James G.’s Post

If someone gets fired over high churn rates it should be the CEO and not the CSM leader. As the leader of the company you do not get to pick the good and "outsource" responsibility for the bad and the ugly. It's easy to make the CSM leader the scapegoat but it's not going to change a thing. You need to understand that 1. Churn does not reflect the CSM team's but the company's performance. 2. Churn can only be solved where it has been caused - Acquiring bad-fit customers --> Marketing & Sales - Product capabilities, stability, usability --> Product & Engineering - Slow and unsatisfying support --> Customer Support - Lack of proper training, education, and guidance --> Customer Success Management 3. CSM leaders can't hold any other team accountable for their (non-) contribution to eliminate the reasons for churn - only you can. 4. CSM teams are responsible for the part of churn that is under their control and the churn analysis/customer exit interviews 5. Churn is high in the beginning because your business lacks of experience/maturity and customer insights. 6. If it does not go down as you grow, you need to pull the brakes until you fix all the major leaks. 7. If you are waiting too long churn will destroy your business. You can replace the lost revenue with new acquisitions. But as it's up to 25x as expensive you will never make any profits and run out of cash. It's time to take full responsibility and make dealing with churn your top priority. PS: The opposite of churn is Customer Value-Led Growth. Learn more about it in my weekly newsletter --> https://lnkd.in/dtC7MEjP

Churn is extremely costly. So costly that it can sink your business if you’re not careful. The true cost has three ingredients:  Loss of churned customer recurring revenue Loss of expansion opportunity revenue The “wasted” customer acquisition cost (some like plugging in the CAC of the “replacement” customer) Kyle Poyar's post from a few days ago nailed it. First, and most importantly, he puts the spotlight on the customer success teams who are the front line to save churns (among other critical things such as expansion) 🙌 Then he gets into what can prevent churn and specifies high level business strategy items such as selling to the right customer and what not to sell, activating users, and more. I agree with every single item on the list, and these should be a checklist and in front of every leadership team. However, beyond strategy, the first thing that an operation should do to prevent churn is to be on top of what their customers and users are doing, or not doing, on the product. More importantly, an operation must know what they are doing or not doing AT THE RIGHT TIME, to take timely actions before it’s too late and costly. As Kyle says, CSMs are busy with so many things. We must push them prompt and timely digests when… new users are stuck in the activation funnel important accounts hit tricky edge cases or ugly errors user engagement or activity drops unexpectedly (just a few examples) You have product usage data and events. That’s churn money on the floor. Make sure to pick it up. — Kyle’s post link in comments —

Too many CSMs are caught with their pants down when customers "suddenly" churn. Because there have been no negative signals suggesting these customers might have been at risk. All-green health scores, more than solid product usage, and no complaints. So why is this still happening? First, I'm sorry, but every i**** can identify churn risks when customers are ⛔️ not using the product ⛔️ giving low ratings ⛔️ becoming unresponsive Life in CSM would be much easier if all churn only happened after receiving obvious signals. But unfortunately, this is not the reality. Churn happens despite positive signals because you are looking at inaccurate metrics. Your customers don't care about any of them and they are not obligated to give accurate CSAT or NPS. They have purchased your product because they want to ✅ increase revenue ✅ lower costs ✅ improve their productivity ✅ etc. and they will churn if they've failed to achieve their desired outcomes. It's really that simple. So if you want to identify churn risks accurately you need to track your customers' results based on what has been agreed upon. If your customers e.g. want to ➡️ lower their annual logistics costs by 30% ➡️ expected savings of 5% within the first 3 months ➡️ but have only achieved 2.5% after 3 months ➡️ they should be considered a high churn risk by default (all under the assumption that these savings were realistic) Stop relying on bs metrics and start measuring what matters. PS: Join 5k+ CS pros and sign up for my weekly newsletter if you like this post --> https://lnkd.in/dtC7MEjP

