Apply Customer Success to Reduce Churn

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Cloud SaaS

In recent blogs, I’ve talked about Customer Success and its potential application to non-SaaS IT companies as well as trends in the subscription economy including my view on whether the perpetual licence is dead.

Having thought about those two concepts together, I realised they actually go hand in hand. In the subscription economy where customers pay only for what they consume, they are less locked in and committed to a supplier.

Previously the investment in changing technology suppliers was often times more expensive than any perceived or actual cost saving. However with the move to cloud based applications, the ease with which changing suppliers can occur is quite straightforward and generally inexpensive. Take for example some of the cloud apps in marketing or CRM: today it would be quite easy for me to switch supplier, the core features and benefits are usually identical, the infrastructure remains unchanged, and the only real cost is training people in the new interface. The point being that if you are a supplier of a technology that operates as a monthly or annual subscription (as I am) or even a channel partner working as an aggregator for your customer, you need to maintain a high level of service to them because it’s very easy for the customer to move on.

This is the very issue telecommunications companies deal with every day, they call it churn.

So what does it come down to – what would potentially make a customer under this model decide to consider alternative suppliers?

It all comes down to expectation and value. We always think price is the most influential factor in a buying decision, and although it does hold some weight, in any purchase, it always comes down to value. Do your customers perceive the value of your technology above others? It’s pretty likely they will investigate alternatives to your solution (especially if you’re more expensive!) but if you properly service them and apply the rules of customer success management, the value of your technology will always be higher and price will be less of an issue.

Let’s quickly review Kate Leggett’s (from Forrester) definition of Customer Success ManagementCustomer Success Management (CSM) is all about actively managing the customer’s experience to ensure they are maximizing the economic value out of your product or service. In the context of subscription billing, if a customer is regularly “experiencing” your technology (and by regular I mean daily or at a minimum weekly) then chances are they are going to value it and are likely to keep paying their subscription.

So in sum, as well as frequently scanning your login stats to make sure your customers are regular users of your technology, it never hurts to check in with them and see what they think or how they’re using it. Quite often they are the ones who come up with new innovations that you hadn’t even considered!

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