The ABCs of Customer Success

As far as SaaS companies are concerned in late 2017, one of the most important topics that we could cover is the idea of customer success. By improving customer success rates, businesses are far more likely to see financial success. I like to think of it like this – Customer success leads to retention. Retention leads to revenue.

So how is customer success achieved? First, let’s talk about something a little less fun…customer churn. Customer churn (when a customer cancels their service) occurs at every stage of business. When a company works to reduce their customer churn rates, they are also likely doing the very same steps to increase their customer’s success rate.

Many startups will focus on closing large enterprise clients. This is understandable. Enterprise clients offer more stable cash flows, glowing references, and more business opportunities for scaling and growing services. However, SMBs (small to midsized businesses) matter just as much. For starters, getting smaller clients is much more manageable with automated processes while enterprise clients are more expensive to onboard.

The essence of customer success is to work on customer retention to reduce customer churn, whether that customer is an enterprise client or a small SMB. In this article, we’ll take a look at some ways of achieving customer success over the lifetime of their subscription.

“H” is for Handoffcustomer handoff

The smaller the company, the less hassle the first handoff is. If your company is relatively smaller, then it is likely that the person that recruits a customer is also their primary point of contact with the company over the lifetime of their subscription. If this is the case, there is no problem. However, it isn’t always so, especially for larger companies. Usually, the person who recruited the client hands them over to a customer success management agent, and they become the new client from then on. It is essential in such circumstances to inform the client of this change so that they do not experience any confusion.

There are a handful of important factors to consider when passing a client or lead over to another team member: who will be working with the lead, the size of the lead, the possibility of a larger team working with the particular client, and so on. Make communication a priority for your team to cover any gaps in the process.

“C” is for Champion

Have you ever worked with a customer who just gets what your company does? They might even love the service you offer and are happy to explain it to everyone they know. A customer champion is a person on the other end of a business deal that understands your products in and out and can easily vouch for it.

Customer champions understand the most fundamental aspects of your product as well as the benefits of the service you offer. Customer champions will also typically be excellent communicators.  That is why they are so valuable to the work you are doing. Having a customer champion isn’t particularly difficult either. All it requires is communicating with someone who always has an ear on the ground and whose colleagues find easy going and approachable.

“T” is for Trial

This point is particularly important for large enterprise clients. Say you have a free trial for your product for 30 days. Your smaller clients will be fine with this trial period. Your enterprise clients, on the other hand, will typically see it as only the beginning.

By the time the trial period is over, larger companies will only be beginning to draw up a blueprint for how they will integrate your product into their systems. During the trial phase, your client will likely incorporate your product into a more massive project. Remember, most clients today are employing a whole host of different digital sales and marketing products, only one of which is your product. They might also be pursuing other strategies such as emails, new sales staff, etc. It’s crucial to keep your product at the top of their list of priorities while also keeping things simple.

The trial phase should be split into two phases. The first is to define everyone’s roles. Have a discussion with the client about what to expect. Also, you need to have clear rules for how to get the top brass at your client’s company informed of crucial role changes and technical tweaks whenever you plan to grow the account. The second phase is creating a blueprint for the customer. This plan will detail the workflow, making it easier for them to follow it.

“A” is for Adapt

There are many changes that could take place at your client’s company. These vary in size and impact. For example, your customer champion might switch from their current position to a different one. If such an instance arises, you should move quickly to recruit a new customer champion.
Another form of change is one that affects relevance. Your customer might discover a new product or change the way they do things, impacting the significance of your product to them. Do you still offer enough benefits to justify them paying you for your services? champion

Remember, your product needs to give more value than it takes. There will typically be regular cost-benefit analyses conducted on your product to see if it’s worth keeping. In such cases, you should be prepared to defend your product and show why it is still a great proposition.

“G” is for Growth

When an enterprise client starts out with your product, they’ll usually apply it to a specific unit of their business. If they understand the benefit of your product and want more of it, scaling up becomes a point of discussion. This is the perfect opportunity for you to grow an enterprise account and bring in more revenue. Most of the hard work building a relationship and earning trust will have already been done. Make sure to plan and act as quickly as possible before the opportunity disappears.

“S” is for Success

There are so many factors to customer success we could probably have a paragraph for each letter of the alphabet. It’s important to learn from each experience you have with a client so that, as your company and processes grow, you learn what works and what to avoid along the way. Remember these primary factors to helping your customer be satisfied, and you will be well on your way to success too!

 


Understanding Why Some Customers Leave

Understanding why some customers leave is something that many businesses struggle with. Companies small and large have been looking for answers on what they can do to reduce their churn quickly to unlock significant revenue potential. As Benjamin Franklin once noted, “An ounce of prevention is worth a pound of cure.” This idea is the foundation of what reducing churn is all about— preventing small issues from turning into reasons for cancellation.

