Feb 9, 2017

Read Time 5 min

Busting Customer Success myths, should you prioritize churn or growth, why CS pros make the best leaders


Fighting Churn Newsletter

In 2003, Discovery Channel launched a new show with a simple but brilliant premise: are the myths we overwhelmingly accept as true – despite clear and/or personal evidence to support this thinking – actually true? MythBusters used elements of the scientific method to test a wide variety of rumors and myths over it’s 13 year run, everything from whether staying in one lane will get you through traffic faster than weaving (busted!) to whether it’s almost impossible to escape a sinking car if it’s turtled (confirmed!…most alarmingly). And while the show focused more on the hows of conducting myth tests, it also revealed something very important: our predilection for believing – and rarely second guessing – the things we consistently hear. Of the 1,015 myths MythBusters tackled, 54% of them were busted while only 25% were confirmed (the remaining 21% were classified as “plausible”). Simply put, they showed that the things we “know” are often flat out wrong.

Adam Savage, Master of Explosions and Duct Tape

So why are we talking about MythBusters when we’re supposed to be talking about Customer Success and churn? Because today’s Churn Fighting Focus is MythBusters, Customer Success Edition! While busting these myths won’t involve any weird/dangerous/insane experiments like the show, revealing the reality behind CS misconceptions – even those that are propagated by well-meaning CS professionals – is critical to developing truly effective CS strategies. In this cool and thoughtful post, Nichole Elizabeth DeMeré does her best Jamie Hyneman impression and takes on 10 CS myths that we all “just know.” We highly recommend checking out the full read but here are our three favorite busted myths to get you started:

  • Myth #6 – There is an Average Customer Success Practitioner Coverage Ratio: One of the most common questions CS pros ask each other is how many accounts each CSM can handle; everyone is worried their ratio is wrong. The truth is that there isn’t a clear answer; even the equation that often floats around of “1 CSM per $2M/ARR” sounds reasonable until you start to think of the ways in which it doesn’t work at all. As DeMeré cheekily notes, “When CSMs are on high-touch cases, like onboarding, trouble-shooting (or, preferably, trouble-scouting and proactively solving), or helping customers reach meaningful milestones that set them on track for upsells… oh wait, that’s practically the entire job description right there.” So how do you figure out the right ratio for you? DeMeré suggests that you first look at your own customers: “Which segments need a higher-touch approach? Start by identifying those, tracking the time it takes to do the job right, and developing efficiency measures from there.”
  • Myth #7 – You must save every customer! This is just blatantly false – BUSTED. DeMeré sums it up pretty succinctly: “When you commit to Customer Success, part of the deal is to take a long, hard look at which customers are likely to find success with your product and which aren’t. Then, you have to be willing to let the ones who aren’t go. And you have to be brave enough to not take any and all business that comes your way – only those who are likely to be successful with what you have to offer. It’s a short-term sacrifice for a long, long term of success-driven growth.” If you’re interested in learning more about the difference between stretch and bad-fit customers and when it’s okay to (or even advised) churn customers, we recommend this read, this read and this read.
  • Myth #9 – Customer Success ≠ Self Service: Many people think that Customer Success needs to be high-touch all the time. But that’s missing the point. The point is for the customer to be successful and sometimes what that customer needs to achieve success is to find their answer on their own, quickly. As DeMeré explains, “Customer Success and AI-improved self-service work really well together, as customer support becomes increasingly automated and smarter chat-bots solve problems more efficiently than ever. One prediction we had for 2017 is that AI and machine learning will help businesses prioritize conversations with customers, funneling those who need a customer success agent directly to the right source.”

As your reward for exploring these Customer Success myths, check out this MythBusters video where they try to ride a motorcyle on water. Yup, you read that right 🙂

Customer Success Around the Web

  • Which should you prioritize – churn or growth? Which is the more important priority? Growth or churn? Churn or growth? Early-stage companies have limited resources to focus their efforts. On one hand, growth is important in order to raise a venture capital round. Growth shows demand for a product. On the other hand, churn is a huge source of friction and raises questions of product market fit. In this insightful post Tomasz Tunguz, a venture capitalist at Redpoint, dives into why churn is the more important of the two priorities, especially for younger companies. An important read, particularly for businesses in their seed and Series A funding stages.
  • Why CS pros make the best leaders: Technology is changing faster than ever, yet one of the major shifts in recent years has been in how we create and present value to our customers – and how we sustain it. This shift has created the urgent need for Customer Success, yet when we look more closely at the best of the best in CS we see a compelling picture of great leaders. This interesting post explores two key traits – a strategic mindset and a strong preference for being proactive – that show clear parallels between Customer Success and executive leadership. A great read for any CS pro thinking through their career aspirations.
  • How cognitive biases impact CS: Cognitive biases can be found in almost all contexts of human life, but we are especially susceptible when interacting with products and services on the internet. There is a dearth of attention and a massive surplus of distraction when someone spends time using their smartphone or computer. Your website or app likely competes with hundreds if not thousands of other things for user mindshare – you’re going to need all the help you can get. This post dives deep into how cognitive biases impact software development and Customer Success. A great read for any psychology geeks (guilty as charged) but also important information for all CS pros to keep in mind when engaging with customers.

Word to the Wise

This week’s wisdom comes from a self-set challenge at Mention: to reduce churn by 20% in three months. Through a variety of initiatives they were actually able to reduce their churn by 22% in a single month(!!), making their story and their strategies well worth a closer look. We recommend checking out the full read, but their efforts around an automated nurture program were particularly interesting to us:

“We have an automated marketing process that is set up to activate and convert users during our free trial. However, everything kind of stopped once users upgraded from the free trial and became paying clients. So, to decrease churn, we extended the life cycle of our emails and in-app messages to paying clients in order to further nurture our relationship. Here is the background. We noticed that, during the free trials, feature activation was the most important driver of full conversion. (The same goes for retention.) The more features a user activates and uses, the stickier the user is, which makes a lot of sense. Therefore, we began sending messages to paying clients to motivate them to activate features. Our first messages were “Pro Tips” to showcase the features that are really popular with power users, such as our Buffer integration. Then — as use cases are worth a thousand words — we started sending out monthly success stories to reaffirm Mention’s value proposition and to directly show how our features could make sense for our users. These steps led to a pretty comprehensive nurturing program covering the entire life cycle of our users.”


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