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Here’s a quick litmus test for potential customer churn: When was the last time you texted a customer? Yesterday? Two months ago? Never?
If you don’t communicate with customers via SMS, your company is just another provider – one of many that your customers only communicate with via email and scheduled meetings.
In short, you likely don’t have a trusted advisor relationship, which means the risk of customer churn is higher.
So how can you become a customer’s most valuable supplier and prevent churn?
It is the responsibility of the entire company. Even if your company has customer success and account management teams, that’s not enough. Marketing, support, sales, and even engineering all play important roles in preventing or reducing customer churn.
Here are four things to focus on.
1. Actively review your leads
Churn reduction starts before a business becomes your customer. Marketing needs to focus on generating leads that match your ideal customer profile. Even if marketing is already doing this, it is inevitable that some ill-matched leads will still be generated and passed on to sales.
The question then becomes: Is your sales team trained and actively encouraged to review poorly matched leads and quickly reject them? Also, do you have a solid feedback loop between sales and marketing to minimize the generation of poor-fit leads?
Make sure sales understand and thoroughly document a prospect’s needs during the sales evaluation process. Success and support teams should regularly review the sales team’s pre-sales qualifications and requirements checklist. Ideally, such information is appended to Salesforce, creating a simple audit trail. This can be useful when a customer is upset about an obvious discrepancy between what was promised and what was delivered.
2. Balance product stability with new feature releases
Gone are the days of “move fast and break things”. Too much focus on releasing new features at the expense of stability can backfire and increase churn when you can least afford it.
The balance between stability and new feature releases is a constant tug-of-war in high-growth companies. It is therefore important that the leadership aligns itself with priorities and, more importantly, recognizes the consequences of their decisions and bears them themselves.
Bring engineering and product team members to customer meetings, even if you’re just listening, so they understand the implications of moving too fast.
3. Teach business acumen
So you’ve hired smart, compassionate, and hardworking people to keep your customers excited.
But do your teams have enough business acumen to have a customer conversation about the customer and their priorities instead of focusing on your product, features, and usage? Does your team know what a P&L is, how a budgeting process works, or how to identify key stakeholders beyond the immediate sponsors? Does your team articulate the return on investment (ROI) of your service clearly and regularly – not just before the renewal -?
Your customers need to think about these things all the time, so you need to familiarize yourself with their way of thinking. Your team needs to understand what customer problems are beyond the narrow scope of your tools or services. Customers want to solve their problems – not yours – and any misalignment increases the risk of churn.
Offer business insights to your customer success and account management teams so they know what questions to ask in order to add real value to the relationship.
4. Listen to your customer support team
If there’s one group of employees who interacts with the customer base far more often than any other department, it’s your support team.
But in too many companies, support teams are treated like a back office function: they are poorly equipped, don’t really have a seat at the table and quickly burn out.
Support is an incredibly valuable listening point in helping you reduce churn as customer issues or issues are usually escalated to them first. The support has the best and possibly the earliest indicator of customer temperature and the likelihood of churn. Therefore, your product and customer success teams should treat support like one of your top customers.
At my company, we hold several weekly cross-functional meetings and it is always the support team who lead and present customers’ product and technical challenges. We have an audience full of engineers, product managers, and customer success managers, including the VP of each department. We appreciate what the support team has to say. The high reputation that support has in our company has helped us maintain a low customer churn rate over the years.
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Every single department in the company helps to reduce churn and improve customer loyalty – even before a customer has touched your product or service.
The fundamental requirement for reducing churn is ensuring a company-wide cultural and behavioral mindset that is dedicated to customer success.
Additional resources for customer success and reducing churn
This is how you prevent churn and keep customers from online services
Five “customer marketing” tactics to increase customer loyalty and reduce churn
Five ways SaaS companies can achieve proactive customer success