How we reduced our churn rate from 10 to 5 percent

Adopting the philosophy of Lincoln Murphy about Customer Success driven growth

If you’re a growing business, you need to focus on one thing – revenue. It’s critical to your profitability, valuation, and ultimately, your survival. As the old saying goes – if you’re not growing, you’re dying.

 

That’s why we’ve built our strategy, our team, our technology, our processes – all geared around revenue. We want to maximize productivity and grow, grow, grow as fast as we can.

 

Most companies spend a lot of time and money focusing on obtaining new customers. But as your business grows, you will also have to shift your focus to make sure retention is top of your list. In the SaaS-industry, churn is essential for your bottom line, and as a result, customer success has become the most discussed topic for enabling healthy business growth.

 

But in fact, customer success is not about churn; real customer success starts once churn is under control. This theory is the philosophy of Lincoln Murphy, Customer Success Consultant and author of Customer Success - How Innovative Companies Are Reducing Churn and Growing Recurring Revenue. Lincoln Murphy calls this Account Expansion when you can move beyond dealing with churn. Instead of putting out fires, Account Expansion is when customers consume more of your product, move to higher pricing tiers, and invite your product into other parts of their company making customer success driven growth a form of indirect anti-churn.

 

Last year, we transformed our Key Account Teams, Professional Services, and Support Teams, into Customer Teams.

 

The Customer Teams have a different set of skills and shared responsibility for approximately 100 clients each and work together with the same goals and incentives creating a unified target for us and a better experience for the customer.

 

A lot changed as we built our customer-teams.

  • The team became autonomous.
  • Everyone shares the same goal in the team – customer success.
  • The customer has one contact group.
  • All needs are met within the group.
  • The team works closely with the customer.
  • The team is measured on the same KPIs and bonus.
  • The group experiences a positive work environment, which, as a result, reflects onto the customers.

 

In turns of numbers, we were able to reduce our churn rate from 10 to 5 percent during 2018! Read more about how we transformed our KAM, Services, and Customer Support teams into Customer Teams here. 

 

We have now also replaced our NPS surveys with a survey focusing on the desired outcome for the customers.

 

In summary, these changes have shifted our focus to help our customers with their problems instead of getting input from the customers on how to solve ours (churn is a symptom, not a disease). The point is that we’ve become proactive in foreseeing potential opportunities and sidestepping oncoming obstacles rather than reacting to issues that are too late to fix. See Lincoln Murphys blog post about this here.

 

Do you also want to get inspired by Lincolns ideas and mindset on Real Customer Success?

 

On April 5th, 2019, Lincoln Murphy arrives in Stockholm - book a ticket below and see him live!

 

Get tickets to Lincoln Murphy