Markus Rentsch’s Post

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

I'm embarrassed to admit that for a long time, I thought asking this question would help me combat churn: "Why are customers leaving?" Seems like the obvious question to ask when customers are canceling, right? I realized that this approach kept me focused primarily on customer's poor experiences. Sure, some customers leave negative feedback...but what about the bigger picture? A customer's journey usually isn't entirely negative, so why only concentrate on that to understand why they've left? Over time, I've found two things to be consistent through my analysis: 1. Satisfied customers who didn't churn often had some negative experiences, but this was because they were deeply engaged with the product. Deeper engagement meant working harder to achieve their goals and naturally encountering occasional roadblocks along the way. 2. Addressing only customer complaints didn't significantly reduce churn because it overlooked other key factors. Enhancing the positive aspects that kept customers engaged was crucial for driving value and increasing retention. So, what does this all mean? It means I was asking the wrong question. Now, I ask, "Why are customers STAYING?" The answer is simple: Customers stay to achieve results. They purchase our product because they need a solution, and they stick around because they find value in our service. Reacting to customer exit feedback won't curb churn as successfully as steering them towards achieving positive outcomes. What questions do you ask to proactively prevent churn?

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

These are some great thoughts from Markus - a few points to add: 1. It is incumbent upon the CS leader to highlight the bad customer fit early - create a "draft review" process that provides a feedback loop to leadership at sale close and after onboarding if expectations aren't correct; 1b. Those changes are sensitive - you don't want to sacrifice sales velocity by making too many changes at the top end, but you'll find some glaringly obvious ones. At times from a small subset of the team; 2. Churn usually becomes the focus "issue" when that tipping point is met where new sales simply can't outsell churn without scale on the sales team (either productivity per rep, or headcount) - damage is already done by this point, and a churn review by cohort is the only way to know if changes are having an impact; 3. The "leaks" are often placated, at least temporarily, by discounts, credits, value adds, or rapid iteration process change - not sustainable for sure, but it becomes hard to attribute improvement to a single change. Outside of the ICP, product, performance, and value creation - CS leaders need to look at onboarding process, and frequency of interaction. There are always improvements to be found, while focusing on those external factors; 4. A quick look at trajectory of onboarding NPS vs. overall NPS can tell if you're making the right moves.

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

Dear CSMs, you can’t afford missing to detect avoidable churn any longer. But that’s what happens if you rely on inaccurate metrics and signals. Customer Health Scores can detect (obvious) churn risks at the bottom end. If a customer is ➡️ not (barely) using the product ➡️ does not study any content ➡️ declining invitations for training it’s not too far fetched that there’s a high churn risk that needs to be addressed asap. But here’s the problem: The same is not true on the other end. A customer can use every single product feature, spend 24/7 using your product and still churn. They appear in perfect health on the outside while they are deep red on the inside (the Watermelon-Effect).  If you are never looking beyond customer health, there always be unidentified churn risks slipping through your fingers. Your customers have purchased your product to ✅ increase revenue ✅ reduce costs ✅ eliminate risks ✅ improve productivity … Consequently, the single most effective way to detect churn risks is to track your customers' outcomes with the metrics they care about. If there’s a negative gap between projected and actual results, these customers are at risk. Plain and simple. It’s time to grow beyond the vanilla CSM practices of the past decade. PS: Grow your impact and net value --> https://lnkd.in/gGRSjD_v

Don't Let Customers Become Strangers: Fight Churn and Boost Retention! ⭐ Imagine a revolving door of customers slamming in your face -that's churn for subscription businesses! Churn is when paying subscribers cancel, leaving you with a leaky revenue bucket. Here's the lowdown on the two main culprits: ==> The Farewell Tour: Voluntary churn occurs when customers ditch you due to a perceived lack of value or a tempting competitor. ==> The Accidental Goodbye: Involuntary churn, where customers unintentionally cancel due to expired cards or billing issues. The Cure? A Two-Punch: 1. Make Your Service Irreplaceable: ==>Rock-Solid Value: Become the Gandalf to your customers' Frodo - the essential guide on their journey! Provide a service that solves their problems and makes their lives better. ==> Crystal Clear Communication: No hidden fees, no surprises! Transparent pricing and billing keep things smooth and avoid unwanted chargebacks. 2. Fight Churn Head-On: ==> Flexibility is King: Offer diverse payment options so customers can choose what works for them. ==> The Power of Personalization: Targeted communication, updates, and feedback requests show you care and build a strong connection. That's where APS steps in! We're your reliable payment partner, providing flexible and predictable payment solutions to keep your customers happy and your subscription model thriving. Ready to ditch the churn and build lasting customer relationships? Contact our team at sales@aps.com or visit our website to explore how APS can be your hero in the fight against churn!

Churn :-Churn is a measurement of the percentage of accounts that cancel or choose not to renew their subscriptions. A high churn rate can negatively impact Monthly Recurring Revenue (MRR) and can also indicate dissatisfaction with a product or service. please suggest any other definition which is related to your business Landscape.

Churned customers can’t summarize why they broke up with your product. Their explanations flatten reality. Too much detail gets compressed into just a few sentences. But churned customers CAN tell you a story. Rather than a single root cause, their stories unfold like a chain reaction. 4-7 dominoes fell over weeks, months, or even years, causing your customer to detach from your product and replace it with another one. Each domino contributed to their decision. Remove any domino from their story and they might not have churned. So when you are trying to understand why a long-standing customer broke up with your product, ask them to start from the very beginning: - When did they first recognize your product wasn't getting the job done? - How was that feeling aggravated in the original or novel ways? - When did they finally conclude “it’s time” to break up? - How did they search for a replacement? - What did they pick and how did they decide? Studying churn decisions in detailed, narrative form reveals a causal chain. Some dominoes reflect product weaknesses or service mishaps. Others reveal how shifts in your customer’s context reshaped their demand. Critically, each domino hints at a targeted intervention to prevent churn.

Losing customers? Let's talk churn management! From proactive communication to personalized experiences, small steps make a BIG difference. Ready to tackle churn head-on? 👉 Check out Nam Paul's strategies: https://bit.ly/4g70AXH #CustomerSuccess #ChurnManagement #RetentionMatters