Have you ever had a customer who just wasn’t a good fit? Whether you sell monthly subscriptions to a marketing automation app, or complicated annual contracts for an enterprise compliance and risk management solution, supporting these customers can quickly become a nightmare.
Whether their use-cases aren’t a good fit for your product, or they’re just plain incompetent in the relevant skill-set, these customers steal resources you could be using to help other accounts grow.
A lot of CS teams just deal with it, but fighting to retain problematic customers isn’t a long-term solution.
For most of the past two years, I was Director of CS at a startup that grew from about 60 customers to over 2000 in 18 months.
A significant amount of customers who signed up during that time were beginners, and didn’t fully understand the scope of the problems they were solving for. Sometimes they churned days after signing up; other times they struggled with the account for months before cancelling.
Beginner customers overload support, have the highest user-churn of any cohort by a significant margin, and account for 80%+ of the firefighting most CS teams do every week. If you sell to small businesses, you know exactly what I’m talking about.
As stressful as dealing with beginner customers can be, nothing compares to the feeling of getting an urgent email from a mega-account asking for a refund and cancellation. These “rage quit” scenarios usually happened for one of two reasons:
If you’ve had friction with customers for either of those two reasons, some critical marketing and Sales processes failed. In growth-driven companies (like startups), the Sales mentality can sometimes be reduced to “bring them in now, we’ll figure out how to deal with them later”.
That might be a great way for Sales to make their top-line growth numbers, but the Customer Success team usually gets stuck with the “we’ll figure out how to deal with them later” part. This is an incredibly expensive way to do business, and puts Sales and Customer Success at odds. Even worse, the customer gets caught in the middle.
This crazy time led me to the following Customer Success maxim:
Just because somebody has budget for your product doesn’t mean they’d be a good customer.” Click to share this quote on LinkedIn
Unfortunately, very few VPs of Sales or growth-focused CEOs will take that maxim too seriously. However, elite CS leaders don’t just take it seriously, they know how to influence others in their organization to take action on it.
The friction between CS and Sales boils down to a failure of communication processes. In a lot of companies, there’s an unclear (or non-existent) communication process in place between Sales and Customer Success. This results in ad-hoc decision making, unclear expectations, and a lack of accountability.
If that sounds about right to you, then it’s time to do something about it. All you have to do is put on your Strategy hat.
Most of the CS teams I’ve worked with had some variation of the following symptoms:
The first premise we have to agree upon here is that the symptom is not the same thing as the problem, even though the symptom feels quite urgent and real.
We can uncover the problem beneath the symptom by adding the word “because” to the end of the symptom – like this:
Now that we have the problems written down, let’s compile the data we used to come to the conclusion that the problem exists in the first place. We’ll continue with the examples from steps 1 & 2.
Now that you have the data to back you up, this step can be as easy as writing down a list of if/then statements. Again, based on the hypothetical examples above:
Are you starting to see how powerful this process can be?
It’s one thing to be able to point out problems, it’s another thing to have the expertise to propose reasonable solutions. Here’s what some solutions could look like to the problems I outlined above:
See what we just did there? We used an objective process of assessment to define a couple of really painful problems more clearly, then succinctly proposed the first step on the path towards solving them. Now the only thing left to do is communicate our findings to the right people.
If you rigorously follow steps 1-5 in this process, you’ll be able to use the information you gathered to disarm even the most hard-headed managers and sales executives. By putting all the work in up front, you’ve shown everybody involved that you’re committed to the process of communication. The more objectively you present your findings, the more respect, trust, and loyal cooperation you’ll earn from your peers and managers.
If you’re a CSM, present this information to a Director you have good rapport with. A good Director will know exactly how to escalate your findings. If you’re a Director or a VP, flex your leadership muscle and go to the decision makers who rely on your judgement and expertise to keep the machine running. When you walk into that conversation, try to remember: this is not a personal issue, this is a process issue. The point isn’t to throw anybody under the bus, or display how smart and strategic you are; it’s to use your natural strengths to make the lives of your teammates and customers better.
This level of communication isn’t easy, but it’s one of the most important things you can do for your career this quarter. It’s also a huge step towards aligning the interests of Sales and Customer Success at your company, which would have a massively positive impact on the health of the entire business.
When people give me pushback on this model, it sounds something like this:
“Hey DanG, this sounds pretty awesome, but who the hell has the free time to spend digging through emails and making pie charts? I barely have enough time for lunch.”
Here’s my answer:
Unless a customer dies, goes out of business, or finds a way cheaper/better product, they churn because your business processes consistently failed to deliver the value they were expecting.
Therefore, if you’re aware of a business process that fails to deliver the value your customer is paying for, it’s your fiduciary and ethical duty as a Customer Success professional to assess the failure, communicate your findings, and assist in the resolution.
If you work in CS, a significant part of your job requires you to make time for this.
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