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Tuesday, October 19, 2021

4 Ways to Reduce Churn – Focus on Customer Success

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Here’s a quick litmus test for potential customer churn: When was the last time you texted a customer? Yesterday? Two months ago? Never?

If you’re not on a texting basis with customers, your company is just another vendor—one of many that your customers communicate with strictly over email and via scheduled meetings.

In short, you likely do not have a trusted adviser relationship, which means the risk of customer churn is higher.

So how can you become a customer’s most valuable vendor and prevent churn?

It’s the entire company’s responsibility. Even if your company has customer success and account management teams, that is not enough. Marketing, Support, Sales, and even Engineering all have important roles to play in preventing or reducing customer churn.

Here are four things to focus on.

1. Actively vet your leads

Reducing churn starts before a company becomes your customer. Marketing needs to be laser-focused on generating leads that fit your ideal customer profile. Even if Marketing already does that, it’s inevitable that some poor-fit leads will still be generated and passed along to Sales.

The question then becomes, Is your sales team trained and actively encouraged to vet and quickly reject poor-fit leads? Also, Do you have a solid feedback loop between Sales and Marketing to minimize the generation of poor-fit leads?

Make sure Sales understands and thoroughly documents a prospect’s requirements during the sales evaluation process. Success and support teams should regularly review the sales team’s pre-sales qualification and requirements checklist. Ideally, such information is appended to Salesforce, creating an easy audit trail. That can come in handy if a customer gets upset about an apparent mismatch between what was promised and what was delivered.

2. Balance product stability with new feature releases

The days of “move fast and break things” are over. Too much focus on releasing new features at the expense of stability can backfire and increase churn when you can least afford it.

Balancing stability with new feature releases is a constant tug of war at high-growth companies. Therefore, it’s important that leadership align on priorities and, even more critical, acknowledge and own the consequences of their choices.

Bring members of the engineering and product teams to customer meetings, even if just to listen, so they understand the impact of moving too fast.

3. Teach business acumen

So you’ve hired bright, compassionate, and hardworking folks to delight your customers.

But do your teams have enough business acumen to make a customer meeting about the customer and their priorities versus focusing on your product, features, and utilization? Does your team know what a P&L is, how a budgeting process works, or how to identify key stakeholders beyond the immediate sponsors? Is your team clearly and regularly—not just before the renewal— articulating the return on investment (ROI) of your service to customers?

Your customers have to think about those things all the time, so you need to get into their mindset. Your team needs to understand what customers’ problems are beyond the narrow scope of what your tool or service is providing. Customers want to solve their problems—not yours—and any misalignment will increase the risk of churn.

Provide business acumen training to your customer success and account management teams, so they know what questions to ask to truly add value to the relationship.

4. Listen to your customer support team

If there is one group of employees who interact with customer base significantly more than any other department does, it is your support team.

But, in too many companies, support teams are treated like a back-office function: They are poorly resourced, they don’t really have a seat at the table, and they burn out quickly.

Support is an incredibly valuable listening post to help you mitigate churn because customer problems or issues are usually first escalated to them. Support has the best and possibly earliest gauge on customer temperature and likelihood of churn. Therefore, your product and customer success teams should treat Support like one of your top customers.

At my company, we hold multiple weekly cross-functional meetings, and it’s always the support team that leads and presents product and technical challenges experienced by customers. We have an audience full of engineers, product managers, and customer success managers, including each department’s VP. We value what the support team has to say. The elevated standing that Support has within our company has helped us maintain low customer churn rate levels over the years.

* * *

Every single department in the company has a role in reducing churn and improving customer retention—starting before a customer has even touched your product or service.

The foundational requirement for reducing churn is ensuring you have a companywide cultural and behavioral mindset dedicated to customer success.

More Resources on Customer Success and Reducing Churn

How to Prevent Churn and Retain Customers of Online Services

Five ‘Customer Marketing’ Tactics to Boost Retention and Reduce Churn

Five Ways SaaS Companies Can Achieve Proactive Customer Success



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