This post is part of Playbook’s growth levers series, read more about growth levers here.
Factor historic retention into your targeting
If you find that a significant portion of customers churn, you could have a targeting problem. One possibility is that some customers are just a weak fit, and you can avoid wasting time on those customer types by defining an Ideal Customer Profile (ICP). As Kirby Wadsworth explains in his playbook, an ICP allows you to use characteristics of successful customers (i.e. those with high lifetime value) to target similar prospects.
Another possibility that Tamara Grominsky points out in her playbook on customer segmentation, is that you haven’t packaged your product well for one or more segments of your customer base. If you target multiple different segments with different needs and different willingness to pay, you might need to pick one to double down on, or offer different product packages (at different prices) for each segment.
Make onboarding sticky
One mistake Donna Weber, an onboarding expert, sees frequently is equating onboarding with technical implementation. Companies overlook the human elements that make a new customer successful; this is especially true for enterprise products, where the users may not have been a part of the buying process. Professional services teams tasked with onboarding should weave together implementation, user education, and organizational change management.
For any product, it’s critical to show early value during onboarding by identifying and showcasing the one or two values that resonate most with a specific customer. In his playbook on product-led onboarding, Shareil Nariman explains that “customers churn early in their life cycle if they don’t understand value. The ‘why’ of onboarding is to explain to customers the true value of your tool for their needs as early as possible in their journey with you.”
Develop a proactive customer success function
It’s valuable to have a customer success function that’s independent of any other role. In her playbook on hiring Customer Success Managers, Maranda Dziekonski explains that “joint” CS roles rarely succeed. Support needs to solve reactive issues, and sales needs to close deals, “so they tend to not be thinking about making sure that the customer is getting a return on their investment and that they’re growing, evolving, and expanding with your organization.” But that’s exactly what somebody needs to be thinking about if customer retention is a goal.
Strong customer success managers (CSMs) excel at identifying and addressing client issues before they evolve into dealbreakers. In his playbook on managing a customer success function, Boaz Moar explains that CSMs need to actively be assessing customers based on both customer health (how well they’re doing with your product) and customer maturity (how sophisticated the customer’s team is). “If health is weak, CSMs may need to drive value; if maturity is weak, they may need to boost execution.” If you neglect a health issue or a maturity mismatch too long, customers can fail to realize the value your product provides.
Automate processes for flagging and addressing issues
For your CS team to be truly proactive, your company will need to have processes in place that flag potential issues and signal to your CSMs that they need to intervene. For instance, what should a CSM do if a customer is experiencing budget issues, shows a lack of product adoption, or if an executive stakeholder leaves the customer’s company? Kristi Faltorusso’s solution is to document standard CS “playbooks” that layout repeatable frameworks for handling common milestones and activities. For example, a “lack of product adoption” playbook would guide a CSM to identify the customer’s current product usage, dig into the customer’s business goals, schedule a meeting to discuss the customer’s usage of the product, and follow up with relevant customer enablement.