Nov 15, 2022 • 21M

How Transparent Should You Be with Your Customers?

A conversation with Gary Lin at Explo

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Patterns and prophets, in SaaS and Web3

Leaders are accustomed to having control over information: who sees it, how much is shared, and when. Arguably, an important purpose of leadership is to explain context to people in a narrative form.

But there are major trends in our society that run counter to this idea. For example, there is a movement to make data on employee compensation more accessible. Some people believe that governments should openly share data on the status and results of funded programs. And certainly employees want to hear the unfiltered truth about how their companies are performing. Should we provide that kind of radical transparency to our customers about the value that they’re getting from a product?

In this post, Gary Lin, the CEO and Co-Founder at Explo, makes the case for sharing usage data with your customers. We discussed:

  • What are the benefits of openly sharing this data?

  • What are the best practices for doing so?

  • What are the implications for CSMs, sales reps, and other customer-facing folks?

You can listen to the podcast or else read the lightly edited transcript of the conversation below. Let's dive in!

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Allison: Gary, I'm so excited to have you on the podcast today to talk about sharing data with your customers, which is obviously a topic that I'm interested in given how long I've spent in the customer success space and generally thinking about how companies can work more effectively with their customers. So thank you for joining us today.

Gary: Thanks for having me. Super excited.

A: Historically, usage data has been an asset that we think about leveraging internally, rather than sharing it externally. But I know you think that’s changing. How are top performing companies leveraging the product usage data that they're already tracking in order to help their customers?

G: There’s been a trend as of late where top performing companies have felt the need to show product usage data to their customers to be able to prove the value that they're providing to those customers. This has happened in a few stages.

The first is that everyone's generating this product data, but no one knows how to really use it. It’s in different source systems: Stripe, HubSpot, etc. Your information is everywhere.

In the next phase, people figured out that they needed a data warehouse to bring all their data together into a single source of truth.

Now we're in a third phase where you have your data in a good state, so how do you share that out to everyone? How do you make sure that your customers are deriving value from the data that you have now curated, to prove why they should pay more money for your products?

A: Are there any specific best practices you would recommend for sharing that data with customers?

G: The most important thing that we've learned across talking to different companies that want to share data is that there actually isn't really a one-size-fits-all answer when it comes to a customer-facing usage dashboard. You might show a dashboard to 10 customers. All 10 probably will ask for some tweak that is hyper-specific to their business.

Let's say that you show a revenue dashboard to all of your customers. Some companies care about monthly revenue, others care about quarterly, some care about yearly, and so on and so forth. That's a very trivial example of the small differences each business has that will make it so they want a different view.

So how can you create a dashboard or share information in a way such that you provide them with that ability to be able to tailor that view to their own specific business?

A: I imagine that different functions at a company might have different perspectives on what data should be shared with the customer. You could imagine one function thinking that less data should be exposed the customer, and another function thinking that there are certain data points that are more important than others. I know we want to give customers input into what data they see, but I also imagine as a vendor, particularly in different functions, we might have our own self-interest in terms of what customers should see. So how should functions work together to figure out what data should be exposed?

G: What we've seen across the businesses that we've worked with, usually the head of product or the product lead is the one that's figuring out amongst the right stakeholders what data should be shown to whom at the customer. The product lead will orchestrate the group conversation to determine the intersection of: (a) What information does the customer need? and (b) What information do you want to show them?

A: That makes sense. But could you imagine a situation where a customer-facing person might say, "Oh no, I don't want my customer seeing X, Y, Z data point because it makes it look like they're not getting as much value as they actually are." A customer-facing person might want control over what a customer sees, so how does their reaction get reconciled into the broader strategy?

G: The business that is showing these customer-facing dashboards has the ultimate decision about what information that they want to share and what they don't want to share. If you asked our opinion at Explo, we would probably say it's best to be as transparent as possible in showing information, because the information that you show will only actually prove the value that you're providing to your customers.

If you aren't actually providing value to your customers, maybe there's a fundamental deeper question about the business that those folks should be thinking about. If there are things that you're trying not to show your customers, there are probably things within the business you should uncover to figure out why those numbers are the way they are.

