Expert Tips from Customer Success Leaders

RYG Customer Success Leadership Hour

This week, we hosted a RYG Leadership Hour in Atlanta. RYG, which stands for red, yellow, green, (health scores) is all about your customers and their success. Wondering how to take your red and yellow customers and transform them into your biggest cheerleaders? Read on! 

Our inaugural Atlanta Leadership Hour featured four discussion topics led by area Customer Success leaders. With the event wrapped up, our participants left with great takeaways to share with their own CS teams. Here are just a few of our favorite tips that we wanted to share with the larger Customer Success community. 

Keep reading to get expert tips and advice on the following topics: 

  1. Customer Success Performance Management (Goals and KPIs) 
  2. Hiring and Scaling a Customer Success Team 
  3. Recommendations for Developing Compensation Plans for CSMs 
  4. Tips for Building Out a Customer Success Playbook 

 

Customer Success Leaders:

Craig Chiofalo - VP of Customer Experience James Scott - SuccessHacker

1.) Customer Success Performance Management (Goals and KPIs) 


Tips brought to you by: 
James Scott, Associate Partner, SuccessHacker 

  • If a customer isn’t engaging in upselling, they are often heading towards churn. When they aren’t seeing enough value to increase their investment over time, it can be a red flag. Oftentimes, they are teetering on the edge of renewal or cancellation and may end up as a churned account. 
  • KPIs need to be easy achievable, clear cut and used in a manner that can predict future activity. It is important for Customer Success teams to adopt a Sales team mentality in this respect. Collecting data is only useful when it can predict future behaviors and be linked together to form an accurate picture of customer health. 

 

Tips brought to you by: Craig Chiofalo, Vice President of Customer Experience, CallRail 

  • As long as you’re going a good job, retention is not as much of a concern with newer clients. However, retention is essential when it comes to older accounts. CS teams are often caught by surprise by longer-term clients who do their own thing and are left to do so with little intervention. When you do finally hear from this type of account it is often because they are not renewing. 
  • Work to make your KPIs available to whatever applications can consume them. This helps you make your CS data available to every employee across your company. Not only does this help track adoption on an organization wide level but it also puts Customer Success at the forefront of all employee activities. 

 

2.) Hiring and Scaling a Customer Success Team 


Tips brought to you by:
 James Scott, Associate Partner, SuccessHacker 

  • When scaling a Customer Success team, you have to paint the picture in terms of what is the least they could do. This is one way to gain executive buy-in and secure the resources you need to build your team. Oftentimes even if a CSM only has a 1-2 percent impact on retention or upsells, this alone will offset their salary 
  • Scaling can be extremely difficult when the team is new or has no track record. It can be harder to measure impact when you have less data to provide referenceAlways be able to show what impact the last dollar you invested had. Likewise, always be ready to demonstrate what the next dollar you invest is capable of. 
  • Many individuals entering the Customer Success world do not have prior experience. While this may seem daunting, it should be viewed as an exciting opportunity. Focus on transferable skills  candidates that are great with people, have relatable industry experience and drive. Having industry knowledge, product knowledge and understanding your customers world is what typically leads to successful CSMs. 

 

Tips brought to you by: Craig Chiofalo, Vice President of Customer Experience, CallRail  

  • As you build out your team always have discussions about fit. Sometimes an account only stays with your company because of the great relationship they have with your success team. Always take this into consideration when evaluating new team members. 
  • The CS community has done a good job improving the word Customer Success.’ That said when it comes to organizations that are new to CS, things can be quite tough. Above all make sure your CEO understands the value of the Customer Success function. It can be challenging when there are salary and headcount constraints, but you need to prove that CS is a driver for corporate growth. 
  • There’s a lot of confusion when people say cultural fit. It’s great to have people who listen to the same music or eat the same foods, but this shouldn’t be all that you are looking for. What you want are people that have curiosity. You’ve got to find someone that is curious, driven and demonstrates their commitment not only to your organization, but also your customers.  

 

3.) Recommendations for Developing Compensation Plans for CSMs 


Tips brought to you by:
James Scott, Associate Partner, SuccessHacker 

  • There’s not a one size fit all approach for compensation. It depends on your type of business, what type of investment you can make and the complexity of your product.  
  • When changing your compensation plan, remember that people have difficulty with change. It’s easy to roll out a new plan and not have your CSMs change their behavior. There is an argument to moving towards short term goals versus those that are more long term. By focusing more on shorter term changes, CSMs are better equipped to adjust their behavior. 


Tips brought to you by: 
Craig Chiofalo, Vice President of Customer Experience, CallRail  

  • Revenue growth and certifications are two areas that can be leveraged when developing CSM compensation. These clear-cut goals leave little to the imagination and ensure that all team members are on the same page 
  • When making changes to compensation plans, having at least a little change is a great idea – oftentimes these small adjustments can take the form of stretch goals. Likewise, it’s a lot easier when CSMs can tie compensation to companywide adoption goals. It’s important for members of a Customer Success team to know how they fit into these goals, and what impact then can make when it comes to achieving these goals.  

 

4.) Tips for Building Out a Customer Success Playbook 


Tips brought to you by: 
James Scott, Associate Partner, SuccessHacker 

  • Oftentimes Customer Success Playbooks fit into two ends of a spectrum – at one end is no playbook – everyone just does the best they can. But at some point, you need automation and consistency. On the other end many organizations create a playbook with too much content that is not easily absorbed. A playbook that leaves CSMs drowning in content is just as harmful as having no playbook.   
  • When building out your playbook, keep it simple! Maintain a select number of workflows that have the biggest impact. This is the best starting point when creating your playbook. Another consideration is where the playbook is hosted – letting it sit in a Google Drive or similar location does not typically encourage use. 

