9 years ago, Joseph Schmitt was a Starbucks store manager in LA.
After a two-year stint at an online retail company doing account management, he was hired by PatientPop — a healthcare marketing platform, where he was handed a team of 20 account managers, and the role only grew from there.
He then joined UpKeep — an Enterprise Asset Management Software — where he went from first CS hire to VP of Success with a thriving team behind him.
Joseph Schmitt is exactly the type of growth story we like to tell—from a few perspectives.
He’s had a surprisingly fast personal career arc from entry-level support to senior Customer Success leader and also helped grow two startup customer success teams from the ground up.
On today’s show, Joseph and Alex chat about:
Alex Kracov: I'd love to start with your first job in SaaS. You went from working at a Starbucks to a CSM at PatientPop. And I think while you're there, you went from an individual contributor to running three teams with 20 direct reports, I think, all within the year. The timeline is very impressive. Can you talk about this experience?
Joseph Schmitt: Yeah, definitely. I think I had such an untraditional path to get into software. But from Starbucks, I had an opportunity to go work at an e-commerce company. That was really focused — there, my role was technical support and this idea of account management. I had the opportunity then to go to PatientPop. It was really an interesting experience because they just raised around funding, and they were literally hiring groups of people in batches of 20 and 30. And so I was going through the interview process and they said, "Hey, we're building out an account management team. And it looks like you were actually managing account managers at your last company. Would you like to manage this group?" I said, of course, I would love to do that.
And so I'll always remember this. I came into the company. There's 20 account managers. There's me. And I started the same day that this group that I was managing was coming into the business. And so they said, "Hey, we've been selling these customers. We have about 2,000 customers. We need you guys to start calling them because no one's ever talked to them before." And so we signed this rule with me and 20 account managers at that time. We started calling people and just saying like, "Hey, we're your new resource. We're your new resource." And so at that point in time in my career, I just assumed account management was just maintaining relationships and being there.
About three months into being at PatientPop, this amazing woman, Carla Nichols, came in. She got hired as our Vice President of Customer Success. I'll always remember this, my first interaction with her. We sat down. We were in a conference room. She just goes to me and she said, "Did you ever hear customer success before?" In my head, I'm like, alright, cool. This sounds like glorified support, but I'm down. Let's hear what this customer success is all about.
She explained it to me. She's like, "Hey, listen. People are paying for a service. You're providing value for it, and we need to continue to maintain that relationship. It's not just this concept of reactive activities." She said it's very proactive. At that point, she introduced me to this concept of customer success. During that time, I started digging into it. Gainsight was getting very popular. I went down this whole rabbit hole of just becoming obsessed with this concept of customer success. To me, it was very simple. You provide value; people pay for it. At that point, that really set me on a whole different career path once I learned what customer success was.
Alex Kracov: So what was like the second half of — after you talked to Carla and you had that moment at PatientPop, how did that change your exact strategy as you're working with all these PatientPop customers? Because it seemed like you went from just being like, "Hey, I'm Joe. I'm here to help you," to actually maybe being a little bit more proactive in your support. What did that kind of look like?
Joseph Schmitt: So in regards to what the team was doing, it didn't necessarily change what the activities were. Because there were a lot of good learnings from that first round of customer success. That team was very reactive, where we didn't have a customer support team. In the early days of it, essentially, customer success more looked like customer support at PatientPop. But when I came over to UpKeep, that was the number one thing that I put in place first. It was we need a customer support team. So the customer success managers do not come as customer support agents.
Alex Kracov: Let's talk about UpKeep, because I know that's where you're still at. You joined UpKeep as the first customer success person. Can you talk about what UpKeep was like when you joined, and what made you take a chance on such an early-stage company?
Joseph Schmitt: Yeah. So you've met Ryan, our Founder and CEO. His energy is just contagious. It all happened on a LinkedIn message one day. He said, "Hey, we just got out of an incubator. This is the space that we're in." He's like, "We're going to build a really big business." He's like, "You have the opportunity to come here and essentially build our first customer-facing teams." And so I was like, great. I learned a lot at PatientPop during that short period of time. I understood the space that we were going into, where we were providing software to manufacturing or to organizations that were not used to using technology.
And so coming into UpKeep, I think I was employee number five. At that time, the rest of the employees were all product and engineering. So it was myself, Ryan, and this awesome guy named Kevin. We just had intercom at that time, and so we were really just doing technical support. When I came into the business, it was really taking over that aspect of like, okay, how do we inbound this reactive work that's coming in? Then the vision behind that was, all right, once technical support was directionally under control, I hired my first technical support agent, this guy Jason. He's actually still with me till this day. He's been at UpKeep for five and a half years. And so he took over technical support from there. I then went in and I said, okay, well, we need a customer success team. So I started doing customer success activities. At that time, customer success, the way that it looked was, it was implementation and customer success where we were onboarding new customers and then we were maintaining those relationships.
Once that had a directional foundation, I then hired my first customer success manager. Her name is Miji. She's actually still with me till this day as well. She's been in the business for five years, and she's now our Director of Customer Success. She's had an amazing career path here. Now she oversees 12 customer success managers. And so the vision was always: let me do the role and then let me essentially find somebody take that role over, run with it, make it their own, and start really specializing these individual roles. Because I believe focus is one of the most important things to get repeatability and consistency.
Alex Kracov: What's your trick to getting people to stay with you for so long? That's amazing that some of these early hires are still with you. I don't know. How have you been able to do that?
Joseph Schmitt: Yeah, one of my I think leadership mantras has always been autonomy and structure, essentially giving everyone a clear understanding from a structure standpoint. Like, what's the mission? What are we focused on? What are you being measured by? How is that impacting the business, and what value are you providing to it? The other part of structure is providing them resources to do their roles.
The autonomy piece is figuring out everything in between. This is my own personal experience, and this is how Ryan essentially has led with me. It's that we understand what we need to do, so you get the opportunity to figure it out. I believe that creates a sense of ownership. If you fully feel what you're doing is contributing, then people will feel ownership which then I think leads to being fulfilled, which leads to people staying.
Alex Kracov: Then what's the structure of the team like today? How has it grown since those early days? Is it still kind of those departments, or has it evolved since then?
Joseph Schmitt: Yeah, it definitely has evolved. We've gone through different iterations of this. And mind you, this has been on a — we're on a six-year journey now at this point. And so it's taken different shapes based on where the business was at. But pretty much, the way that the customer success organization is structured is that we have our professional services team. Eventually, at one point, we broke off implementation from customer success and essentially started specializing that. That team now is focused on new customer onboarding and new customer training. They also are a revenue-generating team, non-recurring revenue, where we essentially charge for professional services which helps support the business.
The second team is the customer success team. The customer success team today is measured by net revenue retention. So very much focused on gross retention as their first primary focus. But to drive the behaviors of being curious about expansion, we essentially measure them by net revenue retention. Now, they don't actually close down the expansion sale, but they work with their sales counterpart to help move that expansion forward.
That customer success department or that team is actually broken down into three different tiers. We have our tier based on potential and spend. That is essentially the ones that we are covering the most with human resources. We have our second tier that is a little bit more one-to-many, still focused on proactive engagements. Then we have our TRC which is essentially more self-service. Technical support is your number one resource for human engagement. That segmentation model has changed over the years as well as we focus the team on different things. Then the third team is our technical support team. They are focused purely on inbounding reactive engagements, both internally from the UpKeep team members and also our customers. That's your live chat, phone and email as well.
Alex Kracov: It's really interesting that you've broken off a whole separate professional services team from customer success team. It sounded like you did that fairly early on. Or was it all the customer success person doing the implementations themselves? I think at Lattice, that was a later evolution in our lifecycle. How did you think about that? I guess, why is implementation so important to the customer success motion in general?
Joseph Schmitt: What started happening is, the customer success managers own that entire journey. As their bandwidth started, essentially focusing more on just doing that versus actually doing customer success activities, that's where we essentially said, hey, this is an opportunity to specialize. So what we did is, we hired our first implementation manager. She came into the company. Her name is Rachel. She came in. We said, "Hey, this is what the implementation team is doing today. Let's build an actual program around it." We really tested into the concept, is it necessary to separate professional services from customer success?
That was wildly successful because what it unlocked is the customer success managers to be purely focused on proactive engagements that were around doing gross retention activities. And so now, actually, Rachel has been with me for four years. Now she's the manager of professional services and oversees a team of four people. That has always been my motion. It's, let me get one person in this role. Prove the value of it, specialize it, make them extremely focused. Then she created the best professional service program. So that was how we got to where we were at. Where that came from was PatientPop. That was actually the previous model that they had. It was professional services and implementation were separate from the actual customer success team. So that was just something that I grew with and then actually worked really well of getting our focus. Why it's so important is that I believe you have one shot, one opportunity. To really get us all for it to launch correctly. And it's even more true with our customer base.
