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Less Customer Churn: How To Ensure Customer Success For C-Suite and SaaS



When scaling your SaaS business, it’s important to look at your customer success. How can you reduce your churn rate, and have a solid impact on your revenue goals?

The keys to eliminating churn are focusing on all the elements of customer experience - from getting onboarding right, to drilling down into your customer health data.


You Mon Tsang is the Founder and CEO of ChurnZero, which helps subscription businesses fight churn with a real-time Customer Success platform. Before ChurnZero, he was the CMO of Vocus (now Cision) and CEO of its marketing automation business unit, OutMarket.


During our ‘In This Together’ live broadcast, You Mon shares some of his top tips for C-Suites to keep your customers loyal and thrive at Customer Success.


Churn, or customer dropoff, is a key reason why Customer Success is so integral to your business. Reducing how many customers choose to stop doing business with you is all about analysing key touchpoints in the customer journey.


Around 5% is a fairly normal churn rate for most small and medium sized businesses. This has an impact on your overall monthly recurring revenue, or MRR. But up-selling to your customers can build a negative churn rate, meaning you're getting more from each transaction.


Do you want to understand your churn better?


Here’s a few questions to ask yourself, from taken Edison Partners. Not all of these are related to Customer Success, but they are a really good starting point:


  • Are you selling to your ideal customer profile?

  • Is your pricing model aligned with the value realized from the product?

  • Do you have a definition for customer/account health?

  • Do you tailor your customer success practice?

  • Are customers asking for product improvements that are not being met?

  • Are you easy to do business with?

  • What is your practice when there is a new point of contact at an account?

  • Are your customers paying upfront for annual contracts?


Churn is impactful, and it compounds

A study done by SaaS capital found that for every 1% increase in revenue retention, a company can increase its value by 12% in five years. So investing in customer success really does translate into numbers.


Best Practices for Customer Success:


When structuring your account team, there are two things to think about:

  1. How many accounts are your CSM’s managing? Is it dozens, or is it hundreds?

  2. Will you have one person that does it all, or will you have a team of specialists?


If there is one person doing everything, you’ll need a lot of automation, because it will be a struggle for them to be successful.


When compensating a Customer Success Manager, think about how responsible they are for sales: Do they own the renewal? How variable is their On Target Earning (OTE)? It might be 5% or 50%. If they don’t own the renewal and have a low OTE, they won’t be massively motivated.


But more often than not, CSM’s do own the renewal, and have an average 20% OTE. You can see a 6%+ increase in net retention rate if you have a customer success leader.


#1 Onboarding


In order to get real leverage, focusing on the onboarding experience should be your number one activity.


Make sure you set timelines, and know how long it takes to onboard your customers.

Think about onboarding as a process. If someone has a bad onboarding, it will affect the health of their customer success for up to two years. It matters that much.


Onboarding is never-ending.


How do you get it right?

  • Set a goal in terms of what you expect your customers to do. I.e. By week 2, I want our users to have a login... By week 8, I want 75% of my users to log in daily.

  • If you’re hitting them, you know you have a good onboarding process.


# 2 Engagement


Are customers using your products and services? Are they engaging with you?

Expansion opportunities are also important. If 20% of your customers are bringing in more business, it’s important to look for opportunities to ask them for more.


# 3 Create a health score for your customer success


This is important when you look across your accounts to see what’s going on. A health score will tell you if your customer success activities are healthy or not.


The data to utilise for your health score are points such as your customer communication, how many support tickets you have open, any ongoing bugs/issues, and evaluations of service and product reviews.


#4 Optimise your products


Are your products designed to improve your customer health score? They should be. Optimising your products using customer data means you can build them with the functionality that your customers need.


  • Mistakes to avoid

  • There’s a couple of major mistakes that CSM’s often make.

  • Firstly, they build a team of heroes, not contributors.


Another is that they don’t understand the corporate margin goals. The CS leader wants to invest in people and products, and the CEO or the CFO may focus more on numbers.


A way around these two mistakes is to ask yourself the question- “What percentage of our revenue are we going to spend on servicing customers?”


By avoiding these pitfalls and focusing on best practice, you’ll soon gather a significant amount of data that will lead you towards real insight and understanding. These tips should help you avoid churn and stay focused on the key activities that lead to high Customer Success.


Thanks to You Mon Tsang from ChurnZero

Want to learn more about Churn and Customer Success? Sales Impact Academy is launching new courses titled, ‘Customs Success Fundamentals’ beginning 6th October 2020 and The Talent Acquisition Playbook starting 10th November 2020.


Kerry Needs - Writer


Our In This Together broadcasts bring together leaders from across industries and disciplines to provide insights and learnings on the hottest industry topics. Catch up on what you missed like Mark Roberge and Christopher Lochhead, by visiting our YouTube channels.

Learn more about becoming a member of Sales Impact Academy here.




© 2020 by Sales Impact Academy.

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