There is one point upon which everybody is in full agreement about Customer Success Management. The core strategic purpose of a CSM / group and program is to reduce churn. Some companies go a step further to charter the team with the additional responsibility of moving customers up the value tiers wherever possible; others do not. But when asked for the reason for establishing a Customer Success Management program, SaaS/Cloud executives invariably answer with an expression of concern about churn. But how does that declared strategic purpose connect to the day-to-day process of a CSM’s work?
I recently heard a SaaS COO describing a very common situation in Customer Success Management. The CSM team was complaining of impending burnout from too many hours and interactions. It was found that about 30% of those interactions were really customer Support calls, so the COO said: “Don’t do that anymore. Let Support handle those.” While that approach makes sense, it also carries risks. Does Support have the resources to handle those extra interactions? Will quality be affected? Will the customers’ progression up the adoption curve be slowed? If so, what impact will that have on the Churn/retention rate?
Needed: A Foundation for Customer Retention Decisions
Strategy is supposed to drive Process and organizational Structure/People. The question of which categories of customer-company interactions should be guided to which of the available communications channels is a strategic one. Some channels are more inherently efficient than others for particular kinds of interactions. And some channels are more expensive than others. If I direct interactions to a self-help or automated channel, what are the consequences and risks of that decision in terms of long term revenue management and company profitability?
The honest answer, at this point of the SaaS/Cloud industry’s development, is that we don’t know. Detailed conversations about the profitability effects of churn, where they occur, seem to happen between the CFO and the CEO/COO at unknown intervals. Over in the Customer Success Management group, which types of interactions are most effective in reducing the risk of churn? Detailed information about interaction categories, durations, volumes and outcomes is rarely available. There’s a gap between customer retention Strategy and tactical decision-making, and it’s time to start taking it seriously.
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