Mike McDerment: Great Service as an Unstoppable, Scalable Sales Strategy

Freshbooks Customer Service Support Team

FreshBooks Customer Service Support Team

Founder, Mike McDerment, has led FreshBooks from a humble start-up operating out of his parents’ basement into the world’s #1 cloud-based accounting solution designed exclusively for small service-based business owners. The company has helped more than 10 million users process billions of dollars through its easy-to-use invoicing, expense management and time tracking features. And, while FreshBooks wasn’t an overnight success, it has become a category leader with an army of fanatical users because of its authentic and uncompromising focus on service.

Just how did FreshBooks navigate that journey from basement start-up to trusted brand?

It all started with Mike—and his authentic belief in service. Back in the days before he founded FreshBooks, Mike built a successful design consultancy by personally delivering exceptional customer experiences and turning his clients into champions of the business. Service has always been in his blood.

So, when it was time for him to start growing the FreshBooks business, there was never a question about outstanding service being at the heart of the company. The DNA of the young business was always going to reflect his natural belief in the power of service to turn customers into fans who would then spread the word.

The real challenge would become how to scale his belief in service into a culture that would drive the entire business.

The big pay-off from building a service culture

Answering that question was critical to FreshBooks’ growth because building a commitment to service into culture of the company creates what Mike calls customer proximity. “We want our people to be close to our customers, and the way you do that is if the phone rings, everybody is able to answer that call because they’ve been trained to do so and they’ve spent time listening to the requests people have – be they changes in the product or simple how-to queries.”

He thinks of that kind of feedback as a gift. Opening the lines of communication to understand what customers are after allows you make better decisions. And it enables you to deliver on what customers need. You can really wow them—and that’s what generates word of mouth and, ultimately, more business.

As Mike says, “It’s like do unto others as you would have done to yourself. When I call a company because I need a hand I just want it to be excellent, and when it’s not — I notice. And so to the extent that we can deliver those extraordinary experiences every day for our customers, that’s going to take care of the seller. Because they’ll be so overwhelmed by the positive experience, they’ll go tell somebody else. And that’s exactly how things have played out over the years.”

In fact, the approach has worked so well that FreshBooks’ number one source of new business through its entire history up to today is referrals. You don’t need somebody out phoning a list of people to land a new customer when your whole customer base is out there telling the rest of the market what a great company you are.

So, as FreshBooks embarked on its journey to grow, how did Mike scale his approach to helping small business owners into a company-wide service culture?

Step 1: Putting a premium on hiring for service-based values

For him the solution to that problem started with people. As he cautions, “I think a lot of people coming from other companies aren’t thinking the same way we do with respect to service and what it really means here. We’re very careful about who we hire.”

He believes great support people aren’t driven by artificial sales targets or the number of tickets they close, but rather by their inherent desire to help. He explains, “Our culture is about serving people, which is actually very contrary to most company’s sales DNA, which is focused on ‘I close this many sales, I do this many activities.’”

From day one FreshBooks put a premium on making sure they were constantly bringing in only people who shared the company’s service values and were committed to them. Candidates who didn’t show those traits didn’t make it far in the hiring process.

Step 2: Growing a service culture

But finding the right people is only half the battle. They need orientation and training to make sure that everyone delivers outstanding customer experiences every time. Question is, how?

As Mike says, “In the beginning we sort of fell backwards into the solution. When we made our first hire, he actually wasn’t allowed to send an email to any client without somebody overlooking it for the first three months.”

It’s a pretty radical level of oversight, but it made sure the message was right, the answer was accurate and the customer was wowed. And it worked. So Mike took the same approach to on-boarding the next few hires.

But can you keep up that level of hands-on orientation when you’ve got dozens of support staff? And, if you want everyone in the company focused on service, can you put everyone, no matter what their role, through the same process? After all, you’re not going ask your CFO or COO to do a month on the service desk, are you?

In Mike’s case, the answer was, yes. Yes you are—if you’re serious about creating a company-wide service culture.

Today at FreshBooks everybody who joins the business, no matter what department or role they’re in, spends their first month in customer service. In that month they learn the product, they learn the customer, and they learn the service culture.

As Mike says, “As a business, we’re investing a whole month of training right out of the box for people in service. We’ve brought in an entirely new executive team over the last year and they all started in customer service. So the person who our customer support team reports into now is somebody’s who’s spent a month in service learning the ropes from their own staff. It lends itself to building a culture that is more egalitarian. And, since, everyone starts in the same place, you have the benefit of that perspective of serving customers and learning the product and how we do things — all of which are invaluable as you start to make decisions on behalf of the business.”

And since everyone starts in customer service, it sends a pretty strong signal to the rest of the organization about what matters. As Mike says, “Our support team is also the team that trains the rest of the company. They take great pride in teaching that and they make sure everyone understands the importance of serving our customers and how we do that.”

Great service can lead to fantastic growth, but…

Creating outstanding customer experiences and turning clients into their sales engine has been a huge success for FreshBooks. But Mike cautions other business owners about the difficulties involved in making that strategy pay off. “You could have a service orientation and take it somewhere else,” he says, “but you probably wouldn’t be successful because the culture is not set up to support it.”

In short, you can’t fake service. You can’t just decide to do it in your company and start rocking it tomorrow. It has to come from place of authenticity, and that means it needs to be a part of everything your company does, and how it’s built. If it’s not genuine, customers sniff that out pretty quickly. It’s not just about being nice, because you need the rigor of understanding the product and how the company works and what the customer is after—so you can provide genuine help.

The heart of the engine

In Mike’s case, he’s most proud of building a team filled with people who care and have the skills and resources to help. And because they train everyone who comes in, they reinforce and spread that belief in care to all corners of the company. They make service the heart of everything. And that’s why service as a sales strategy has worked so well at FreshBooks.

What role does service play in your company? How can you build it into the fabric of everything your company does and turn word of mouth into a real sales engine?

By | 2017-06-22T10:32:35+00:00 August 22nd, 2014|Blog|1 Comment
Jamie Schneiderman is the Founder and CEO of Clearfit. Jamie is a Harvard MBA with over 20 years experience building Fortune 500 businesses such as Procter & Gamble and Coca-Cola as well as tech startups. He loves eating from the kids' menu but hates hugs from anyone other than family. Donald is the Head of Content at ClearFit. He’s a best-selling author and former child actor.

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