 

Tips brought to you by: Craig Chiofalo, Vice President of Customer Experience, CallRail  

  • Ensure you really think through your plays when building out a Playbook. This isn’t just a one-time process… you can’t just implement and think you’re done. A successful playbook is one that is future looking and is consistently updated. 
  • Building a Playbook can seem daunting but it’s best to keep things simple. It’s easy to pile in lots of workflows or other criteria. Just remember that these won’t answer every question that your CSM has. Leverage your CSM’s sentiment and instincts. By segmenting each customer group, you can get your team attuned to each account’s needs (product focus, usage etc.)  
  • Build out your Playbook early- it’s so much harder to do so when your team is busy. Always be documenting your processes and tracking events that you may have not tracked priorA successful Playbook is always thinking towards the future. 


Huge thanks to our co-hosts of the event, Craig and James! We hope you found these expert tips to be as helpful as we did. Stay on the
lookout for our next RYG |Leadership Hour in your area! 

Learn More About RYG


Upcoming Webinar

How Customer Success Can Catalyze Customer-Centric Change

Wednesday, April 10, 2019, 1:00 – 2:00 PM EDT

Customer-centricity is a term that gets bounced around, but what does this really mean and how can customer success teams contribute to their organization’s CX evolution? Julia Ahlfeldt breaks down what it takes for an organization to truly put the customer at the center of their business. Emphasizing CX within the B2B context and the role of Customer Success teams in driving change, this webinar will: 

  • Teach you about the key aspects of customer-centric business practices (e.g. organizational accountability for customer experience, Voice of Customer feedback loops), with examples of best practices 
  • Empower team members to understand where their organization stands on the CX maturity curve, and clarify what it takes to progress
  • Provide practical tips and suggestions that CS teams can implement to catalyze customer-centric change 

Speaker: Julia Ahlfeldt, Certified Customer Experience Professional 

 

Register Now

 


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Expert Tips from Customer Success Leaders appeared first on ChurnZero.

TrustRadius Announces ChurnZero as a 2019 Top Rated Award Winner in Customer Success Software

Trust Radius - Top Rated - Customer Success
TrustRadius Announces ChurnZero as a 2019 Top Rated Award Winner in Customer Success Category

Dust off your suits and party dresses —ChurnZero has won another award! We’re excited to announce that ChurnZero has been awarded a 2019 Top Rated Customer Success Software by TrustRadius.

TrustRadius - Customer Success - Top RatedChurnZero, the experts in fighting customer churn, today announced  TrustRadius has recognized them as a 2019 Top Rated Award Winner in Customer Success Software.

Since they launched in 2016, the TrustRadius Top Rated Awards have become the industry standard for unbiased recognition of the best B2B technology products. Based entirely on customer feedback, they have never been influenced by analyst opinion or status as a TrustRadius customer.

“Churnzero has earned a Top Rated Customer Success award from TrustRadius based entirely on customer feedback,” said Megan Headley, VP of Research at TrustRadius. “Reviewers on TrustRadius frequently highlight Churnzero’s customer profiles, customer segmentation and health-scoring, and integration with Salesforce.”

With a TR Score of 9.2 out of 10, and with great customer support and high recommendation scores from TrustRadius users this award exemplifies the commitments ChurnZero has made to fighting customer churn.

“There is nothing more satisfying that winning an award that is built on the reviews and opinions of the customer,” said Abby Hammer, VP of Products at ChurnZero. “We believe our future is built on customers finding success in using our platform. The TrustRadius Top Rated Award affirms the efforts we’ve made thus far.”

To learn more about TrustRadius Top Rated awards, check out the TrustRadius scoring criteria breakdown.

“Our Customer Success and Support teams use ChurnZero to guide our customers through an onboarding process and help to maintain the ongoing relationship. Previously, we had no visibility into which customers needed our attention, and ChurnZero’s analytics give us just the visibility we need.”

–  Director Training and Support | Workzone| Read the full review here

Check out more ChurnZero reviews and ratings on TrustRadius.

 

About ChurnZero:

ChurnZero helps subscription businesses fight customer churn. Its software solutions allow businesses to understand how their customers use their product, assess their health and their likelihood to renew, and give businesses the means to personalize the customer experience through timely and relevant touchpoints. 

 

About TrustRadius:

Established in 2013, TrustRadius has become the most trusted site for B2B software reviews. Each month, about 400,000 B2B technology buyers use over 168,000 verified reviews and ratings on TrustRadius.com to make informed purchasing decisions.

 

The post TrustRadius Announces ChurnZero as a 2019 Top Rated Award Winner in Customer Success Software appeared first on ChurnZero.

How Best to Create a B2B Customer Survey

Customer Success SurveysThis is a guest blog post by Gaetano DiNardi from Nextiva. 

How Best to Create a B2B Survey


You may think when looking for clear feedback from clients in the B2B sphere, it can be simple enough to directly ask for an assessment of the products or services you are providing. After all, the people you are interacting with have usually been in on many back and forth conversations with you regarding your relationship, service or product.

However, the direct approach of just inquiring about what a client thinks of how things went in interactions is not very organized. It can put someone on the spot and result in a general answer that doesn’t serve you, your client, or the evolution of your service or product. With that in mind, it is generally more useful to conduct a formal survey.

So, even if you are working hand in glove with a client on a regular basis, the formal customer survey can be deployed to great effect, garnering answers you never thought about, and identifying pain points or positive reactions that your clients may not have revealed to you otherwise.  