Today, we're selling into organizations that people never used a phone to do their job before. So we're coming in, and there's definitely the energy of like, "I don't need a phone to do my job. I've been doing this for 30 years." And so we really specialize that like, hey, our customers don't buy software all the time. So for the implementation managers, take the role of being prescriptive and consultive so we can go in there and say, this is best practices. We've implemented for 1,000 people. Based off our experience, this is how we recommend that you do it.
And so we found that if we guide them through the implementation and essentially act as a filler, and maybe either skill gaps that they have, or resource gaps that they have, getting to the point of having a successful deployment is going to set us up for long-term retention. And so what we saw is actually the retention, the rate of retention of those who go through our professional services versus those who go through a more self-service route, it's night and day. So it just shows the value of actually having a team dedicated to doing that, and getting teams set up for success that first go around.
Alex Kracov: You mentioned there that your customers are not the most tech-savvy, right? UpKeep works with maintenance teams. I'd love to talk more about what it's like working with that type of customer, and what advice you have for other customer success teams, or even sales teams who are trying to work with this non-tech-savvy audience. You're trying to bring them online and get them adopted into your software. How does that work? I mean, is it like selling software to my mom? Is it what I imagined it's like?
Joseph Schmitt: Seriously, when I first talked to Ryan about joining UpKeep, I channeled my dad. I was like, alright, cool. I explained to my dad how to set Wi-Fi up all the time. I was like, I listened to my first demo call. I was like, this is my dad we're selling to. But yeah, I think it's great selling into a team that might not be used to using technology because you get to help them.
The way that I explain it to the sales team here is that you get to teach them how to buy software. You get to educate them on how to do that. Because they're not used to buying software. They're not numb to marketing emails, so I feel like they're not jaded by buying software all the time. So it puts us in a different position to be able to educate them on how to do that activity, which I think people respond to really well. It really builds that trust factor with that.
Now, I think probably the toughest part around from being through the lens of a customer success manager and working within this space is that they don't use calendar invites the way that we use. They don't use emails. So from a level of engagement, we have to get creative on how we do that. Because for customer success manager, at the end of the day, the number one thing that you can do is engage with your customer base to find opportunity or find risk. But it gets hard if you can't find them. And so that's why texting, or doing in-app messaging, or getting understanding of multiple people at an organization to engage with is absolutely critical. So we've tried everything that you could possibly think of of engaging. We send people stuff. You name it. We've tried it.
Alex Kracov: Do you go on site and visit customers? How big are your customers? Is it like more mid-market enterprise? Actually, I have no idea.
Joseph Schmitt: Yeah, it's a mix of customers. We have the SMBs of the world, the mid-markets, and then we have these really large ones. Primarily, we go on site for these larger customers of ours. And so more recently, we've had a big focus of doing that. Because going back to what I mentioned before, they're not used to buying software. So in some scenarios, they're used to more of a human engagement.
What we've seen when we go on site, when it comes to doing adoption activities like training and everything, building that in-person relationship is way more successful for larger organizations than it is trying to do something remote. Because, again, they're already against technology. So then now they're trying to learn on technology on how to use technology. Sometimes it just doesn't really fit well with them. So for our larger accounts, it's been a bigger emphasis of going on site, for sure.
Alex Kracov: Can you take me behind the scenes of a day in the life of a CSM at UpKeep? You mentioned this idea of proactive engagement. But what does that actually mean? Is it showing them new product features? Is it trainings? How are CSM sort of thinking about their book of business, and what type of activities are they trying to push on customers?
Joseph Schmitt: Yeah, good question. Again, we've gone through many iterations of doing this. But for the customer success managers, a priority of them is based on renewal. Because they have more customers than they have essentially time in the day. What Miji and I have learned is that, if we can help them prioritize on where to spend activities and energy at, it helps them move through their day. So they're not coming in or not saying who I talk to in my book of business. We're anchored on renewal dates.
