Customer churn is one of the biggest fears for businesses focused on growth. Now, in the wake of a life-threatening pandemic, COVID-19 has given businesses a run for their money, to say the least. Managing churn during COVID-19 has become a prime necessity, more than ever before.
It goes without saying that this pandemic has had an economic impact that could cause a sharp downturn in the SaaS industry. As a result, customer success managers are readying themselves for battle.
According to a report published by TSIA, the pandemic is reducing consumer cash flow. This, in turn, will result in large churn rates, as more than 90% of customer value is driven from the recurring revenue.
But, could customer success be the answer to COVID-19?
Yes, it is.
Get ready. It’s time to reprioritize your sales process. Investing in new customers is between 5 and 25 times more expensive than retaining existing ones. Plus, acquiring new customers amid a pandemic could be even tougher than you think. So, what should you do?
The answer is to retain your existing ones!
This is when recurring revenue saves the day. As customer success managers, it’s imperative to have a plan to recuperate losses in 2020. Here are some solutions that you can follow to embrace customer retention and navigate through the current business landscape to make it to the other side:
1. Communicate and engage
You can turn this potential curse into a gift. This is your golden opportunity to win back customers on the verge of churning. In tough times like these, healthy and clear communication is invaluable. Don’t let the pandemic cost you your relationship with your customers.
Reach out to them and regularly engage with them to ascertain if they need any assistance from you. Suggestions for better communications include:
- Strive to coordinate and connect across all customer touchpoints
- Delve into online discussion forums for mentions of your brand and solicit feedback or respond to mentions when needed
- Take to social media or in-app communication channels
- Render support and encouragement to customers to adapt to remote working conditions
- Engage frequently
2. Offer discounts, deferments or pauses
One of the best practices during COVID-19 is offering customers help. Offer them discounts, if they have financial restraints, in order to avoid churn, for instance.
You can also offer 10 or 20% off renewals or free subscriptions for a specific period of time. If your customers are struggling financially, you can also offer pay deferments, allowing them to pay when the economy picks back up.
Additionally, you can always freeze or pause subscriptions. You can do this for a certain period until they have the means to continue subscribing. This also cuts down the hassle of re-onboarding them. Simply put, they can resume their subscriptions once they are able.
3. Predict future needs and plans
During the pandemic, customer success teams must have all of their strategies ready. It doesn’t do you any good to plan for disasters after the fact.
You will want to come up with comprehensive business continuity plans and test them frequently. Despite the uncertainty, you should be ready to ramp up productivity.
4. Empathy precedes sales
Interestingly, this is the time you need to spend more time listening to your customers and less time selling to them.
Remember, during times of crisis, they want to be heard, they want to know that you are there for them and they want to be understood.
Customer success teams that pay more attention to their customers will be in a better position to understand what they need, both as an individual and as a team.
Needless to say, customers during a crisis can hit a rough patch. In such tough times, it is a good idea to show empathy and be compassionate.
5. Organize data and alerts
Unfortunately, as the pandemic cripples so many people, both financially and economically, churn will be unavoidable. In that case, how do you judge if a customer is about to churn?
Successful managers need to get real-time alerts to let them know when an account is at risk or a task requires immediate attention. Customer success platforms can be the answer allowing you to make changes based on health scores as the needs of your customers and their expectations from your product may have changed.
Also, ensure that you are tracking the right data. The system will alert you in the event of any change in the product software.
Low product usage, reduced number of loyal users, decrease in subscriptions, and delay in payments could be some of the red-flag alerts. Assess the platform, organize all of the required data you need, and take necessary actions.
Managing customer success during COVID-19 could be the biggest challenge businesses ever face. Customer success can make all the difference in reducing churn.
With any luck, the pandemic will be a cause for positive change for businesses, such as creating the ability to work from home when necessary. Customer success add-ons can also help with your current and future remote work needs.