This may be because a client simply never gathered the thoughts about your service that the right questions will elicit of because a more formal setting makes them feel more comfortable about opening up.

Begin with the End

The most crucial part of creating a survey is to consider what results you are anticipating. You want to try to garner measurable feedback as well as useful commentary on how well your service is fulfilling client needs.

Are you looking to enhance ways of marketing your products? Checking in on customer service objectives? Focusing on customer retention? Your objectives must be clear and focused, while you may want a number of outcomes from a survey, be sure to pick one or two at the most as you want to make sure to be respectful of your client’s time. After all, you can always run more than one survey if you are looking to consider multiple angles.  

Methodology

While most B2B clients are likely anticipating an email survey that they can take care of at their leisure, you might want to consider other options. If your survey is short enough, you could go through it on the phone or ask clients to fill out something on paper.

While the personal connection might skew results, it is also a good way to inspire people to actually participate. Remember that while you want some qualitative information, it is usually crucial to be able to process this information in a quantitative way. For this, it is useful to use numerical rating systems in questions.

Types of Rating Scales

The main questions come from three major rating scales:

  • Customer Satisfaction (CSAT)
    Questions usually utilize this rating scale to get clients to demonstrate their level of satisfaction with a product or service. Sample CSAT questions can involve a rating of customer service, product viability, website usability, and the ability of the company to resolve any issues. Usually answers are rated from 1-5 with one being lowest and five highest level of satisfaction.
  • Customer Effort Score (CES)
    This gauges the difficulty or stress of a client to achieve different tasks successfully. This crucial metric often includes a few questions rating timely resolution of problems as well as more specific questions on particular aspects of a process.

    Was a client able to get from point A to B (or A to G if they wanted) with minimal effort? The hope is that your user experience is streamlined and if not, it’s crucial to know where users are being tripped up so you can fix it right away. The ratings generally used for this range from very easy to very difficult when assessing tasks like getting to customer service or finding the correct portal. These can then be translated to a number based system.

  • Net Promoter Score ® (NPS)
    By measuring overall satisfaction, this kind of rating system is straightforward. Usually reliant on a 1-10 scale, this is a way to get an overall view of how a client is currently enjoying your product in order to see if retention may be an issue.

    Studies show that retaining customers is far less expensive than seeking new ones, and sending surveys like this one can make sure that clients feel heard and have a greater investment in remaining with your service or product.

Create an Incentive

Honest answers can be difficult to come by. Usually people are not very motivated to take a survey unless they have had an amazing or very poor experience. Incentives like a percentage off of a follow up purchase is a great way to retain clients and, perhaps, receive more balanced answers. If you create an effective survey, the information that you collect will be well worth the investment.

Some tips for survey construction:

  • Make surveys clear and concise
  • Avoid open-ended or double barrelled questions
  • Use simple short answer prompts or allow clients to judge on a scale
  • The fewer questions the better. See how much information you can manage to get in the shortest format.

The One Question Survey

It is universally considered that the shorter the survey, the more likely you have of receiving reactions. Many companies now consider a volume of diverse opinions more important than obtaining comprehensive answers from a small group.

If you have the ability to give a survey out to a large number of people (for example, a large team of clients using your enterprise software) it’s a clever strategy to ask just one or two questions to each person (randomly chosen from a longer list). Ultimately, this has been shown to garner an equal number if not significantly more responses in total to each question coming from a much broader demographic.

If you are looking for specific ideas, Nextiva put together 60 examples of excellent and probing questions that will allow you to build a solid list for your own surveys. Make sure to start with a clear objective and to remember to respect the time of your clients in order to gain the best results.


Upcoming Webinar

How Customer Success Can Catalyze Customer-Centric Change

Wednesday, April 10, 2019, 1:00 – 2:00 PM EDT

Customer-centricity is a term that gets bounced around, but what does this really mean and how can customer success teams contribute to their organization’s CX evolution? Julia Ahlfeldt breaks down what it takes for an organization to truly put the customer at the center of their business. Emphasizing CX within the B2B context and the role of Customer Success teams in driving change, this webinar will: 

  • Teach you about the key aspects of customer-centric business practices (e.g. organizational accountability for customer experience, Voice of Customer feedback loops), with examples of best practices 
  • Empower team members to understand where their organization stands on the CX maturity curve, and clarify what it takes to progress
  • Provide practical tips and suggestions that CS teams can implement to catalyze customer-centric change 

Speaker: Julia Ahlfeldt, Certified Customer Experience Professional 

 

Register Now

 


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post How Best to Create a B2B Customer Survey appeared first on ChurnZero.

Understanding the Real Impact of Improving Customer Retention


Did you know: For every 1% increase in revenue retention, a SaaS company’s valuation increases by 12% after five years?

This was just one of the takeaways from our well-attended webinar this week on- Understanding the Real Impact of Improving Retention and Customer Success Best Practices.

To better understand the impact, we had Rob Belcher, Managing Director at SaaS Capital share benchmarking data from their eighth annual survey of private B2B SaaS companies. We also had You Mon Tsang, CEO and Founder of ChurnZero share tried and true ways to improve customer retention.

You should view this webinar on-demand to learn:

  • How your company ranks in terms of net and gross churn compared to companies with similar ACV’s and ARR
  • How to measure the impact of churn on your company
  • How to structure and compensate a Customer Success team
  • How to develop a customer health score and key customer events to track

We also had a really outstanding Q&A session with our speakers. Since we thought there were some valuable takeaways, we wanted to share the Q&A recap here.

Speakers:

Q&A Recap

Q: Can you talk about the trade-offs between gross margin and churn as it relates to LTV and CAC?

