It’s time to talk churn monsters again. This month’s customer churn risk is a cheater. A cheater is a customer who is actively being wooed by one (or maybe even more) of your competitors in attempts to steal their business.
Of course, competition is always going to be a thing in any marketplace, but sometimes we can get so wrapped up in the bubble of the company we work for that we become naive and blind to the outside world and the competitive landscape.
Knowing and understanding your competition is a critical step in executing a successful go-to-market strategy. If you are not aware of who the competition is and knowledgeable about their strengths and weaknesses, it’s likely that another vendor could enter the picture and provide a competitive advantage, such as product offerings at lower prices or value-added features. Identifying your competition and staying informed about their products and services is the key to remaining competitive in the market and is crucial to customer retention and the survival of any business.
So, let’s take a look at scenario involving a cheater and how you might be able to save that customer from switching to a competitor and churning.
You have been working with this one account for almost two years. They signed on with a two-year contract, that included a discount. During this time, they have pretty regularly been using your product. And you really don’t hear much from them in terms of customer issues or complaints. You would say they are pretty satisfied as a customer.
You have a call scheduled with them, and during this time you remind them that they have a renewal coming up in a few months.
A week later, your main point of contact starts sending you these one-off questions via email about their subscription and you are starting to worry that they might be talking to competitors and comparison shopping. What do you do?
Plan of Action:
First you log into your CS platform and take a look at their customer health score. Their account as a whole is currently in the green. You dig a little deeper to see the main user has only ever given an 8 on the Net Promoter Score (NPS) surveys that have gone out over the time of their customer history. This indicates that she is a passive customer. You know that passive customers are usually open to alternatives, price sensitive, and not particularly loyal.
Knowing this, you decide to give your contact a call directly to answer her subscription questions. While on the phone, you also try and tease out the reason behind the questions. It’s at this time she reveals that they are looking into other alternatives before they make a decision about the renewal. You ask her what other platforms they are looking at. She tells you, and you assure her you want to work to retain their business and offer to provide her some information to help in their decision process.
Luckily, your Customer Success and Product team recently did competitive intel and created a set of battle cards for each of your main competitors. You then take the list of the competitive options that the customer provided you and put together a presentation of how you positively stack up against the other vendors they were considering.
You also go back to your notes in your CS platform from when the client went through on-boarding to reference what their goals and challenges were before becoming a customer. You then highlight in the same presentation, how you have helped them overcome those initial challenges and worked towards their goals.
And lastly you make sure to emphasize your unique value proposition for them in the presentation to really drive home why it would be a poor decision if they decided to switch to a competitor.
You set up another meeting with the customer to go over this presentation. While in the meeting you were able to answer all their questions and you left feeling hopeful about their renewal.
You had told them you would follow-up in a week to see if there was any other information you could provide. On that call the client tells you they have decided to renew with another two-year contract. She said that it was clear that you value their business and have decided that your company would be the best option for them continuing forward.
That was a close call with having the customer churn and switch to a competitor. But in the end, you took it as an opportunity to remind them of exactly why it’s the right decision to remain a customer, and you think the relationship is stronger because of that.
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.
- Churn Monster #1 – Disengaged Customer
- Churn Monster #2 – Cash-Strapped Customer
- Churn Monster #3 – Slacker Customer
- Churn Monster #4 – The Victim Customer
- Churn Monster #5 – Manic Customer
- Churn Monster #6 – Abandoned Customer
- Churn Monster #7 – Stuck Customer
- Churn Monster #8 – Ghosted Customer
Fight Customer Churn!
ChurnZero Resource – ROI Calculator
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Customer Success Around the Web
- 10 Ways to Improve Your Customer Success Strategy – Building, running and executing a CS organization is not easy. Check out these ten tips to help.
- The Ultimate Guide to Customer Delight – Customer facing teams have a vital role to play in achieving customer delight. Learn how.
- Reducing Churn: ROI- Focused SaaS Strategies for Customer Success – ROI-focused SaaS strategies should be based on comprehensive data gathered from every customer engagement.