Churn Monster: Bad Fit Customer

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Churn Monster #10: Bad Fit Customer 

customer churn monster bad fit
This month we are going to take a look at a churn monster that we’ve all experienced but is different than all the rest, for one very specific reason, that we will get into.

We’re talking about a bad fit customer. A bad fit customer is a customer who is unable to receive value from your product or service due to a mismatch of currents needs and offerings.

It’s inevitable with the nature of Sales, that not all deals that come over to Customer Success are going to be 100% great fit customers. So, what should a Customer Success Manager do when one of these type of customers land in their lap?

Let’s take a look at a scenario involving a bad fit customer and how we should handle this one of a kind churn monster.

The Scenario:

You get a notification that you have been assigned a new customer account. You log into your Customer Success software platform and start reviewing the account notes and details that came over from Sales.

As you are digging in you notice that there’s some missing information in the handoff notes from Sales that you would need to know to start the new customer implementation process. You go back to the Sales rep who sold the deal and ask for specifics on some of the gaps in the notes.

It’s at this time while talking to the Sales rep that you start to realize some red flags about being able to successfully bring this new customer onboard due to his understanding of how their data is structured, which doesn’t align with how your platform works.

You are worried you have acquired a bad fit customer. What do you do?

Plan of Action:

The first step is to correctly identify if this is in fact a bad fit customer. You know this is best to do as early on in the process as possible (which ideally would have been before they became a customer – but well, here we are). You want to be careful not to just jump to the conclusion that they are a bad fit when they could possibly be more of a stretch fit customer, so you set up a joint introductory call with the customer to learn more.

Your goal for this call is to be as upfront and honest as you can with the customer, so expectations are understood and both parties can make informed decisions for next steps. You are sure to have Sales also on this call to demonstrate that your teams are collaborative, and that your company cares about their success.

After a lot of back and forth with the customer and their team over the last month and a half, you come to the conclusion that the customer’s data structure is in fact a roadblock to fully implementing your solution, and the customer doesn’t seem interested in re-working their processes to try and make it work.

In spite of that, you put together a plan to help them utilize the parts of your product that they can given the development constraints and ask that they let you know if any business changes occur on their side to make you a better fit solution.

At this time, it’s safe to say- they are a bad fit customer, and you mark them as such in your Customer Success platform. This will allow you to adjust your engagement strategy with this customer to be a low-touch model where most of the communication is automated since their likelihood to churn is pretty much inevitable.

Although it is unfortunate, it is necessary to at times to count your losses and let these bad fit customers churn. It’s in everyone’s best interest as they can be a drag on growth, a waste of resources, and harmful to employee morale and industry word-of-mouth. And that’s what makes this churn monster different than all the rest- instead of turning this at-risk customer around you consciously let them go.

Follow the links below to learn about the other churn monsters we’ve covered so far and stay tuned for a new churn monster next month.

Fight Customer Churn!


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Understanding the Real Impact of Improving Retention and Customer Success Best Practices

Wednesday, March 20, 2019, 2:00 – 3:00 PM EDT

Did you know: For every 1% increase in revenue retention, a SaaS company’s value increases by 12% after five years? Clearly churn has a big impact on a SaaS business. 

To better understand that impact and hear ways to improve retention, we invite Founders and C-Level executives to a webinar led by Rob Belcher, Managing Director at SaaS Capital and You Mon Tsang, CEO & Founder of ChurnZero. We will share benchmarking data from SaaS Capital’s eighth annual survey of private B2B SaaS companies and hear customer success best practices from ChurnZero. 

Please join this webinar to learn: 

  • How your company ranks in terms of net and gross churn compared to companies with similar ACV’s and ARR
  • How to measure the impact of churn on your company
  • How to structure and compensate a CS team
  • How to develop a Health Score and key customer events to track

 

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 Speakers:

  • Rob Belcher, Managing Director, SaaS Capital
  • You Mon Tsang, CEO & Founder, ChurnZero

             churnzero ceo you mon 

 


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Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

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