Rob: So, this is a profitability point. If you can increase retention a customer becomes more profitable. So, LTV (lifetime value) and CAC (customer acquisition cost) increase quite a bit, your profit margin increases, and you can then reinvest all those dollars back into sales and other growth initiatives that are compounding.

You Mon: I’m not a huge fan of LTV. I think the way it’s calculated can be highly manipulated. It can really fluctuate, because the denominator is churn and a little change, can really change your LTV.

What I focus on, as an alternative, is the payback period, and that is – how many months does it take for your customer to become profitable. That’s a different version of LTV over CAC.

I would say best in class companies, will spend six to twenty-four months to get payback from a customer. If you’re selling a smaller deal size, you should be at the lower end of that, and if you are selling a larger deal size, you can be at the higher end of that. And that is a straight line to profitability.

Rob: Payback period is a great one, and from talking to folks out there and other VCs and private equity firms, twelve months is a good target.  It’s especially great if you get payment up front and then know that customer is profitable from that point on.

 

Q: Do you think the percentage of spending on Customer Success is too small, especially given the thesis of this presentation and the impact it can have?

Rob: I would say there are definitely certain ways to go about it, and I think it all depends, and is why we will do a whole research report on that spending data. Because ACV is important, vertical vs. horizontal is important.

We had one of our portfolio companies with 60% of their headcount reporting up through CS, and that’s how they focused and was the culture of the business. So, it all depends on your business and how you decide to structure your team.

You Mon: I agree, this is a big, it depends answer for sure. I will say that, I think the market is changing a lot, and we’re slowly moving away from an era where new sales dominated the conversation to one where CS will.

I’ll encourage folks to think about it this way. If you’re a land and expand type of company, in other words, you sell a small piece first and then your thing is to expand, you should spend much more of your revenue on CS, because CS will be driving a lot of incremental revenue.

For example, Slack is a great land and expand type strategy. You go in with maybe one team using it, or maybe in fact you’re using the free version, so you’re getting almost nothing in terms of revenue. But then over time with Customer Marketing and Customer Success, people love to use Slack and then all of a sudden, it’s expanding. So, the initial sale is very small, and all the sale is upsell.

Now, if you are selling something like an ERP system, which is a huge decision and will change the whole company, there might not really be much to upsell, since the initial sale is so big.  So here, it’s really all about new sales. Therefore, your Customer Success has to be a smaller part, just because you don’t have much to expand later.

If I were to predict what will happen if SaaS Capital does this same survey ten years from now, my prediction would be that – the percentage devoted to Customer Success will rise but maybe by single percentage points.

 

Q: How do you go about convincing an executive team to buy into a model where it’s a more proactive Customer Success team versus a traditional reactive Customer Support team?

You Mon: That’s a great question. Typically, what people say is – who would you rather buy from? Would you rather buy from the CS person who’s been with you on the journey all the way from when you bought the product up until you saw success with hand holding the whole way, doing regular calls, making sure that you’re doing well. Basically, someone that is on your side, and when they ask for something, you’re more likely to say yes. Rather than, an Account Manager who at month nine or month ten reaches out, really just in time for the renewal, and all they do is ask you for more money with an upsell. Who would you rather buy from?

So, that’s sort of the typical thought process there. You of course would rather buy from your CS person. For that point of view, if you are trying to make the argument for CS to own expansion, I think that’s your best bet. You want to make sure your business partner is asking for the expansion.

On the other hand, there’s reasons not to do it. One of them being it is hard to find a CS person who is customer focused and business outcomes oriented and that can also ask for money. Those virtues often don’t sit in the same person, so it’s kind of hard to find that unicorn.

Rob: I think it’s a bit of chicken and the egg. If you have more products and features that you can upsell, then yes, go to your CEO and say I want to build a team that goes and sells these things.

There’s one other anecdote I would share. Generally speaking, portfolio companies, or just companies we’ve met and talked to overtime, seem to have pretty good luck with small price increases. Generally speaking, a small price increase each year, hasn’t been met with customers voting with their feet and churning out. If you make it a culture, where we increase prices by a small percent each year, and you just take that hard line. To You Mon’s point- about trying to find someone who can ask for more money, you might have success with that.

 

Q: When going through the Customer Success best practices, can you explain what the term “champion” refers to?

You Mon: Your champion is the person who either bought your product or is the person who’s really dedicated to making your product successful on the customer side. They champion your product, they love it, they expound the virtues and they work hard to make it successful. And when you lose your champion, oftentimes your product or service will go rudderless. Software requires a lot of feeding and attention and the champion is the person who is doing the gardening. So, if they’re not there, then you’re really at a high risk of that customer churning.

Some people call it POC (point-of-contact), decision maker, buyer, all of these are variations of the term champion.

 

Q: Would you recommend having CSMs complete onboarding to own the relationship from the beginning?

You Mon: This is a great question, and one we think about a lot even at ChurnZero. I think it really depends on how technical or unique each of the onboardings are. So, if your onboarding is – let me give you some training and you have these five things to do that can be fairly straightforward, then let the CSMs do it. But if your onboarding is more technical, where it requires data integration, maybe there’s some coding, a lot of change management, a lot of meetings and project management – stuff that requires specialized skills, you may need an onboarding specialist. So, it really depends on the kind of offering that you have, and the more complex the offering the more likely you are to want to split onboarding as its own thing.

 

Q: Can you go over how you calculate churn?

