10 Internal and Customer-Facing Processes to Boost Customer Retention

In Primary Impact’s Hindsights 20/20 series, we review the strategies we’ve deployed over the last few years and share what works. Follow along as I reintroduce valuable learnings that have stood the test of time and can inform current practices. Keep up with new installments by following me on LinkedIn.

While it is important for SaaS companies to give net promoter score (“NPS”) its due, net dollar retention is typically the north star metric for customer retention. Customer success teams can move the net dollar retention needle in two ways: reducing churn (and contraction) and growing their existing customer contracts. Mitigating churn risk is the critical path to net negative churn (100%+ net dollar retention), yet all too often churn reduction efforts are reactive. A preventative approach to churn reduction — a strategy that thoughtfully incorporates risk mitigation efforts into all points of the customer lifecycle — pays dividends in boosting net dollar retention. The best churn management programs combine both internal processes and customer-facing playbooks to mitigate risk throughout the customer lifecycle.

Companies should be embracing these ten internal and customer-facing “plays” as they work to minimize churn and boost net dollar retention:

Internal-facing “plays”

1. Leverage — and action! — customer insights.

Businesses should continuously revisit their working assumptions about which attributes yield the stickiest customers, both in terms of explicit traits (company size and resourcing, industry, contract size, etc.) as well as more implicit usage and adoption information (“sticky drivers”).

Businesses — more specifically, customer success leaders — should study their retention curves and optimize both their new business and customer success strategies accordingly. If small customers regularly churn (or put an undue resource strain on your business), consider instituting a minimum deal size. Once you unlock your business’ “sticky drivers,” your onboarding and broader customer success playbook need to be maniacally focused on driving customers toward those milestones and behaviors.

2. Run an internal line-by-line process with executive team involvement.

A quarterly line-by-line process (“LxL”) — wherein CSMs review a segment of customers line by line — is a powerful accountability framework for the entire business. The LxL is a forum for the entire CSM team plus other CS leadership (e.g. head of technical support, head of implementation) and the entire executive team to discuss at-risk accounts. Generally, CSMs will present accounts in their books that are either at-risk — because a calculated health score tells them as much or because the CSM can sense it — or ripe with upside for expansion (sometimes those two traits are one and the same!). The CSM will provide a brief history of the account, key challenges, and then make very specific asks of the business to support the partnership (e.g. CEO alignment). The LxL ensures that all of the right people are in the room to align on the requests and/or to brainstorm tactics for saving and growing the customer. LxLs also serve as a great platform for CSMs to gain visibility with the executive team.

Companies can review a host of different health factors in these LxL sessions. Alloy, which offers an API for regulated companies to collect and manage customer data from different sources, will look at support ticket metrics and trends (open tickets, wait times, etc.) per customer. Alloy’s process also includes customer-specific deliverables and action items that are reviewed in the following LxL to ensure action and accountability. Chartbeat, which provides data and analytics to publishers, similarly saw results from focusing on action items with clear ownership from across the business. Chartbeat structures their quarterly LxLs to review any accounts that are six months out from renewal, which allows them to celebrate successes in addition to leaning in on challenges.

3. Build internal feedback loops to ensure a customer-first culture.

Customer success is everyone’s job, but it is challenging to excel without visibility into what customers need. It is important to build a customer-first culture where there is radical transparency around customer feedback. All NPS data (including verbatim feedback) should be made public to the company, and should ideally be used to dictate product roadmap work. NPS write-in responses are also helpful for identifying relevant candidates for beta tests. Rapid UX prototyping and beta testing are both inherently customer-centric practices.

It is important to diversify the customer feedback mix beyond just NPS and customer satisfaction surveys, especially given those surveys often yield only a ~10–20% response rate. Hosting customer talk forums where an executive interviews two or three customers in a panel-type format is a great approach for gathering live feedback.

Formal customer advisory boards of 12–15 client executives are extremely valuable once companies have confirmed product-market fit. These groups convene live a few times per year and provide executive teams direct feedback around the competitive landscape, the product roadmap, customer service and so forth; radical transparency around company challenges is also important with these advisory board participants for deriving maximum return. Executive sponsors in your accounts will of course seek input from their direct reports, so it is helpful to assign a bit of homework in advance of advisory board meetings to ensure that participants are properly informed by their key stakeholders.

