When is it too late to save a customer?

Anuj Agrawal

How far in advance of renewals do you begin to identify at-risk customers?  By the time they are 3 months from renewal it is too late to save. We are developing our methodology, so I wanted to hear perspectives. My inclination is to analyze customers 6 months from renewal. Note, we are starting this without a CS tech stack so it's hard to automate and have an ongoing read of customer health. 

Kevin Mitchell Leonor

Given the amount of engagement we have as CSMs, we are able to identify at-risk customers way before renewal. I am in the beginning of a 24 month contract and this customer is already at-risk due to a disagreement with PS regarding the scope of a finished project where the customer doesn't feel we met the requirements of being a completed project. 

For us in Customer Success, the health of a customer is a living and fluid status. 

The account I mentioned is probably going to go green by the end of this week once I get the approval for us to cover the cost of the additional work since I was present during discussions and I agree with the customer that they set expectations that we failed to meet. Customer is happy with product, sales, support, and Customer Success. This is an easy save account.

I would suggest Marketing having a cadence call with the CS department to go over at-risk accounts and their months left in contract. This will help while you don't have an automated visibility into customer health.

Tammy Krieger

Depending on long it takes a customer to evaluate a replacement and do an implementation is what should drive your work back schedule. For instance if an RFP, negotiation and implementation process to replace you takes on average 6 months then you had better know 10 months or earlier to keep them from even putting out that RFP or asking their network for recommendations. Once you get that far you now have a higher hurdle to over come.

That said a monthly check in with each customer will pay dividends in retention strategies. If a customer knows who their legitimate advocate is or escalation path then you have the opportunity to hear from them sooner rather than later.

Anna Alley

Where we have accounts with an assigned CSM (our higher revenue customers), I agree that we are able to identify risk very early on (regardless of renewal date). Where we are more challenged, and what we're focused on, is for our long tail of what we call Tech Touch customers. These are less engaged and have less 1:1 interaction, etc., and we are trying reach out for those customers about 4 months prior to renewal. We are currently building touch points related to various other key milestones to keep them engaged throughout the life cycle as well.

Arit Nsemo

We review customer risk quarterly for all customers. Customers are automatically put on high risk by the 3-month business review if there has been any hiccup in onboarding because -- no surprise a poor onboarding experience colors the entire relationship, sometimes regardless of value. If you can't get buy in when you have their attention early in the partnership it's hard to get it later. We're just now implementing CS software, so previously we identified early risk in three ways:

At three months:

• How was onboarding? Was there an escalation? Was onboarding completed on time?
• If there was an issue, customers were put on high visibility internally, leadership would reach out, and we'd engage them differently to ensure we kept buy-in

At 6 months:

• Have they been engaged? Did they attend all scheduled calls? Has there been turnover on the client side? Are they using the product to the level we defined in the success plan? What are their results?
• If any of these red flags are present, the business review format at 6-months is heavy on realignment of goals, and reselling the partnership

 

Arit Nsemo

I love that you're looking at how long it takes to evaluate a new vendor. That's so critical. We've all been in a position where a customer says they're leaving and are about to go live with your replacement and we were none the wiser. I'm curious, @Tammy Krieger do you have and discovery that you're doing to uncover if your customers are actively speaking with competitors?

Tammy Krieger

Not really. The key is developing a solid trusted relationship. Once you have that you will notice a change in behavior if a customer is becoming disenchanted. Some people are not comfortable with a potential hard conversation so won't necessarily tell you so I pay attention to what they are not doing. Is their tone less casual? Do they re-schedule or avoid regular touch points/check ins? 

Sometimes you get lucky and have a very transparent champion and that is awesome. You always know where you stand and how to move forward. When you don't have that just put yourself in their shoes and ask "if I were behaving in that way what would be going on behind the scenes?" 

Willow Moellering

A great place to start without a tech stack is to do an in depth review of churn with the right team members in the room.  These meetings can be a little tough, so you want to make sure there isn't any blame game.

I have used a template like the one below, and it helps to facilitate data and experienced based decisions without detailed reports.  

KEY TIP: Make this a leadership meeting with cross functional attendance.  Leadership visibility and Products attendance is a must!

BenB

Our true Renewal Process starts 90 days before contract end date. However we start reviewing every contract at 6 months.  I make the CSM answer the following questions:  Why did they initially purchase?  Why should they renew? and the answer to those questions help guide our interaction with customer for next 3 months up to "renewal playbook" time. 

