by Ali Ghafour on November 19, 2014 - Comment(s)
Churn is a signal into whether your customers are happy and getting value out of your product. It is also one of the five key performance indicators that business owners and investors look for to determine if a company is healthy or not (a healthy churn number is < 5%).
As VP Client Success at viafoura a big portion of that churn falls on my shoulders (I am happy to say that we are under that 5% number and very proud of keeping our customers happy and successful). Churn however is not a one person or one department responsibility. From my own experience and research Client Success has a direct impact for 50% of churn. But what about the other 50%?
I came across a great article from Preact (who sells customer success software). They surveyed their clients and came to the same conclusion I have when it comes to who owns churn.
Client success has a direct impact on 50% of the churn metric and for the other 50% Client Success has a strong influence on its direction.
To understand where the 50% number came from, consider these metrics as to why customers churn
23% – Poor on boarding (Client Success direct impact)
20% – Product under performs (Product/Technology)
15% – Ineffective relationship building (Client Success direct impact)
14% – Overselling (Sales)
14% – Poor customer service (Client Success direct impact)
8% – Customer organizational change
6% – Weak customer marketing (Marketing)
(I know I said my own analysis says client success owns 50%, and these research numbers add up to 52% – the 2% difference in percentage is not significant)
Here are some tips and tactics on how to address each of these areas on Churn:
Poor On Boarding – 23% – (Client Success Direct Impact)
- Automate and systemize as much of the on boarding as possible (email templates, how to guides, strong documentation)
- Make any tasks a client has to perform very simple
- Create videos on basic usage to educate a wider audience
- On boarding has to me mandatory, and should be given a name (i.e. smart start)
- Suggest best practices during your on boarding kick off call
- Show clients how to monitor the performance of your product on their own
- Measure this through a KPI: Time to onboard
Ineffective Relationship Building – 15% - (Client Success Direct Impact)
- Have quarterly checkins and review their performance
- Survey your customers to show that you care about their opinion
- Have tools to proactively monitor whether usage drops, and put in a call
- Build relationships with key contacts, power users, executive sponsors (send them a gift, thank them, ask them to be a speaker at your event, take them out to lunch, say happy birthday, remember an important life event for them and follow up on it)
- Measure this through a KPI: Reference-able Customers
Poor Customer Service – 14% - (Client Success Direct Impact)
- Measure this through two KPI’s: first response time & first resolution time. Ensure these are below your set goals (we have it as 2 hours and 24 hours respectively)
- Ensure there is enough documentation (and they are reminded where it is) so that clients can help answer simple questions themselves without having to send an email every time.
- Ensure your employees themselves are happy. If they are not it will be hard for them to treat the customers well
- Ensure your team knows your product inside out and has the correct set of vocabulary to interact with clients
Product under performs - 20% – (Product/Technology)
- Track customer feature requests and prioritize this list on your own (based on the frequency you see the request and the type of clients asking for it) and provide this input into product team
- Provide a profile of usage for successful companies with those who churn
- KPI: Product Usage
Overselling – 14% – (Sales)
- Ensure sales, marketing and client success are on the same page as to what a “good” customer looks like
- Review the sales qualification sheet
- Client success should participate in sales calls monthly to ensure both sides are on the same page
Weak customer marketing – 6% - (Marketing)
- Ask for regular cadence of customer outreach
- Identify and cultivate product advocates
- Work with marketing to help develop any content as it pertains to any clients perspectives
- In addition to product tips and updates, add more value with thought leadership
8% was attributed to customer organizational change. Although you can not influence the changes within your clients organization, your strong relationship building should help mediate any churn as a direct result of this.
Within client success at Viafoura, we provide very smooth on boarding, world class support (we even share how we are doing on our first response and first resolution times publicly) and work hard to build solid relationships with our clients. Beyond this, we have systems in place to ensure the voice of our clients are heard and reflected in our product, sales and marketing.
by Ali Ghafour on September 12, 2014 - Comment(s)
I read a blog post recently titled “Why you should reject that startup job“. Below are four of his points and why I think they are incorrect.
- Your equity does not grow as an employee
No ones equity grows. Not the founders or existing shareholders. You should be expecting dilution. The value is in the price of the share. The team needs to be focused on increasing the share price, not getting more of the pie. You increase the share price, you make more money, and so does everyone else.
- You can’t work your way up in terms of seniority
Incorrect. So many of my employees have moved to seniority roles simply because they knew that part of the business the best. If there is a gap in the company that can not be filled internally and someone from the outside can do that job better than someone internally, then why would we not hire them? That includes every role including CEO, CTO, CFO. Who wants to work for a company where people are promoted just because they have been there longest? Promotions have to be based on capability. This is not a union or government organization. It’s a pro sports team. That is where I would want to work.
- You can’t transfer the experience and you work on menial things.
Big B.S. The skills that you learn growing something from the ground up is equivalent to building a car when the drawings are made, to sourcing the metal to building all the parts and then selling and maintaining it. You learn so much from that whole process that you can apply to almost anything in life. Is there boring work – 100% there is. I have to look at contracts, order phones, setup emails – this will never stop. Every job in the world has menial work, at every single level. Thinking otherwise is a fallacy.