Companies such as marketing technology company Sailthru have also seen success with standing up regional user groups targeted at non-executive stakeholders; they host semi-annually localized meetups where 3–4 customers present on deployments and product use cases and all customer attendees connect and trade notes amongst themselves. This is also a great way to present the latest product roadmap to customers and gather feedback to ensure the voice of the customer is being heard directly by the development team. (Interestingly enough, Sailthru’s executive-level advisory board members were the ones who suggested these regional user groups!). Given that in-person events cannot happen currently, Sailthru is kicking off its first global remote user group program this month.

4. Align incentives to outcomes.

CSMs may technically “own” their customers, but again, customer success is everyone’s job. If companies do everything in their power to ensure customer success, it would take something catastrophic for those businesses not to be successful themselves. Aligned incentives ensure everyone is rallying behind the customers, and that alignment starts at the top: devising an executive bonus plan that is consistent for the entire leadership team cements the business’ priorities. Rather than set an NPS or net retention target for your customer success leader, set it as a component of every executive’s bonus plan; you will be amazed by how the customer influence on the roadmap subsequently unfolds! (The same calculus applies beyond customer success; for instance, if a company institutes cash or EBITDA bonus targets for everyone, not just the CFO, other leaders will prioritize strategies for improving margin, etc.).

Aligned incentives also need to trickle down into the broader organization. Companies most often use a bookings attainment figure to calculate a sales manager’s bonus; if they augmented that with a kicker for hitting churn targets, surely the sales manager would be thoughtful about investing time in helping to “re-pitch” at-risk customers. These incentives also apply to individual contributors. Even if CSMs do not manage renewals, they need to be compensated on net dollar retention rate so that they are incentivized to both mitigate the risk of churn as well as to drive upsell and expansion in their accounts.

5. Conduct churn retrospectives.

Churn is inevitable, but it is important to learn from it; as a mentor once told me, “sunlight is the best disinfectant.” Companies should conduct robust churn retrospectives when customers are lost, particularly in scenarios where the churned customers were not surfaced as risks in the aforementioned line-by-line exercises; these retrospectives should summarize the history of the partnership and outline measures that could have been taken to prevent churn. Ideally, those learnings are then operationalized into the company’s customer success playbook.

It is also important to learn about churn first-hand, ideally through both internal and external interviews. Customer success leadership is typically well-equipped to conduct an exit interview with churning customers, and that process is best handled once the customer has fully wound down so as to ensure the greatest level of transparency and detail (of course CS leaders should ask the “is there anything we can do to save your business” question? when they learn of the churn!). Conducting anonymous post-churn interviews with an external third party is often particularly helpful, so businesses should consider using a consultant or even investors for this tactic (we regularly conduct churn interviews for Primary’s portfolio company customers).

Customer-facing “plays”

1. Ensure a seamless onboarding experience, focusing on accelerating time to value.

With time to value strongly tied to overall customer satisfaction and lifetime value, a seamless onboarding process is critical. To prevent a Groundhog Day effect for customers, businesses should always conduct an internal kickoff/sales to CS transition session prior to any customer-facing meeting, wherein there is a thorough review of customer goals and prior pain points. Ideally, implementation should be a key topic in pre-sales discussions to avoid surprises following the signature, e.g. sales teams should socialize onboarding plans and technical requirements before a deal closes so that the customer can allocate resources accordingly.

Force Therapeutics is a digital care platform and research network designed to extend clinicians’ connection to patients outside of hospital walls. The team conducts external kickoff meetings within four business days of deal signature; to ensure those kickoffs are as productive and efficient as possible, they use surveys to collect information for each project team stakeholder (administrator, clinician, project manager/lead) in advance of the meeting to help shape a highly relevant agenda.