Scott Hopper

How sticky are you. Do you have pockets of stickiness. How much of a commodity does the market think you are?   The more you are a commodity the more you risk flight.  What  use case does your customer use you for. Especially in this current age of uncertainty. You better hope there is more than one use case that customer's were latching onto.  How much are you willing to fight for your customers. 

I say this because, I spent over 20 years working on Notes/Domino what remains is less about email than applications @HCL  which at 20k customer's is a viable business.  Email was the commodity. Applications were what was sticky. Get them to sticky.  

Sharmila Nandwani- Nigam

We review our contracts a year prior to the out clause, this allows the CSM and really the whole account team to strategize on what needs to be done to ensure a healthy account, I look at metrics which create the baseline to determine if actions taken are impacting account health. When the conversation about renewal, usually 6 months prior, we will be in a very good position. 

 

Anuj Agrawal

Our "Tech Touch" type of customer base is fairly large, and is exactly the type of issue we are having. Since it's a large amount of customers, it's hard to have deep relationships with all of them and see early warning signs. And given we are currently doing a manual process to pull together analytics to assess risk, we are trying to identify the right segment/tenure of customers to prioritize the assessment. 

Anuj Agrawal

This is a great framework - thanks!

Thomas Seelbinder

I'm a firm believer that the only time it is truly too late to save a customer is when they request to terminate their contract. Once a decision has been made, in my experience, it's incredibly difficult and rare to save that account. 

We start the renewal conversation 3 months prior to the renewal date and on average have 2-3 calls before we get the renewal contract back. 

 

Areya Dargahi

In my opinion, waiting until the 6 month window is way too late. All interactions and outcomes from engagements should play a huge role in how you work with this customer moving forward. For example, if it was a tumultuous on-boarding, I would never consider that a success (albeit completed) and should COMPLETELY shift how your "normal" engagement were structured to something incredibly more proactive. 

So for me, when you need to start identifying your customer being at-risk? The second they sign the agreement.

Andreas Knoefel

This challenge can pop up in every step of the customer journey. I wrote about this in "Recover, Rescue or Farewell". As a pre-cursor, I benchmark my customers and define exceptional Champions who I point others to as an inspiration, Cruisers who are doing ok, and then Laggards.

Laggards are falling behind because of issues our company caused (bugs, bad implementation), joint issues (incorrect expectations), and customer self-inflicted wounds (lack of sponsorship, questionable solution fit). The more the customer is responsible for their demise, the less we invest in their rescue. The SLT decides together to place a customer on "limited life support".

Note: I find that those we rescue become exceptionally loyal and make the extra effort to move towards becoming a Champion.

Anna Alley

That's exactly what we're looking at as well. Currently, we plan to use certain changes in behavior to trigger proactive, mass outreach: changes in transactional volume, login frequency, etc. TBD on how effective it is as we're still building it out!

Vijaya Vardhan P

@Anuj Agrawal  great discussion here. As an outside observer, I have seen customer success teams scurry during the last 90 days to try and "save" customers, who eventually churned. This brings an important question. Who is responsible for the churn? If we are in a hurry, it means that,

1.  We have noticed signals early on that we have not acted upon.
2. Someone has noticed signals and sent them our way, which have not been acted upon.
3. The customer has sent signals our way that we failed to notice and act upon.

In my opinions, it is important to have a process to watch for these signals and trigger actions for relevant stakeholders. And, a tech stack should be part of that process. Preventing churn is always a 'catch-me-if-you-can' game and not a 'catch-up' game, if you will.

Steve Bernstein

As you said, it's critical to acquire sentiment from the entre "stakeholder" team (those that participate in renewal/purchase decisions) well before renewal and our clients typically do this at ~5 months prior to renewal, but more importantly they also have such "moments of truth" immediately following onboarding (this is probably the most important one!) and at other key moments in the customer lifecycle.  If you have Salesforce then you have enough to manage this by just setting up appropriate triggers (or Waypoint's TopBox has out-of-the-box automation and task management). Make sure you have CSMs actively reaching out to ask the client to provide quantitative feedback (nay, "survey" but you can use a "survey" tool) and you'll get 60-80% response rates from those who matter, which not only provides actionable data at the account level but also in the aggregate.  Here's a link to a VERY detailed "cookbook" with templates and processes that our clients leverage: https://waypointgroup.org/whitepapers/silver-bullet-customer-health-scoring/