Churn Classification for Customer Success Management

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company. If you focus on Customer Success, churn will not be an issue. At least in theory. To take that from a simple theory to your Operating Model, you need to put systems in place, be able to monitor their effectiveness, and routinely perform root cause analysis when things go wrong (and also when things go well so you can replicate, right?). So while our goal is to live in a world where churn doesn’t happen, while you have it, you really need to understand it so you can avoid it in the future. To that end, I put together this Churn Classification system (or matrix or quadrant or whatever) to help you do that.

All Churn is Bad

All churn is bad, but some churn is worse than other churn. Customers
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The Magic of Negative Churn

Editor’s Note: This article first appeared on the StatusQuo blog here. Let’s face it – customer churn is a reality for subscription businesses. Even with great product, amazing support, and top-notch training, some customers are just going to leave. Budgets dry up, companies go out of business, your internal champion moves to a new role, etc. For a lot of companies, a lost customer drops additional responsibility on the plate of the sales team. One customer out means you better find a new customer to fill the gap, right? Wrong! The best SaaS companies can do the impossible: generate negative revenue churn despite losing customers each month. In other words, they are generating more revenue from existing customers than they are losing each month. Let’s dive into exactly how they make that happen.

The Mathemagic Behind Negative Churn

Here’s a simple example to illustrate the point. Say we have a
Negative churn example
Negative Churn Example
Negative churn attach rate
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SaaStr Podcast #170: Rob Reid, EVP & Managing Director @ Sage Intacct on Scaling Intacct’s Team & Culture To An $850m Exit

New! Prefer to read the transcript? We’ve got you covered! You’ll find this week’s transcript below. Welcome to Episode 170! Rob Reid is the Executive Vice President & Managing Director @ Sage Intacct, the undisputed global leader serving finance teams of any size. With over 10,000 employees and and over 3m customers, their financial solutions generate over $2Bn in revenue. Prior to Sage Intacct, Rob led Intacct over an incredible 8 year journey culminating in their reported $850m exit to Sage in 2017. Before that he was CEO and President of LucidEra, a market leader for on-demand business intelligence. Prior to LucidEra, Rob was group Vice President of industry leading Siebel CRM for Oracle, managing the SMB sector. Fun fact: over his phenomenal 30 year career, Rob has been involved with 8 startups, 7 of which have had successful exits. In Today’s Episode You Will Learn:

What Every SaaS Business Needs to Know About User Adoption

Editor’s Note: The following article is based on Rachel Orston’s presentation at SaaStr Annual 2018. You can see the full presentation here. User adoption is the process of ensuring each of your users is successful in using your product to achieve their business goals. This is critical for SaaS (software-as-a-service) businesses who rely on recurring revenue because, if managed effectively, it leads to higher retention rates and unlocks new revenue growth opportunities for your business. Unfortunately, this step is often skipped as companies quickly try to move straight into retention. Getting user adoption right is hard work, but without it, retention, expansion, and advocacy become significantly more difficult to master and leaves your organization vulnerable to preventable churn. It’s the bedrock of any best-in-class customer success strategy because it sets the foundation for users’ understanding of and success with your company and your product. When you make user adoption a
Churn Rate
User Adoption
Get to the What
Realities of Alignment
Product management user flow
Time to wow
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When and How to Make Your First Customer Success Hire

In the early days of a startup everyone from the CEO to the Content Marketer is a defacto member of the Customer Success team. Being removed from customers isn’t a concern because you interact with them daily through support tickets, live trainings, and sales demos. As the company grows, it becomes less clear who owns Customer Success. Customers start complaining that they’re not getting the service they need to see value. Churn increases and expansion revenue evaporates. At this point (or sooner) it’s time to make your first Customer Success hire.

Why You Need a Dedicated Customer Success Team

A high churn rate is often the catalyst behind creating a Customer Success team. From day one, companies are focused on building their user base and increasing revenue by acquiring new customers. But what happens after a customer signs up? Companies rarely give enough thought to how they will help customers
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When to Add a European (or Other International) Office

SaaS has been global from the earliest days, although how and when you go global can vary.  Salesforce went very early into Japan (it takes a lot longer to add a lot of Japanese customers for most of us), which quickly accounted for almost 10% of their revenue in the early days.  I had 15% of my revenue in the U.K. in Year 1. And these days, the opposite is just as common.  European and Indian SaaS startups in particular start selling in the U.S. early in their lifecycles. The mistake most U.S. SaaS companies make however — that most European and Asian SaaS startups don’t — is they wait too long in setting up other offices.  You’ve got to be near your customers and partners, at least, if the customers are larger.  You leave too much money on the table, in
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Xero’s CRO on Delivering Exceptional Customer Experience at Scale

Customer acquisition is always front and center when a company is in high-growth mode. During periods of intense expansion, everyone is hyper focused on attracting and converting as many new customers as possible. Customer experience and customer education are far too often afterthoughts, thrown together without any real strategy. This is a big mistake. I recently sat down with Amy Vetter, Chief Relationship Officer at Xero. Amy has been responsible for leading teams to develop innovative customer experiences and education efforts. During our discussion she shared some insights about the best practices she has employed to help contribute to Xero earning its spot as a market leader in driving customer engagement and adoption. Here are five of her top tips for delivering exceptional customer experience at scale:
  1. Listen to Your Customer
  2. Take a Team Approach (But Know Your Role)
  3. Make NPS Your Guiding Light
  4. Make Customer Education Fun
  5. Go
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How to Beat the Competition with Legendary Customer Support

Customer experience is the new competitive battlefield – and it’s become more important than even price and product to some customers. And it’s not just something for consumer products. When you’re offering a product or service to another business, they are relying on you to complete their mission. Service downtime or project delays aren’t just annoyances; they cost your customers money. And in some situations, that can snowball and cause an untold number of problems. Just like you, they have deadlines and customer expectations. Zendesk and Dimensional Research found that 66% of B2B customers stopped buying after a bad customer service experience – and 36% recommended that others not buy from this company. How to Beat the Competition with Legendary Customer Support(1) On the other hand, 62% of people purchased again after a positive experience. And the power of great customer service goes beyond that – it can salvage a poor product experience. In fact, if you resolve a
How to Beat the Competition with Legendary Customer Support(2)
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SaaStr Podcast #162: Olof Mathé, Founder & CEO @ Mixmax Shares How To Achieve True Virality in SaaS with $0 CAC

Welcome to Episode 162! Olof Mathé is the Founder & CEO @ Mixmax, the startup that allows you to be a sales pro, providing powerful analytics, automation and enhancements for your outbound communication and a product that has achieved almost the impossible in SaaS, true viral growth and a $0 CAC. As for Olof, prior to Mixmax he led the team that built Inkling Habitat, now adopted by the world’s largest publishers and before that he was an entrepreneur and worked at Skype and McKinsey. In Today’s Episode You Will Learn:

Amazon solved the customer experience puzzle. Can you?

Editor’s Note: This article first appeared on Inc. here. One of the biggest mysteries in business right now is why so many companies pay lip service to the customer experience, but don’t practice what they preach. Brands undo millions in advertising spending by often intentionally making their customer service as unpleasant as possible. Surly staff undermine top retail brands. Product manufacturers continue to print long user manuals that no one reads. Things take weeks to arrive by mail when Amazon would have shipped it in two days. Such common failures are one reason that Amazon, Apple, Uber, Expensify, Calendly and Nest, to name a few, stand out. In an attempt to catch up, the industry has quantified many aspects of customer experience. As a result, companies with terrible or mediocre customer service can make big improvements. But the leaders tend to be companies run by fanatical people who are obsessed
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