Covid-19 is increasing the risk of churn: What should customer success do?
I always thought 2020 would be the year when SaaS companies will finally realize the importance of remote work. But not in such a way. Covid-19 has forced everyone to go 100% remote but more than that it has led to SaaS companies taking tough measures to survive the economic downturn that is already in motion.
And I want to talk about the one function that is going to be most critical during this crisis — Customer Success. It’s becoming more and more evident that acquiring new customers won’t be as easy as 2019. So retaining the existing customers is of prime importance. This is where the superhero called recurring revenue comes in and saves the day. But is customer success ready for covid-19?
The last time the world had an economic meltdown was 2008–09 during the subprime crisis. Customer Success as a function did not even exist back then. In fact, total size of the SaaS market was about $10bn in 2010. Compare it to the fact that the total size of the public SaaS market in 2020 is projected to reach $157 billion. So, in short, no customer success team has ever faced an economic crisis.
So I thought we should discuss some of the challenges and their possible solutions to help customer success teams worldwide manage this situation without affecting business continuity.
Customer Success challenges due to Covid-19
- Unavailability of customer success leaders
Since customer success as a function did not even exist the last time we had a recession, customer success leaders who have been there and done that are practically non existent.
Now is the time to step up and shine. Customer success leaders should own the business continuity plan as companies try to figure out how to survive 2020.
- How to manage key accounts without travel?
I recently published a blog on this. To summarize, you can use the following 6 alternatives to travel: a. real-time collaboration, b. recurring calls, c. join customer internal meetings, d. live chat, e. your internal chat platform and f. video calls.
- Centralization of communication
If you are a customer success leader, now you can’t just walk to a CSM’s desk and ask what’s going on with an xyz account. You need to keep a tab on all communications between CSMs and customers (especially key accounts) so that you know when to step in to save a customer.
You could either do this by having a single inbox for all CSMs or if you have a customer success software like CustomerSuccessBox, all customer communication including calls, emails and tasks would be in one centralized place as we integrate with Gmail (2-way), Outlook (2-way), Twilio (for making calls) and you can auto create tasks via playbooks and assign to CSMs.
So, a CSM never has to leave the platform to perform daily tasks. And as a leader, you can just log in to the platform and see what is happening in accounts at high risk of churn currently.
- Importance of alerts
Now that the entire workforce is remote, it’s very easy to get distracted and lose an existing customer. So it’s important for success managers to get real-time alerts whenever an account is at risk or a task requires immediate attention.
If you are using a customer success platform, then it should not be that difficult. For example our customers integrate alerts with Slack or Gmail to be on top of critical issues.
However, if you are not using a platform, I’d suggest creating risk alerts from your product analytics tool based on any negative change in product usage and early alerts from your billing tool so that you know which accounts are up for renewal before time.
- Multiple data points are not possible to comprehend
This one is specific to 67% of organizations who still do not use a customer success tool. How do you judge if an account is about to churn? You can’t expect your CSMs to look at 5–10 different platforms and then make a decision whether a customer is at risk or not. And in the current scenario you won’t be able to meet your customers either. So how do you collate all the data in one place and get a clear signal?
To them I’d say today is the right time to start evaluating a customer success software so that next time around when such a situation arises, you will just have to look at your health scores and you would know which accounts are at risk.
For those with existing platforms, I’d suggest you reconfigure your health scores as the needs of your customers and their expectations from your product may have changed post the crisis. They may also be reevaluating their tech stack as everyone will be conservative about money in the current economic scenario. So make sure you are tracking the right signals, i.e., lower product usage, less number of users using your product (customers may lay off employees or look to reduce licenses), delay in payment (especially for monthly paying customers), etc.
We have covered 5 of the key challenges that customer success leaders are facing in light of the current crisis. But how do you save your customers without having customer success technology in place?
Customer Success strategies to prevent churn during Covid-19
- Explain the downside of not using your software now
If you are a critical software for customers like a billing platform or a customer success software, you need to educate your customers about the necessity of your product during an economic downturn.
- Free plan upgrade
Offer a free upgrade or additional features to your customers who could benefit from extra features during this time. For example, if you are a marketing automation platform, you could offer a premium plan for free for 3 months or add advanced analytics and multi-touch attribution for free till the situation normalizes.
- Deferring payments
Another tactic could be deferring payments especially for those customers who pay monthly. Let them pay once the lockdowns are over.
- Reducing the number of licenses
For multi-user products, one of the best ways to reduce cost for customers without losing them is to let them reduce the number of licenses without paying a penalty and even refunding dollar value for the months left on those licenses.
Offer a flat x% discount on renewals or add 2–3 free months to retain them during the lockdown period.
- Offer to freeze accounts
For customers who can’t afford to pay for your product during the course of the lockdown, you can always offer to freeze/pause subscriptions for x months so that you don’t have to reboard or re-onboard them. They can just restart their subscription when they are ready to pay.
What strategies have you been using to prevent churn? Tweet to me @nileshsurana.
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The original blog was published here.