Dan Martell - September 14, 2020


How to Identify & Stop At-risk Customers from Cancelling

Hosted by
Dan Martell
Mentioned
John Facebook Messenger
The Future of Sales Is No Quota with Jacco @ WinningByDesign.com - Escape Velocity Show #36 How to Define Your Vision of Success and Achieve It

Episode Stats


Length

10 minutes

Words per minute

187.51

Word count

1,938

Sentence count

96

Harmful content

Hate speech

1

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Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, Dan Martell shares how to identify customers that could cancel and make sure we build a strategy to retain them so we can increase our revenue. And be sure to stay at the end to get access to my EBR Flow Planner, Executive Business Review. It s the meeting structure you need to be having with your customers so that you can expand the revenue amongst some of the upsells and cross-sells, and also get them activated and winning.

Transcript

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00:00:00.000 Hey there, Dan Martell here,
00:00:01.000 serial entrepreneur, investor, and creator of SaaS Academy.
00:00:03.840 In this episode, I'm gonna share with you
00:00:06.040 how to identify customers that could cancel
00:00:09.300 and make sure we build a strategy to retain them
00:00:12.020 so we can increase our revenue.
00:00:13.540 And be sure to stay at the end.
00:00:14.640 We're gonna share with you how to get access
00:00:16.520 to my EBR Flow Planner, Executive Business Review.
00:00:20.020 It's the meeting structure you need to be having
00:00:22.620 with your customers so that you can expand the revenue
00:00:26.620 amongst some of the upsells and cross-sells
00:00:28.160 and also just get them activated and winning.
00:00:31.080 Let's get into it.
00:00:44.640 Now, I'm not sure if you experienced this,
00:00:46.780 but back when COVID coronavirus hit,
00:00:49.620 a lot of my clients, I coach dozens of SaaS founders,
00:00:52.860 and many of them work with restaurants,
00:00:54.940 gym owners, retailers, et cetera,
00:00:57.100 And they were like bracing for the impact.
00:01:00.840 But essentially what we did is I created the crisis navigator roadmap to help them think through not only how to keep those customers, which I'm going to share with you today, but also how to look at the opportunities to either do a minor or major pivot for them to grow their business.
00:01:15.760 I'm going to leave a link below so you can get access to the crisis navigator roadmap as well.
00:01:20.160 But this is the specific strategy that we use personally, even in my own businesses, to lose less than 1% of our customers through cancellation.
00:01:29.440 In the myth of the worst economic recession and global shutdown in history, this is how we did it.
00:01:37.300 Number one, measure health score.
00:01:39.600 So in the world of customer success, one of the key metrics we need to be monitoring is called the health score.
00:01:46.080 Some companies call it the CHI, the Customer Happiness Index.
00:01:49.300 Other companies call it,
00:01:50.460 well, I call it the member at risk monitor strategy.
00:01:53.380 But essentially you need to put your customers
00:01:56.380 in one of four buckets.
00:01:57.700 Are they red?
00:01:58.740 Like haven't used a product, logged in,
00:02:00.880 aren't really engaged in any of the core modules
00:02:02.960 that you know make sticky customers.
00:02:04.540 Red, yellow, they were, but now they're not.
00:02:07.720 Green, they're good, they've been using it.
00:02:10.240 And my favorite color is purple.
00:02:12.080 Are they referenceable?
00:02:13.400 Ambassadors, leaving you testimonials,
00:02:15.140 saying yes to do reference calls, et cetera.
00:02:17.840 But the only way to do that
00:02:19.220 is we need to figure out the health score.
00:02:21.280 And then what we do is we identify the reds 0.96
00:02:23.360 and we execute what's called a red playbook, okay?
00:02:26.600 In your customer success process,
00:02:28.260 you should be creating playbooks for different scenarios
00:02:30.960 to take somebody that's red all the way to green,
00:02:34.100 ideally purple, so that you can save those accounts.
00:02:37.980 So making sure that you at least have the list
00:02:40.140 so that you can reach out and approach them,
00:02:42.620 that's number one.
00:02:43.400 Number two, review sales slash CS notes.
00:02:47.520 So my whole premise on software and SaaS, okay,
00:02:52.200 is success as a service.
00:02:53.780 I really believe people don't buy a tool to have a tool.
00:02:57.160 They hire a product to do a job.
00:03:00.240 They have a need that they need to accomplish
00:03:01.680 and they bought your software.
00:03:03.460 And the best place for you to figure out
