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  • Churn Strategies Newsletter (4/31/23)

    This week: DATA STORY: What's the impact of fumbling the Sales to Customer Success hand-off? PODCAST: 10 Customer Churn Benchmarks for SaaS Leaders UPCOMING EVENT: KAMCon 2023, Boulder Colorado, April 12-13 QUOTE OF THE WEEK... What's the impact of fumbling the Sales to Customer Success hand-off? I've sensed for years that time is of the essence for new customers. Any delay in getting customers started always seems to be a bad sign. But the hand-off from sales to onboarding can take time because people are busy. Anyway, what do a few short days matter in the grand scheme of things? IT TURNS OUT IT MATTERS A LOT! 📊 To answer this question, we looked deeply into one of our clients' retention data by comparing long-term retention differences based on how quickly customers started. [COMPANY INFO: SaaS, B2B, $50m-$100m] The difference was astonishing... 👉 Customers that engaged with the solution within the first few days experienced virtually no churn over the next FOUR YEARS, whereas those who didn't get started quickly NEARLY ALL CHURNED over the same period! 👈 ► Why does speed matter so much? ⦿ Remember that getting good results always requires customers to expend effort and change their behavior. ⦿ Their willingness is a finite resource that is most available right at the beginning. ⦿ Customer enthusiasm drops with every minute that passes as other problems and priorities demand their attention. HOW TO GET CUSTOMERS GOING FAST 🚀 ① SET YOUR KICK-OFF SLA: Determine the maximum number of days within which the customer kickoff or first engagement will happen. For example, in many cases, I recommend ensuring that the kickoff happens within two business days of signup. ② SCHEDULE THE KICKOFF DURING THE SALE: I've found that meeting the kickoff SLA is difficult to impossible unless the meeting is scheduled during the sales process. Finding a time to meet often takes too long. Provide a method for sales reps to quickly set up the first call 'live' while they're talking to the prospect. ③ GET CUSTOMERS STARTED PRONTO: Even if implementation and onboarding will take time, it's extremely important to get the customer going quickly. Build a "quick start" playbook for new customers by identifying key things they can DO within just a few days. PODCAST: 10 Customer Churn Benchmarks for SaaS Leaders I had a terrific conversation last week with Jay Nathan and Jeff Breunsbach on the Gain Grow Retain Podcast talking about my latest 10 Customer Churn Benchmarks for SaaS Leaders. UPCOMING EVENT: KAMCon 2023: Boulder, Colorado; April 12-13 I'll be speaking at the upcoming KAMCon event in Boulder in two weeks. The title of my presentation is: "Building Account Strategy On The 3 Laws of Retention" Quote of the week: Customers don't leave because they have a reason to leave. They leave when they no longer have a compelling reason to stay.

  • Churn Strategies Newsletter (3/24/23)