For the sake of this article when we refer to churn, we will be referencing customer churn rate or the pace in which customers are leaving your book of business. This likely effects your company but if you are a SaaS provider, then this should hit especially close to home. So how can you reduce your customer churn rate now? For starters, you must understand the customer experience from start to finish.

It’s time to get tuned into your customer lifecycle. If your lucky enough to have customer success managers within your organization, speak with them about the signs of a customer who is about to cancel your service. These are the people you should be learning from to better your chances of keeping customers paying for longer. Signs of churn can range from being late on payments, browsing the terms of service page on the application, calling a help number, or even the age of the account. Learn which signs of churn are most important in your business and address them as soon as possible. If a CSM is not readily available for you, use your data to determine common traits of customers who have canceled your service. By monitoring the symptoms of churn, you can better address customer needs before it’s too late.

why-do-customers-leave-a-company-2017Consider this, according to SuperOffice.com 68% of customers leave a service because they feel as if the company does not care about them or their needs. One thing you can be doing right now is reaching out to your customers to understand what they expect from your service. By doing this, they will know that you care about their needs being met and will likely stick around.

caleb-jones-131206We live in a data-driven world, and responsible decision makers understand the power of decisions backed by data. By following and tracking your customer experience from start to finish, you better understand common trends and better address concerns. Here at VisualCue, we offer the tools to see in real-time which customers need attention. With limited training, you and your team can find the patterns in the data necessary to meet your customers’ expectations. Happier customers lead to less churn which leads to more monthly recurring revenue in the case of a SaaS company.

No matter the industry you are in if you are running a business than it is safe to say that you are concerned with keeping customers happier for longer. Reduce your churn rate by understanding the customer experience and look for patterns in the data. As you analyze the data, you will begin to recognize commonalities between the unhappy customers. Find these trends and address them because in the end, if you don’t take care of your customers, then I am sure someone else will.

 


What can you do about customer churn?

Although 96 percent of businesses fail within ten years, some companies manage to become successful enterprises. Companies like Apple, Berkshire Hathaway, and General Electric manage to thrive even though they face considerable trials—but how? What are these companies getting right that so many others are getting wrong? They keep clients onboard.

interview deskThese companies get a few other things right, too, but when it comes to customer retention, they refuse to leave a single box unchecked.

With a five percent reduction in churn leading to a 25 to 125 percent increase in profits, it should come as no surprise that your company can benefit significantly from reducing its churn rate. And with new information and customer retention software that can help decrease your churn rate today, there’s no excuse for not improving this aspect of your business.

Below, you’ll find more information on customer churn, its importance and how you can retain more customers.

What is Customer Churn?

The software as a service (SaaS) industry is primarily responsible for making churn a noteworthy metric. Churn is equal to the number of customers you lose every month divided by your total overall customers. For example, if you have 100 customers and you lose three, your churn rate for the month will be three percent.

Acceptable customer churn rates often fall somewhere between 10 to 20 percent churn per year. Churn standards often vary by industry. For example, SaaS rates are considered good if they’re below seven percent.

One other thing that’s important to note about churn is that the percentages as mentioned above aren’t universally accepted. Although a five percent churn rate might be acceptable to you as a business, venture capitalists and other funding parties prefer churn rates of around two percent a month.

Finding Your Customer Churn Rate

As mentioned above, the most basic way to calculate customer churn is to take the number of subscribers or customers you lose every month and divide that number by your total customer base. Some companies will claim that they have a negative churn rate because they add more customers than they lose every month, but industry experts suggest that businesses avoid this method because it often provides a less comprehensive picture of their consumer retention success.

mrr-churn-analysisChurn can also be calculated with revenue as the baseline. With this approach, companies first derive their monthly recurring revenue (MRR). Then, they take the amount of their canceled MRR and divide it by an interval of time multiplied by total MMR at the beginning of the period.

How to Reduce Customer Churn

There’s no hard-and-fast rule when it comes to what you should and shouldn’t do to reduce churn. Contemporarily, large businesses primarily use the following techniques: they give their customers fewer chances to terminate their relationship, they conduct a survey, or they invest in a customer retention software.

Whether you know it or not, you’ve probably been subjected to the first retention strategy. Companies that enlist this technique start by offering a free trial of their product or service. Once the trial is up, they just bill the free trial user annually. This approach seems to improve customer churn efficiently, but at the end of the day, it might only delay the inevitable. After all, if you’re unhappy with a company, you’re going to stop doing business with them eventually.

Surveying customers is another way to try and prevent churn. Call your customers or send them an email and ask them what they like—and don’t like—about your product. This technique will give you a greater understanding of what causes people to become valuable customers so you can try and replicate their experience. As you get to understand your customer base better, you will begin to learn what is essential to the people or companies you serve and what needs attention.

Last but not least, you can reduce customer churn with the help of a software platform. This is often the preferred approach because it provides companies with more valuable customer churn information than the two other strategies combined. Customer retention software offers real-time data that are key to reducing current churn and preventing it in the future. If this is the route, you take to make sure to study the options you have before you. So tools deliver insights on data while others, like VisualCue, offer actions to consider as you monitor your client base. No matter how you plan to take on your churn rate, remember that, it is best not to wait!


Interpreting Your Data to Reduce Customer Churn

Customer churn is costing you money. Most times it’s costing you a lot of money! Fortunately, increasing your customer retention by only five percent can increase your profits by 25 to 95 percent. So, you might be wondering how you can convince a customer to stick around. Well, it all starts with analyzing your customer relationship management (CRM) data.

CRM systems have transformative potential when it comes to reducing churn. However, very few businesses understand how to maximize their systems to improve customer success. If this sounds like your organization, you should focus on three areas when you track and analyze churn. After you’ve finished reading this article, you will understand how to identify problem areas and monitor change as you implement strategic solutions.

Analyzing Customer Behavior

Have you ever noticed that some of your customers behave the same way—especially if they have similar characteristics? Particular groups of your customers do in fact exhibit common behaviors.

If you can learn the common behaviors associated with particular groups, you can predict how similar customers will behave under similar circumstances. For example, you can estimate what a customer’s reaction will be to a future marketing action or an outreach moment from a team member.

Luckily, building customer behavior models is fairly simple with the help of a CRM tool. The confusing part is often translating the data into all-in-one visualizations. Many companies work with a data visualization, like we do Visual Cue, to better understand their reports.

Image #1 (1)Another aspect of customer behavior analysis that can challenge companies is deciding how specific the models should be. Businesses that already use software designed to track user behavior can generally make their reports very granular. After all, one of the advantages of a CRM software is that it collects and organizes a plethora of specific user data.

Businesses that don’t have a user behavior software in place may need to work with their engineering team to see if they can provide the data or create a tool that will collect it moving forward. Overall, the more specific you can get with customer behavior data, the better. An in-depth report will take time to produce, but it’ll provide you with the best picture of what behaviors lead to customer success.

Considering Customer Age

Another effective way to analyze customer churn is to look at churn by age. Here, age is calculated by how long customers have been with your company. In other words, one age group could be “first month,” and another could be “twelfth month.” After all of your users are sorted by the amount of time they’ve been customers, you can start to analyze customer abandonment rates.

Viewing data in this way will help you grasp customer information in a simple way. It will also allow you to know your customers’ behaviors as they age. Chances are you will notice some similarities that you can try and address.

Companies that have high churn rates within the first few months can and should be working on improving their onboarding process. On the other hand, businesses that notice increases in churn several months in might find that their rates increase when customers need to renew their contracts. If spikes occur during specific time frames for various reasons, and addressing these reasons can make all the difference.

Risk_Pg11Once you implement solutions to problem areas, take the lessons learned there and apply it to another problem area in your business. Step by step you will be able to conquer all the issues your company faces.

Churn By Time Frame

In some ways, analyzing churn rates by time frame is similar to analyzing churn rates by age. The main difference is that time frame data can be harder to track and analyze—especially if you’ve been in business a few years. Again, this is why many companies work with a data visualization tool or software. It’s all too easy to become confused by a chart that has hundreds of lines.

To group customers by time frame, you must first define your parameters. There are several common ways to do this, but one of the most popular is to group customers together my month. Under this parameter, all customers who purchased in January of 2017 would be grouped, all customer who purchased in February of 2017 would form another group, so on and so forth.

When you analyze data based on time frame, you’ll notice two benefits right off the bat. First, you’ll find that your numbers aren’t influenced by customer acquisition. You’ll have clean, clear data that speak only to your customer abandonment rates. The second benefit is that you’ll see clear patterns for various groups.

After you create this report, analyze patterns and look for causes of customer churn. If you find that a lot of customers joined your company in November but abandoned shortly after that, seasonality might be to blame. With this speculation in mind, you can begin to look into what happened in the month November to learn why that time frame group had a high churn rate. As soon as you figure out what led to the increase in abandonment, you can create a plan to improve your retention for the future.

This type of report may also provide you with insights on actions that improved customer retention. For example, if individuals that joined in April have lower attrition rates, chances are you did something right to influence them to stay with your organization.

Once you dig into the month, you can begin to determine the elements that incentivized customers to stay active. Then, you can work on reducing churn by creating similar conditions for your entire customer base.

