Exhibiting excellence as individual CSMs in retention and expansion

For the remainder of this chapter, I’m going to focus on what it can mean for an individual CSM to develop personal strategies to support the company’s overall strategy for driving customer retention and growth. In so doing, because the overall strategy is so central to the company’s future, CSMs are presented with tremendous opportunities to make a real business impact that is both visible and discreet.

Let’s zero in on why retention is so critical for companies, especially SaaS companies, which are reliant on subscription models. Because it’s expensive to land customers (expressed by the metric customer acquisition cost (CAC)) and it is typically associated with sales and marketing expenses, it’s imperative that those costs are recouped over time. If not, in theory, a company that has out-of-control churn will find itself quickly on a trajectory toward going out of business because customers will leave before those costs are recouped (in renewed subscriptions), so the company can never reach a point where the math makes sense.

You can see, then, why CS is such a critical business function. Unless the product is so flawlessly built and it is so blindingly obvious how value can be realized from it, customers will more often than not require some guidance during the life of the subscription so that their business goals for the product can be satisfied.

Churn is a company killer, so CSMs can do themselves a tremendous favor by becoming familiar with retention and churn metrics that the executive team and the board of directors pay attention to. The SaaS CFO is an excellent resource, and you can learn more about it at https://www.thesaascfo.com/. Understanding what’s important to the executive team and the board will crystalize for the CSM how they should prioritize efforts with their accounts. In other words, if churn is a worry for the board, then CSMs can make sure that they are taking all the right steps in their accounts to prevent it. And remember, preventing churn is mostly a matter of driving the successful adoption of the product and ensuring that the customer’s business goals for the product, as expressed in the success plan, are achieved. If a CSM performs the duties associated with those activities, the odds are very high that the customer will decide to renew the subscription at the appropriate time.

Here are recommended steps for CSMs to take to support the overall corporate strategy for retention and expansion:

• Know your customer and know their business goals for the product/solution (conduct independent research, consume account information that sales documented during the acquisition process, and study the work of other CSMs who previously worked with the customer, if applicable).
• Establish with the customer a co-developed success plan that documents their desired business outcomes and associated milestones.
• Ensure that there is an accurate mapping of the customer key contacts and financial decision-makers.
• Use the success plan as the vehicle for driving adoption (may require additional project plans that branch out and loop back).
• After some time (three quarters, one year, etc., depending on the subscription period), begin to develop a strategy for renewing the customer. Base it on the successes and milestones achieved as documented in the success plan.
• Depending on your company’s organizational structure, communicate internally about the upcoming renewal. Your company might have a separate team responsible for renewing its customers, they might make it the responsibility of the salesperson who sold the initial subscription, or it might be your responsibility as the CSM. Whoever has the actual procedural responsibility, it’s important that the CSM is involved and shares information about the customer. Ideally, that would be documented in the CRM. This is the step during which a CSM can stand out to the entire company. It’s the CSM’s opportunity to take the lead by showing their knowledge of the customer’s environment, their business, and the track record of their success to date.

There are certain fundamental tasks that CSMs need to perform when the customer is scheduled to renew their subscription. The most critical is the first one I listed—know your customer. No matter how large or small your customer’s business is, and no matter the engagement model your CS practice has assigned to them (high, low, or no touch), if they are approaching their renewal date, they represent company revenue that is on the line. Understanding their business and how your products and services have impacted it is the first step toward ensuring that the renewal process concludes with the customer’s decision to stay with your company.