Customer Success: The Lost Art of Churn Reason Analysis

It’s critical to understand why your customers churn, but if you’re relying solely on the reason the customer gives you for that churn, you’re definitely missing the actual reason.

‘Churn Reason’ analysis, like most things in Customer Success, is more complex and requires more deliberate effort to get right than it might seem on the surface.

It’s easy to just ask a customer why they’re cancelling or not renewing and to leave it at that.

It’s easy, but it’s not going to get you the answer you need to keep future churn from happening.

This guide will help you analyze the “churn reasons” in a way that will get you much closer to the truth and help you take appropriate action to keep that churn from happening in the first place.

Let’s go!

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Customer Success: How to Quantify the Impact of Bad-fit Customers

What’s the cost of working with Bad-fit Customers? Everything rolls-up to dollars… time and other resources – and even the negative sentiment in the market caused by churning-and-burning customers – all have an associated monetary value.

For those who wrongly consider Customer Success an altruistic endeavor, rather than a profit-seeking business strategy, you will want to try to make Bad-fit Customers successful at any cost. You’ll want to, but you can’t. That’s why we call them Bad-fit Customers.

I put this guide together for the rational person who knows intuitively that investing resources into Bad-fit customers (customers that lack Success Potential) is, well, bad for business. You get this. You understand this. But you don’t know how to prove it.

Well, now you do. And by “now” I mean after you read this.

Go. Read this.

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Customer Onboarding: How to Design and Implement an Effective Onboarding Process

  The phase of the customer lifecycle that gets the most attention is Customer Onboarding, yet ironically (or tragically), most people fail to understand what onboarding really is, and few do it well.   And even though Onboarding is … [Continue reading]

Designing a Sales-to-CSM Handoff that Actually Works

The best place to set our relationship with the customer up for huge success - on both sides - is right at the beginning, and it doesn’t get much earlier than the Sales-to-CSM Handoff. Of course, the Sales-to-CSM Handoff is also where companies can … [Continue reading]

What is a good SaaS Churn Rate?

Is 5% a good monthly SaaS Churn Rate? Read on to learn the answer... As a consultant to SaaS and Cloud providers that are looking to grow, I get asked what an acceptable SaaS churn rate is all the time. This article was originally written in 2013 and … [Continue reading]

Customer Success: CSM Capacity Planning Guide & Calculator

How many Customer Success Managers (CSMs) do we need to give our customers their Appropriate Experience (AX)? What happens if we ramp sales? What happens if a bunch of customers upgrade? Downgrade? How much excess capacity do our current CSMs … [Continue reading]

Customer Success: The Definitive Guide to Customer-centric Growth 2020

Customer Success is transformative. Whether you have a Software-as-a-Service, subscription or membership business or you sell one-off products or services and simply want to do business with your customer more than once, Customer Success should be … [Continue reading]

Achieve Exponential Growth by Focusing on CAC Efficiency

Companies struggling with growth are the ones that try to figure out how to spend as little as possible to acquire customers. The companies growing like crazy have figured out it's not about how much you spend, but the efficiency of that spend. They … [Continue reading]

TTFV as a Sales KPI to Drive Engagement and Expansion

Time to First Value (TTFV) is a commonly used Customer Engagement metric to measure the efficiency of the customer Onboarding process, but not generally a Sales KPI. But it should be. How can we hold Sales accountable for the customers they bring in … [Continue reading]

Time to First Value (TTFV) is a Customer Onboarding Goal

Time to First Value (TTFV) is a commonly used Customer Engagement metric to measure the efficiency of the customer Onboarding process. Unfortunately, the way this metric is used is almost always wrong. Time to First Value (TTFV) is the amount of time … [Continue reading]

Customer Onboarding: AHA! or WTF?

You think the AHA! Moment during Customer Onboarding is a positive thing. But it's not. AHA! moments are only a positive thing if you’re searching for something… perhaps aliens or a missing sock. At the end of this journey you discover what you’re … [Continue reading]

Emotional Disconnect During Customer Onboarding

Theres one major reason your Customer Onboarding sucks and it is something you can easily fix with little to no engineering or overhead. Fix the Emotional Disconnect that happens during Customer Onboarding. You see, Sales and Marketing create … [Continue reading]

Bad Sales Handoffs Cause Customers to Ghost During Onboarding

Customers ghosting you during onboarding comes up from time to time... you've probably experienced it yourself. Someone said that when this happens they kick it back to Sales since they have the relationship with the customer. This is unfortunately a … [Continue reading]

How to Know if Customers are Actually Ghosting you

When there is a legitimate reason for a customer to interact with you – based on helping them to get value from their relationship with you – but they are not… we say, in the parlance of our times, that they’re ghosting you. But… sometimes what you … [Continue reading]

Why Customers Ghost you

When there is a legitimate reason for a customer to interact with you - based on helping them to get value from their relationship with you - but they are not… we say, in the parlance of our times, that they’re ghosting you. You could say they are … [Continue reading]

The Basics of Customer Onboarding

Onboarding is perhaps the most critical phase in the customer journey - if nothing else, it sets the tone for the relationship - and is too important to just slap together and hope it works. Please ensure you're giving the Onboarding process - and … [Continue reading]

Success Potential: Real Customer Success Starts Here

Customer Success starts with acquiring customers that have Success Potential. Customers that have Success Potential are said to be good fit customers. This is the opposite of bad-fit customers that cannot get value from a relationship with us now or … [Continue reading]

Account Expansion: How to Upsell Unsuccessful Customers

Getting your customers to buy more from you is awesome. Remember, you’re in business here and getting customers you’ve already spent money to acquire and serve to then expand their relationship with you - giving you more revenue - just seems like a … [Continue reading]