    This week: ARTICLE: My 5-Point Emergency Churn Strategy RESEARCH: There Can Never Be Too Many Tickets! VIDEO: How do I define a "Customer Result"? ARTICLE: Why don't some customers know their key results? ARTICLE: How to choose which customers to 'save' QUOTE OF THE WEEK... MY 5-POINT EMERGENCY CHURN STRATEGY FOR PROFITABILITY Solving customer churn is the fastest route to stability and profitability in hard times. With the failure of Silicon Valley Bank and looming market disruption, here are the five things you need to be doing right now... ① STOP BUYING CHURN ▪︎ The primary source of churn for most companies is new customers that are destined to fail. ▪︎ Taking chances on bad-fit customers is a luxury companies cannot afford in hard times. ▪︎ Therefore, the first step is to choke off churn at the source. ② PRIORITIZE SAVE-ABLE ACCOUNTS ▪︎ It’s essential in a crisis to spend limited resources where they’ll have the biggest impact. ▪︎ In good times, you can focus on the customers who are most likely to fail. ▪︎ But difficult times require a shift in mindset to prioritize the accounts you can most likely make successful. ③ MEASURE + MATERIALIZE CUSTOMER RESULTS ▪︎ When the going gets tough, your customers will ruthlessly cut any costs that aren’t connected to their survival. ▪︎ You can no longer rely on your product's “benefits”, “value”, or even its “ROI". ▪︎ Retention depends on measuring and materializing the customer results that are vital to their business. ④ HELP CUSTOMERS DOWNSIZE TO STAY ▪︎ During challenging economic times, it's necessary to shift priorities from retaining DOLLARS to keeping CUSTOMERS. ▪︎ Budget pressure will lead customers to look for ways to “right-size” their spending. ▪︎ Helping customers down-size their accounts is a key crisis retention strategy. ⑤ INVEST IN UP-SKILLING YOUR TEAM ▪︎ You can never have as many people as you need, but in bad times you can often lose some of your best people. ▪︎ That’s why it’s critical to figure out how to improve your team members’ confidence and abilities to punch above their weight. ▪︎ The key is to focus on simplifying your processes and coaching key customer skills. THERE CAN NEVER BE TOO MANY TICKETS! WHAT DOES THE DATA SAY? 📊 ⤵ "A few support tickets are a sign of customer engagement, but too many tickets are a red flag for customer churn." Not only is this wrong, it turns out it's just the opposite → 👉 THE MORE SUPPORT TICKETS CUSTOMERS SUBMIT, THE LONGER THEY STAY! 👈 Our previously published research on customer retention (you can get the full report by following the link in the comments ↓) reveals a consistent relationship between customer tickets and average customer lifespan. But the fascinating finding here is that there is no threshold number of tickets beyond which the relationship reverses. In other words: customers can't submit too many tickets. 📊 Our research reveals that the customers who submit the most tickets stay many times longer than those who submit none or only a few tickets! WHY? Like so many other findings, this may seem counterintuitive. Doesn't a large number of tickets indicate that a customer is failing? Remember that... ► Support tickets are a signal that customers are engaging with the solution and trying to make it work. ✅ PRINCIPLE: Customers who are engaging and trying are more likely to run into issues AND ALSO more likely to achieve results! 💭 Now, simply follow that principle through to its logical conclusion... ⦿ Customers who are trying are more likely to run into issues. → When their issues are solved, they get results. → When they get results, they want more. → So they try to do even more things. → This leads them to run into even more issues. → (and so on...) What about high-severity issues? Our research didn't address this factor directly, though it's obvious these can lead to customer frustration and even the potential for churn. But in my experience, if an issue severely impacts a customer's business, it means that the solution is extremely important to that customer. These are the customers most likely to stay. I have found that when we do our best to address high-severity issues, customers tend to appreciate the effort, and most will not churn. How do I define a "Customer Result"? In my latest Churn Strategies Live Stream (3/23/23) I answer the question: What is the right way to define a customer result? WHY DON'T SOME CUSTOMERS KNOW THEIR KEY RESULTS? Customer results are everything, but... You can't drive your customer's results if you don't know what they are. It can be surprisingly difficult to get some customers to identify which results ultimately matter to their decision to renew and expand. Some customers already know their key business objectives, but many more are not that prepared. I've found that three things frequently happen when I ask customers for their key business objectives: ① They don't know what they are. ② They don't care what they are. ③ They won't tell you what they are. Knowing how to knock down these obstacles is key to establishing the customer's results and setting them up for success. In this post, I'm going to address the first (and most common) of these obstacles. ① WHAT TO DO IF THEY DON'T KNOW WHAT THEIR KEY RESULTS ARE? The most important reason they can't articulate their results is that they haven't translated WHAT they are doing into → WHY they are doing it. They often assume the business benefits are obvious and think this step is unnecessary. But we know that making the results explicit is critical to measuring and materializing (M+M) them for success. THE SOLUTION: The key to shifting the customer from a "WHAT" mindset to a "WHY" mindset is something called: ►► THE 5 WHY'S The great Sakichi Toyoda realized that you can't ask "why" more than 5 times without getting to the root cause of any problem. And the same applies to identifying the fundamental purpose. And since most people don't think in terms of root causes or purposes on a daily basis, we need to be able to ask "WHY" in up to five different ways to help them reason it out. For example, when you ask a customer what is their purpose in adopting your solution, they will commonly respond that their purpose is to "enable new tools", or "do new activities." They are thinking in terms of WHAT they are doing rather than WHY they are doing it. So we ask WHY Questions: 💭 "Why is this important to the business?" 💭 "How will it impact the business?" 💭 "What is driving the need for this now?" 💭 "How will you know if it works?" 💭 "How will you measure success?" If you are speaking to the right person, your customer will engage with these WHY questions. My experience is that the vast majority of customers genuinely appreciate the exercise and value the clarity it produces. [This simple skill is one of the 8 Core Power Skills we teach in our customer success team training. Reach out to me if you'd like to learn more.] HOW TO CHOOSE WHICH CUSTOMERS TO 'SAVE' It feels like you never have enough people, but in hard times you may quickly find yourself operating with far fewer resources than you need to execute your customer success process. There are two key strategies... The first strategy I'll discuss in a separate post: dramatically reduce what you do for your customers to only the things that directly impact results. In this post, I'm going to talk about the other strategy: reducing the number of customers you are actively engaging to concentrate your resources. Even when you've pared back your customer success playbook, you'll likely still need to target a subset of customers for active engagement. Doing this well requires a key shift in mindset... In good times, we work to identify which customers are at risk of failing and prioritize them for help. But in hard times, we have to flip this idea: Instead of focusing on the customers who are most likely to fail, the key is to target the customers who, with your intervention, are most likely to succeed. This ensures that your limited resources have the absolute highest impact on your results. HOW TO PRIORITIZE CUSTOMERS FOR SUCCESS: 1. AT RISK CUSTOMERS: The first step is to identify the customers at risk of failing. In order to get a manageable list, we need to be able to eliminate customers we have a genuine reason to believe are stable. Be careful not to assume "happy" customers are stable! Identify the lightest-weight processes that will be sufficient to maintain these customers. 2. KEY SUCCESS FACTORS: The next step is to identify the factors that improve the likelihood of your interventions driving results for at-risk customers. This is where your knowledge of your customers and their business is critical. Some key questions to ask: ► Why do some customers respond better to our help? ► What factors make a customer more likely to change their behavior? It's best to choose just a couple of key factors rather than build a complex model. The reality is that everything is a rough guess, but don't underestimate the value of that judgment. In order for this to work, a simple framework works best. I've found that in many cases, the two best factors to use are: The 'newness' of the customer: how long have they been a customer? The size of the customer: how big is their business or organization? 3. PRIORITIZATION FRAMEWORK: Once you have your key factors, the idea is simply to tag the at-risk accounts according to those factors. Now you can see one big reason why simpler is better: tagging accounts can be time-consuming. Finally, you simply organize them into groups by the key factors to form a basic prioritization framework. I've included a simple doodle to illustrate the idea below. WHY IT WORKS Understand that this method works primarily because it focuses your resources, and that cannot be done without prioritization. The power is not in the precision but in the concentration of effort. Quote of the Week...

