Prioritize the Right Signals


Have you ever had a surprise cancellation?

The story is almost always the same. “I met regularly with customer success managers to go over their accounts. I looked at health scores, usage, and NPS and even talked to our main contact and everything seemed great… until it wasn’t. They gave us a cancellation notice out of the blue. I guess there was just no way we could have seen it coming.”

But the truth is as a Customer Success leader you could have (and should have) seen it coming. It’s your job to identify the risk!

Why Surpise Churn Happens

Surprise churn comes from bad or missing account intelligence. If a customer cancels and you didn’t see it coming, it’s because you’re not looking at the right signals.

Signals are trigger events that signify a change or noteworthy trend in an account. Did they stop using the product? Did they have internal organizational changes? Is their business performing poorly?

These signals can help direct you and the customer success team to gather the right intelligence from the right people at the right time and help you keep and grow your customers.

The Right Intelligence Signals

What are the right metrics and activities to monitor? If you’re just getting started, here are some basics you should have in place:

  • Usage Patterns and Product Engagement: Start by analyzing the customer’s usage patterns and product engagement metrics. Track important indicators such as login frequency, feature adoption, and usage intensity. Identify customers who are not actively utilizing your product or show a decline in engagement.

  • Support Interactions: Support interactions can offer significant clues about a customer’s satisfaction and potential churn risk. Monitor the frequency and nature of support tickets or escalations raised by a customer. Identify patterns such as increasing support requests or persistent unresolved issues. Promptly address these concerns to prevent customer frustration from escalating into churn.

  • Financial Indicators: Financial indicators can provide valuable insights into the customer’s stability and commitment. Monitor factors such as late or missed payments, changes in billing frequency, or requests for downgrades. These indicators may indicate financial challenges or dissatisfaction with the value provided. Proactive engagement with customers facing financial difficulties can help mitigate churn risks.

  • Customer Feedback and Sentiment Analysis: Regularly collect customer feedback through surveys, NPS scores, and customer reviews. Additionally, leverage sentiment analysis tools to analyze customer sentiment from support interactions, social media, or product reviews. Identify negative sentiment, recurring issues, or dissatisfaction trends that may indicate an elevated churn risk. Address these concerns promptly to improve customer satisfaction and retention.

  • Executive Engagement and Relationship Strength: The strength of your relationship with key stakeholders and executives within the customer organization is a vital factor in churn prediction. Assess the level of executive engagement, communication frequency, and involvement in decision-making processes. Strong executive relationships often contribute to customer loyalty and reduce churn risks. Identify accounts where executive engagement is weakening and take proactive measures to re-establish connections.

  • Market Trends: Stay informed about the competitive landscape and market trends within your industry. Understand the challenges your customers are facing and how your solution addresses their evolving needs. Identify shifts in the market that may impact customer retention.

The Right People Signal

Armed with the right intelligence signals, you can have informed and productive conversations with your customers. These conversations are people signals. However, be aware that one of the hardest signals to interpret is people. Is the person you’re talking to a credible source? By credible, I don’t mean honest. You’ll find some people will lie or try to manipulate you, but overall most people are honest.

A credible source is someone who can provide reliable information on intelligence signals, company goals, and strategy and knows how and when a commercial decision will be made.

The most credible source you can find is the real and actual decision maker for the budget being used to pay your company. If you can earn this person’s candor you will have the real people signal that matters - “What does the person who signs the check think?”

In customer success, we too often talk to our day-to-day contacts (not decision makers, not budget holders) about what they think will happen with a contract. This is a problem for two reasons:

  1. Most people are nice to others they have a relationship with, and won’t easily or openly share negative feedback.

  2. While they are the day-to-day expert and can influence the decision, they don’t have a macro view of how and why decisions are made or what other pressures there are on the budget.

My advice is that if you don’t have confirmation from the actual budget holder and decision maker that they will renew, you don’t have the right people signal and should consider that account at risk.

The Right Time Signal

Even with the right intelligence signals and the right people signal, you may find yourself facing surprise churn or a cancellation you can’t reverse. That’s because you need time to build a plan to get at-risk customers back on the happy path. If you find out a customer has intentions to cancel with only 30 days left on your contract, it will be hard to make any meaningful changes to give the customer the confidence they need to reverse the decision.

Engaging early gives you a chance to identify any challenges the customer may be facing that could impact their renewal decision. By understanding their pain points, you can create an account plan that delivers tailored solutions, addresses their concerns, and showcases how you can continue to meet their evolving needs. It also opens doors to identifying upsell opportunities that can enhance their experience and increase your chances of success.

In Conclusion

You have to prioritize the right signals to successfully understand your client’s renewal intentions.

If you can build success operations that gather the right intelligence from the right contact at the right time, you’ll be empowered to deliver exceptional customer experiences, anticipate churn risk and achieve sustainable customer growth