Now, that's not to say that if somebody engages outside of their renewals, we're not going to have proactive engagements with them. But for a CSM, as I walk in, that's how I started prioritizing it. Then based on where they're at within their year at UpKeep, we'll determine the style of proactive engagement that we're going to do with them. We have here the standard QBRs. We essentially have different themes. The themes are aligned on where would you be at within your first year of UpKeep? So your first QBR is very much going to be focused on how is your team adopting to it. Are there any things that we need to do? Versus your second or third, where it's going to be more around conversation of, great, we're getting adoption. Now, where are areas that we either want to optimize? For the CSM, again, because they're focused on that revenue retention, it's always either listening or probing for opportunities for growth.
What we found is that there's a strong correlation behind the number of QBRs we hold per rep versus the number of PQLs that they're able to identify for expansion opportunities. So we do definitely know that that's a money activity there. But it really depends on where you're at. So we've come up with the concept of themed QBRs as we've gone through. Ideally, what happens is they come in, they prioritize their accounts. They're looking at who's coming up for QBRs. Obviously, with no customer success organization, it's fully proactive. I'd say our team is probably like a 60/40 mix — 60% proactive, 40% reactive. Then they're inbounding any reactive stuff that's coming in.
Alex Kracov: I love the idea of themed QBRs. It's something I need to start doing at Dock instead of just like, oh, how's it going? How can we help you, so on and so forth? But really thinking through. Because you're right. As the year goes on, there's different priorities and motivations, both from the customer side but also from the vendor side. So that's super interesting. Are customers using UpKeep for the same business outcome every time? Does everyone have the same goal? Are there competing goals and business outcomes your customers are trying to drive with your software? How do you think about that side of things?
Joseph Schmitt: It's super interesting because UpKeep is used by a wide range of different industries. I say it's our superpower, and it also makes it a little bit tough sometimes. It's superpower just because UpKeep can provide value in all these different spaces. The crazy thing about UpKeep is that UpKeep isn't really customizable. It's configurable. Meaning that when you go into one UpKeep account, it's going to be structured the same exact way, regardless if you're using UpKeep for manufacturing or if you're using UpKeep for facility maintenance.
Now, the ways that they use it could be a little bit different, where somebody is purely using UpKeep because they are doing reactive work orders versus somebody that is using UpKeep to do preventative maintenance work orders. But at the end of the day, they're using the same features. They just might have a little bit of a different way of doing that activity.
Then I think the other part of it is value is different for some organizations, where in some organizations, UpKeep is again providing value to their customer experience. So if I'm using UpKeep to maintain a hotel room, well, making sure that everything is up to the best standard is obviously going to provide a better customer experience which will result in revenue for them. Whereas for manufacturing, maybe I'm subject to audits and compliance. So making sure that I have a digital record of all these activities becomes way more serious because it could result in something like a fine. So value is also different based on the industries that we might be using UpKeep in.
Alex Kracov: Going back to the early days, you joined as the fifth employee. I imagine you maybe had some level of product market fit, but you're still figuring out a lot. Were there any memorable customer stories or moments where you're like, aha, we are on to something. This is actually working really well?
Joseph Schmitt: Yeah, I'll always remember my first demo where it was my first day at UpKeep. The guy, Kevin, he was doing a demo call. The guy that was on the end of that call — I don't remember the customer specifically — he showed them that you can take a picture with your mobile device, draw on it with your finger, and then attach it to the work order to communicate somebody specifically what you were trying to communicate without using words. This guy was like his head blow up. He was just like, "This is amazing." I was like, dang, we really have something good here that is providing value.
Because for a customer success person, the hardest thing is if you have a product that is performance-based versus actual value. And so that was one of those aha moments where I was like, okay, this guy is real pumped about what we just showed him. As one of our most basic functionalities, I was like, we have something here for sure.
Alex Kracov: That was a good start to show the benefits of selling to a non-tech savvy audience. The bar is a little bit lower as opposed to if you're selling to product engineering folks, right? They have a much higher bar when it comes to the product you're selling to them.
Joseph Schmitt: Exactly. We can provide value all so much faster in some of these situations, which is great.
Alex Kracov: What was your relationship like with the product team? Because I imagine, yes, you're able to blow some people's minds. But I'm sure there was a lot of product gaps, especially as you're moving up market and working with bigger customers. How did you think about being the voice of the customer and sharing feedback and your relationship with the product team?
