May 20, 2020

Issue #4: Gauging churn risk during the pandemic

Chris Hicken By Chris Hicken
CEO at 'nuffsaid
gauging customer health during covid-19

An excerpt from:

Gauging customer health during the pandemic  

The burning question among Success leaders right now is, “How do I check in with my customers to gauge churn risk without sounding tone-deaf?”

 

Emails to customers asking “whether they’d recommend the company to a friend,” talking contract terms, or blindly pushing recent product updates can risk the company sounding too vendor-focused or insensitive. But there are no guidebooks or frameworks on assessing churn risk during a global pandemic, so for lack of tested alternatives it’s only natural that Success teams are leaning on tools like NPS. 

 

Here's an alternative way to assess churn risk amid COVID-19:

  1. Look at the sectors most impacted by COVID-19. Some industry sectors have been impacted more than others; a customer in Tourism should be approached differently than one in Pharmaceuticals or Online Retail. Ask CSMs to map their customers into “high exposure,” “moderate exposure,” and “low exposure” industries as in the graphic from Moody’s (which can be viewed in this blog post). Once this exercise is complete, Success teams can measure how much revenue is up for renewal in each exposure category, and prioritize customers that need the most immediate attention.
  2. Create a playbook based on each level of industry risk. Build templates for reaching out to customers in each level of exposure. For high risk customers, as an open-ended question about how you can support them. Give moderate customers the chance to pick from a menu of options, like delayed payment terms or discounts. For low risk, open a channel for them to make an ask if they need to. Tell them their renewal date is coming up and to let you know if their business is encountering any economic challenges. 
  3. Take into account how customers have previously been influenced by pricing. Right now, price rules everything. Even companies in low exposure industries will want to cut some extraneous costs. This is a time when everyone is more sensitive to overall expenses. So to tailor the outreach, ask CSMs to look at how discounts have affected customers in the past. 

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The top articles this week: 

This week's newsletter features posts on: 

  • A Bias to Action
  • Scaling Customer Success
  • Executing an Executive Sponsor Program
  • A Great Team Doesn't Make You a Great Manager

 

 

CULTURE

A Bias to Action

“Many CEOs face similar challenges of keeping a growing organization executing with the same relentless and risk-taking spirit of the early days.” Here, Henry Ward, CEO at Carta, shares an internal memo he wrote in February 2020 to get the company back to their core values. 

Read the full post

 

SCALING

The CCO's Guide to Scaling Customer Success

Jennifer Dearman (Pendo’s CCO) offers her best advice on evolving a Customer Success org for scale—with detailed strategies for setting team structure, segmenting customers, and more.

Read the full post

 

STRATEGY

Executing a Successful Executive Sponsor Program

Losing a customer due to “weak executive sponsorship” shouldn’t be an acceptable cause—this problem occurs when CSMs don’t have a playbook to build the right level of champions in an account. Here, Jeff Breunsbach of Customer Imperative teams up with Alejandro Sanchez of Adzerk to give the critical steps to build an effective Executive Sponsor program complete with aligning, designing, and following-up. 

Read the full post

 

LEADERSHIP

A Great Team Does Not Make You a Great Manager

“Far too many managers prefer to be reporters instead of investors.” This timeless (and concise) piece makes the case that managers should be able to make deep connections with their team and create individualized plans for improvement.

Read the full post