Churn prevention is a team sport: Here's what we’ve learned about it at Dreamdata

Churn. It’s probably the most painful part of running a Saas business. But it’s unavoidable. Even for the best out there.

You still remember the joy of selling to the customer months or even years back. The future was looking bright. The skies were clear. Your product matched the requirements of the prospect. POC worked out well. Everybody was happy.

But now, renewal is up. The customer does not want to extend the contract.

The reasons can be many. Your onboarding was a bit too slow. The internal champions left the customer. Your product is providing massive value, but it’s not understood as such by the customer.

Pain. True pain.

Investors are complaining. Your retention rate could be better. You’re not upselling more than you are?

And so it continues.

Selling subscriptions? 

Then you need to get good at preventing churn and predicting who might go into churn risk.

This is super important for Saas companies in general, and so it is for us at Dreamdata as well. 

We’re talking about it all the time: 

• How can we make our customers even happier? 

• How can we make life easier and simpler? 

• How can we provide more value, so we can lift some numbers on the renewal contract?

We’ve learned a lot about it already. But we’re also very well aware that we can always get better.

In this post, we’re going to transparently talk about what we do and think about it today. 

Churn prevention is a team sport

Though churn might typically be assigned to Customer Success as their key metric, it should never be thought of as a siloed topic or process. In fact, tackling churn can only be achieved through a company-wide team effort.

Before looking at exactly how each team is involved in preventing churn, there’s an overarching strategic element that needs to be settled.

If you don’t know your Ideal Customer Profile, don’t even start thinking about tackling churn

Looking through our go-to-market data in Dreamdata you can look around two years back and you will see a clear inflexion point. Slowly, but surely, metrics start to climb at an increased pace.

That inflexion point represents the period in which we settled on an Ideal Customer Profile for Dreamdata.

The easiest thing in the world is to broadly state that our product is (in our case) pretty much applicable for any B2B in the world.

The much more painful exercise is to sit down and accept that we can’t handle selling to everyone. We simply don’t have enough resources. So we needed to analyze. We needed to understand where product/market fit was better for us.

The good news is that when the (hard) work of defining an Ideal Customer Profile has been done, then everything else gets a lot easier. 

Across Marketing, Sales, CS and Product you would now hear this:

Should we do this or that? Well. The one idea works well for our ICP. The other does not. Done. On to the next question.

If you’re currently in a company that does not have a company-wide accepted Ideal Customer Profile, you raise that as a topic of discussion.

Now let’s look through what you actually do to keep those churns to a minimum.

Marketing

As mentioned above, all go-to-market teams are involved at some level in churn prevention. Even in the lofty heights up the top of the funnel Marketing teams can impact churn.

Here’s how we do it:

• Positioning 

Before you go to market with your product you need to figure out what you want your company positioning to be. What do you call yourself? What do you want others to be talking about when they are referring to your company?

In the words of April Dunford, words on positioning customers need to: Get it, buy it, love it.

Once you’ve settled on positioning for your company make sure everybody in your company knows, understands it and respects it.

• Communication

With the positioning in place, you need to run a continuous exercise of aligning all your communication towards this. Look at your website, your sales slides, employees social selling on LinkedIn, the ads you run and so forth. 

Ideally, all of it stays within an acceptable range of your positioning’s dartboard - and as close to the bull’s eye as possible.

We constantly drum this mantra in our content team and try to evaluate every piece of copy and content through our ‘positioning’ lens.

And above all, never lie.

• Value proposition

Equally important is communicating the value you’re providing. What problems are you actually solving? 

Miscommunication here can create false expectations and a mismatch between your customer’s needs and the solution you actually provide.

Prospective customers need to be completely aligned with the value prop.

• Qualification (The handover to Sales)

Who you allow into your pipeline is another avenue for setting yourself up to churn.

The early lead qualification is the gateway to your pipeline. So it’s vital to get this as tight as possible - without making it impossible to generate leads. 

What we’ve done is make sure our Marketing Qualified Lead is tied to a ‘strong conversion’ that signals buying intent: free sign-up and demo request. 

Coupled with the positioning and value prop- focused messaging we’ve put out in the lead-up to this action, we limit the number of unwanted leads entering our pipeline. 

Learn more about the dos and don’ts of Marketing Lead qualification here → 

Sales

Sales is (typically) the first face-to-face interaction a customer has with the team. This interaction makes it a valuable resource for picking up any early red flags with the customer, which might lead to churn in the future.

Here’s what we look at:

• Only sell to ICPs

After learning the hard way, we apply a very strict approach to selling only to ICPs. Although admittedly, there is a little wriggle room as our ICP adapts to market and product changes.

The reason is, that it’s vital not to spend any time on customers who aren’t within your ICP. Not only are these harder to sell to - and so risk wasting precious time - but the risk of churning goes through the roof!