A: That's a really good point. I'm happy you pointed out the value of transparency as well. I think one of the values of a typical modern company to share as much information as possible with employees and other stakeholders, especially customers. It reminds me of the movement for companies to make salary bands, or even specific employee salaries, completely transparent.

G: Totally.

A: Certainly there's a different mindset when you're revealing things that previously had been kept secret. When data is kept secret by default, a company might be more inclined — intentionally or unintentionally — to manipulate whatever data they do show, in order to communicate a particular message.

G: Yeah. What we've heard from our customers is that, even if the numbers aren't as pretty as they would like them to be, transparency actually builds trust with their customers. That trust is important to helping their relationship flourish and helping them grow as business partners.

We've dug a little bit here from a historical perspective to understand how information has been shared in the past. People used to share information through physical mail. Credit card companies and banks are still doing this. Later on, companies migrated to sending emails with static data cuts — screenshots. Now we’re seeing the industry and communities pushing toward a live dashboard: a live data asset that anyone can go to and look at. It'll show them the most up-to-date picture that they could possibly get. That's the world that Explo is encouraging other organizations to move to.

A: It's nice if you're a customer to be able to interact with the data in some way. To be able to slice it according to some frame that's helpful for you, instead of simply receiving one form in which the data could be represented. So it sounds like there's more interaction that could be enabled through sharing of a dashboard online.

G: Yes. We've learned that our customers’ customers want to be able to slice and dice data in a dashboard, but it actually goes a step further than that. They actually want to change a dashboard for the specific business needs that they have. Back to the example that we had with the revenue dashboard: if you showed a base revenue template dashboard to a set of people, everyone will have their own tweaks that they want. And sometimes it's not as easy as, "I want to slice and dice the date range. I want to add this filter.” Instead, sometimes it's: "I want to change this bar chart to a line chart. I want to move these things around. I want to add the apparel revenue above the shoes revenue." Those are obviously very trivial examples, but the general idea is that people want to take this dashboard template or a blueprint, make their own changes on top of that, and then save their own hyper-specific view of a blueprint.

A: What reactions are you hearing from your customer's customers who are receiving this data?

G: A lot of the requests that we're receiving are about the ways they want to visualize the data — the way the information is presented on the dashboard.

In an ideal world, our customer's customers don't actually know that our customers are using a third party tool. We want Explo to be fully white labeled and essentially an extension of our customer's product teams.

A: Gary, I'd love to know what types of companies you're seeing that are sharing data in this way with their customers. Who are these companies, and what are the use cases?

G: The general type of company that utilizes Explo is usually a company that's very operations heavy. If I were to simplify that further, the types of companies that absolutely love using Explo are companies that are generating a lot of application data. For example, we have a handful of companies that put on virtual events as their business. When you put on a virtual event, you're collecting a ton of data: Who signed up? When did they sign up? Who actually showed up? How long were they in a certain virtual fireside chat? What questions were asked? What pamphlets were picked up? Et cetera.

So they're sitting on this wealth of data that they want to be able to send back to the event coordinators, these companies that are paying to use them. The best way to do this is through a dashboard with live information, as data is actually being collected through the event itself. They utilize Explo to do so, and then an event coordinator is able to look at that data and be able to better optimize future events that they want to put on.

A: I know you've also worked with eCommerce companies in the past. Maybe you could talk about an example from that industry.

G: We have a few e-commerce companies that work with us as well. They want to be able to show dashboards and analytics to their suppliers, to give them a sense of how much things are being sold for, how much supplies are actually needed and used by the business, etc. In addition, the e-commerce companies want to be able to showcase how much of which product is being sold in which regions of the world.

A: Is there any value that companies get from sharing data with their customers, apart from making their customers happy?

G: In addition to the transparency that they're obviously providing and showing the value of purchasing their product, when you share these dashboards with your customers and they start utilizing the dashboard, you’re able to develop a sense of what they care about and what they're prioritizing. Let's say that Costco is showing dashboards to their suppliers: Nike, Reebok, Adidas. Through the suppliers’ dashboard usage, Costco finds out that Nike cares a lot about shoes in the U.S. but very little about shirts, except in Mexico. And Reebok cares only about socks in the U.S.

