May 11, 2020

Customer Support in Tough Times: Retaining Customers

Identifying At-Risk Customers

The techniques for identifying at-risk customers don’t suddenly change in a downturn. Continue using the techniques that are working for you, and build on them:

  • Watch product usage. If you notice that usage is tapering down overall, that some users are no longer using the product, or that specific functionality that was used in the past is no longer being used, look into the details. Diminishing usage patterns are all signs that change is afoot.
  • Watch support usage. A sudden decrease of support requests is not a good sign, but instead an indication that your product is no longer being used, customized, or enhanced.
  • Watch for changes in personnel. There could be changes in the Customer Success Manager’s contacts or changes in support contacts. Layoffs, reorganizations, and spontaneous departures before the storm hits are all signs that budgets are being tightened.
  • Understand the industry. Some industries are booming today. If your customers are hospitals or grocery chains, you may want to work on expansion rather than retention. But other verticals are hard-hit, and even your best customers will likely make changes.
  • Stay close to your contacts. A CSM with tight connections will hear about upcoming changes and have a chance to present appropriate mitigation strategies. Without good connections, uncontrolled surprises are much more likely.
  • Expand your contacts. A common problem during tough times is that existing contacts disappear, and with them your entire personal connection to the customer. Always cultivate multiple contacts, at various levels and in various departments.

Customer Retention Techniques for Rainy Days

Assuming that you have deployed the right identification techniques, you will know about issues early enough to be able to deploy retention strategies. Here are a few:

  • Don’t waste your time on lost causes. A customer that is severely stressed financially will likely churn regardless of your efforts. Concentrate on others.
  • Provide best practices information, above and beyond how to use your product. This is a great way to impress your customers that they can rely on your company to provide value and guidance.
  • Maintain a good level of support. At-risk customers are particularly sensitive to even small issues that would not normally matter very much.
  • Help show value. CFOs yield a lot of power during downturns. If your contacts are not able to present a credible ROI, your product will be on the chopping block. Help your contacts create a customized ROI analysis for your product or service.
  • Review existing contracts for rationalization opportunities. If you hold a contract that was signed in happier times and includes a fat margin, that particular customer is likely to flag the issue during an internal review. Renegotiating preventively may be a good way to goto save the account, with a less-generous margin but still.
  • Consider scaling down. Along the same line as the point above, it may be better to continue with a smaller footprint than to sever the relationship entirely. If your customer needs fewer licenses, or fewer modules of the product, or different payment terms, you may want to acquiesce to their requests(or even propose options proactively!) instead of having to process a cancellation. When business conditions improve, you can go back to the current setup.

Expansion Strategies (Yes, You Can Expand in a Downturn)

The specific strategies you use will depend a lot on the customers you serve, and specifically the industry they belong to.

  • Scale up for high-demand customers. If your clients are hospitals, grocery chains, streaming services, or other vendors that are experiencing high demand, you can and must offer larger sets of services to them, and quickly.
  • Offer to take over internal functions. Customers who are looking for savings are often more open to outsourcing functions that they previously wanted to keep internally. For instance, they may look to outsource system administration for your products, which you can package (and perhaps, do package already) as managed services.
  • Capitalize on demands for higher efficiency. If your products allow customers to automate manual tasks, create and present attractive ROI analyses to expand your footprint.

Share your customer retention stories. We all need them!

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