Joseph Schmitt: So I always say like one of the things about UpKeep that I think is very unique about us is that with the product team being the first team, and then me coming into the business, and customer success being the second team there, we originally started the business. We're like, "Hey, we have this really great, all this inbound that's coming in. We're going to build this." At the time, they weren't calling it PLG. But we're going to build this PLG engine. And so all these customers were coming in, and we didn't necessarily need to sell anyone. They were automatically finding value themselves. And so it was just product and customer success. We're connected at the hip, and we're in the same office together.
Then after that, the customer success team was being built out. Then we onboarded sales. We onboarded marketing. We onboarded all these roles. So product and customer success were always the foundational components of just building a key business. And so it really created this relationship that a lot of people coming into the business didn't know anything about maintenance. We knew a lot about software. So in order for the product team to build, they needed to rely on the customer success team to feed them everything that they needed to know to build a really good product. That relationship stayed true as the business kept growing. So again, I think it was always a unique thing that it was like product, customer success. Whereas what I've shared about PatientPop, it was product marketing sales. They sold a bunch, and then CS was like an afterthought.
Alex Kracov: What did that workflow actually look like? Is it like a stand-up meeting where you're talking with the product team? Do you just dump feedback into a Slack channel? Are there surveys? How does that actually like?
Joseph Schmitt: Again, it has taken a lot of different shapes over the year. Back in the day when there was like 10, 15 of us and everyone was in office at that time as well — that's another thing that's completely different this time — we were just sitting next to each other. We had lunch together, and we're just having conversations together. Everyone was in the same room, so they could also hear us as we were selling.
As the teams matured, we specialize in all these different roles. We started things like Slack channels. For us, one of the big things that I've always been focused on, it's creating a self-sufficient team for my managers. And so we've created these different outlets for customer success managers and sales team members to get questions to answers that they might have for the customer. We heavily rely on Slack for everything, so we haven't asked product channel. If you have a question around how products should work, you can go there and ask that question. We haven't asked support channel. If you need support internally from our technical support customers do that. So we created all these different channels to get information.
Then the other thing that we do, we have a re-occurring meeting every week which we call our perm meeting, which essentially is product and engineering. Pretty much, any customer-facing team has the opportunity to bring either a feature request or a issue that is blocking them from moving a customer or prospect through the deal. That's where we have a lot of engagement there where we're presenting these issues each week and talking about them. So it's really just creating different channels of engagement between the two different teams.
Alex Kracov: Yeah, it's really interesting to hear how the different processes evolve. At Dock right now, we're still such a small company. We have internal bug report channel and customer feedback channel where we just dump everything in. At Lattice, it was much more like, okay, we have these clear windows of customer success. Sales can share feedback with the product team and ranking and prioritizing all that stuff. And so, I don't know. I always find it so fascinating how these processes evolve as companies grow as they need to be. Because if you had this crazy roadmapping process now, it'd be so overkill for what we need.
Joseph Schmitt: Totally. Yeah, 100%.
Alex Kracov: Switching gears a little bit, I'd love to know what it's like working with Ryan. I mean, I know Ryan. You're right. He's so energetic. He responds to all my emails with 1,000 exclamation points. I'd love to know what your relationship is like. It kind of had evolved over the years. Because I'm sure it's very different today as you all have grown up with this company.
Joseph Schmitt: Yeah, definitely. I absolutely love our relationship. As I mentioned before, the way that I lead my teams is the way that he leads, where essentially, it's like this concept of autonomy and structure where I truly feel like I'm the CEO of my own business. It's great because I'll have him as a resource to bounce ideas off of and make sure that we're aligned with the overall company. But the one thing I think his superpower is, really, he believes that you can do more than you can believe. And he's always pushing you. And so there's been a handful of situations where we're throwing out an idea. I'm like, I don't know. That sounds pretty crazy. But I'm down for the calls. Let's try it. And it works out. And so I learned that early on. So it's like trust the process and then learn.
But the other part of it, too, is that we've tried so many things. Not a lot of them have worked. We've created this environment here at UpKeep where failing is okay in regards to testing things out. So having that runway to test things in my own business has been really helpful. Again, he has essentially created this culture and this structure here that allows for that. So that relationship of him and I have is super solid.
Alex Kracov: Are there any memorable experiments that stand out?
