This is the Customer Success edition of our New Operational Model series – a practical department-by-department guide for startups operating in the post-COVID world. You can also read about our HR and Marketing Operational Models.
Over the past few months, business around the world have been busy trying to figure out the best ways of accommodating their customers while transitioning through the COVID-19 crisis.
As we’ve said before, maintaining the existing customer base will become the most important KPI in companies’ ability to successfully navigate to the other side of the crisis. As shown in a survey conducted by Gainsight – 100% of companies ranked “preventing churn” as a “very important” issue – a higher rate than any other issue.
Given the fact that this is going to be a long-term issue, companies are redesigning their operational models around retaining customers, focusing on 2 general strategies:
1. Showing value and ROI to the customer (ex: faster implementation)
2. Preventing downsell
In any case – CS is becoming an even more important role than ever, and over 87% of companies are planning to keep or grow these teams.
We hosted a Viola Virtual webinar with my good friend Nick Mehta, the CEO of Gainsight, as well as customer leads from Walkme, Redis Labs and SimilarWeb, to share industry best practices that you can allow your company to take a proactive approach to customer success and shift from defense to offense.
8 steps to kill the churn
1. Empower CS reps – If you can, allow your CS to grant contract extensions and price reductions to customers without escalating through the entire chain of the business. This will enable them to be empathetic and communicate on a human level with clients, and will ensure that your customers are quickly getting the help they need. That said, make sure there is a clear, official policy that outlines the limits of the concessions they can grant, so they’re not working on an ad-hoc basis.
At SimilarWeb, a policy designed to empower CS reps led to 90% of customer requests being handled directly by the account managers, instead of being escalated through the normal approval process. This was a win-win – It freed upper management from the laborious approval process, and it kept customers happy with a quick, proactive approval process.
“We took off the handcuffs… and that immediately enabled the CS team to feel greater degrees of control in conversations they weren’t used to dealing with,” said Uri Snyder, VP Sales at SimilarWeb.
2. Identify struggling customers – Some of your customers might have suffered massively from COVID-19, while others did so to a lesser degree. The CS team needs to quickly assess the projected impact of COVID on your customers, based on a combination of subjective and objective data points, and try to create a “customer score” that measures the projected impact on their ARR (negative, neutral or positive.)
3. Measure usage – Companies no longer have the luxury of paying for products that aren’t helpful on a day-to-day basis, so if you’re not a “must have” product, you will likely see significant churn. Which is why, now more than ever, usage is a key metric to analyzing the health of your customer base. When identifying low usage, be proactive about finding ways to get your customers to rediscover the benefits of your product.
4. Make product enhancements – Your customers will almost certainly have different needs than they did before COVID-19. Your CS team must be active in understanding these needs, communicating them to Product/R&D, and making sure they are delivered as quickly as possible.
5. Redesign onboarding – Your focus should be on the customer experience – Ease of use, fast implementation, and faster onboarding. Companies no longer have months to spend integrating a product into their business operations – value needs to be realized almost immediately.
At Redis Labs, the team focused on completing 2 key automation products – automatic analysis of flows and proactive anomaly detection by Anodot. These processes, whose implementation was accelerated by COVID-19, have allowed the CS team to scale.
“Both of these allow us to do our jobs more efficiently and reduce the time wasting for agents to a minimum,” said Oren Yaqobi, VP Customer Success at Redis Labs.
6. Allow free access to premium features – Even if it’s for a limited time, allow your customers to use features they otherwise wouldn’t have access to. This will not only help you show value but it will also expose them to the full product suite you offer; when they recover, they might be interested in paying for those services. CS can help communicate this offering to the customers. Added benefits include:
o Educating the customer
o Not being overly “salesy” during a difficult time for customers
o Driving the bottom line in the long term
The WalkMe team promoted a time-limited offer of free access to their Workstation product – a super-notification center that allows streamlined communication with employees directly from the desktop. They believed it would provide real value during a time that everyone is working from home.
“Customer-centricity is a company-wide philosophy,” said Yael Haloutz, RVP, EMEA Account Management at WalkMe. “Customers are now, more than ever, looking for solid partnerships and tangible value, and this is what we’re focusing on doing.”
7. Offer long-term renewals in exchange for concessions – Upcoming renewals might be tricky these days so consider coupling them with price reductions for an extended period of time, or offering product enhancements and access to premium features.
8. Collaborate cross-functionally – Revamping your CS efforts is an all-company effort – it cannot fall squarely on the shoulders of your CS team. It will start with market analysis from the marketing team, it will move to Product/R&D to assess and implement enhancements required in your product, and then it will continue with the customer-facing teams – CS and Sales – to execute on the strategy.
Shifting CS efforts from defense to offense
As we begin to transition out of crisis mode brought on by COVID-19, we should shift our customer success from defense to offense. It is now more important than ever to have a proactive CS department that is offering relief to customers during this difficult period and safeguarding the upsell pipeline of the future.
Eran Westman is a Partner at Viola Growth. With more than 20 years as a technology executive, he has vast experience in business leadership, and developing and executing strategies in challenging markets. He served as CEO & President of Vidyo, and as EVP of Global Business, President of Asia Pacific and VP of EMEA at Ceragon Networks.