Can Customer Churn Be Good for a B2B SaaS Business? Sometimes...
Customer churn tends to be viewed negatively by SaaS companies, and for good reason. However, in specific scenarios, it can actually be, dare we say, a positive.
Customer retention is critical to a business’ growth and continued success. That means that companies are always on the lookout for superstar Customer Success Managers.
According to a report from Hubspot, an increase of just 5% in customer retention can increase topline business revenue by 25-95%. The TL;DR? Customer retention is critical to a business’ growth and continued success. That means that companies are always on the lookout for superstar Customer Success Managers—the individuals responsible for building relationships and driving customer retention.
So, if you’re a Customer Success Manager (CSM) reading this post, you may be asking how you can unlock “superstar CSM level” in your own career. Well, in this blog post I’ll walk through the top five tactics that have helped me grow my career as a Customer Success Manager and excel in every company I have worked at. With that, let’s dive in!
The key to driving retention and growth within your existing book of business is to provide added value to your customers. However, you can’t provide added value to your customers if you don’t know what their Desired Outcome is.
The formula looks a little something like this—Desired Outcome = Required Outcome (RO) + Appropriate Experience (AE). Let’s break that down further:
Required Outcome (RO) → What your customers are looking to achieve/solve/improve. Without this, you are unlikely to succeed in creating value.
Appropriate Experience (AE) → How your customers achieve their RO. This is the differentiating factor between you and the competition.
Throughout my tenure as a Customer Success Manager, I have let the Desired Outcome of my customers be my compass when it comes to any significant touch point with the customer. I always keep these questions in mind; “How can I get my customer closer to their Desired Outcome”; “Will this showcase value?”; “How can I make it more impactful and significant?”. What I’ve found over the years is that the best way to know your customers' Desired Outcome is by creating a success plan together with your customer. One that provides transparency and accountability.
CSM superstars always focus on the Desired Outcome, and they do so by completely mapping out the Required Outcomes of their customers, and by ensuring that every touch point with the customer matters and adds value. This process will not only equate to better results and help you win as a CSM, but it will also keep your customers’ expectations managed.
The best, and frankly only, way to build meaningful relationships with your customers is by earning their trust. The key to earning a customer’s trust is by taking steps to build trust over time through every touch point you have with your customers. Think about your customer’s trust in you as a bank, and every time you have a meeting/call/email with the customer where you add value or solve a problem for them is a deposit into the “trust” bank.
At the end of the day, if you are helping your customers achieve their Desired Outcomes, you are empowering them to succeed in their roles. In addition to creating value for your customers, you are positioning yourself as the go-to trusted advisor within your organization.
A big component of the Desired Outcome is the Appropriate Experience. Keeping that in mind, creating and fostering meaningful relationships is so critical to your success as a CSM. Ultimately, as a CSM, we are dealing with people. And as important as it is to deliver value, it’s equally as important to have that human connection with your customers.
These relationships will not only help you toward your ultimate goal of retaining/upselling your customers, but these relationships will also become your foundation of brand advocates, and advocates of your capabilities as a CSM.
How confident are you in your knowledge around your product and your industry? Do you know the ins and outs, advanced features, workarounds? In addition to your skills as a CSM, domain expertise is one of the strongest weapons you can have in your arsenal.
Product knowledge will help you find the best ways to tailor your product to what your customers are looking for. If they ask complicated questions, you know how to give reassuring answers and lead them through the right path—instilling confidence in you and the product. Knowing where you stand in your industry will allow you to understand what value your product adds to the industry and how it should be used by your customers according to the vertical they’re in.
There are many ways in which you can gain enhanced knowledge about your product and the industry. Some examples include signing up for industry-related newsletters, setting up Google news alerts for keywords related to your product and industry, speaking with your work colleagues or subject matter experts (SMEs) from other departments, watching product demos from the product team and attending department-specific all hands, and accessing your company’s knowledge base, i.e. a log of solved support tickets that could help you better understand what customers are asking and how to approach complex situations.
Having more than a surface level of knowledge around your industry and industry-related current events, and knowing your product inside out will help you establish yourself as a trusted advisor for your customers. Furthermore, it will help you identify the parts/features of your product that are most relevant for your customers, better enabling you to guide them toward added value and tailor the customer journey according to their Desired Outcome.
First impressions matter. That’s true in life, and most definitely in B2B SaaS. The customer onboarding stage is one of the most (if not the most) important stages in the customer journey since it will be the first time your customers will realize the value of your product—Time To First Value (TTFV). Defining what will be considered the TTFV for your customers, and how you will help the customer get there is one of the most critical responsibilities of a CSM.
Real-life example: During my time at Appsee, I was assigned the project of leading the onboarding program for our customers. The first step was to break down the product to make the onboarding as “digestible” as possible, and to identify the value at each step in the onboarding process. Not only did we improve our net retention numbers exponentially, but we also onboarded our customers so well that they became experts themselves on the usage of the product. In doing so, we reduced the dependency on our support team and increased upsell opportunities as the customers clearly understood what kind of value they would get from the product starting on day one.
Circling back to gaining product expertise, whenever I start a new role as a CSM, I start by breaking down the product and analyzing how to deliver the most effective and impactful onboarding. In the process, I gain a lot of tacit knowledge about the product’s capabilities and functionalities, helping me ramp up in less time and achieve superstar CSM level faster.
If CSMs are measured on net retention, what is your track record like? Do you consistently reach or surpass your goals? Being able to document and articulate how you’ve been a key driver of your company’s ultimate success will always attract the right attention from any company/recruiter/CS leader.
One approach I’ve taken to document my wins is to make a spreadsheet of all account names, ARR/MRR, renewal dates, net retention rate, and new revenue coming from upsells/cross sells, and identifying trends that I’ve had an impact on. It’s always encouraging to see your hard work paying off in black and white, and that you’re on the right track. Moreover, it’s a great way to stay on top of your accounts and be proactive about your strategy. Building a report, or dashboard, to report on your KPIs directly within your Customer Success software is another great way to go about documenting your wins.
Your Customer Success wins will always be derived from your ability to manage customer expectations, continuously add value, and lead your customers to achieve their desired outcome.
If you take anything away from this post, it should be this—there are countless ways to grow your career as a CSM, but ultimately, it comes down to the success of your customers and your ability to empower them to achieve their goals through your product, and deliver the Desired Outcome they anticipated.
This post was originally published on EverAfter's blog. Republished with the author's permission.
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