Customer Growth: Why Lack Of Expansion Is A Really Bad Sign

Customers buying more from you is awesome. I mean, you're in business here and getting customers you've already acquired to expand their relationship with you just seems like a super-efficient way to grow. And it is. So when you have customers that … [Continue reading]

Account Expansion: If You Want To Grow Fast, Do This…

If you want to grow fast, don't do what most companies do! When most companies want to eke out some quick incremental growth, they'll often have their sales people turn to their existing customer base to make some sales. After all, you have a captive … [Continue reading]

Customer Growth: Upselling Hurts Trust (When You Do It Wrong)

When it comes to Customer Growth or Account Expansion (upselling & cross-selling), I assumed people knew that... ...you don't have to hurt the relationship with your customer to hit your numbers. ...it doesn't have to be a difficult slog that you … [Continue reading]

Customer Growth: The Difference between Sales and Expansion

If you missed it, I'm done talking about churn. If you have a churn problem, read this post and follow my directions. Churn won't be an issue for you anymore. Now we can move onto GROWTH! And the first order of business is understanding the … [Continue reading]

Eliminate Churn Forever in 5 Simple Steps

Churn... ya boring. Yawn. Time to move on. I'm so over talking about churn and if you really understand what Customer Success is all about, you should be, too. Churn is so easy to get rid of... you just have to do five simple things. If churn is a … [Continue reading]

Introducing the BEAST Message Framework for Customer Engagement

Let's talk about Customer Engagement, specifically one part of the Communication Model, which is my BEAST Message Framework for creating messages that actually engage customers. It's really interesting that we communicate all day long - with our … [Continue reading]

Introducing the Customer Engagement Communication Model

Let's talk about Customer Engagement, specifically the Communication Model. We communicate every day, all day. We communicate with friends, family, co-workers, industry peers, customers, vendors, celebrities, trolls, politicians, restaurants, … [Continue reading]

Churn Classification Framework For Customer Success Management

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company. If you focus on Customer Success, churn will not be an issue. At least in theory. To take that from a simple theory to your Operating … [Continue reading]

Customer Success and Sales: Why the Latter determines the Former

Sales is part of Customer Success. Like it or not. No, I don't mean the Sales organization should report to the Customer Success Management org. I mean that Customer Success as an Operating Philosophy, as a way of doing business, includes sales. It … [Continue reading]

Appropriate Experience is Required for Customer Success

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company. As I've said before, Customer Success as a concept is very simple. Don't overthink it. But I always have to unpack one piece of that … [Continue reading]

What Are The Best Customer Success KPIs?

As you can probably imagine, I'm asked all the time what the best Customer Success KPIs are. What metrics should you use to know if your Customer Success initiative is working. Here's the deal. I'm not an analyst... I'm a consultant. Companies hire … [Continue reading]

You Can’t Solve Upstream Problems Down Stream

When it comes to Customer Success, I've seen a lot of things. I've seen what works (and what works REALLY works... it's amazing). Unfortunately, I've also seen what doesn't work. A lot. In 2017 I heard "Customer Success doesn't work" way more than I … [Continue reading]

Customer Success is a Simple Concept (Don’t Overthink It)

Customer Success is a very simple concept that you'll really want to overthink. Resist the urge. The beauty of this concept is in its simplicity. Implementation is another story, though. But the concept is simple. My definition of Customer Success … [Continue reading]

Customer Success can’t fit into Existing Frameworks

I've been battling more and more misconceptions when it comes to Customer Success than the fewer that I expected. I assumed as Customer Success became more well-received, moved more into the mainstream, and simply became more common that we'd all … [Continue reading]

Those aren’t Problems. Those are Customers!

I work with companies around the world as a Customer Success consultant, I speak at events, and I do workshops. I'm constantly teaching others about Customer Success. And even more, I'm constantly learning. My understanding of Customer Success is … [Continue reading]

Customer Onboarding Success Secret: Don’t Overwhelm Customers

I've said this before, but it is worth repeating; Customer Success is not limited to one part of the customer lifecycle, and Customer Success Management is not limited to simply helping the customer get up and running at first or to save them from … [Continue reading]

A QBR is NOT Required for Customer Success

There's a myth in Customer Success Management that you must conduct Quarterly Business Reviews (QBRs) or Executive Business Reviews (EBRs) with your customers. This myth is propagated by those who only work with high-touch customers, by software … [Continue reading]

Customer Success: The Importance of User or Customer Onboarding

Customer Success is not limited to one part of the customer lifecycle, and Customer Success Management is not limited to simply helping the customer get up and running at first or to save them from churning later. Rather, when a company has Customer … [Continue reading]

How to Define Roles in Customer Success Management

Most companies just getting into Customer Success start by defining roles (well, one... Customer Success Manager), then they try to figure out the size of the "book of business" the CSM should handle, etc. That's wrong. But I won't leave you hanging! … [Continue reading]

Customer Success: High/Low/No Touch Customer Segmentation

The traditional Customer Success method of simply looking at what a customer pays us and giving them a particular level of 'touch' is old and outdated. It's time to logically segment customers based on Appropriate Experience (AX). For context, on … [Continue reading]

Customer Success: Incorporating High/Low/No Touch into Onboarding

Proper Customer Onboarding isn't done to prevent churn; it's done to ensure the customer achieves their Desired Outcome. Retention comes from that. But what is "proper" customer onboarding? Let's find out. For context, on Friday, May 19, 2017, I did … [Continue reading]

Customer Success: How to help Salespeople with Customer Segmentation

The age-old issue of Customer Success and Sales alignment, only this time focused on segmentation. This is my attempt to definitively address this eternal quandary. For context, on Friday, May 19, 2017, I did a Customer Success Ask Me Anything (AMA) … [Continue reading]