Here are the signals and why we ignore them⤵
Have you ever had this experience?
You've just finished a kickoff call with a new customer, turned to your neighbor, and said, "They aren't going to make it." (Likely, you were just thinking it. More on this below...)
An astonishing amount of experience and data indicates that your judgment is almost certainly correct. That customer will probably fail sooner or later.
🚫 But how can you possibly know that? You've only just met them!
Actually, kickoff calls can be quite revealing and frequently surface reliable signals of customer churn.
🛜 What kind of signals? Think back to the call. What did you see or hear that made you concerned? I'm sure you can think of several things right off the bat!
Here are just a few common examples:
⚠️ The key customer leader/sponsor doesn't show up to the call.
⚠️ The customer reveals totally unachievable expectations.
⚠️ They can't articulate what result they are hoping to achieve.
⚠️ They're surprised at how much effort will be required.
⚠️ They lack one or more key elements necessary for success.
⚠️ There's no assigned internal owner, or the owner lacks authority.
⚠️ [You've seen more - share them in the comments below↓]
❓Why are these signals so reliable?
Understand that the fundamental driver of customer churn is the failure to achieve measurable results against their key business objectives.
📉 Customers who achieve measurable results stay 6 times longer than those who don't. Even customers who get poor results stay more than twice as long! IT'S ALL ABOUT RESULTS. Therefore...
👉 Any obstacle to achieving measurable results is a reliable predictor of customer churn. 👈
Go back through the list above, and you'll see that they all directly relate to the customer's likelihood of achieving measurable results.
🚨 THESE CUSTOMERS ARE "RED" RIGHT FROM THE START! 🚨
This is also how to know that some signals are NOT major risk factors.
For example, our research shows that being "difficult" or "demanding" is NOT associated with a higher risk of churn. These factors are either irrelevant to results or sometimes even positive indicators.
😵 Why do we ignore the risk signals?
Short answer: The conventional approach is to wait until customers are frustrated before pulling the alarm. CSMs quickly learn not to bring up these concerns too early. Nobody wants to hear it. Their job is to "make it work!"
This is a losing strategy and a tragic waste of CSMs' value.
The winning approach is the opposite: amplify the early signals!
HERE'S MY RISK PLAYBOOK:
1️⃣ Identify and systematically track the early results indicators for every account from the start.
2️⃣ Set accounts with ANY indicators to "Red" immediately to ensure action (no "Yellow" wait-and-see status).
3️⃣ Build standard playbooks to address each type of risk specifically.
4️⃣ Execute and track actions aggressively to ensure rapid resolution.