Welcome to a 3-part series, Customer Success Failure: How the Pros Lost Customers (and Learned from it). Pros share their stories of losing, or almost losing, an account. Their lessons learned can help you develop your Customer Success function and improve retention rates.
Some say the mark of success isn’t that you never fail, but how you react when failure occurs. Failure happens, but when handled well, something far more powerful can happen: Growth.
Jay Nathan, SVP of Customer Success at PeopleMatter, workforce management software used by Del Taco and Charlotte Russe among other brands, was taken by surprise with his first cancellation: “The first major cancellation I received after taking responsibility for retention was like a gut-punch – no warning.” He reacted like any of us would: Try to figure out what went wrong, see if there was anything he could do to stop it, and figure out how to prevent nasty surprises like this in the future.
Why did they churn? Failure to respond to the customer’s requests and suggestions.
His first step was to call the departing customer directly to get feedback and to better understand the situation. In that phone call, he learned that the “customer had recurring product issues with no workarounds. They had made multiple product requests that we accepted as ‘good ideas’ but with no clear answer on whether we would or would not address them.” The client was frustrated. And after having their “good ideas” seemingly dismissed, they were ready to walk.
There was no winning them back.
But, the steps Jay Nathan took next are a real success story.
First, he created a Technical Account Management position as part of the Support team for each of PeopleMatter’s largest customers to help with ongoing product and configuration projects and issues.
Then he developed a health scoring system for Customer Success Managers (CSMs) to rate the overall health of every account and alert the team of any cancellation-related red flags.
His next step was to work with the Product department to create a “Client Care” roadmap to ensure that at least 10% of the work involved with each product release would be devoted to resolving specific customer issues (ie. making use of their “good ideas” – but only those that apply broadly to the customer base).
At the same time, he began to assimilate feedback from customers into the Client Care product roadmap, keeping an eye out for substantial issues that might require even more attention than the 10% usually allotted.
He says, “It sounds counterintuitive, but we also started to work harder at upsell and cross-sell opportunities. In this process we were able to reaffirm our value and potential value to customers, as well as have more opportunities to respond to persistent, passive issues.”
Taking a Cross-Department Approach
Realizing that real success for his customers required a cross-departmental approach, Jay also reached out to Sales, Product, and the entire executive team to highlight issues and find solutions with the benefit of multiple perspectives. Recently, he says, Customer Success has also been actively working with Marketing by having CSMs responsible for parts of the customer marketing plan.
The Results? Vastly improved retention rates.
Now, with everything he and the PeopleMatter team have put in place to monitor customer health, Jay can sleep at night knowing he won’t face another surprise cancellation.
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