If you’re growing a SaaS business, you’ve got to have visibility into the health of your customer relationships since customer retention is critical to to organizational success. If you want to keep a close eye on churn risk, you should be sure to look at your customer service department. It’s well known that poor customer service/experience is the most common reason for churn. And, it’s avoidable!
Find the Unhappy Customers
Unhappy customers are the most likely to churn, so you should have ways of spotting unhappiness in your customer base. Surveys do some of the work, but by the time a customer identifies himself as unhappy, it may be too late to save the relationship. This is where performance metrics come in to play. The customer service experience can be broken down into a variety of metrics that lets you spot underperformance easily. A customer with too many “risky” values is likely to be unhappy with your business.
If a customer has too many problems in a short span of time, that’s a risk. Similarly, if a low percentage of these problems go unresolved, or take too long to get answered, that contributes to a poor experience. Too many strikes, and you’re out.
It’s Not You, It’s Me
Ideally, we want everyone to be happy, and we’d like to keep every customer forever. And I wanted a new Ferrari when I turned 16. The reality is that you’ll lose some portion of your customers. You could bend over backwards and try to save every relationship, or you could take a step back and ask yourself which relationships are worth saving. Some customers will never truly be happy. Some customers are needy, and their first instinct on every little question is to open a new case. Some customers bring no revenue to your business, and are unlikely upsell candidates.
The bubble chart above plots customers based on their value to the business and the effort it takes to serve the relationship. If someone’s way off to the right—low value and high maintenance—you should ask yourself if that’s a relationship you want to work to keep. Similarly, you should see where in this mix your risks show up. Any red in the top half of the chart—high value customers—requires immediate attention. How does your service look across your customer base?
Check Your NPS
Most ticketing systems let you send a satisfaction survey after each resolution. Hopefully you’re tracking this data, and break it down over time, by employee, and by account. Wait time and resolution times help you infer customer satisfaction, but it’s always important to get first-party feedback directly from customers.
There’s no single metric for monitoring customer health. If you want to increase your LTV or reduce churn, you should use all the data available to you to get a holistic look at your customer relationships. How often do they open your emails? How is their product usage trending? When is their contract up for renewal? Add to that list: have we done a good job solving their problems?