If customer success professionals can agree on one thing, it’s that customer churn is inevitable. While most CSMs will try their hardest to deliver amazing customer experiences, make data-backed account decisions, and escalate issues wherever applicable, there are always problems that are just out of reach. Sometimes, customer churn is something that just can’t be avoided, no matter how hard your CSMs try.
Patterns often emerge in customer accounts that give CSMs and their managers a deeper look into the reason behind churn. While it’s true that not all churn can be avoided, it is possible to use these patterns and data to reduce churn and increase customer satisfaction.
If your customer success team is looking for new, innovative ways to address customer churn in your organization, here is a three-step process to give you direction:
Step 1: Gather the Data
The customer success arm of a business, like other departments, is nothing without access to the right data. Modern customer success teams must be able to visualize and aggregate the right metrics to calculate the overall health and standing of an account. Once a customer has already churned or decided not to renew a contract, these metrics become even more important. Where there any signs of low satisfaction or a sudden drop off in product utilization? Looking at these numbers after the fact can help your team identify tell-tale signs of at-risk customer accounts, which can help reduce churn in the future.
When addressing customer churn, it’s important to keep in mind that there are many departments involved – not just customer success. Be sure to take a look at other touchpoints that involve the customer, including:
- Sales Team: Analyzing the sales process can help identify what is actually coming into your customer bucket and why these customers are there. Instead of selling based on ideal customer fit, sales reps should be selling based on customer pain.
- Onboarding Process: If the sales process is running smoothly but accounts are still churning, then it’s time to look at the onboarding process. The ideal benchmark of the first time-to-value should be around 30 days, depending on your internal processes and procedures. This short timeline is ideal because, if you have a 12-month contract and your customer isn’t seeing value for 120 days, they don’t have a lot of time to see enough value to want to renew.
- Product Team: If you have looked at the two points above and your team is still seeing customer churn, then it’s time to turn to the product team. Clearly, your customers aren’t receiving the desired impact (both rational and emotional) from the product or service they wished to see. Your two courses of action are either to go back to your product and rework the solution to meet customer’s needs or to look at what you’re actually selling customers and rework this value proposition to meet the value proposition of your solution.
Step 2: Develop Clear Strategies
Once you know which metrics signal at-risk or red-flag customer accounts, you can use them as guideposts to develop clear, focused strategies. If you notice a large number of churned accounts frequently missed check-in calls during the last few months before the clients left, then it’s time to build a customer engagement strategy for the middle of your customer lifecycle.
We often refer to this middle customer lifecycle stage as the “Adoption & Value” stage as customers have not fully realized the value of the solution yet. This is precisely why your CSMs should be even more diligent and attentive to customer needs, since your data shows that after this middle period at-risk accounts are more likely to go dark. Creating data-backed strategies can help address these pressing issues while continuing to train and enable your CSMs.
Having clear, honest conversations with your customers is key to making sure they provide you with feedback (and success stories!) in the future. Keep your eyes open for common issues, such as:
- End users don’t fully understand how to use the product or service
- The product that was implemented is not the same as what was sold
- There is a clear lack of educational materials, documentation, or training offerings
- Hands-on help isn’t available to end users
Step 3: Work Directly with Customers
Now, with the right data and strategies in place, your team can bring these new solutions to customers to proactively address churn and keep satisfaction levels high.
There are a few ways to address customers in these types of situations:
|No red flags||Some at-risk signs||High risk|
|If your CSM is dealing with an account that is relatively happy and hasn’t hit red-flag status yet, encourage them to keep doing what you’re doing but not get too comfortable. Customers like being top-of-mind, so it’s important that they don’t take this easy-going customer account for granted.||If your team is dealing with a customer that has started to show signs of being at-risk, meet directly with stakeholders to discuss a plan. Don’t let your CSM be afraid to have open and honest with customers and tell them that the issue that they’re having is something that’s being addressed.||Finally, if you find out a customer is at-risk too far down the road, or if a customer decides to leave with little to no advanced warning, it’s a good idea to have executives sit down and discuss where things went wrong. Where was the red flag, and how did it slip through your data gathering? This creates a continuous feedback loop that allows your CSMs to always be learning from customers.|
For customer success leaders, churn is something that should be addressed both on an individual CSM level and an entire team level. At the CSM level, you can determine if it’s a personal relationship impacting customer accounts. And on the team level, you can see if there are certain account types or client profiles that need specific attention.
While this visibility starts with having access to the right data and metrics, building the right strategies – and then being clear and upfront with customers – are just as critical. With the right data, strategy, and execution in place, your team can proactively address customer churn and keep more customers happy.
Learn more about churn management with these great resources:
- eBook: 3 Steps To Putting Your Customer First This Year
- Webinar: How to Handle Churn in Your Organization and Focus on Growth
- Toolkit: Churn Management