It is easy for implementation teams to fall into a “lift and shift” trap wherein they are mostly focused on translating the customer’s workflow with the incumbent partner to a new platform. Instead, success should be dictated by customers’ adoption of the new platform’s “sticky drivers.” To make product adoption easier, businesses often need to build technology to guide those outcomes; if you have a critical mass of customers coming from a particular incumbent, perhaps you build an “Incumbent X connector kit” that easily integrates the old data and transforms it into the ideal setup for the new platform.

The team at customer success platform Catalyst recognizes that a customer’s first 30 days set the tone for the rest of the customer journey. Customers enter the onboarding process with grand visions for what they want implemented, but the Catalyst team is deliberately prescriptive about the implementation plan. While they respect customers’ wishlists, they do not allow for the customer’s opinions to set the plan. Instead, Catalyst outlines a clear plan around configuration, training, and foundational workflows, which ensures that customers are adopting the features and use cases that yield the stickiest and happiest relationships.

Lunchbox, which offers a collection of digital ordering platforms for restaurants, requires customers to attend weekly status meetings during the first 30-day window. If customers have no updates or questions, the Lunchbox team uses the time to pre-emptively review FAQs derived from other onboarding experiences.

Communication is also of paramount importance during the onboarding period. A customer-facing project plan is an important artifact for spelling out progress and for highlighting potential risks to project completion. While Professional Services Automation (PSA) tools are powerful, they are best suited for operations with some scale. Earlier-stage companies can easily build project plans with tools such as Google Docs or Monday.com. Beyond reviewing this project plan on a regular basis, implementation team leaders should plan for formalized midway-through-implementation touchpoint meetings with the customer’s executive sponsors as well as for a formal feedback loop once the customer has exited onboarding.

Sample Client-Facing Onboarding Plan from Lunchbox

2. Devise customer value plans as living, breathing artifacts for your partnerships.

A good rule of thumb is that your customer status meetings should never entail conversations about the weather. Every interaction should be rooted in a customer value plan that is agreed to at the onset of the partnership and refreshed in each quarterly business review. (Again, ideally, this value planning would start in the pre-sales process.) When considering successful customer engagement, think about the old CEB analogy of a bartender versus a personal trainer: the bartender listens to the customer’s problems and reacts to them (maybe by trying to sell them something additional!), but the personal trainer understands the customer’s desired outcomes and coaches her to get there.

Value plans are designed to do just that — ensure the customer extracts value from their investment — but they also drive focus. All too often customers’ eyes are bigger than their stomachs in the buying process and the “boil the ocean” effect kicks in. With value plans, CSMs can push customers to focus on no more than three strategies or tactics at a time; these tactics should be agreed upon in the quarterly business review and should be the focal point for status meetings for the 90 days that follow. If the customer is slow to adopt the agreed-upon plan, it is appropriate (and important!) to escalate the roadblocks to the customer’s executive sponsor. If the customer implements those three tactics faster than expected, you can certainly accelerate work on the next three.

For Lunchbox’s restaurant customers, the North Star metric is native ownership of digital sales — in other words, what fraction of the customers’ online orders are placed directly through the restaurant? To boost that ratio, Lunchbox structures its value plans around a “growth hacking” playbook that gives restaurants actionable tactics for how to boost direct sales, including templates for loyalty programs, win-back marketing, etc.

Value plans actually become easier as companies scale, as they become richer with customer examples. Ideally, businesses should have a strategy playbook that outlines the 3–5 most important outcomes for that customer set (can vary by industry served, but should not be ad hoc per customer), and then maintain a repository of recommended tactics to achieve those outcomes (with supporting customer case studies and ROI metrics).

Perhaps most importantly, celebrate value. Provide regular updates to client stakeholders in between formal check-ins, whether that be in the form of automated reporting or even just a quick note. Rocketrip, which reduces corporate travel spending by rewarding employees for saving, has made waves in offices after sending cupcakes with little flag adornments boasting the total annual dollars saved for that customer.

3. Ensure quarterly business reviews are happening and meaningful.

Quarterly business reviews (QBRs) are a helpful forcing function for ensuring that the partnership is meeting the customer’s expectations, as well as to push value plans and sticky drivers. To avoid unwelcome surprises at the renewal, always include contract details and seek to get a gut check on how the customer is thinking about the renewal, even if it is nine months away!