  • HUGE CUSTOMER SUCCESS MISTAKE → "First get a customer to renew, and THEN expand the account."

    "First get a customer to renew, and THEN expand the account." Wrong. Our research shows that this thinking is actually backward because... 👉 RENEWAL IS A FORWARD-LOOKING DECISION. 👈 Customers don't renew because of what you did for them. They renew because of what you ARE GOING TO DO for them! It's all about what's next. What you did in the past is important only because it makes your promises for the future credible. Our data clearly shows the powerful connection between account expansion and long-term retention. That's why I say... ► Companies that focus on retention tend to have poor retention. Companies that focus on expansion get retention for free. ◀︎

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  • Consulting | ChurnRX

    Rapidly Transform Your Retention With Our Expert Consulting Our team of world-class retention and growth experts are armed with battle-tested methodologies for creating radical improvements that scale across your entire organization. Schedule a Consultation Customer Retenton Strategy Customer Retention Analysis Customer retention is achieved when a company aligns every department with delivering customer results. We design your most effective strategy using your data: Expert customer data analysis Executive Customer Retention Training Tailored strategy with actions for each department Retention Tracking for measuring improvement ​ ​ Contact us now to start designing your Retention Strategy → Ideal Customer Profile Ideal Customer Profile In recurring revenue businesses, your Ideal Customer Profile (ICP) is about who retains the most NOT who could buy or use your product. To establish your Ideal Customer Profile we: Conduct a Retention Data Analysis to find your ICP Study the business use case of your ICP to identify opportunities Setup a dashboard for operating to your ICP ​ Contact us today to find your true ICP → Customer Behavior Analysis The most effective way to impact churn across your customer base is to find out the key behaviors your successful customers are doing and bring them to your failing customers. In our Customer Behavior Analysis, we do that by: Identifying your top 10 most successful customers Conduct multiple customer behavior Interviews Prioritize the key customer behaviors Provide a strategy for implementing key behaviors ​ ​ Contact us today to start learning from your customers Intenal Process Analysis Whole Company Retention Strategy Every team that engages the customer from marketing and sales to onboarding and customer success has an impact on how they retain. ​ Our Company Retention Strategy includes: Internal Process Leader Interviews (Marketing, Sales, Onboarding, and Customer Success) Identify misalignment between customer-facing departments Priority list of high-impact opportunities for process improvement ​ ​ Contact us now to analyze your customer processes → Tailored Team Retention Training Customer retention is achieved when a company aligns every department to deliver customer results. We design your most effective strategy using your data: Expert customer data analysis Executive Customer Retention Training Tailored strategy with actions for each department Retention Tracking for measuring improvement ​ ​ Contact us now to start designing your Team Training → Executive & Leadership Consulting Fractional Customer Success Leadership We provide you with an experienced CCO-level leader who will give your Customers Success org the mission and training they need to drive customer results and retention. ​ Our Fractional CCOs bring with them: The 4 Key Customer Success Playbooks ​ Churn metrics and dashboards for diagnosing and managing your retentio n Training content to develop mid-level leaders Skills training for Onboarding Specialist, CSMs, and Support Reps ​ ​ Contact us now for the leadership your team needs to succeed → Other Retention Consulting Needs? Schedule a Consultation

  • 23 Ways To Reduce Churn | ChurnRX

    Get your copy of the 23 Ways to Reduce Churn in 2023 Proven methods for rapidly increasing customer retention backed by real-world data. Name Phone Business Email Company I Agree To ChurnRX's Terms & Conditions We help tech companies see a 90% reduction in early churn. Would you like us to reach out and explain how? Yes, you can send me more info! Submit

  • June '22 Expert Chats | ChurnRX

    On-Demand: How to Advance Your Career In Marketing Come and learn from industry leaders in Marketing: Andrew Jones, Erica Chappell, and Mark Goldhardt Topics will range from getting started in Marketing, the necessary skills to advance in your career, and transitioning into management and operational roles. Watch this session on-demand First Name Last Name Email View Session

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