This is our first guest blog post in our ‘View From The Top’ Series which brings together top C-Suite leaders and investors in the software industry to share their stories and elaborate on why investing in customer success has become a must-have for any business today. We’ll be hearing how these leaders have invested in customer success to help their entire organization increase revenue, reduce churn and drive business outcomes.
Churn is often considered a lagging indicator. What indicators do you recommend companies examine as an early warning detection for customers’ happiness or dissatisfaction?
Drew: First of all, I would say get focused on a few indicators. There was actually one case where my team went after a full analysis of two years’ worth of churn and came back with 30 indicators. Well, that’s great, but you need to be able to focus. We tried to whittle it down to four or five key ones, and the ones that seem to really matter most and be the best predictors. First and foremost, if you have a change in leadership or your champion leaves, that should be a red flag and trigger your customer success program into motion because do not assume that the new contact or leadership understand the value that you are delivering. Do not assume anything at that point. You want to make sure that you properly engage around that.
Secondly, I think it’s going to really depend on which service you’re in, what type of services that you’re delivering, but I think if you are in a system where you have a client portal, a client interface or something like that, then you’re going to want to track those things that actually give you an indication if there is usage or engagement with the service. You need to be able to answer, what are the key touchpoints for value delivery, and are those touchpoints actually occurring? That’s what you should be measuring.
I would say that those are definitely the top two that I would do before you do anything else.
It can be nearly impossible to avoid at least some amount of customer churn as a company scales. For example, they might be moving upstream or perhaps their ideal customer profile changes over time. So what advice do you give to other leaders in this position where your churn rate might be going up as you’re shifting strategy to build a bigger book of business?
Drew: First and foremost, I think there has to be a sense of urgency around retention. Retention has to be something that’s driven from the top. From a leadership perspective, if you aren’t concerned about churn, then the rest of your organization is not going to be concerned about it.
Just because you have had a great retention rate historically, don’t assume that the direction that you’re heading doesn’t mean that you’re not going to have a flare-up. The way we talk about it now at InteliSecure is that you never have solved for retention. You always have to be focused on customer experience, customer value delivery, and if you’re not, it can sneak up on you and bite you. In other words, you have to be proactive.
“You always have to be focused on customer experience, customer value delivery, and if you’re not, it can sneak up on you and bite you. In other words, you have to be proactive.”
As you move down the strategic path that you have chosen, and sometimes these paths, they can be directly adjacent to your history with your existing clients, your existing customers, sometimes they are a significant shift. And obviously the more of a shift that there is, the more aggressive, the more intentional, that you have to be around the retention mentality.
My advice from a leadership perspective is to make sure that the retention conversation comes first in your organization, in your meetings, in your KPI discussions. Don’t let the priorities of the new strategy, the KPIs around the new strategies, such as bookings, such as logos, such as funnel metrics on the sales and marketing side distract you or allow you to get ahead of yourself. Retention is key. Churn kills. You’ve got to be focused on the value delivery for your clients, first and foremost. If you don’t, you’re asking for trouble.
“Retention is key. Churn kills. You’ve got to be focused on the value delivery for your clients, first and foremost. If you don’t, you’re asking for trouble.”
Stay tuned for more interviews in our ‘View From the Top’ Series to hear why other organizations are investing in customer success. You can also check out the full recording of Steven’s interview here. Have questions about retention? Head over to our Success Masters Community to chat with like-minded C-Suite leaders.