Joseph Schmitt: Yeah, I will say one of the — I don't know if this is an experiment. But we were at the company, it was probably — gosh, we were maybe under 15 people. The Oklahoma State correctional facility uses UpKeep to manage all their 27 public prisons. And so at the time, it was our biggest customer. It was only him and myself. And so we flew out to Oklahoma. We essentially went into this training. We met with all these people, had a killer time. We're coming back on the flip the flight, and we're just sitting next to each other in the plane. We're talking about expansion. We're like, "Hey, we're coming out with all these new features. Right now, we only have two plans." We're like, "Let's test this concept of creating a new tier that's focused on what we call business. Plus today, that has gone to be for more advanced features." And so on that plane ride, again, just with only 15 people at the company, we're like, let's start a new plan type. So we came back to the office, and we did it. It was wildly successful in doing that. That plan type is the one where our customers are at and provides the most value, but it's organized in a way. Again, maintenance maturity of how people are buying or using UpKeep. So I think that's always a funny one that we reflect back on and be like, hey, we came up with plan type on a plane ride home.
Alex Kracov: Yeah, that's amazing. Also, amazing customer that you're going to visit. Are you actually going to visit at a correctional facility?
Joseph Schmitt: Yeah, I actually had the opportunity to go two times. The first time was more relaxed where we were only on the administrative side of it. The second time around, we went back and did another training. This was with my Director of Customer Success, Miji. We actually got full blown tours of the prison. Not sure if you know this, but prisons essentially will certify the prisoners to do certain activities. And so in the world of maintenance, we'll certify them to HVACs. And so we got to meet with two prisoners. Unfortunately, they were doing life in prison, but they did their HVAC systems in that specific prison. They were utilizing UpKeep to manage their work.
Alex Kracov: Wow. That's amazing. Yeah, exactly as you'd expect it's like. Yeah, the user of your software, I'm sure. That's an amazing story. I'd love to talk a little bit about you. Because it's amazing what you've done — going from the first customer success hire and building this team. How has that journey been for you on a personal level? How have you kept up with the company's growth curve?
Joseph Schmitt: Yeah, definitely. It's really crazy. Because I tell this to all new hires when I come in. I feel like I'm in the same energy around UpKeep from my first day of here, even though I've been here for six months. I think for me, personally, I thrive and change. I thrive in trying to figure out problems. As we're trying to grow a really big business, the problems that we faced three years ago are totally different than the ones that we're figuring out now. They're not necessarily bad problems. You're growing the business problems, and they need to be figured out.
I think with the combination of Ryan creating this world of autonomy and ownership, and my love of solving problems, I don't ever feel like I'm really doing the same thing all the time. Then I think the other component of it is just like the people. I think the number one thing of why I'm where I'm at and where the team is at is that we made really good hiring decisions and bringing on really smart people. For me, I got out of their way, and I let them run. They are absolutely crushing it. So now at this point where I'm at in my leadership career, obviously, I want UpKeep as a business to do really, really well. But my people are my number one focus. That, to me, is just so motivating day in and day out.
Alex Kracov: How do you think about the difference between being a manager where you're directly managing the people who are doing the work to being I think of as like a leader, VP, where you're the manager of managers? How do you think about that distinction and your leadership style between those two worlds?
Joseph Schmitt: I think, for me, one of the biggest things that I always push for my leaders — this came with time from switching from being just a manager. Not just a manager but a manager to a director, to Vice President — is delegation, honestly. I'll always remember this conversation. I've mentioned this before in a few other stories that I've told before. It's that I just mentor, and I came to my one-on-one with him one day. I said I don't have bandwidth to do X. I said, "I don't feel like I'm being strategic enough in the business. I'm in the weeds so much." Then he asked me. He said, "Well, rattle off. What are some of the things that you're doing?" I said I'm doing this, this, and this. Then he goes to me. He's like, "Well, can't Miji do that?" I said, well, Miji's bandwidth is also — she has a full book of business. He's like, "Did you ever ask Miji that?" I was like, I didn't ask her that. Then he is like, one of the biggest takeaways of transitioning from being a manager into vice president into that executive role is delegation is opportunity.
He's like, there's two ways to look at it. One, if you're not delegating, then you're not giving yourself the opportunity to step up and make better decisions to help move the team forward. The other is that the individual that you're not giving them new opportunities because you don't think they have the bandwidth, you're holding opportunity from them. Maybe something that you wanted to delegate to them is something that they're passionate about or would find a new love for. You're doing them an injustice by essentially holding back all these things.