• Ensure tech fit

Tech fit is, to some degree, already part of our ICP - and if you’re in tech, it should be too. However, when the prospect hasn’t adequately self-qualified, the first sales call serves as a great opportunity to assess their tech setup and act accordingly.

For us, some tools - or lack of - are immediately disqualifying grounds. Saving us time and resources on prospects who will likely churn.

• Buying committee

Our customer journey data proves that our average won deal consists of three individuals (aka ‘contacts’). We also know that by SQL stage, all won deals involve at least two individuals. 

So, when we encounter a (ICP) customer, who hasn’t yet involved more than a single individual in the buying process by the time they’re talking to us, we raise a flag.

Find more benchmarks on the B2B customer journey here →

• Early CS intro

Another great habit we’ve adopted is incorporating our CS team in the Sales process. As we’ve already mentioned, it’s CS who’s in the trenches ensuring customers get the best possible value out of Dreamdata, a corollary of which is avoiding customer churning.

This makes them highly attuned to the signals a potential-churner shows. Picking these signals up early enough allows us to:

1) fix the potential challenges at the Sales stage - either by managing expectations (more on this in a sec) or,

2) disqualify the prospect outright.

• Never over-promise

With targets to meet and commissions to earn, it’s easy to promise the world to customers. Customers who then end up being a burden on CS and at high risk of churning.

We try to set as realistic expectations as possible - without underselling, of course.

Customer Success

Now we get to the team handling the (potential) churners.

Implementing all the above trip wires at the early stages of the customer journey already provides CS with low-churn-risk customers. But even with these in place, the chances for hiccups continue to exist.

Here’s how we try to make the customer experience as obstacle-free as possible:

• Smooth Onboarding

Onboarding sets the tone for the customer’s user experience, which means getting it wrong can be the first step on the road to churn.

We continually optimise our onboarding process to make sure it’s tailored to the customer’s unique needs and expectations.

What’s more, in order to make the process as smooth as possible, we have a comprehensive handover process with Sales, usually also involving the Sales rep in the initial onboarding meetings.

• Direct communication channels

Smooth communication doesn’t end at onboarding. Continual, free-flowing, and direct communication needs to be the norm - provided of course, the customer wants this.

We’ve given customers direct access to CS via Slack or even LinkedIn to ensure all and any troubleshooting is handled efficiently.

• Continuous activation

New features, dashboards and novel use cases are the status quo in tech. But often these can end up being overlooked by existing customers.

We try to mitigate this by consistently activating our customers on new features. Both through releasing self-service Dreamdata recipes and arranging 1-1s.

• Timely renewal talks

Customers become most “honest” when the renewal conversations start. In fact, renewal time is when the risk of churn reaches its zenith. 

What we’ve done to mitigate any cold feet customers might get, is to start renewal talks early. This allows us to deal with any concerns or issues that haven’t been communicated beforehand and ensure they don’t impinge on the renewal process.

• Customer employee turnover

According to this recent LinkedIn study, Marketers have a turnover rate of almost 13% - the third highest profession. For those readers who like us are in the martech space, this presents a particular problem.

In fact, the high turnover of marketers is one of the biggest issues we’ve had to grapple with.

Our solution: in the same as we get Sales to involve more than one contact in the Sales process, we’ve made sure our CS team encourages customers to open up the product to all the relevant teams. And involving as many relevant stakeholders in the onboarding process as possible.

• Self-serve content

Customers don’t always want to be taken by the hand through every step and use case. Having the ability to read instructions for doing X or achieving Y is very useful.

At Dreamdata, we’re trying to make it as easy as possible for our customers to find the answers to their questions in our documentation and content. 

From setting up integrations and tracking to learning about features and dashboards to value-add recipes, we’re actively expanding our library of self-serve content for customers to consume as they need it.

• Feedback from churners

Finally, the customers who churn are invaluable in churn prevention. After all, they’re the ones who best understand why they didn’t want to work with us anymore.

That’s why we’ve introduced feedback sessions with customers who churned. Which are CS team then carefully reflects on and shares with the respective teams where relevant.

Product

Before finishing up, it’s worth mentioning that Product also plays a role in churn prevention.

If feedback on customer needs isn’t relayed back to Product, most of the efforts mentioned above will be in vain. 

But the burden doesn’t only fall on the go-to-market team’s shoulders. The product team should be very aware of the ICP, and should proactively be talking with customers.

Summary (TL;DR)

Churn is a real and inevitable concern for every B2B SaaS - without exception. Which makes having a churn prediction and prevention strategy a non-negotiable must.

In this post, we’ve shared our story on how Marketing, Sales, CS (and even Product) play a role in predicting and preventing churn.

From clear solid positioning and messaging, to selling only to ICPs, to involving CS early in the process, there are many avenues for tackling churn which have proven successful for us at Dreamdata.

We hope you’ve found these (still-unfolding) churn prevention tips useful and have gained some inspiration for your own use. 

If there are some activities we’re missing that you’ve nailed, we’d love to hear (and apply) them! Let us know.