto didn't do any paid customer acquisition in their first year. Their growth was solely organic, driven by word of mouth. As Josh says, "I think a lot of companies rush into doing paid acquisition too early on. They don't know if they've actually fixed a problem by building a great product, or not. Customer Success for us means serving someone well and fixing a problem in their life. It's a partnership where we help enable them to achieve their goals. If we do that right, they pay us. If we don't, they leave us. That's the way it should be and it has worked for us so far." To dive deeper into this, we explored the 4 Ps of Customer Success to see how Gusto's philosophies are put into practice.
Purpose: "Our values are not just on a poster"
Gusto's strong core values have sustained the company on its journey so far and are what attracted Lexi to the role of CXO. They are:
- Ownership mentality
- Don't optimize for the short term
- We are all builders
- Go the extra mile
- Do what's right
- Be transparent
As Lexi puts it, "Our values are not something we pay lip service to. They permeate how we hire, how we manage performance, how we treat each other, and how we treat our customers. That consistency means that our values become our culture, as opposed to a disconnected set of aspirational wishes."
To achieve transparency, Lexi says, "The leadership team is incredibly generous with the amount of information that is shared with everyone in the company. We have bi-weekly all-hands meetings, and regular 'Ask Me Anything' sessions that are open to anyone. You don't even have to come with questions - you can just listen in. If we hire the right people, who take ownership of problems and are not here to do a specific job, this transparency will empower them to go the extra mile and help us find solutions. We ensure everyone at Gusto shares the same vision and understands how we are getting there. We take time to explain the cost of acquiring a customer and our gross margins, so people do not just see these as metrics we need to manage, but ways of understanding if we are doing the best job finding and serving our customers well. At every meeting, we talk about what a privilege it is to serve small businesses, the economic engines of the world today."
Josh adds, "People should always be able to ask the 'why,' otherwise the ownership mentality gets lost. When a company doesn't enable someone to be curious, the person loses ownership because it is out of their control. Or worse, they can scapegoat a nameless, faceless entity that they have never interacted with, and that in reality doesn't exist. Everyone here runs this company. Each person deserves and needs to understand the why if they're going to work at Gusto."
Achieving success means hiring the right people in the first place. As Josh says, "We hire people who are curious and interested. Our team shares the willingness to own a problem and spend each day collaborating and trying to solve it." Lexi adds, "We look for energy, expertise, and most importantly, empathy." She is passionate about delivering small businesses the service they deserve. "There are many Fortune 1000 companies that are built on the backs of serving SMBs, who basically say 'Serving you is a real cost. It's a pain, it's something that WE need to manage down.'This never made sense to me. Service is the heart and soul of why we exist and as we grow, we're excited to maintain this focus on customers in all aspects of what we do. This is possible by hiring people who share a deep passion for doing right by the customer, and who feel, 'We're lucky to serve you, and we aspire to do it in an extraordinary way. '"
Part of doing the right thing is not rushing the solution. As Josh says, "Gusto is trying to fix a big problem, and fix it the right way, which takes time. We are in it for the long haul, which has influenced how we approach fundraising, hiring, and how we prioritize our roadmap. Sometimes you have to wait longer than you expected to find that right alignment, but it's worth it because all that matters is doing it in a sustainable and scalable way. This is a 50+ year mission for us."
People: "Customer Success is everyone's responsibility"
At Gusto, Customer Success permeates every part of the business and this is one of the things that attracted Lexi to the role of CXO. "We absolutely don't think of Customer Success just as a department. Our product is equally the software and all interactions you have with it."
Josh agrees, "We have a team called customer experience but everyone is responsible for doing right by our customers. There's a lot of collaboration between product, engineering, and care. It's back to our core values - if we aren't serving our customer well, we aren't solving a problem. Our core values run through everything we do at Gusto, regardless of what your job title says. Everyone spends time in customer care, engaging with the customer and focusing on our true objective of solving the customer's problem."
Again, this is not lip service - it is put into practice. Josh explains, "We use December and January to rally the whole company around serving existing customers and helping get new ones on board. This month, everyone is participating in serving customers, meaning that we have a whole volunteer force. Everyone, not just the people whose job it is usually, is talking to customers and it's wonderful to see the empathy the team has for who we serve. We train our entire team on how to engage with customers because we believe it makes them better at every aspect of their job."