00:03:05.300 why the initial conversation started
00:03:07.400 is for you to go back to the sales notes.
00:03:10.500 So this is where your account exec would have talked to them about where they're at today,
00:03:15.420 the needs they had, what they would use as a way to measure success.
00:03:19.520 And then also when your customer success team was onboarding the account,
00:03:24.180 they probably had similar conversation, kickoff calls, activation calls, et cetera,
00:03:28.220 where you want to review those notes before you reach out to the customer.
00:03:30.960 You need to know more yourself than they remember what they shared with your team
00:03:35.820 in regards to the specific problems they want to solve with your product.
00:03:39.680 Number three, multi-channel communication.
00:03:42.880 Now, this is something I learned, you know, selling over $30 million in software is if you're doing follow-up, you need to use multiple channels.
00:03:51.480 If you assume that emailing the person, you know, every third day for two weeks is follow-up, you're missing the boat.
00:03:58.780 The way I think about it is I want to approach every channel.
00:04:02.900 So I'm, because some of these clients
00:04:05.040 that potentially are about to turn or cancel
00:04:06.780 or not renew in their next renewal timeline,
00:04:09.960 they're not gonna reply to your email.
00:04:12.100 So I like to call, leave a voicemail, reference my email.
00:04:15.640 I like to hit them up on LinkedIn, message them.
00:04:18.820 Hey, John, I just wanted to reach out.
00:04:21.120 Quick question, got three minutes, let me know.
00:04:24.280 So keep it short and sweet.
00:04:25.460 Don't give them too much context
00:04:26.580 because you wanna kind of get them in micro commitment
00:04:28.700 and then roll it up into a full conversation.
00:04:31.660 I'll hit them up on Facebook Messenger.
00:04:34.460 I'll even go as far as reaching out to other team members
00:04:37.280 that might be registered in the product
00:04:39.240 and ask them, hey, is John still with the organization?
00:04:42.040 I emailed them last week and haven't heard back.
00:04:43.800 Now you wanna be a little bit more delicate on that,
00:04:46.200 but it is fair play.
00:04:47.580 Your role and responsibility is to get those accounts
00:04:50.780 on a call where you can do step four.
00:04:54.200 And if you aren't willing to go multi-channel,
00:04:56.540 then you're probably gonna reduce your potential by 70%.
00:05:00.020 Literally, it's in the text messages, in the LinkedIn's,
00:05:03.980 in the Facebook Messenger, the team message,
00:05:06.500 where that person hears, they're like,
00:05:08.040 man, this person's not going away.
00:05:09.300 I gotta reach out to them to make it stop,
00:05:11.380 and that's when you have the opportunity to engage.
00:05:13.740 Number four, resell vision.
00:05:15.880 So once you've got them to agree to a phone call,
00:05:18.660 you can go 15 minutes, you can go 30.
00:05:21.260 The way I like to think about that call
00:05:23.100 is it's very similar to a product demo
00:05:25.920 or a sales conversation or strategy session,
00:05:28.120 is we want to ask them kind of, you know,
00:05:32.240 what's going on in their world?
00:05:34.280 You know, like nobody cares about what you have to say
00:05:36.500 until they know that you care.
00:05:37.760 So I wanna know what's been the impact?
00:05:40.280 What have you done?
00:05:41.560 What are the strategies?
00:05:42.700 Like just really try to understand their perspective,
00:05:45.760 their world first.
00:05:47.380 Once you do that, I'll even start off the call by saying,
00:05:49.500 hey, I just wanna let you know
00:05:50.420 that I'm not here to renew you in the software
00:05:52.840 or get you to buy more stuff.
00:05:55.160 I'm here to help.
00:05:57.180 And from that perspective, they're, you know,
00:06:00.740 they relax a little bit
00:06:02.060 and it allows you to have an open conversation.
00:06:04.140 If they're on their heels and they're very defensive,
00:06:07.000 then it's gonna be like pretty much impossible
00:06:09.300 for you to have a conversation that leads with them saying,
00:06:12.680 all right, let's do it, let's renew.
00:06:14.260 I'm recommitted to the software.
00:06:15.660 I'm recommitted to the outcomes that I want to achieve.
00:06:17.800 And the big thing is you're trying to
00:06:20.080 essentially reconnect with the gap.
00:06:22.980 You know, I think a sale is made,
00:06:24.640 and I got this from my buddy Yako at Winning by Design,
00:06:27.140 incredible customer success and sales consultancy.
00:06:30.940 But the gap is where they're at today
00:06:34.120 and what that new world looked like.
00:06:36.900 And the only way we can get people to go on that journey,
