The Best Time to Plant a Tree
There’s a Chinese proverb that goes something like this:
“The best time to plant a tree was 20 years ago. The second best time is now.”
The same applies to Customer Success.
Picture This:
You’re a SaaS B2B company selling to Enterprise markets. You’ve been in business 8-10 years, and every year you enjoy huge growth in sales and top-line revenue. You were first to market with a laser-focused offering that really appeals to your ideal customer. The sun is shining, and you are making hay.
Step One: build a complex, enterprise product.
Step Two: customers flock to you.
Step Three: profit.
Since you have dominated your market space from day one, you’ve never experienced a retention challenge - you believe your company is bullet-proof, and you believe you’ll never see the day when your retention is less than 95%.
Then “something” happens. This “something” could be
Market downturn
New competitor enters your space
Natural disaster
You get the idea. These are things you can’t predict very well, and certainly things you can’t control.
Suddenly not only are your new sales down, which is tough enough on its own, you find yourself faced with a drop in retention rates at the same time. Overall company revenue is plummeting, you’ve cut costs to the bone, and the Board is breathing fire. Since everyone loves new sales, you pour what available funds you have in to demand generation and sales efforts, trying desperately to sell your way out of this spiral.
But as we know - sometimes with the benefit of hindsight - trying to sell your way out of a retention problem is like pouring water into a leaky bucket. Sometimes even a sieve.
What Can You Do?
Hire 25 Customer Success Managers to beg your customers not to leave?
Offer huge discounts on renewals? Hey, next year is a problem for Future You.
Turn your Sales Team into Customer Success Managers?
Spend 90 hours yourself on each and every account that threatens to churn?
The truth is, as an established company it may be very difficult to get back on track. Over the years, you’ve been ‘training’ your customers not to expect any engagement from your company until it’s time to ask for payment. You have a sophisticated product, but your customers have always been willing to pay for professional services so there was little investment in simplification or DIY. The social support was there, so there was no reason to suspect that your favorite customer wasn’t actually using your platform at all.
You didn’t plant a tree 20 years ago. But you can plant one NOW.
Three Things To Do NOW:
1. Get data. Rely on it. Use it to drive your decisions around investments.
Reliable data is not a luxury. It’s essential for your company to see what’s happening in and around your product every day. Have a feature that no one uses? Sunset it to save costs and reduce platform bloat. See a customer with declining platform use? Reach out early and see how you can assist them. Got churn? Dig in to see exactly why each customer decided to non-renew.
2. Segment your customers, and engage in appropriate ways.
It’s nonsensical to try to be all things to all customers all the time, and chances are they don’t want you to, either. Look at the characteristics of your customer base, identify patterns (using data!), and define logical tiers. Partner 1:1 with your Champions in key accounts, partner with Account Execs to reach mid-tier accounts, use broad-reach engagement methods to scale across all segments.
3. DO NOT ignore your brand new customers!
Pull out your trusty Customer Journey Map - or make one, if you don’t have one! - and take a hard look at the experience your customer has in the early days. The transition from Prospect to Customer is crucial, and the way your company supports them during implementation and adoption may well define the entire relationship. If you want those new customers to stick around, you have to ensure they quickly and painlessly realize value with your offering.
Need help plugging the holes in your Customer Retention bucket, and planting the seeds of renewal? We’re here to help!