It is not just a case of listening. For customer feedback to work, Josh stresses that you need to understand the underlying issue. "If you asked people what they wanted 120 years ago, they wanted faster horses. They didn't know what a car was. It is important to listen, but you really have to deconstruct the problem, not just do whatever is asked for." He recommends believing in yourself and exceeding your customer's expectations with a transformative change: "Try to really understand the underlying issue and take a bet. Trust in your instinct and realise that the path to the answer may not follow a straight line."
Gusto bets on its own operations. "We are constantly improving how we foster collaboration across the business," Josh says. "We repeat what works and refine what doesn't. We talk to our new hires about what we do and give them a chance to make it even better. From the beginning, our philosophy is that we are one team, and that remains, however large we grow. My co-founder Tomer ran both the product and customer experience teams early on. From a scaling standpoint, it was important for us to decouple, which is where Lexi comes in as CXO, but they still collaborate a lot. That means sitting together and working closely with each other. We use some technologies like Slack to approximate, but nothing can really replace human interaction."
Gusto takes collaboration so seriously that have an exercise they call "Gustaway." They bring together 30 people from different functions across the company and rent a house for a full day. Josh explains, "Gustaway is our structured approach to regularly taking a step back from the day to day as a team, but community is not created through one event. Every day that we work together, eat meals together, serve our customers together, is a chance for us to connect. During Gustaways, we prepare meals together because cooking is a fantastic exercise in collaboration, and everyone can eat as an outcome. We spend time in nature, and do a workshop on introspection. We find out about the journey they're on, and what they want to keep about Gusto as we scale. People care about what we've built, and how we do it, and they want to maintain it while knowing that change is the one constant. Some aspects of how we work should change, but the essence, the value system, should stay very constant. These values have been in place since we started the company and they have been a key part of our success."
Process: "Don't burden your team with too many metrics"
Lexi's answer to scaling Customer Success is: "Don't burden your team with too many metrics. Just allow them to put themselves in the customer's shoes and see if they delivered on their promises rather than purely focusing on just Net Promoter Score (NPS), Customer Satisfaction (CSAT), and retention metrics. These metrics are important and we check them often, but the important thing is having a team leadership structure that allows you to look further into specific examples of Customer Success done well and situations in which it could have been done better." In addition to measuring short and long term customer happiness, Gusto also tracks how many new customers come from word of mouth. Lexi says proudly, "Ultimately, that is our customers saying 'I like you, I'm going to tell a lot of people to sign up for you.' Today, referrals drive the lion share of how new customers find us and that is the real measure of if we hit our goal of serving our customers well."
Lexi also recommends having a clear set of metrics that are shared with Product, such as "We received this many calls on this topic in the past month. Should we be getting that call in the first place, or could we fix it with software? Alternatively, could we deliver content to our customers so they can solve it themselves?" She goes on to admit, "It's easy to say and harder to do, but we literally say, if we get 10 cases on a particular topic, we don't want to get the 11th, so how do we prevent it?" This is what Lexi feels will improve efficiencies within Customer Success: "We build a product that works and gives peace of mind to our customers so they can focus on the parts of their business that matter most. These systems should just work. A big part of our mission is taking this responsibility that has been on the shoulders of business owners for a long time and saying you can trust us, we'll be your partner and do all the complex tax calculations, filings, payments, insurance enrollments for you."
Platform: "There is no God mode"
Gusto has a unique solution for a CRM system. It is built on their external product. Everyone in the company can access the system in customer mode. As Josh explains, "There is no God or power user mode. We see the same experience that the customer sees, so there is no confusion about what is working for them and what isn't. We developed dashboards to turn the system into our own CRM platform, so our customer advocates can access contacts and manage their interactions. We think of it as another product: we have a product for our customers, and a product for our internal stakeholders, and we are investing in the design, UX, engineering, scalability and infrastructure of both."
Lexi adds, "We're really obsessed about not making our platform so complicated that it obstructs the customer, and it distracts what their real needs are. We wanted a platform that enables people to really understand the whole person, and then do the right thing, whatever that is in that moment. We have had some great successes to date and we're always striving to get better."
The future looks bright for Gusto as they stay true to their core values. "We're taking a lot of technology that used to only be available to big companies, and bringing it to smaller businesses," Josh explains. "At the same time, we've learned a lot from our customers, in terms of care, and empathy and service, and we plan to bring these lessons to larger and larger businesses, as well as more small and medium enterprises, over time. We aim to deliver Customer Success in a way we're proud of, no matter how large or small you are. Every company can put people first and if we do our job right, HR won't stand for human resources any longer. It will stand for human relationships."
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