It’s critical to understand why your customers churn, but if you’re relying solely on the reason the customer gives you for that churn, you’re definitely missing the actual reason.Customer Churn Reason analysis, like most things in Customer Success, are more complex and require deliberate effort to get right than it might seem on the surface. It’s easy to just ask a customer why they’re cancelling or not renewing and to leave it at that.It’s easy, but it’s not going to get you the answer you need to keep future churn from happening.This guide will help you analyze the “churn reasons” in a way that will get you much closer to the truth.Let’s go!My (now) standard disclaimer: As with everything I publish, this is just an article. It is necessarily incomplete and generic. I cannot tell you exactly what you should do and if someone who
What’s the cost of working with Bad-fit Customers? Everything rolls-up to dollars… time and other resources – and even the negative sentiment in the market caused by churning-and-burning customers – all have an associated monetary value.
For those who wrongly consider Customer Success an altruistic endeavor, rather than a profit-seeking business strategy, you will want to try to make Bad-fit Customers successful at any cost. You’ll want to, but you can’t. That’s why we call them Bad-fit Customers.
I put this guide together for the rational person who knows intuitively that investing resources into a customer that does not have the ability to get value from their relationship with you is a waste of your precious and finite resources. You get this. You understand this. But you don’t know how to prove it.
Well, now you do. And by “now” I mean after you read this.
Go. Read this.
The phase of the customer lifecycle that gets the most attention is Customer Onboarding, yet ironically (or tragically), most people fail to understand what onboarding really is, and few do it well.
And even though Onboarding is something people talk about all the time, experts abound with advice and blueprints and templates, and thought leaders drone on about “first impressions,” the fundamentals of effective customer Onboarding seem to be totally missing.
So I put together a list of things that will help you design an effective Customer Onboarding process that truly does set your customer up for long-term success.
Here we go…
Designing an Effective Customer Onboarding Process
As with everything I publish, this is just an article. It is necessarily incomplete and generic. I cannot tell you exactly what you should do and if someone who doesn’t know your business and your customers tells you
Is 5% a good monthly SaaS Churn Rate? Read on to learn the answer…
As a consultant to SaaS and Cloud providers that are looking to grow, I get asked what an acceptable SaaS churn rate is all the time.
This article was originally written in 2013 and has been updated several times over the years. The lessons are accurate even in 2020.
As I stated in 2013, the answer to “What is a good SaaS Churn rate,” was, “you want a churn rate to be ‘as low as possible.'”
In 2020 I just say, “let’s make churn a non-issue.” It will vary depending upon your market and your position therein. And it likely will never be zero. And that’s okay. Just make it a non-issue.
So, before you continue reading this article, if you’re in a position where you’re trying to figure out what an acceptable SaaS
How many Customer Success Managers (CSMs) do we need to give our customers their Appropriate Experience (AX)?
What happens if we ramp sales?
What happens if a bunch of customers upgrade? Downgrade?
How much excess capacity do our current CSMs have?
When will we need to hire more CSMs?
Is our Customer Success Management team too big?
Those are just some of the questions I get from Customer Success leaders all the time.
How to solve this? Let’s dig in.
I put together a Customer Success Capacity Planning calculator using Rock Content’s interactive content platform Ion (Rock has been a client off-and-on for about 4 years and you should 100% use them for your content marketing needs. They’re awesome).
Play around with the CSM Capacity Planning calculator, and just so you can see how cool it is to use Interactive Content for lead gen (seriously, I’m a legit fan
Companies struggling with growth are the ones that try to figure out how to spend as little as possible to acquire customers.
The companies growing like crazy have figured out it’s not about how much you spend, but the efficiency of that spend.
They know that if you can outspend your competition to get in front of prospective customers, you’ll win.
Let’s explore this in more detail.
Outspend Your Competition
If you can outspend your competition to get in front of prospective customers, you’ll win.
Like I said, companies that struggle with growth are the ones that try to figure out how to spend as little as possible to acquire customers.
But the companies growing like crazy have figured out it isn’t about spending as little as possible, but increasing the efficiency of that spend to bring in more revenue, faster.
Time to First Value (TTFV) is a commonly used Customer Engagement metric to measure the efficiency of the customer Onboarding process, but not generally a Sales KPI.
But it should be.
How can we hold Sales accountable for the customers they bring in – getting them Onboard and setup for long-term success (and expansion!) – without them owning the customer post-sale?
And how can this accountability be used to change the behavior of Sales to accelerate the stream of Good-fit customers, and eliminate the Bad-fit customers, without telling them to “stop closing Bad-fit customers?”
As I said, TTVF is a commonly used Customer Engagement metric to measure the efficiency of the customer Onboarding process, but not generally a Sales KPI.
But since you can’t solve upstream problems downstream, we need a way to fix things upstream. Stop dumping toxic chemicals into the stream.
Time to First Value (TTFV) is a commonly used Customer Engagement metric to measure the efficiency of the customer Onboarding process.
Unfortunately, the way this metric is used is almost always wrong.
Time to First Value (TTFV) is the amount of time between the close of the sale and when the customer is Onboard.
Your customers are considered “Onboard” once they get actual value from OR (in more complex scenarios) see the real value potential in – outside of the promises made by marketing and sales – their relationship with you.
Let’s dig in…
TTFV is a Customer Onboarding metric that is really just a goal.
Every customer makes progress on their own cadence, on their own schedule, on their own timeline.
But you have to set a goal for them.
You would like [customers in this segment] to achieve [first value] in [some amount of time].
Again, they either
You think the AHA! Moment during Customer Onboarding is a positive thing.
But it’s not.
AHA! moments are only a positive thing if you’re searching for something… perhaps aliens or a missing sock.
At the end of this journey you discover what you’re looking for and you say, “AHA!… I knew it was there all along.”
That’s a great feeling because it validates your scientific hypothesis or completes the pair of socks.
But as your new customer with an emotional connection to their goals who sees – or SAW – your product or service as the catalyst to reach those goals, the Aha! moment comes at the end of a discovery journey…. only it’s NOT AHA!
“Why did you let me poke around for so long not knowing what to do only to discover this on my own and waste a bunch of time in the