00:06:39.980 because it's a prioritization process,
00:06:42.160 it's an investment, it's a team collaboration,
00:06:44.800 it's a commitment,
00:06:46.080 is we need to figure out what's the critical event
00:06:48.460 that made it a now thing.
00:06:50.880 Like what is, why did you buy the software?
00:06:53.580 What was the reason?
00:06:54.900 Is that still a priority?
00:06:56.680 Is still something that we need to talk about?
00:06:59.620 Or is there a new critical event?
00:07:01.560 So we wanna do that.
00:07:02.280 And then the second is we have to connect
00:07:03.660 the emotional connection to that outcome.
00:07:06.360 What's your life gonna look like?
00:07:07.640 How is it gonna feel
00:07:08.620 once you solve those big major challenges?
00:07:12.260 From a personal level,
00:07:13.640 sometimes it's getting a promotion,
00:07:15.160 making sure your team isn't stressed out,
00:07:17.900 making sure the customer's not having a bad experience
00:07:20.900 because things are getting dropped.
00:07:21.860 whatever the emotional impact that has to be uncovered
00:07:26.700 and that is stretching the gap
00:07:28.380 and it's in that gap where the sale is made from,
00:07:31.740 you know, think of like a rubber band
00:07:32.800 from on this side where they're at today
00:07:34.400 and you stretch that rubber band to the other side
00:07:36.320 and you put the peg into the potential.
00:07:38.900 That gap is where the renewal,
00:07:43.160 the saving of the account and in sales,
00:07:45.960 the sale is made because without that,
00:07:48.040 no customer is gonna buy.
00:07:49.000 Number five, set milestones.
00:07:51.860 So once you've accomplished the recommitment to re-engage them into the vision that they had for deploying your software,
00:08:00.100 now you want to set a plan over the next 90 days with clear schedules.
00:08:04.820 My whole thing is that I'm not here to do the work for you.
00:08:07.560 I'm here to support you and coach you and get you the resources and templates you need.
00:08:12.540 But I need commitments from you to me and what timeline that's going to occur so that I can hold you accountable.
00:08:19.000 And it's in doing that, the accountability and the follow-up, where the account actually gets from red to yellow to green, executing that playbook, holding them accountable to what they said, the commitments they made.
00:08:32.260 And I like to use a structured meeting to make sure that when we start, we have clear understanding of where we want to go, break it down into key projects, understand the resources required, and then make sure we have a timeline to execute that.
00:08:46.800 But setting the milestones and holding them accountable is how we actually get the account from, you know, dormant or inactive to full deployed, activated, and loving the product.
00:08:58.900 So quick recap, how to identify at-risk customers and keep them from leaving.
00:09:02.600 Number one, we have to measure our health score.
00:09:04.600 Number two, we have to review the sales or customer success notes.
00:09:08.500 Number three, we have to use multi-channel communication to get them on a call.
00:09:12.460 Number four, on that call, we need to resell vision.
00:09:15.120 And number five, we need to set milestones for success.
00:09:20.740 As I mentioned at the beginning of this episode,
00:09:22.380 I wanna share with you literally
00:09:23.740 one of the most powerful frameworks I've created
00:09:25.960 for customer success and retention.
00:09:27.640 It's called the EBR Flow Planner.
00:09:29.900 EBR stands for Executive Business Review.
00:09:32.340 You can click the link below to grab your copy
00:09:34.560 where I talk about the five hot principles
00:09:36.120 and the nine steps to executing this meeting agenda.
00:09:41.400 It will allow you to not only retain customers,
00:09:44.660 but my favorite thing in the world to expand the account.
00:09:49.060 It's called expansion revenue.
00:09:50.620 It's how we do land and expand
00:09:53.320 within your software and account base.
00:09:55.740 So be sure to click the link below
00:09:56.740 to download your executive business review flow planner.
00:10:00.420 And if you like this video,
00:10:01.300 be sure to subscribe to my channel,
00:10:03.440 hit the notification button
00:10:04.800 so that you'll be notified when new episodes get released.
00:10:08.220 And also leave a comment.
00:10:09.440 Let me know if there's any other things, strategies,
00:10:11.420 ideas, or questions you have around this topic
00:10:13.200 that I might be able to serve you with.
00:10:14.660 And as per usual, I wanna challenge you
00:10:16.720 to live a bigger life, end a bigger business,
00:10:18.720 and I'll see you next Monday.