The Impact of Reducing Customer Churn

There are many ways to make reports, but every single one you create should inform strategic action. Overall, the easiest way to interpret data is a clear and accurate visualization that will help you gain insight into your customer base.

Equipped with strategies to collect and represent your data, you’ll be able create plans designed to influence churn. You might instruct your marketing team to run campaigns that share similarities with past successful campaigns. Maybe you take the time to work with your call center employees and teach them about certain behaviors they can perform to reduce churn.

As you roll out your solutions, make sure you understand how you will measure their impact. A sound monitoring system should be in place you so you can promote the aspects of your customer churn reduction plan that are working.


together solving churn

Making BETTER-Informed Business Decisions

As a business leader, you’ve probably heard hundreds of iterations of the phrase “Challenge the status quo.” Management experts and industry leaders have been told to tackle conventional thoughts and systems head-on for as long as they’ve been around. The only issue with this phrase, though? It’s become so common that it’s become the status quo!

It’s all too easy to settle for a technique that works, even if there are better options out there. Companies often rely on antiquated processes because they’re familiar with them. They fail to explore new ways to make better-informed business decisions in the name of comfort. If you’re ready to break away from this norm and make a change, this article is for you.

Reducing Churn With Real-Time Data

Although it’s been a trending topic for some time, there is still a lot of confusion about what big data collection can be used for. Simply put, a collection of extremely large data sets can be analyzed to reveal correlations, trends and patterns. These trends often hold powerful insights, that if acted on quickly, can provide awesome results by way of reducing customer churn, increasing customer satisfaction, and will usually result in an increase in company revenue.

Getting data in real-time has many advantages and possibilities, but it’s gaining traction in the business sector because it allows companies to make better-informed business decisions. Historically, organizations had to look at the past to create business insights. For example, they would gather information from the prior day, month, quarter or year and then create reports, projections and working plans from said information. Today, businesses that want to make strategic moves can rely on real-time analytics to inform action. Instead of looking back, decision makers can visualize current data to make time-relevant decisions when they matter most…now!

In the past, a simple question like “How many customers are about to leave our service?” could take hours or days for teams to understand. More complicated questions often took weeks or months to be analyzed. With real-time data being used, answering complex questions is no longer a burden that takes time. In seconds, you can receive a robust answer to your most complex business queries.

The opportunities of real-time data are endless—as long as you know how to access them. For most companies, this technology seems foreign, complicated and time-consuming. Luckily, this couldn’t be further from the case. With a small amount of know-how, every business— regardless of size—can start to use data to make better business decisions.

Knowing The Customer

Experts suggest that companies first use data to better understand their customers. It seems today, people only stay with a company if they have a very good reason to do so. There’s plenty of competition and similar offerings in almost every market, which makes it very hard to gain loyal customers.

As a result, businesses must work harder than ever before to avoid churn and increase customer success. Real-time data can help you understand exactly why and when your customers jump ship. With this information in mind, you can create a plan that keeps customers coming back time and time again.

6a00e54ee3905b8833019aff835edf970Long gone is the need to select and study small samples of customers to try to guess who will be leaving your business portfolio next month. With real-time data, you can understand virtually every one of your customers at any given time. Can you imagine sending fresh customer feedback to your employees instantaneously so they can improve a customer’s experience in real-time? More importantly, can you picture using this technology to turn a bad customer experience into a positive one?

The Goal? Understanding the Customer

With a clear goal in mind, real-time data improves venerable business models. Without a clear goal in mind, this information can do more harm than good. Companies that fail to define what they want will waste their time and money trying to analyze countless sheets of information. Time and money are two of your most valuable resources, so don’t waste either of them for a second. You must create a goal early on and visit it often if you want to use your data effectively. infographic-the-power-of-a-positive-customer-experience-1-638

One major roadblock for decision makers is understanding the picture that real-time data paints. Typically, businesses organize their findings in various charts and graphs—which can tell different stories depending on how the information is enterprited. Fortunately, there’s a new workaround for this issue. Instead of creating pages of visualizations that showcase findings from Big Data, organizations can use a data visualization tool that does it all for them.

This tool creates easy-to-understand visual representations of data. They are designed in a intuitive way, so everyone in an organization can understand them with little to no training. With the help of these visualizations, companies are able to scale up their entire organization’s ability at once.

Industry experts know it’s important to challenge the status quo. However, many of them fail to use this knowledge to drive action. If you’re ready to take your business to the next level, you need to move away from outdated processes. It’s time to stop relying on antiquated business intelligence procedures and transition from capturing data to making it useful.

Departing from the tools and practices that your business knows might feel uncomfortable at first, but it will be well worth it. By 2020, your customer experience will be more important than any brand differentiator. If you learn how to reduce churn rates and improve your customer experience now, imagine the success you’ll have in the future.