The Path to seamless Customer Retention

Hi, Markus here. Welcome to a new episode of the Customer-Value-Led-Growth Newsletter.

I share strategies and guides to help you to become a proactive CSM delivering more value for your customers and revenue for your company every week.

If you are not a paid subscriber, here’s what you might have missed:

• 5 highly effective Tools every CS Team needs to use

• The not-so-Secret to high Product Adoption

• How to build a Customer Success Metric System that rocks

• Customer Onboarding that drives Growth

• How to build a dedicated Customer Success Plan

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Customer renewals are not won on the renewal date because it’s not an event. They are won on the 364 days before.

They do not depend on your sales skills and techniques. They depend on the value customers have received up to this renewal.

Customers have purchased your product because they want to accomplish their goals. Depending on what you are offering they came for

• increasing revenue

• reducing costs

• eliminating risks

• hiring the best people

• building their brand

• …

If your customers have received what they came for they will stay. If not, they will churn. With a few exceptions namely when customers have missed their goals by a narrow margin and you can negotiate a second chance.

However, there’s no such thing as“retention strategies”. There’s only one and it’s called delivering customer value.

In today’s post, I’ll show you a strategic and repeatable way to meet and exceed your customers expectations - the CSM Operating System:

1. Customer Discovery

The easiest way to set yourself up for failure are botched customer discoveries. Many CSMs are relying on the information they get from the sales hand-off.

This is a big mistake. Despite their best efforts, your colleagues from sales do not have the skills and knowledge you do.

They might be able to accurately identify customer goals and success metrics. They can capture the problems customers need to solve.

But they are not qualified to run a problem analysis to uncover their root causes. They are not qualified to evaluate your customers’ skills and knowledge.

Both are relevant in any situation where you are not moving customers through one-size-fits-all-eat-or-die CS programs/journeys. So use the hand-off you get from sales as the starting point for your advanced discovery.

At the end of the day, you must have

• clearly defined goals and success metrics (accountability)

• a thorough understanding of your customers problems (solution-design)

• clarity about the scope and nature of the inputs customers need (skill gaps)

2. Success Planning

Most so-called success plans are merely use case documentations. It’s a summary of objectives, KPIs and key challenges.

But they don’t contain a single word about how to overcome these challenges and meet their objectives.

So what is a real success plan? A real success plan is a roadmap that outlines all the steps customers need to take to accomplish their goals.

• Milestones to achieve

• Problems to solve

• Tasks to complete

• Skills and knowledge required

• Content and services required

They are built - you may have already guessed it - based on the information from the customer discovery. If it’s incomplete or inaccurate you end up sending customers into the wrong directions.

And your customers are not patient. They want success fast and easy and are not willing to follow a process of trial & error.

3. Customer Enablement

Your CS plans outline the skills and knowledge your customers need to accomplish their goals. Your content (guides, tutorials, etc.) and services (training, webinars, etc.) need to cover the gaps.

More often than not, there’s no such connection. Content and services are built on broader education or worse - they are product centered.

Customers don’t need 60-minute tutorials showing them the 78 customization options of a feature. They need a 3-minute version that shows them how to use it to achieve a specific outcome.

Some companies like to brag about the number of articles and hours of video material they have in their knowledge base. They don’t get that more is not better.

What matters is how many customers are able to implement their learnings toward the intended outcome.

Speaking of, in a high quality CS program, every piece of content and services is built with a clear goal in mind.

4. Success Tracking

Despite your best efforts, customer success is not guaranteed. You need to track your customers progress with the appropriate metrics.

The appropriate metrics are the ones your customers use to measure success. The ones that you’ve identified during the customer discovery.

If you can’t track them inside your product you need to find other ways to get the information. Ask your customers to share their reports, spreadsheets or send you smoke signals.

However, numbers can be deceiving and issues may arise in between. The best way to prevent your customers from falling behind and address potential churn risks in real-time is to follow up regularly.

Schedule meetings with your customers at critical points in their journey. Customers went through your webinar series?

Meet with them 1,2 or 3 weeks later and evaluate whether they have been able to successfully apply their learnings.

5. Demonstrating Value

Your customers have created reports measuring the impact of your product? They can see it directly in your product? That’s great. But do you know whether they are aware of how much they benefit from working with you?

Better be safe than sorry. Start all your strategic customer meetings with a value recap. Highlight the gap between their initial performance and where they are now. This is not restricted to QBRs or how I like to call them - Quarterly Value Reviews.

This is pretty much straight-forward part but there’s one thing that adds complexity. If you are working with larger mid-market and enterprises most likely not all stakeholders are present at your meetings.

But they are key decision makers that can’t be ignored. So you need to find a way to demonstrate value remotely.

The key to succeed here is to leverage your customer relationships. Use the insider knowledge of your champions to create reports that highlight the ROI for different stakeholders (VPs, COOs, CFOs, etc.)

The Bottomline

This framework isn't about building complex playbooks and tracking dozens of metrics. It’s about doing the basics that have been lost in CSM exceptionally well.

If you put your customers front and center of everything you do their success becomes (almost) inevitable. And consequently, their renewals follow seamlessly.

The hardest part is to unlearn the old ways of

• prioritizing product adoption and usage

• measuring health scores, NPS and CSAT

• chasing scalability and efficiency

that are the reason why you spend so much time in reactive mode that’s getting you nowhere.

You have to trust the framework because if you do, it works for you.

PS: Want to dive deeper into the CSM Operating System? Check out the CVLG Community and get access to unique resources, training sessions and peers.