- Founders can make the same amount of money in 5-7 years at a bank than they can from an (unlikely) exit.
You are missing the whole point. If it were only about sure fire money – I’d be a banker. There is more to it than that. It is the thrill of the challenge. It is the satisfaction about working on something new, that has not existed before. Building something. It’s about working with other equally passionate people that think the same way. It’s about working on the leading edge of technology. Its about walking into a startup and FEELING the energy of everyone around you. You just don’t get this at a bank. I have had many successful bankers, MBA’s and lawyers talk to me about jumping ship to the startup world because they were lacking these in their work.
So when you do get that offer from a startup – take it. You will get so much satisfaction in your work that is very hard to replicate anywhere else. It just so happens that I have a blog post on what is like to work in a startup that gives some more insights.
by Ali Ghafour on July 16, 2014 - Comment(s)
I came across a very interesting video that has the CTO/founder (Jason Hoffman) and VP Engineering (Bryan Cantrill) of Joyent talking about their roles. It provided a unique perspective specifically of the VP Engineering role and their relationship with a CTO.
Here is the 40 min video https://www.youtube.com/watch?v=bAHItZ1cSNM
I have summarized the video below, but the presentation is valuable to watch as it puts the story together well.
Jason and Bryan believe that CTO’s fail when they think they are engineers and VP Engineers fail when they think they are managers of people and not creators of things. Read the rest of this entry »
by Ali Ghafour on May 28, 2014 - Comment(s)
Over the years of being an athlete and co-founder of viafoura, I have come across great books that shaped my thinking. Here is a list of some of those books, and a quick summary along with the benefit I got from it
This book is over 30 years old, but very relevant and does an amazing job of breaking communication down into its elements. It is great for engineer types that think in detailed fundamental ways.
When you are at the early stages of forming a company, or raising a round of financing – this book helps you understand both sides of the deal (the investor and the company) and also gives easy definitions to terms that are common place. Read the rest of this entry »
by Ali Ghafour on April 28, 2014 - Comment(s)
Churn (or the loss of a customer) can be tricky to track down in a SaaS (Software as a Service) company. Was it a bad product, bugs, bad customer service, not the right features?
I found this break down to be very helpful in framing the conversation around Churn, and start the process on how to address the issue in your organization.
You can click on the image for a larger version.
by Ali Ghafour on January 4, 2014 - Comment(s)
How long does memory last?
There are lots of types of memory. The memory in our brains, our hard drives, our DNA, a carving on a tree or a rock. All these forms of memory are distinct not because of the things they store – that doesn’t matter, but how long they are stored for and how its contents are read in the future. Here some forms of memory with their pros and cons, and some ending thoughts on how to pass on this storage long after the world has ended. Read the rest of this entry »
by Ali Ghafour on November 3, 2013 - Comment(s)
I had an funny/interesting conversation with our product manager Gus at viafoura this week. It was early morning – we just got in and no one had coffee. He asked me in a joking tone: “Hey is google working for you?” and we both just laughed and I said, “Make sure your are connected to the internet”.
I thought about it a little more and came up with so many reasons why Google could not be down, and it MUST be him making the mistake. I was thinking: “Of course its not down, its google. Check your internet, call Rogers (the ISP), check your network card, buy a new computer, did you reboot?”.
by Ali Ghafour on October 28, 2013 - Comment(s)
When I heard the saying: “Work Hard, Smart and Fun – You Can’t Pick Just One” I wanted to break this down some more. I wanted to see what it’s like in each of the scenarios:
1) Work Hard Only
A lot of first time entrepreneurs fall into this category (and the work fun only category), but it is dangerous to only work hard without having fun or being smart about it. You could work hard heads down and spend months on a product, idea, sales lead or client only to realize they have no impact on the larger picture – you should have added smarts. Or maybe you worked so hard and you got that right product, client or lead but you burned out and pissed off all your employees. Neither approach is sustainable.
by Ali Ghafour on October 22, 2013 - Comment(s)
When I read the title of this post: “10 easy things that will make you happier, backed by science” I loved it right away. For a few reasons.
It is a short, catchy, leading title – which is hard to do. A title (and the picture) are the number one reasons someone decides to click through or not. But I digress.
I really love it because of the content. Happiness is very important to me. I have a whiteboard in front of my bed for the last 10 years with 7 things I want in my life. #1 is to be happy. This article gives easy (really easy) tips, and to top it all off, its backed by science! Who doesn’t love science?!?
I’ll let you read the article to get the details on the science to back it up. Here are the 10 tips, and how It has affected me: Read the rest of this entry »
by Ali Ghafour on October 14, 2013 - Comment(s)
Recently, I have had a few friends working in other industries (legal, government, large consultants) ask me about the startup day to day, and what it is like.
if I had to summarize it in one word, it would be this: Rewarding.
You just feel like you get stuff done, get to work with passionate people and you learn a lot.
There is a blog post on 17 tips on working at a startup (from Dharmesh Shah Founder of Hubspot). I wanted to call out 6 that resonate the most with me: