Customer Success teams may operate in different ways depending on their strategy and customer base, but one thing all Customer Success teams have in common (or at least should have in common) is that they all aim to prevent and decrease churn.
Some organizations will say that their goal is to achieve negative revenue churn (which is when your expansion revenue is greater than your churned revenue) but it’s difficult to achieve this if you aren’t focused on how to prevent churn in the first place.
There are two sides to the conversation on churn. Preventing churn and fighting churn risks as they arise.
Today, let’s focus on churn prevention.
If you’ve read my other posts, you’ll notice a trend by now that I break topics and approaches down into strategy and tactics. This topic is no different.
So first let’s talk about the strategic element of churn prevention. Churn prevention is truly a team effort that starts at the top with the CEO and spans across and down the entire organization. It’s every team member’s duty to play their part.
In order to prevent churn over the long term it’s imperative that leaders and every team are aligned on company vision, the target market, and ideal customer avatar, and the customer experience your organization aims to provide. Having a Customer Success strategy that is created at the senior leadership level, integrated with the overall company strategy, and has the support from the CEO is one big step towards achieving this alignment. This also helps to break down the silos between Customer Success and the rest of your organization and create a customer-centric culture. It will help to keep the customer experience at the forefront of everyone’s minds.
It’s also important for Customer Success metrics to become company metrics. While your CS leader can be the one to present churn numbers in a company meeting, churn needs to be owned by the entire company, as it’s a team effort that needs team focus. This is not to say that Customer Success Managers and teams aren’t accountable for churn results and the role they need to play in preventing customers from leaving, however, it’s not solely their responsibility either.
Understanding the resources required to help your customers and to retain them is vital as well. A CS strategy will help to inform your hiring and resource requirements. You don’t want to be understaffed and under-serving your customers but you also don’t want to be overstaffed and driving your cost to serve up too high either.
While what we’ve just discussed is a big part of preventing churn, it’s only part of the battle. You can have the best strategy planned in the world but if you don’t have a tactical plan on how to execute it, it won’t do you or your customers much good.
So, let’s talk about tactics and where the bulk of Customer Success execution comes in, but let’s be careful not to put Customer Success on an island on their own here either. 80% of the projects and tasks that come out of the strategy will be executed and managed by Customer Success Managers and teams, however, in order to really make this churn prevention thing work, there are other players that need to do their part too.
Let’s look at the Sales to CS handoff as an example. The sales team needs to take the appropriate action and steps when closing a sale and handing the customer over to Customer Success. There needs to be a handoff process in place which will require the execution of tasks from both sales and CS team members.
Everyone needs to work together and Customer Success teams need to be accountable and responsible for their role in churn prevention. Customer Success Managers need to ensure they are effectively engaging with customers and striving towards retention/churn prevention with each customer interaction. CS leaders also need to coach, enable their CSMs, and advocate for the appropriate resources that their teams need in order to execute on the strategy and tactics of their customer engagement framework.
I created this Churn Prevention guide that you can download here.
The guide discusses each of the 15 steps that I’ve outlined below in more detail. I’d encourage you to print this guide off and post it on your desk if you are a CSM to remind yourself of the churn prevention efforts you can take. Or if you are a CS leader share it with other leaders in the organization to help create organizational and cross-team buy-in on tackling churn prevention.
Although I get into more detail in the guide, here is a breakdown of the strategic and tactical things an organization must do in order to prevent churn:
- Market and sell to the right customers.
- Practice proactive customer success.
- Perfect the sales to CS handover.
- Provide an effective onboarding program for your customers.
- Focus on First Time to Value and help customers achieve it.
- Conduct effective QBRs.
- Create a customer education strategy and provide educational content to your customers.
- Create a feedback loop between product and CS.
- Provide a great user experience with your product.
- Provide great customer service.
- Create a warning system for churn risks.
- Create and execute on Customer Engagement Frameworks.
- Create an organizational-wide CS strategy.
- Make your customer a hero and showcase their accomplishments to their manager.
- Continuously engage your customers.
Everyone has their part to play in churn prevention and the first step to long term churn prevention is to create a customer-centric culture and getting everyone on board. Churn prevention starts with a customer-centric culture, followed by a sound CS strategy that’s shared across the organization, and through the execution of a tactical plan that brings your Customer Success strategy to life.
If churn is on your mind and you’d like to improve your churn numbers and even reach negative churn, get in touch and let’s chat. We can help through our churn audits and with creating strategies that will have a positive impact on your business and your customers.
