Ed Powers: Let’s face it, many people in our profession don’t like math. It’s understandable. However, the best decisions are made based on facts, and correctly analyzing data is the best way to uncover those facts. It’s very helpful to hire at least one spreadsheet jockey for the CS team. That person can play a critical Customer Operations role, supporting you and your team in a variety of ways. This includes building valid customer health scores, which keeps your team members focused on the right accounts.
Ashley: What is the best way to drive accountability for churn reasons across non-CS departments?
Ed Powers: Pareto analysis will help quantify the cross-functional nature of churn, but by far the best technique I’ve ever used to drive change is a Japanese method called hoshin kanri. Unlike MBOs or OKRs, hoshin is a top down, closed-loop, integrated process that keeps organizations stay hyper-focused on achieving a single, enterprise-wide breakthrough. The technique decomposes complex issues into manageable chunks, cascading, executing, and then reviewing improvements from bottom to top. Metrics and accountability are built in. Global companies like HP, 3M, Microsoft, and Danaher all swear by it.
Ashley: Where do you see organizations make mistakes when it comes to data?
Ed Powers: The biggest mistake I’ve seen is relying on the financial community to provide Customer Success KPIs. Very few CFOs and board members understand the true nature of variation and how to accurately measure churn. In fact, the equations they commonly use increase the odds of making bad decisions. The best advice I have is to track your own numbers correctly and accurately, and be prepared to discuss them when you meet with C-levels and board members.
