So your main contact just left...
Daniel Hoesing
Helping SaaS Companies Scale ARR with Actionable Data and proven Customer Success Strategies | Powered by the Predictive Customer Behavior Index? | Guaranteed ROI
Recently I asked a Customer Success leader for their top 5 churn reasons. The top reason was “Main Contact Turnover”. If this were an in person presentation instead of an article, I’d likely see some nodding heads in the audience along with a few shaking side to side. That's because churn reasons are not standard across organizations, but that doesn't mean they shouldn’t have standards!?“Main Contact Turnover” is a common challenge that almost every Customer Success department must manage - but how???
Before we address "how", let’s step back and identify the purpose of the exercise. The purpose for assigning churn reasons in the first place is to identify the root cause reason the Customer stopped purchasing or failed to renew a product or service. (Presumably so you or your company can do something about it). But it must be the root cause, not the symptom, otherwise there is no value in the information.??
Few if any Customers leave for the competition because they like the competitor's name better
Here is an example: In most cases, Customers that leave your company leave for a competitor, but is the competition the root cause? Of course not, the REASON they went to the competition is the root cause. Few if any Customers leave for the competition because they like the competitor's name better. Better functionality, more value for the price, integration, future capabilities, better service, etc. These are reasons Customers leave AND go to the competition. They are also reasons that?can be influenced, if you know about them. The competitor IS relevant information and should be captured at every opportunity, but it isn't THE reason the Customer left. Once you have the root cause, it becomes a question of whether you can influence it or not.????
it's what happens next that matters...?????
Now back to the challenge of Main Contact Turnover. There are few things CS controls LESS than the employment status of the main contact. In almost every case, it has nothing to do with CS or your company! Plus, the main contact leaving doesn’t terminate the commercial relationship, it’s what happens next that matters! What happens next, depends on how prepared you are. “Main Contact Turnover” is not an effective churn reason because it's not the reason Customers leave. It IS, however, a serious RISK of Customer churn (an event that precedes churn but may not be the cause.)?
Below is a list of common variables to consider capturing in your CRM. This list can be flexed up or down based on the value or needs of the client.??
When did you learn of the departure:
What is the coverage of the account*?
Where is your former client going?
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What is happening with the new role.??
Replacement identified: (this may come months later so you’ll want to measure the length of time Customers are at risk- ultimately you want to learn, and if necessary, influence, the intentions your new contact has for your product)
Capturing the information above allows you to manage this type of risk the same way across Customers based on predefined steps that you improve over time. It's the only way to drive consistency across multiple CSMs. If you don’t have CSMs, it's even more important to capture this data so you are prepared for the day you do.???
Companies that follow the Predictive Customer Behavior Playbook? standards, have specific action plans in their CRM that outline the steps and the data to capture when their main client leaves, based on the Customer segment. This data helps standardize the response to this common challenge across your company and gives a much deeper insight into the health of your Customer. It helps develop better tactics to save Customers and improves your effectiveness at retaining revenue. You can also identify the stages of risk for each of your enterprise Customers (and CSMs) by associating a % complete next to each stage of the at risk action plan in the CRM. Obviously this amount of effort must coincide with the financial value of the Customer.??
Just imagine being able to report at your next executive meeting:
Just imagine being able to report at your next executive meeting: “Last week we saved 2 Customers from Main Contact Turnover risk worth $43,000 because the new contacts completed onboarding and are now real fans of our product. We have 12 Customers currently at risk because of Main Contact Turnover, they are worth a combined $250,000 in ARR. The average time at risk is 1 month and we are 60% complete with the recovery action plans. Based on the progress so far, we believe we can save $190,000 of the revenue at risk, while $60,000 remains at a high risk of churn. Are there any questions about specific accounts?”???
THIS is how Customer Success actively reduces Customer churn by becoming predictive of Customer behavior. It also has the added benefit of quantifying the value of Customer Success to the rest of the organization!???
About the author: Daniel Hoesing is the creator of the Predictive Customer Behavior Playbook? development process, a tool used to create and implement Customer Success playbooks, policies and procedures for scaling SaaS, ecommerce and subscription based organizations with limited Customer Success infrastructure.?Daniel also created the Predictive Customer Behavior Index? assessment, a tool used in assessing and improving Customer Success capabilities for more established organizations.?Both tools regularly produce a $4 to $1 return within the same year!
Daniel is an accomplished leader with over 20 years experience in management & leadership; working in the SaaS B2B industry for over 12 years for fortune 100 companies as well as pre-equity startups. Predictive Customer Success identifies gaps in current capabilities and reduces the complexity by narrowing the focus and providing a list of prioritized projects, as well as a roadmap of future capabilities to consider as the organization scales.?This critical information is not only used to produce outstanding customer loyalty, but to also provide key customer insights companies need to shape their future. Results are guaranteed!?Please reach out to him for more information Daniel Hoesing on LinkedIn
Co-Founder, Waypoint’s TopBox for B2B Customer Engagement | Author of Definitive Book on NPS for B2B | Helping Companies Accelerate Revenue Growth
2 年This is a great reminder of the importance of "multi-threading" in an account. I think we'd agree that CSMs need to engage/strengthen relationships with ALL key stakeholders in a given account (customer engagement technologies are a great way to scale this important activity) proactively to avoid the inevitable "loss of key contact" since people change jobs "all the time." But if proactive coaching and relationship management isn't in the cards, please follow Daniel Hoesing's process.
CX & BPO Advisory Specialist @ OUTSOURCE CONSULTANTS "Strategist for Success!" - #callcenteroutsourcing, #callcenterservices, #businessprocessoutsourcing, #outsourceditsupport
2 年Read and enjoyed/learned from your article... would like to connect on LinkedIn.