This week:
23 Ways To Reduce Churn: #4 Stop Overselling
Churn Cheat #6: Making it Hard for Customers To Cancel
Recent Webinar: Dave Blake & Greg Daines - part 2
23 Ways To Reduce Churn: #1 Stop Selling to Bad-Fit Customers
Quote of the Week: Align Everything to Customer Results...
23 Ways to Reduce Churn ► #4. STOP OVERSELLING
CLIENT STORY:
I recently worked with a large publicly-traded company with an expansive product range. The problem is that sales have been incentivized to load up the initial deal sheet beyond the customer's immediate needs.
The result was bloated deals that were difficult to close, and even more difficult to implement. Customers became frustrated when results took too long to materialize, even more so when they could utilize only a small fraction of what they'd purchased.
We helped the company by...
⓵ Building a framework that helps reps identify customer results accurately.
⓶ Establishing a team of practice experts to support sales in rationalizing customer needs with the right solutions.
⓷ Sell customers what they need for achievable near-term results, and tell them you'll be back to sell them more results at that point.
To maximize long-term retention, it's essential to "keep some of your powder dry" by saving key upgrade opportunities until customers are ready for them.
WHY OVERSELLING MATTERS
When you sell customers more products or services than they need to get results, you set them up for inevitable frustration later.
👉 Oversold customers understandably churn at a much higher rate than those with a right-sized solution to match their needs. 👈
WHAT TO DO:
✅ Base Sales Compensation on License Utilization
WHAT TO MEASURE:
✅ Number of Licenses Utilized
✅ Customer Half-Life by License Utilization
WHO'S INVOLVED:
✅ Marketing, Sales
CHURN CHEAT #6: Making It Hard For Customers To Cancel
Some companies will do anything to prevent customers from canceling.
☎️ For example, some companies (cough, cable companies) force customers to call a phone number and endure aggressive tactics to deter them from canceling.
👩🏼🚒 This is very similar to the customer "rescue" playbooks employed by many SaaS companies.
THIS DOESN'T WORK.
Very few customers are "saved" this way - probably less than 10%.
📈 But it gets worse: our research reveals that the vast majority of "saved" customers will churn soon after.
The lesson is clear: You can delay - but not deter - only a small number of customers from canceling.
But at what cost?
The ultimate outcome is a profound loss of goodwill.
Because these practices understandably ENRAGE people. 🤬
Don't be like the cable company.
23 Ways To Reduce Churn: #1 - Stop Selling to Bad-Fit Customers
👉 Selling to bad-fit customers may be the largest single driver of churn across all companies. 👈
By definition, bad-fit customers cannot get good results and, therefore, will inevitably churn - usually quickly.
But there's a silver lining: Bad-fit churn is also the easiest and fastest type of churn to solve!
HOW TO SOLVE BAD-FIT CHURN:
🔬 Identify the most common use cases in your existing customers.
🎯 Rank them in order of how long customers retain, and at the top will be your "Bullseye Use Case."
📢 Share this with marketing and sales so they can aggressively target and attract more of those customers.
CLIENT STORY:
I worked with a client who was experiencing too much early churn. Their solution managed tasks for front-line workers and was being marketed to a wide range of verticals.
🔬 Our analysis showed that the customers with the best retention were restaurants. 🎯
Narrowing the marketing and messaging to focus on restaurants led to dramatic reductions in churn and increases in marketing and sales performance!
This is not a coincidence. Customers who stand to achieve the best results tend to be more interested from the start.
Recent Webinar (6-15-23): Dave Blake & Greg Daines on Reducing Churn - part 2
This week I continued my discussion on the 23 Ways to Reduce Churn, this time with Dave Blake, CEO of ClientSuccess.com. We talked through several real company examples that implemented the churn strategies successfully described in the book.
If you haven't already, get your copy of the ebook free here: https://www.churnrx.com/23-ways-to-reduce-churn
23 Ways To Reduce Churn: #1 - Stop Selling to Bad-Fit Customers
👉 Selling to bad-fit customers may be the largest single driver of churn across all companies. 👈
By definition, bad-fit customers cannot get good results and, therefore, will inevitably churn - usually quickly.
But there's a silver lining: Bad-fit churn is also the easiest and fastest type of churn to solve!
HOW TO SOLVE BAD-FIT CHURN:
🔬 Identify the most common use cases in your existing customers.
🎯 Rank them in order of how long customers retain, and at the top of the list will be your true "Bullseye Use Case."
📢 Share this with marketing and sales so they can aggressively target and attract more of those customers.
CLIENT STORY:
I worked with a client who was experiencing too much early churn. Their solution managed tasks for front-line workers and was being marketed to a wide range of verticals.
🔬 Our analysis showed that the customers with the best retention were restaurants. 🎯
Narrowing the marketing and messaging to focus on restaurants led not only to dramatic reductions in churn but also to increases in marketing and sales performance!
This is not a coincidence. Customers who stand to achieve the best results tend to be more interested from the start.
QUOTE OF THE WEEK
The key to preventing churn is to know the customer is failing before they do.
