Effective Risk Management in Customer Success Part II
Hi, I’m Markus, and welcome to a 🔒 subscriber-only edition 🔒 of my newsletter. I help you to deliver, grow, and monetize customer value to improve your performance, accelerate your career, and build a profitable SaaS business.
In last week’s episode, we started to build an effective risk management framework by determining how to
identify risks that are non-obvious
analyze risks based on customer results and performance
prioritize risks based on severity and probability.
Today we will continue with understanding churn in the customer lifecycle.
The most effective way to deal with risks is to eliminate them pre-emptively. The next best thing is to address them proactively, contain them early, and leave no chance for escalations.
Firefighting, band-aiding, and quick-fixing are the exact opposite. They result from failing to detect risks early enough and as a consequence, you have to to save the day under high pressure.
QBRs that you are conducting once every 3 months are not suitable for discovering risks. So is “checking in” with your customer once in a while.
The success of your risk responses depends on how well you understand where and why they happen. That requires breaking down the (intended) customer journey into smaller pieces.
One key part is to split the customer journey into smaller pieces
milestones into problems to solve
problems to solve into tasks to complete
tasks to complete into skills and knowledge required
skills and knowledge required in education and training
as outlined in the Success Plans you’ve created.
All the (major) steps outlined contain their own churn risks. Put simply, every piece of content and all the services you provide.
A guide that does not help customers solve a particular problem as intended
A 1:1 consulting call that leaves customers confused about what to do next
A webinar where customers are not able to transfer the lessons learned
this is similar to running a churn analysis but done when customers are still here.
Okay, let’s dive into the customer journey now:
1. After the signup
According to industry research, 50% of new customers log into the product only once and 75% leave within a week. Many SaaS companies have plans for the 30-60-90 days in the customer lifecycle.
But what about the first 30-60-90 MINUTES? The first impression is the most important one as it will last (forever).
Okay, there are customers who find out the product is not the right choice after they have signed up. That’s a pity but there’s no risk to be solved. It can only be fixed for future acquisitions.
I’ve experienced it countless times myself. I signed up for a new product and don’t know where to start. A ton of options were provided but no guidance. But also the exact opposite exists. You sign up for a new product and get overwhelmed with messages and triggers.
The easiest way to reduce the risk of customers not getting off the ground is to guide them in the right direction. It requires understanding their goals, where they start, and their priorities.
You need to ask your customers via an in-app questionnaire or via in-person kick-off meetings. If your customers don’t know themselves, it’s up to you to come up with qualified suggestions.
An example of an easy way to get started is to wow your customers by doing a tedious task with a handful of clicks e.g. successfully migrating data.
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