Risk vs Churn in SaaS world
Renee Murphy
Member Posts: 18 Thought Leader
We are looking to start a risk account review and I am creating criteria for what qualifies as a Risk Customer that warrants executive review. ARR, Renewal Date, Potential Upside are all easy criteria but I am starting to feel a bit blurred between this and my churn risk meetings as we have an annual subscription so if they are not adopting they should be at risk. One way I was thinking about it was my Churn meeting is more immediate vs my risk are the up and comers for my churn risk?
Would love to get anyone's thoughts on this and if someone has this process written up at all...I would be thrilled to see it.
Thank you,
Renée
Would love to get anyone's thoughts on this and if someone has this process written up at all...I would be thrilled to see it.
Thank you,
Renée
0
Comments
-
Hi Renee -- We use our own technology (Waypoint's TopBox) to (1) acquire feedback from all the key stakeholders in any given account ~4 months before renewal, then (2) establish the right action plan for the account based on sentiment, tier, etc. With the feedback request well-timed in advance of renewal, we generally look at revenue from 4 categories:
1. Highly positive sentiment from the key contacts in the account: Up-sell/cross-sell! Opportunity to leverage promoters to increase the strength of relationships around the account
2. Low sentiment (e.g. a negative NPS from the account): this is clearly revenue at risk
3. Silent accounts that are disengaged: also revenue at risk (our data finds that silent accounts are ~14x more likely to churn!), but beware that you need a clear "WIIFM" for customers to participate in the feedback request and strive for ~80% response rates (we and our clients achieve this all the time)
4. Mid-scoring accounts: Look for opportunities to act on what they tell you in order to bump them into category 1
I've oversimplified a bit and would be happy to provide more details...
/Steve0 -
Hey Renee,
Long time, hope you are well.
I would keep it simple and use any of the following criteria to trigger an exec review;
1. If the customer is a big logo = reputational damage if they churn
2. If the customer spend is x amount and is a risk to you to hit the desired renewal rate if they churn
3. If there is x amount of upside forecast with the customer that is no longer achievable if they churn
And this would be looking over a quarter ahead of renewal time.
All the best,
Conor0 -
@Renee Bochman, I'd like to offer a different way to segment your meetings.
To set the stage, as a CS leader you should analyze all of your past churn. Identify the key reasons for it, and decide which reasons you have the resources to combat - likely along the 80/20 rule. There's no way I'll describe that process better than @Ed Powers so I'll link his recent post here:
https://www.gaingrowretain.com/communities/community-home/digestviewer/viewthread?MessageKey=0fbcae9f-67c8-464e-a8f4-b7600c948f9f&CommunityKey=1261a423-6343-48a3-a722-6c04f19eacc8&tab=digestviewer#bm0fbcae9f-67c8-464e-a8f4-b7600c948f9f
Then, for all of your current at-risk accounts, identify the reasons for potential churn. Narrow the list to the accounts whose reasons are the ones you identified above.
Now, you can hold 2 recurring meetings:
Churn strategy sessions: likely weekly meetings with cross-functional leaders who lead the departments responsible for addressing whatever issues are causing the churn. Lots of project management for you, and make sure to succinctly summarize these meetings at the exec level.
Business forecast meetings: forecast churn the same way you'd forecast renewal/upsell/cross-sell opportunities. In other words, share solid expectations for imminent churn as well as visibility for future possible cancellations (which you may still be in a position to avert based on your churn strategy sessions). You mentioned warranting executive review - this is the meeting that will pique executive attention on churn reasons and very well may result in an executive wanting to join a churn strategy session. That's great - now you have an exec sponsor.
------------------------------
Russell Bourne
------------------------------
-------------------------------------------
Original Message:
Sent: 09-29-2020 15:18
From: Renee Bochman
Subject: Risk vs Churn in SaaS world
We are looking to start a risk account review and I am creating criteria for what qualifies as a Risk Customer that warrants executive review. ARR, Renewal Date, Potential Upside are all easy criteria but I am starting to feel a bit blurred between this and my churn risk meetings as we have an annual subscription so if they are not adopting they should be at risk. One way I was thinking about it was my Churn meeting is more immediate vs my risk are the up and comers for my churn risk?
Would love to get anyone's thoughts on this and if someone has this process written up at all...I would be thrilled to see it.
Thank you,
Renée
------------------------------
Renee Bochman
VP, Customer Engagement
------------------------------0
Categories
- All Categories
- 2024 Demopalooza Videos
- 197 GGR Information
- 172 GGR Cafe
- 19 Welcome to the Community
- 6 Badge and Rank Program
- 195 Specialized Groups
- 27 Future Customer Success Professionals
- 805 CS Conversations
- 197 CS Conversations
- 34 CS Operations Conversations
- 273 CS Org Conversations
- 32 Industry Insights
- 197 Strategy & Planning
- 72 Customer Journey
- 716 Technology and Metrics
- 275 Digital CS (Engagement Programs)
- 204 CS Technology
- 237 Metrics & Analytics
- 17 Value Realization