Calculating Customer Churn

Rob: The way we look at things is annual retention. So, we look at your total MRR, let’s call it – February of last year, and then what did they do for you in February of this year? You don’t count any new sales that happened in March through the rest of the year (that’s not retention, that’s new net adds), and you exclude churn and contraction. When you are doing net dollar retention you can include cross-sells, upsells, and price increases. If you are doing gross dollar retention, you don’t include any of that, you just remove out any churn or contraction. So, gross retention can be up to 100% but can’t be any better than 100%. You can do what you did last year, with no price increases or contractions or churn, and that’s as much as it can be. On net retention, it can be infinite with price increases, upsells and expansion. So, it can be greater than 100%.

That’s the way we look at it. If you do multi-year contracts that’s probably a more specific way of doing it. Some companies that do month-to-month contracts might track monthly churn cohorts, and all kinds of stuff like- first year versus veteran customer. You could slice and dice however you want, or whatever is useful for you. But in the end, I think it’s important for investors and your board or stakeholders to know annual retention rate.

You Mon: The last thing I would add here, is that this is not GAAP finances, so generally accepted accounting principles. You know, when I say margin and EBITA and it means the same thing no matter where I live the terms churn and retention, are not that. So, when you’re comparing churn to churn you almost have to ask each other – what do you mean? How do you calculate it? What Rob shared is actually the most common way. The industry will start to consolidate so if you’re doing something different, you’re going to be an outlier real soon and your numbers are not going to mean much.

We’re not there yet, there’s still a lot of definitions out there on how to calculate churn. Too many even. There should really only be one definitive way.

View Webinar


Upcoming Webinar

How Customer Success Can Catalyze Customer-Centric Change

Wednesday, April 10, 2019, 1:00 – 2:00 PM EDT

Customer-centricity is a term that gets bounced around, but what does this really mean and how can customer success teams contribute to their organization’s CX evolution? Julia Ahlfeldt breaks down what it takes for an organization to truly put the customer at the center of their business. Emphasizing CX within the B2B context and the role of Customer Success teams in driving change, this webinar will: 

  • Teach you about the key aspects of customer-centric business practices (e.g. organizational accountability for customer experience, Voice of Customer feedback loops), with examples of best practices 
  • Empower team members to understand where their organization stands on the CX maturity curve, and clarify what it takes to progress
  • Provide practical tips and suggestions that CS teams can implement to catalyze customer-centric change 

Speaker: Julia Ahlfeldt, Certified Customer Experience Professional 

 

Register Now

 


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Understanding the Real Impact of Improving Customer Retention appeared first on ChurnZero.

Churn Monster: Bad Fit Customer

Churn Monster #10: Bad Fit Customer 

customer churn monster bad fit
This month we are going to take a look at a churn monster that we’ve all experienced but is different than all the rest, for one very specific reason, that we will get into.

We’re talking about a bad fit customer. A bad fit customer is a customer who is unable to receive value from your product or service due to a mismatch of currents needs and offerings.

It’s inevitable with the nature of Sales, that not all deals that come over to Customer Success are going to be 100% great fit customers. So, what should a Customer Success Manager do when one of these type of customers land in their lap?

Let’s take a look at a scenario involving a bad fit customer and how we should handle this one of a kind churn monster.

The Scenario:

You get a notification that you have been assigned a new customer account. You log into your Customer Success software platform and start reviewing the account notes and details that came over from Sales.

As you are digging in you notice that there’s some missing information in the handoff notes from Sales that you would need to know to start the new customer implementation process. You go back to the Sales rep who sold the deal and ask for specifics on some of the gaps in the notes.

It’s at this time while talking to the Sales rep that you start to realize some red flags about being able to successfully bring this new customer onboard due to his understanding of how their data is structured, which doesn’t align with how your platform works.

You are worried you have acquired a bad fit customer. What do you do?

Plan of Action:

The first step is to correctly identify if this is in fact a bad fit customer. You know this is best to do as early on in the process as possible (which ideally would have been before they became a customer – but well, here we are). You want to be careful not to just jump to the conclusion that they are a bad fit when they could possibly be more of a stretch fit customer, so you set up a joint introductory call with the customer to learn more.

Your goal for this call is to be as upfront and honest as you can with the customer, so expectations are understood and both parties can make informed decisions for next steps. You are sure to have Sales also on this call to demonstrate that your teams are collaborative, and that your company cares about their success.

After a lot of back and forth with the customer and their team over the last month and a half, you come to the conclusion that the customer’s data structure is in fact a roadblock to fully implementing your solution, and the customer doesn’t seem interested in re-working their processes to try and make it work.

In spite of that, you put together a plan to help them utilize the parts of your product that they can given the development constraints and ask that they let you know if any business changes occur on their side to make you a better fit solution.

At this time, it’s safe to say- they are a bad fit customer, and you mark them as such in your Customer Success platform. This will allow you to adjust your engagement strategy with this customer to be a low-touch model where most of the communication is automated since their likelihood to churn is pretty much inevitable.

Although it is unfortunate, it is necessary to at times to count your losses and let these bad fit customers churn. It’s in everyone’s best interest as they can be a drag on growth, a waste of resources, and harmful to employee morale and industry word-of-mouth. And that’s what makes this churn monster different than all the rest- instead of turning this at-risk customer around you consciously let them go.

Follow the links below to learn about the other churn monsters we’ve covered so far and stay tuned for a new churn monster next month.

Fight Customer Churn!


Upcoming Webinar

Understanding the Real Impact of Improving Retention and Customer Success Best Practices

Wednesday, March 20, 2019, 2:00 – 3:00 PM EDT

Did you know: For every 1% increase in revenue retention, a SaaS company’s value increases by 12% after five years? Clearly churn has a big impact on a SaaS business. 

