"Customer Success is when customers achieve their desired outcome through interactions with your company with the appropriate experience." - Lincoln Murphy
Video Introduction to Customer Journey and Process Framework
The following shows the high-level view of the capabilities that we will be developing as mature our customer success team, processes and systems. A pdf version for viewing.
Create a company-wide customer success approach, providing an engagement framework for the Customer Success organization and integrating related programs and operations from the GitLab operations (i.e., marketing, sales, customer success, product / engineering and support).
Deliver faster time-to-value and customer-specific business outcomes with a world class customer experience, leveraging the full capabilities of the GitLab application. Increase average Incremental Annual Contract Value (IACV) as well as Life-Time Value (LTV).
Each customer deployment will go through the following lifecycle stages.
Onboarding: The objective is to prepare the customer for a successful customer journey with GitLab, meaning they can achieve their business outcomes with a great experience. This includes success planning, expectation setting on engagement approach and tools, and education on GitLab resources, programs and support services. Onboarding is completed when all the tasks are completed or closed (i.e., not applicable).
Implementation: The objective is to ensure the customer has the right infrastructure to support GitLab solution operations. For self-managed customers, this could include setting up on-premises equipment and/or cloud infrastructure. For customers leveraging GitLab.com, this includes integration of the GitLab cloud service with the customers environment (e.g., SAML SSO integration). This is considered complete when production infrastructure is ready for use.
Adoption: The objective is to support our customer's utilization of the GitLab solution to address the customer's original purchase intent (i.e., product stage(s) and capabilities, licenses). Adoption is complete when:
These will be measured according to product analytics (if available) or through agreement with the customer. We define the adoption of a stage using the criteria established in our Stage Adoption page.
Optimize and Grow: The objective is to enable the customer to get additional value from the GitLab platform. This is achieved through the adoption of additional features, use cases and/or stages, deeper process and operational integration in a customer's environment, optimization of application performance and availability, expansion into additional teams, and additional application of GitLab and DevOps best practices. The customer will remain in this stage as long as the customer continues to renew. The maturity of the customer will be tracked by product analytics (if available) or by collecting feedback from the customer on stages adopted.
As part of our customer journey, we highly value the customer's initial experience and measure time-to-value. Specifically, we will measure the time in calendar days from the initial transaction to:
We measure customer success through Net Retention.
Our Target net retention rate is above 130%.
Our Target gross retention rate is 90%.
We measure Net and Gross Retention aggregated by month, for the three levels of customers.
For an individual customer:
Gross Retention (%) = C / A * 100%
Net Retention (%) = B / A * 100%
**A** = MRR from 12 months ago from active customer
**B** = Current MRR from the same customer in A
**C** = Gross retained dollars calculated as min(B, A)
Individual customer retention calculations cannot be averaged together directly to determine the retention across all customers.
Because customers have different values, the retention percentages don't represent the same magnitude.
For all customers, first calculate gross retained dollars for each individual customer and then calculate as follows:
Gross Retention (%) = sum(C) / sum(A) * 100%
Net Retention (%) = sum(B) / sum(A) * 100%
**A** = MRR from 12 months ago from all active customers
**B** = Current MRR from the same set of customers in A
**C** = Gross retained dollars for each customer (see individual example)
Example:
There are two customers (X and Y) who each have $100 in MRR in the current month (B).
12 months ago, X had $50 in MRR and Y had $125 in MRR (A).
Gross retention for X is (min(100, 50) / 50) * 100% = 100%
Net retention for X is (100 / 50) * 100% = 200%
Gross retention for Y is (min(100, 125) / 125) * 100% = 80%
Net retention for Y is (100 / 125) * 100% = 80%
Gross retention across both is sum(min(100, 50), min(100, 125)) / sum(50+125) * 100% = ~86%
Net retention across both is (sum(100+100) / sum(50+125)) * 100% = 114%
Gross Retention cannot exceed 100%. Industry guidance suggests median gross dollar churn performance for SaaS/subscription companies is 8% per year (or 92% gross retention).
Since MRR values can change on a regular basis, retention can therefore change since it relies on MRR. See Monthly Recurring Revenue for more details
We need to choose a single retention level to measure for customer success, so the default value used is the Parent Account in that context.
A measure of the causes for retention (compared to the same time period for the previous year) MRR decreases (churn) or increases (expansion). Churn is specified as Cancellation or Downgrades. Expansion is specified as Seat Expansion, Product Change, Product Change/Seat Change Mix, or Discount/Price Change. These are reported as a percentage using the change in MRR for the given reason over the total MRR change for all types in either the Churn or Expansion category. Trueups are excluded from these metrics.
We use a standard cost estimate to project margin on PS Statements of Work. The standard rate is calculated by dividing the average annual OTE plus benefits by the estimated annual billable hours. For this calculation, we assume 1,880 billable hours annually. We update the standard cost estimate on a quarterly basis.
To standardize the cost estimate for projects, make a copy of the SOW Cost Estimate Calculator and attach it to the issue for the SOW in question. This calculator will be updated to reflect any changes to the standard cost estimate.
If you need help with determining the standard cost rate or if it is applicable to your project, please contact your Finance Business Partner.