Too many CSMs are caught with their pants down when customers "suddenly" churn. Because there have been no negative signals suggesting these customers might have been at risk. All-green health scores, more than solid product usage, and no complaints. So why is this still happening? First, I'm sorry, but every i**** can identify churn risks when customers are ⛔️ not using the product ⛔️ giving low ratings ⛔️ becoming unresponsive Life in CSM would be much easier if all churn only happened after receiving obvious signals. But unfortunately, this is not the reality. Churn happens despite positive signals because you are looking at inaccurate metrics. Your customers don't care about any of them and they are not obligated to give accurate CSAT or NPS. They have purchased your product because they want to ✅ increase revenue ✅ lower costs ✅ improve their productivity ✅ etc. and they will churn if they've failed to achieve their desired outcomes. It's really that simple. So if you want to identify churn risks accurately you need to track your customers' results based on what has been agreed upon. If your customers e.g. want to ➡️ lower their annual logistics costs by 30% ➡️ expected savings of 5% within the first 3 months ➡️ but have only achieved 2.5% after 3 months ➡️ they should be considered a high churn risk by default (all under the assumption that these savings were realistic) Stop relying on bs metrics and start measuring what matters. PS: Sign up for my weekly newsletter if you like this post --> https://lnkd.in/dtC7MEjP

The Churn Myth: It's All About Price Too often, when a customer leaves, we blame it on pricing. They found a competitor offering a cheaper solution, right? It's a convenient excuse. Price sensitivity is often a symptom, not the root cause of churn. Customers who truly see value in your product will pay a premium. If they're walking away, dig deeper. Here are a few common churn culprits disguised as price concerns: Misaligned Expectations: Did you overpromise during the sales process, setting the customer up for disappointment? Lack of Perceived Value: Is your solution solving their core pain points? Are they finding it difficult to use? Is it delivering tangible ROI? Poor Onboarding: A rushed or ineffective onboarding experience leaves customers feeling confused and unable to get maximum value. Neglect & Lack of Engagement: If you stop proactively engaging with customers after the sale, they'll feel unimportant and more likely to explore alternatives. Fighting the REAL Churn Battle: Honest Alignment: Be transparent about your capabilities and ideal use cases. Value Focus: Track customer outcomes alongside revenue. Can you prove the ROI you provide? Invest in Onboarding: Make it exceptional. Ensure every customer quickly understands how to get maximum value from your product. Proactive Relationship Building: Regular check-ins, strategic reviews, and a genuine interest in their success keep you top-of-mind. Price is a factor, but it's rarely the whole story. Focus on delivering a consistently valuable customer experience, and churn rates (and those pricing objections) will naturally decrease. Are there any other churn misconceptions you've encountered? #CustomerSuccess

Been thinking a great deal about risk and customer churn lately (and it’s frequently a topic of investor calls and earnings reports). Not surprisingly, this is a top priority for any business leader, but it’s especially important for CCOs. I came across this article from VC firm Bessemer Ventured and I think it has some good insights to wet the palette. But how can you systematically break down different factors that increase risk and churn? There are many different dimensions you can use to categorize risk and churn, including: 1/ Controllable vs. Uncontrollable 2/ Immediate vs. Longer-term 3/ Product vs Relationship But in my experience, here’s what really matters: Mutual engagement. When your customer engages and you as the vendor are ready and willing to engage back…it creates the ideal situation. Engagement helps lead the way for better customer adoption and outcomes, which in turn helps sustain durable growth. In my time at BMC, we’ve definitely found this to be the case (and we can prove it quantitatively!). Customers who want to engage — learn about best practices, speak with other customers, understand future innovation and roadmaps — are most interested in getting value out of what they’ve purchased. Sometimes the engagement from the customer may be critical or negative, but that’s much, much better than zero engagement. What does this mean enterprise software firms? At least two things: — It requires the vendor to be thoughtful about how, when and with whom to engage back with the customer. Sometimes customers are super energized to engage, while others may take some more effort and convincing from a value and outcomes perspective. If you say you are going to do something, follow through — no matter how small the commitment might be. This has to be engrained throughout the culture of the customer facing teams. — Find a way to measure the degree to which your customer is engaging with your company. Engagement can come in many forms — CSM activities, participation in Communites or Advisory Boards, purchasing professional services and consuming education, attendance in webinars and other 1:M events, etc. Engagement should be factored into health scores and how you discuss risk internally. https://lnkd.in/ehDewVuX