Based on what they're searching for, what they're filtering on, and what information they're looking at, Costco can learn a lot of valuable information about what their customers care about and what they're actually prioritizing. That information is quite useful to Costco. They could change their business strategy from an account perspective: maybe what they were doing originally with Nike should actually be changed. It might be worth a conversation with them. Maybe Nike should actually be supplying more shoes than they are supplying shirts.

That's a very important feedback loop. Once you reach a certain scale, it's very hard as a company to be able to talk to your customers. This is a different way for you to understand what your customers care about, through data.

A: I'd love to talk a little bit about other movements that are propelling the ability and the need to share data with customers. We talked about transparency being a major trend, and I think product people taking charge of this data-sharing is a major trend. It seems like the evolution of the modern data stack is making this more possible. I remember when we'd share usage data with a customer without being totally sure if it was accurate or not; this wasn’t that long ago. Whereas now with the modern data stack, there's often a single source of truth in the data warehouse, much more seamless access to that data. Do you consider yourself to be a part of the modern data stack?

G: We're part of a category that I’d call “customer-facing analytics” or “embedded analytics.”

What's really interesting about what you said, though, was that in the world before the existence of unified data, it wasn't actually as valuable to send information to customers, because of the lack of trust in that data. When you send a dashboard to a customer, and then the next day you send a different dashboard to correct a mistake, you can lose trust. And it can be very difficult to regain that trust.

Previously companies had initiatives to build a customer-facing dashboard experience, but they weren't successful because of the inability to have a single source of truth. Now that we're in this phase where mostly everyone has a warehouse, a single source of truth, and information is all ETL-ed into a single destination, it's much easier to show verified data to customers. Now you can develop trust with the end user and the client.

We are part of the modern data stack, but we would not be part of it if it weren’t for other parts of the data stack that had to be matured first.

A: In some ways it can look like your product is a BI tool. How do you think about yourself in relation to BI tools?

G: Business intelligence tools are primarily built for the internal-facing use case. BI tools like Looker, Tableau, etc., were built for employees within a company to analyze data. When it comes Explo, we build customer-facing dashboards and analytics. Because of that, our product fundamentals are actually quite different from a BI solution because we think about things a little bit differently from the security side, the design side, etc. All those things lead to a very different end-user experience, which is the most important thing when it comes to embedded and external-facing analytics.

A: One of the big topics that's been on my mind is how do we demonstrate the ROI of the modern data stack when revenue-generating teams are just starting to see some of the benefits of it. Do you think that your category will enable there to be more ROI from the modern data stack?

G: Definitely. I think the easiest place for us to think about this ROI is from the time savings that teams get when they're using Explo, instead of having their own engineers build dashboards to show their customers. The easiest way to sell people on the build versus buy question is, you could have three engineers spend multiple quarters building out the solution and then some part of a few engineers to maintain it forever. Or you could use Explo to do that building and maintenance, as well as continue to improve the suite of tools that you have to flesh out your dashboards. It’s a no-brainer when it comes to not just time saved, but also execution speed.

A: Final question. If you had to share one tip for product managers about how to leverage their product usage data to help customers more directly, what would you say?

G: Sometimes product people don't prioritize sharing information with their customers over other product priorities because they think it's not the most important thing. But what we've actually seen across all the companies that we work with is that once you actually start sharing the information, this kickstarts many other conversations with your customers, which help you prioritize product bets. And so it allows you to create a communication channel that builds trust and more easily and effectively improve your products.

A: Super interesting. Creates a feedback loop, and also it makes me wonder whether this is part of the natural evolution of product teams taking even more responsibility for net dollar retention and some of the metrics that come from our customer base.

G: Totally.

A: Gary, thank you so much for joining us today. You're challenging my historical thinking on a number of these topic, and I'm sure the audience will learn a lot, too.

G: Awesome. Thanks for having me.

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