And so when that conversation took place, that really switched gears for me, whereas delegation is opportunity. It is not delegating because it's work. It's for you to own something else. That was a big switch for me. Now, if I feel more confident in delegating out, then I have the opportunity to hopefully look at the business more holistically to make bigger adjustments that are going to help move the team forward.
Alex Kracov: And as you're delegating all this work, how do you think about accountability? Because that gets harder as the organization grows. Are you managing purely by metrics? How do you hold people accountable?
Joseph Schmitt: Yeah, definitely. I think managing people, it comes in like two different ones. It's based on what is the role, how long has that person been in their working career. It's activities versus outcomes. For my leadership team, they are equipped with the skill set and enough freedom and that autonomy component to get to an outcome. So if we say, hey, the mission is x net revenue retention, Miji is going to be the one that is strategizing with her team and herself to come up with the activities that are going to take place. Whereas for maybe a more junior role, maybe for a sales role, it's activity-based. How many activities are you going to do to get to your outcome, versus you trying to figure out what those activities are?
So I think based on the role, it's a little bit different. We've always had ways to measure the team's outputs in there. But again, some of it is, how many activities are you doing versus what is the actual? Did you hit your lagging goal of being successful?
Alex Kracov: Everyone right now is thinking about renewals. Renewals are tough with the economy and where it's at. Maybe it's not in the maintenance realm. But I'm curious how you think about this process in UpKeep. Because it was interesting early in the conversation where you had these QBR themes you mentioned. I imagine that sets up the renewal really nicely. But how do you think about the renewal process holistically?
Joseph Schmitt: Yeah, definitely. So we do two engagements. As I mentioned before, we tier out our customer success team, and we tier out the engagement model that they get. So there's a whole entire tier of customers that do not have a dedicated customer success manager, but we need to ensure their renewal. So in those instances and even with the ones that you get high human touch, we send them out a notice. We ask them the question. Are you planning onto renewing, or are you making any changes to your subscription? That essentially prompts the conversation.
For those that are saying, "I'm going to stay on my path," it's fantastic. What other resources can we provide you? For those that essentially say, "Hey, I do want to make changes to it," that's when we go into a more reactive, let's have a conversation of why you might not renew here at UpKeep. And so we've layered in both. It also goes back to some of our customers don't want to get on the phone with us. We can't force them to do that activity. So let's try to meet you where you're at to ask you the question on how you're feeling about your renewal. Then for other ones, it's more of a QBR. Let's sit down. Let's talk to three people at your company to articulate the value that UpKeep is bringing to you. Then let's confirm that renewal there. So it's a combination of different touches.
But for us, a renewal is also an awesome opportunity to talk about expansion. Because we've essentially covered, hey, you guys are finding value inside UpKeep. Let's talk about how you're going to use more of UpKeep. And if there's more that look like you inside your organization — maybe it's a new location, maybe it's another team — let's talk about them, and let's use your success story to go tell everyone in your company about how successful UpKeep is. So renewal is also a really good point to have that conversation.
Alex Kracov: When it comes to expansion, do you pass that off to the sales team to come in? Is it like a tag team effort? Is it the CSM and an AE or an account manager or something working together? What does that look like?
Joseph Schmitt: So our rules of engagement around expansion get broken off into two points. So if somebody comes to us and they say, "Hey, I want to add two more users for our user base model. I want to add two more users," it's like, okay, cool. Let me educate you on how you can do that and the product yourself. Then we'll teach them that PLG route of how to add users. At the end of the day, some customers just want that from a convenience component. They don't want to talk to someone when they grow their team by one person. So that's one path.
Over five users, if someone comes to us and they say, "Hey, I want to add five users," for us, that is a signal that we should have a deeper conversation of, how are you growing your team by five more people? Let's talk about that. At that point, the customer success managers create a PQO, product qualified opportunity. That gets passed over to the account owner. The account owner, aka territory manager, is going to work with the customer success manager to schedule that call and have that conversation around why we're expanding at the clip that we're expanding. The ideal situation is that we identify more, or we forecast more. We understand what full potential that we have in those accounts. So we essentially split it off between either you're going to go a self-service expansion route, or you're going to go more of a sales assist. And with the sales assist, the hope is that it's going to be larger.
