Who Owns Churn and How Do You Fix it?

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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.