To better understand that impact and hear ways to improve retention, we invite Founders and C-Level executives to a webinar led by Rob Belcher, Managing Director at SaaS Capital and You Mon Tsang, CEO & Founder of ChurnZero. We will share benchmarking data from SaaS Capital’s eighth annual survey of private B2B SaaS companies and hear customer success best practices from ChurnZero. 

Please join this webinar to learn: 

  • How your company ranks in terms of net and gross churn compared to companies with similar ACV’s and ARR
  • How to measure the impact of churn on your company
  • How to structure and compensate a CS team
  • How to develop a Health Score and key customer events to track

 

Register Now


 Speakers:

  • Rob Belcher, Managing Director, SaaS Capital
  • You Mon Tsang, CEO & Founder, ChurnZero

             churnzero ceo you mon 

 

 


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Churn Monster: Bad Fit Customer appeared first on ChurnZero.

Is Your Customer Segmentation Too Basic?

Customer Success - Customer Segmentation

This is a guest blog post by Jay Nathan, Founder at Customer Imperative. 

Most B2B SaaS companies know that not all customers are the same. The concept of segmenting customers, and building an account coverage model based on these segments, is not a new idea. At Customer Imperative, we often see early stage SaaS companies choose the customer’s ARR value as the primary segmentation metric.  On the surface, this is logical – but is often an area where we can do better.

Customer Success is all about driving outcomes and customer experience, and tailoring those needs by customer segment. Identifying the segmentation metrics that make sense for your business is critical to unleashing the power of the Customer Success organization. Consistently evaluating your customer segmentation strategy has many benefits, including:

  • Finding opportunities for strategic upsell or cross-sell
  • Identifying revenue and customer risk
  • Aligning the organization around key pillars that represent your customer-base

 
Segmentation can also help align strategy and drive cooperation across the various parts of the organization. For example, other teams can benefit from:

  1. Creating a feedback loop to let sales know the right-customers who will be long-term successes with your product
  2. Developing more targeted customer profiles to deliver focused messaging through marketing
  3. Understanding customer traits and high priority needs to create more focused products strategy that helps the customer achieve their key jobs to be done


Over the years, we’ve found that a shared view of segmentation with a common customer vernacular helps SaaS companies move faster.

Let’s take a look at the types of segmentation that may be applicable:

 

1.) Trait-based segmentation (most common)

Trait-based segmentation utilizes readily-available demographic characteristics about your customers such as industry or company size. These data elements are often available for purchase and are often part of the go-to-market segmentation used by the Sales team.

For example, one of our recent clients had a simple segmentation: they divided their CS team between small, medium and large businesses. The challenge was that their product offered various value props, and customers subscribed in order to get multiple, discrete jobs done. Although their mix of human touch vs. tech touch was appropriate, they were missing opportunities to drive the right outcomes within deeper segments.

Benefit: Easily identifiable and allow for industry-experts to become a part of your CS-team

Risk: Assuming that organizations who share traits share the same desired outcome

2.) Needs-based segmentation

Accounts for the key use cases each customer plans to use to reach their specific desired outcomes, grouping customers who may cross traits. These needs are often identifiable during the sales cycle.

We recently worked with a customer to categorize their entire customer base into the outcomes each client wanted to achieve from using the product. Originally, the client thought that most clients centered around one use case. With a deeper dive, the client realized that while they didn’t need to change account assignment, they needed to design separate customer journeys around each customer segment in order to deliver the unique value each segment needed.

Benefit: Align the organization around outcomes

Risk: May not show the economic value driven to your organization

 

3.) Value-based segmentation

Differentiates customers by their economic value to your organization, primarily focused on growth indicators that point to ARR potential. This may include existing ARR vs. whitespace ARR, adoption levels and product attachment rates.

We often see customers spending a lot of time firefighting with large accounts that don’t have much upsell opportunity, missing the opportunity to grow entire segments where current product attachment still leaves a ton of white space. Or, in reverse, we see clients with a generalist approach to their account coverage, missing the opportunity to build executive level relationships with their largest customers with the most revenue potential. Segmenting customers into the nurture vs. grow categories helps you drive the outcomes needed in each segment and maximize revenue potential.

Benefit: Understand the revenue potential within your customer base

Risk: Does not necessarily equate to the outcomes customers need

 

As you get started, is important to create and some assumptions around segmentation and discuss cross-functionally. The best segmentation models apply some elements of each of the methods above. This typically gives us a more complete picture than any one method alone.  

Over the course of the last two years, we’ve had the good fortune to work with 30 different B2B SaaS organizations. The successful ones tend to find multiple segmentation strategies. The ability to step outside of a static segmentation allows for a more curious Customer Success organization.

 

Customer Success - Customer Imperative logo
About Customer Imperative:

Customer Imperative helps B2B SaaS businesses drive Customer Success through insights, outcomes, customer experience and customer-centric product marketing. Since our inception in 2017, we’ve helped over 30 B2B SaaS organizations retain customers and grow revenue through Customer Success. You can follow the Customer Imperative on LinkedIn.

 


Upcoming Webinar

Understanding the Real Impact of Improving Retention and Customer Success Best Practices

Wednesday, March 20, 2019, 2:00 – 3:00 PM EDT

Did you know: For every 1% increase in revenue retention, a SaaS company’s value increases by 12% after five years? Clearly churn has a big impact on a SaaS business. 

To better understand that impact and hear ways to improve retention, we invite Founders and C-Level executives to a webinar led by Rob Belcher, Managing Director at SaaS Capital and You Mon Tsang, CEO & Founder of ChurnZero. We will share benchmarking data from SaaS Capital’s eighth annual survey of private B2B SaaS companies and hear customer success best practices from ChurnZero. 

Please join this webinar to learn: 

  • How your company ranks in terms of net and gross churn compared to companies with similar ACV’s and ARR
  • How to measure the impact of churn on your company
  • How to structure and compensate a CS team
  • How to develop a Health Score and key customer events to track

 

Register Now


 Speakers:

 

  • Rob Belcher, Managing Director, SaaS Capital
  • You Mon Tsang, CEO & Founder, ChurnZero

             churnzero ceo you mon

 


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Is Your Customer Segmentation Too Basic? appeared first on ChurnZero.

ChurnZero Becomes One of the First Custom-Built Integrations on Segment

ChurZero, Customer Success Solution, Segment Integration
ChurnZero Now Live in Segment Integrations Catalog

 

Segment has just announced the launch of their new Developer Center, where developers can build and publish their integrations in a matter of weeks.

ChurnZero is proud to now be a part of the Segment Integrations Catalog as a Customer Success partner. You can check out the ChurnZero + Segment Integration here.


What Does This Integration Mean to Me?

If you are a Segment customer, you know how easy it is to get new integrations up and running. ChurnZero + Segment is the same – simply add a Destination for ChurnZero within Segment with the flip of a switch. No need to touch any code at all. 

The integration is built for Customer Success, Account Management, and Customer Marketing teams. Easily sync over your Contact/Account Event and Attribute data into your ChurnZero platform. This integration will allow you to understand how your customers use your product, asses their health, map and track customer journeys, and give you the means to personalize the customer touchpoints. 

 

How ChurnZero Works (“without Segment”)


ChurnZero is a real-time Customer Success platform that helps subscription businesses fight churn, expand current accounts, increase product adoption, and optimize the customer experience. Real-time product usage data is a central component of ChurnZero – and of proactive Customer Success teams. ChurnZero provides our customers with a variety of methods to send usage data, including a JavaScript library and an HTTP API.


Get More Out of ChurnZero with Segment

Configuring ChurnZero with Segment makes it easy to get up and running without custom code or requests to your development team. Simply find ChurnZero within the Segment Integrations Catalog, then copy and paste your ChurnZero App Key into the Segment Settings UI to give ChurnZero access to your Segment data. Once you’ve done this, ChurnZero will start tracking the Events and Attributes that are relevant to your Customer Success team. ChurnZero + Segment gives your Customer Success team real-time insights into the behavior of your customers with zero effort from your development resources.  


What Does the ChurnZero Integration Look Like?


Account Profile

ChurnZero, Customer Success Solution, Segment screenshot 1
Analyze usage trends at the individual contact and overall customer level. The customer’s ChurnScores summarizes their health based on customized factors including usage, engagement, and ROI. 


Journey Report

ChurnZero, Customer Success Solution, Segment Screenshot 2Track customers’ progress in real-time as they move through various stages of the customer lifecycle. 


Play Report

ChurnZero, Customer Success Solution, Segment screenshot 3Automate tasks and communications based on customers’ engagement metrics.

If you are looking for more integration information please check out the documentation here:

This integration requires subscriptions to both ChurnZero and Segment. Learn more and get connected today!

The post ChurnZero Becomes One of the First Custom-Built Integrations on Segment appeared first on ChurnZero.

Churn Monster: Cheater

Churn Monster #9: Cheater Customer

customer churn monster cheater
It’s time to talk churn monsters again. This month’s customer churn risk is a cheater. A cheater is a customer who is actively being wooded by one (or maybe even more) of your competitors in attempts to steal their business.

Of course, competition is always going to be a thing in any marketplace, but sometimes we can get so wrapped up in the bubble of the company we work for that we become naive and blind to the outside world and the competitive landscape.

Knowing and understanding your competition is a critical step in executing a successful go-to-market strategy. If you are not aware of who the competition is and knowledgeable about their strengths and weaknesses, it’s likely that another vendor could enter the picture and provide a competitive advantage, such as product offerings at lower prices or value-added features. Identifying your competition and staying informed about their products and services is the key to remaining competitive in the market and is crucial to customer retention and the survival of any business.

So, let’s take a look at scenario involving a cheater and how you might be able to save that customer from switching to a competitor and churning.

The Scenario:

You have been working with this one account for almost two years. They signed on with a two-year contract, that included a discount. During this time, they have pretty regularly been using your product. And you really don’t hear much from them in terms of customer issues or complaints. You would say they are pretty satisfied as a customer.

You have a call scheduled with them, and during this time you remind them that they have a renewal coming up in a few months.

A week later, your main point of contact starts sending you these one-off questions via email about their subscription and you are starting to worry that they might be talking to competitors and comparison shopping. What do you do?

Plan of Action:

First you log into your CS platform and take a look at their customer health score. Their account as a whole is currently in the green. You dig a little deeper to see the main user has only ever given an 8 on the Net Promoter Score (NPS) surveys that have gone out over the time of their customer history. This indicates that she is a passive customer. You know that passive customers are usually open to alternatives, price sensitive, and not particularly loyal.

Knowing this, you decide to give your contact a call directly to answer her subscription questions. While on the phone, you also try and tease out the reason behind the questions. It’s at this time she reveals that they are looking into other alternatives before they make a decision about the renewal. You ask her what other platforms they are looking at. She tells you, and you assure her you want to work to retain their business and offer to provide her some information to help in their decision process.

Luckily, your Customer Success and Product team recently did competitive intel and created a set of battle cards for each of your main competitors. You then take the list of the competitive options that the customer provided you and put together a presentation of how you positively stack up against the other vendors they were considering.   

You also go back to your notes in your CS platform from when the client went through on-boarding to reference what their goals and challenges were before becoming a customer. You then highlight in the same presentation, how you have helped them overcome those initial challenges and worked towards their goals.

And lastly you make sure to emphasize your unique value proposition for them in the presentation to really drive home why it would be a poor decision if they decided to switch to a competitor.

You set up another meeting with the customer to go over this presentation. While in the meeting you were able to answer all their questions and you left feeling hopeful about their renewal.

You had told them you would follow-up in a week to see if there was any other information you could provide. On that call the client tells you they have decided to renew with another two-year contract. She said that it was clear that you value their business and have decided that your company would be the best option for them continuing forward.

That was a close call with having the customer churn and switch to a competitor. But in the end, you took it as an opportunity to remind them of exactly why it’s the right decision to remain a customer, and you think the relationship is stronger because of that.

Follow the links below to learn about the other churn monsters we’ve covered so far and stay tuned for a new churn monster next month.

Fight Customer Churn!


ChurnZero Resource – ROI Calculator

As we strategize for the year ahead, it’s time to make sure you are investing for your Customer Success team wisely.

This calculator simulates the potential return on investment that you could realize by implementing ChurnZero’s customer success platform.

Enter your current metrics now to calculate your potential returns.

Calculate ROI


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Churn Monster: Cheater appeared first on ChurnZero.

Customer Success Takeaways from SaaStr 2019

Top 10 Customer Success Takeaways from SaaStr

 

Last week we attended and exhibited at SaaStr Annual in San Jose as a gold sponsor. It was a huge uniting of the global B2B SaaS community. 

We had some great conversations in our booth about scaling in SaaS and the role that Customer Success should play in driving that growth. 

It was also fantastic to meet so many Customer Success leaders at the event and see numerous Customer Success focused talks included in the session programming. 

In the world of SaaS there’s the underlying truth that Customer Success plays a key role in the recurring business model. Given that, we wanted to share with you some Customer Success takeaways we picked up while at the conference.

1.) CSM Profession is Exploding!

2.) There’s More than Meets the Eye (or Ear)

3.) Focus on Both the User & the Chooser

4.) Focus on Your Customers, Not Yourself

5.) Key Product Metrics to Track

6.) CS Tips to Scale

7.) Listen for Opportunities to Build Lifelong Fans

8.) Work Backwards from the Customer

9.) Customer Success Question to Answer 

10.) Have Empathy for the Customer in Everything You Do

 See you next year SaaStr!


ChurnZero Resource – ROI Calculator

As we strategize for the year ahead, it’s time to make sure you are investing for your Customer Success team wisely.

This calculator simulates the potential return on investment that you could realize by implementing ChurnZero’s customer success platform.

Enter your current metrics now to calculate your potential returns.

Calculate ROI


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post Customer Success Takeaways from SaaStr 2019 appeared first on ChurnZero.

2019 Customer Success Themed Grammy Playlist

In honor of the 61st Annual Grammy Awards that are airing this Sunday evening, we decided to pick some of the songs from the nominations list and create a Customer Success playlist to help power you through your day.

We hope you enjoy!

The Middle – Zedd, Maren Morris & Grey
Nominated for Record of the Year

As Customer Success professionals we’ve all had moments where we seem to be at our wits end with a client trying to resolve an issue or even with an internal team you are trying to work with to get something accomplished on the client’s behalf. It’s even more frustrating when the person you are trying to work with doesn’t seem to be doing their fair share in working towards a solution.

So, this song goes out to all of you who have ever wanted to say to the other person…

“Why don’t you just meet me in the middle?
I’m losing my mind just a little,
So, why don’t you just meet me in the middle?”

 

Say Something – Justin Timberlake featuring Chris Stapleton
Nominated for Best Pop/Duo/Group Performance

According to CX Solutions, for every customer complaint there are 26 other unhappy customers that have remained silent. This is a profound insight, as it reminds us that a good number of customers don’t actually communicate to businesses that they are unhappy – they just leave.

So as CSMs we should encourage our customers to always – say something!

The bottom line is, don’t assume your silent customers are happy. Keep a close pulse on their customer health and sentiment.

 

Better Now – Post Malone
Nominated for Best Pop Solo Performance

We don’t want to admit it, but for whatever reason, sometimes customers do decide to cancel their subscription and stop using your product.  This not only hurts your book of business but it’s also hard not to let it get you down.

Even though the customer might have left thinking that they will be better on the other side, either with a competitor or maybe not even using another solution all together, that’s not always the case. So, don’t give up hope.

Before the customer churns, make sure it’s known that you are sorry to see them go and would like to work together in the future. Then, give it some time. Let them see what life is like without your product or service. You never know, given the right circumstances that customer might be ready to boomerang back to you.

 

Four Out of Five – Arctic Monkeys
Nominated for Best Rock Performance

In this song, the singer jokes about getting reviews of four stars out of five. It’s an ironic nod to critics who will never give you a perfect 100%.

The same holds true in the Customer Success world.

No matter what you do, you will always have those customers who will give you an 8 or 9 on a Net Promote Score (NPS) survey, because, they will say there is always room for improvement, even if they are satisfied customers.

But the truth of the matter is, your company is never going to please everyone, so just aim for satisfying the majority of your customer base and you will succeed.


ChurnZero Resource – ROI Calculator

As we strategize for the year ahead, it’s time to make sure you are investing for your Customer Success team wisely.

This calculator simulates the potential return on investment that you could realize by implementing ChurnZero’s customer success platform.

Enter your current metrics now to calculate your potential returns.

Calculate ROI


Customer Success Around the Web

Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

The post 2019 Customer Success Themed Grammy Playlist appeared first on ChurnZero.