Alex Kracov: What is your relationship like with sales more at the top of the funnel right before implementation? Are they getting their hands in the product before they buy it all? What does that handoff look like between sales and customer success when they're a new customer?
Joseph Schmitt: Yeah, definitely. I actually oversee two additional teams. I also oversee our solutions engineering team here at UpKeep, and also our revenue operations. So I'm very heavily involved in the pre-sell side of it. And so with being involved in that and SCs essentially reporting to me, it's been really great. Because the number one way to stop churn is just to make sure that good fit customers are getting in from the get go. That's it. And so with having the SCs report to CS, there's very much their lens on, are you a good fit customer? And if they're not, let's see their solution for it. And if we can't find a solution, then let's have the hard conversation and the trust conversation of, we're not a good fit.
So with that comes in speaking about professional services. We very much rely on the value that CS and professional services provide in the selling side of the house. When we go into these new sales calls and we're pitching, we're essentially going in with the conversation that UpKeep is just not a software. The value that you get is the people in the process behind it. So we very much speak about professional services and customer success during the buying journey. Because for our customers going back, this is the first time that they've ever purchased a software before. So we need to paint the picture of what the full journey will look like, so they'd have confidence going in and being like, "Hey, I just bought a software. Now what do I do with it?" So when we go and we sell, we very much speak about it.
Then for the larger deals that are coming through professional services, we get in the calls with them. Again, we'll go in. What I do think it creates is for the buyer in understanding of like, wow, I have a whole team behind me that's going to help me do this. It's not just this one salesperson that's articulating and painting this whole picture for me. It's like, hey, this team has it figured out. They have a really strong process in place. And so hopefully, that gets them more confident in their decision to purchase UpKeep. So definitely, heavily rely on CS in the sales side.
Alex Kracov: Yeah, it's a such a good point. It's easy to forget that Software as a Service, there's a big service component of the software that people are buying. Most of the advice out there is focus and build the best product. You don't even need CS people in theory. But now you always do, because people are buying it for the people, as well as the software. It's a huge, huge part of it.
Joseph Schmitt: Yeah, totally.
Alex Kracov: I'd love to end today's conversation with advice you might have for other early stage CSM hires, other people who are the first customer success person in a company and aspire to do what you've done at UpKeep. What type of mentality should they have? How should they approach that?
Joseph Schmitt: Yeah, definitely. So I think that when you're building a team, as I mentioned before, I always take the approach of: let me get in there, and let me do some of the role myself to really figure it out so I understand the inner workings of it. Once you feel like you have a foundation on there, go hire someone really strong. When you're hiring, your profile of where your company is at is going to determine who you hire.
When Miji came into the business, for example, we didn't have anything. So I needed to hire someone that was totally on board with no process being in place, and essentially being curious and figuring it out. So your initial hires that you hire at any startup are going to be your most critical hires, because it will make or break essentially where you spend your time at. So I think that's probably one of the key one. It's the people. Then our strategy has always been of: let's hire, specialize, show value in it, and then grow the team behind it. Versus coming in and trying to either with an assumption of being like, hey, I think we hire implementation managers that will work. We always crawl, walk, run into making those bigger decisions on how do we grow the team, or how do we change the dynamics of the team based off what we think the business needed at that time.
Then I think the other part of just bringing people in is people that really are motivated by change and want to solve a problem. I think working in a startup, it is a special type of person. Because some people look at startups and they're like, "That looks chaotic. I don't want to do that." Whereas us, for example, or anyone at an early-stage startup, they're like, "This is great. I'm thriving in all this change." And so you need someone with that energy that doesn't get deflated if things aren't figured out or if things don't go well. You need to find people that like to solve problems and ones that are curious as well, and really want to try things out. So it really comes back to the people component.
Alex Kracov: Well, thank you so much for an awesome conversation, Joe. If people have questions, want to follow up with you, where's the best social network for them to find you?
Joseph Schmitt: Yeah, definitely. LinkedIn is a great platform — honestly, the only social platform that I really use. So if anyone ever has any questions, I'm always happy to share my journey. Because, as I mentioned, I had an untraditional path into being in hospitality and retail and then getting into software. So I'm always happy to share some of my learnings and the things that didn't work as well.
Alex Kracov: Awesome. Thank you so much.