It is of paramount importance that a senior sponsor from the customer attends the meeting and that any materials reviewed are shared after the fact; if a CSM feels awkward sending a QBR deck to a CMO when only the VP of Marketing attended the session, she should ask her manager or exec to do so. CSMs should not be shy about insisting on rescheduling QBRs if a customer’s senior sponsor is unable to join. QBR coverage is not a vanity metric: the intention is not to have yet another meeting, but rather to drive value exchange with the customer. Great QBRs include customer performance data (including benchmarks vis-a-vis other customers), tactical recommendations for program optimization and feature adoption, and last but not least, a customer-facing product roadmap and a recap of recent releases.

To ensure business reviews land well with their executive sponsors, the team at Force Therapeutics brings together an internal cross-functional team to discuss their relevant customer stakeholders (surgeons prescribing the platform and care team end users who connect with patients through the platform). Armed with information about how the end-users use their technology, Force can deliver a highly customized and thoughtful review (and proposal for growth) to their C-suite sponsors.

4. Establish an executive sponsorship program.

Stakeholder turnover is frequently a top reason for churn, which is why the “high and wide” concept is critical in customer success: when it comes to building relationships with customers, it is a best practice to be three-high and three-wide in terms of the span of contacts. Executive sponsorship programs help with the “height” portion of the equation: it can sometimes be challenging for a CSM to establish a strong relationship with a CEO, but any member of the CSM’s executive team can certainly do so.

The best executive sponsorship programs are tailored, consistent, and focused. If you have a highly technical customer, align a Product or Engineering executive sponsor to the account. Consistency is also critical; executive sponsors should attend QBRs and other key milestone meetings. It is also important to try to maintain the same executive sponsor for a prolonged period of time. (It’s fine for other leaders to check in on a customer if they are traveling to their location or checking in on a specific topic, but the primary executive sponsor should not change.) Because effective executive sponsorship programs are reasonably time-intensive, they should be focused. Rather than assigning an executive sponsor to every account, understand the Pareto dynamics of your business: if 80% of your revenue comes from the top 20% of your customers, focus on building a robust executive sponsorship program for your top 20%.

5. Leverage customer enablement programs.

“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime” (or the duration of a software partnership). Perhaps more important than a proactive customer success program is exhaustive customer enablement. Product marketing is inherently important for educating customers on features and benefits, but customer enablement programs are critical for ensuring customers feel in control of unlocking the benefits of your product.

It is most often the case that customers who attend training programs (or who watch them online) are stickier and happier, so it is worth investing in those programs early and often, even if you are directing customers to a low-production quality video. Focus your training programs not only on unlocking the sticky driver components of your platform, but also on support ticket deflection. Study your most frequent support ticket topics and build content around them (e.g. knowledge base articles/FAQ and videos); in addition to making the information discovery possible easier for customers, these tactics also boost margin in the longer run.

A train-the-trainer approach can be powerful for both customer satisfaction and business efficiency. The customer success team at Kinetic, a hardware-software company that offers wearable devices to reduce workplace injury (and thus often has to visit numerous industrial facilities for new customer onboarding), recently launched their “T3” train-the-trainer to accelerate time to value for customers. The program, which offers on-site training in one facility supplemented with a knowledge base and other self-service training artifacts, ultimately reduced customer onboarding time by 81% whilst still ensuring extremely high customer satisfaction scores — and increasing scale and margin in the process! After facility managers complete their training, Kinetic empowers them with a Manager Action Plan, a guided form that prompts managers to define their program goals and to select actionable items to focus on throughout their first six weeks with Kinetic. Following form completion, managers receive a customized plan outlining a personalized week-by-week plan (remember those value plans?!).

So far as timing for building a playbook for customer success is concerned, it’s never too soon. While advanced tooling and customer success platforms can certainly be helpful for scaling customer success programs, they are by no means required; the vast majority of the initiatives outlined in our two blog posts can easily be tracked with a reasonable Google Docs setup. When it comes to implementing a customer success playbook, it’s best to follow this Chinese proverb: “The best time to plant a tree was 20 years ago. The second best time is now.”