Churn is not the enemy. It's your secret weapon. 💥 Most founders panic when customers leave. They slash prices, offer discounts, and do anything to keep that revenue. But here's what they're missing: Good churn exists. And it's incredibly valuable. At Cclarity, we're in our early growth phase. And you know what? Sometimes I'm lowkey happy when customers churn. Here's why: 1. We get the right feedback on what needs improvement 2. It shows us who our ideal customers really are 3. It saves us from chasing the wrong leads Think about it: Would you rather have: A. 100 customers who are a poor fit and constantly complaining? or B. 50 customers who love your product and rave about it to others? The answer is obvious. But many founders get trapped chasing that new revenue high. They'll do anything for that short-term boost. It feels good in the moment. But it's a false sense of progress. You end up with: • Unhappy customers • A demoralized team • A confused product roadmap Instead, embrace the churn. Use it as a compass. It will guide you to: • Your true ideal customer profile • The features that actually matter • A more focused, energized team Remember: Not all revenue is good revenue. Build for the right customers, not just any customer. When you do that, magical things happen: • Customer appreciates the value • Word-of-mouth happens • Clearer gtm strategy So the next time a customer leaves, don't panic. Be sure to ask and understand why. Thank them for the clarity they've given you. Then use that insight to build something even better. What's your take? Have you ever experienced "good churn"?

Churn is not a Customer Success problem. It's a Sales and Product problem.👇 That sounds harsh. Yes, CS plays a key role. But let's get real. If you've been in CS any period of time, you're probably tired of explaining why churn is not a CS problem. It's a constant battle in most organizations. Did you ever wonder where this notion came from? How did CS become the scapegoat for churn? Because CS in most companies is created IN RESPONSE to customer churn. --> Companies grow quickly through new logo acquisition. --> Leaders are not concerned with post-sales. Renewals are a given. --> Companies succeed for a while, until customers start leaving after their first or second renewal. --> CS is spun up to stop the bleeding. --> Churn slows, but then hits a wall as CS delivers the bad news. And that bad news... --> CS can't fix churn. --> Sales is making promises the product doesn't deliver on. --> Product isn't addressing big gaps that customers say matter to them. _______________ Yes, our customers' success is an organization-wide responsibility. Marketing has a big role. So does Finance. But if your Sales and Product leadership isn't owning churn MORE THAN CS, things will never get better. How do you start? --> Get your leadership together and align on what CS means across the org. --> Define the role that CS plays. --> Prioritize rolling out CS principles across the org, starting with Sales and Product. Your leaders' openness to this process will tell you whether they "get it." If they do, you can make huge strides to becoming a true Customer Success org. If they don't, you're going to have to settle for small, incremental improvements. But at least you'll know. P.S. Want to explore how this works? DM me. #customersuccess #churn #saas 🔖 Save for later 💬 Comment and let's start the conversation ♻️ Repost for more visibility and to show you care

Agree completely. I would add that depending on your industry, mergers and acquisitions can change what base products your customers use for daily business. Try to keep them in your court through engagement and enablement.

7 bad habits that will keep CSMs poor in 2024: 1. Lack of discovery If you don't understand your customers' needs you can't help them achieve their goals. If they fail, they will churn and the value of your customer portfolio is shrinking. The hand-off you get from sales is not the end of the discovery. It's where yours starts. 2. Not tracking customer results. It's astonishing how many CSMs are surprised when customers churn. If it happens, aside from external reasons, your risk management has failed. You need to spot customers leaving the success path, not trying to save them last minute with discounts. 3. Spending time with the wrong customers Trying to help all your customers become successful is a noble attitude. But some of them are simply not meant to be. You are wasting your time trying to fix them. The time you could spend on growing your top customers. 4. Repeating redundant work Customer success is not performing as many tasks as possible. It's about delivering value with every interaction. Too few CSMs measure what works, what does not and why. They keep repeating redundant work with zero impact. 5. Not following up Do you know what your customers do when you are not in the (virtual) room? Schedule frequent follow-ups with your customers to ensure they are progressing as projected and correct the course asap if they are not. 6. Not asking for referrals You have helped your customers to achieve their business and personal goals. Thanks to you they are growing their business, getting raises and promotions, etc. You have more than earned the right to ask for referrals and you need to go for it. 7. Not demonstrating value Never count on your leadership being aware of the value you bring to the company. Create a report that outlines the revenue - at risk you saved - you recovered from churn - you created from expansions and upsells - you sourced through referrals and present it to the leadership at the opportunity. The more value you (visibly) bring to the company, the more you will get paid. This is the way. PS: Join 5.5k+ CS professionals and sign up for my weekly newsletter if you like this post --> https://lnkd.in/dtC7MEjP