Jul 13, 2018

Read Time 5 min

Churn Monster: Cash-Strapped


Churn Monster #2: Cash-Strapped

We are now ready for our second installment of the Churn Monster blog series. In this series we are going over common customer churn risks that your company might be facing. We’ll go over a typical scenario you might be experiencing involving that churn monster and give you a recommended plan of action to successfully defeat that risk.

Imagine this…


Carl is a Sr. Manager of a team and is your relationship contact at one of your accounts. He was an influencer in the decision to purchase your product two years ago, but he was not the primary decision maker. His boss, the VP, owns the budget and had to give final approval for the purchase.

Over the past two years, Carl helped get your platform implemented from the customer side and has motivated and encouraged the team to get ramped up to where they are all using your product pretty regularly.

Over the past month, Carl has informed you of some departures on the team. You dig a little more to come to understand that there have been some layoffs company-wide and all departments are being asked to reduce expenses and scale back resources.

You hear this news and are worried your company might not make the cut with these new budget constraints. What do you do?

Plan of Action:

You immediately mark the account as at-risk, so it will be sure to stay at the top of your watch list from now until the end of the quarter. You also alert your boss, the Director of Customer Success, and clue her in on the news from Carl and the current situation.

The two of you decide to help Carl out and take the liberty of putting together a comprehensive business case to justify the renewal, that is coming up shortly at the end of the quarter. You and your boss schedule a meeting with Carl and his boss the VP.

During this meeting your share with them the business case you put together. You also revisit the primary pain points that led them to purchase in the first place and highlight how your product has since helped solve those problems for the team.

During the call Carl and his boss reveal, that they agree there has been an impact over the past two years, but unfortunately that doesn’t guarantee they will be able to renew. They inform you that budget cuts have been pretty deep.

You wrap up the call by offering your help during this uncertain time, with pulling numbers/reports, or whatever they might need to help convince leadership to remain a client. You also let them know you will be working on some pricing options for their upcoming renewal.

You offer to remove some of the licenses from the contract since there are empty seats that are not currently being used and lock in the discounted rate for when they are ready to re-purchase those seats if/when the team rebuilds.

You also give them information on the lower edition of your platform detailing what the feature differences would be. If they decide to go to the lower edition they would be saving 30%.

Since you would rather them stay on their current edition with the full functionality you offer them a year three loyalty discount that would save them 20% over the next year. This discount is contingent on them agreeing to participate in both a testimonial and case study for your company. (This customer success story will be a win for your marketing team, and even better – most of the messaging work has already been completed with the business case you put together.)

And lastly you also offer to change their payment terms from an upfront annual payment, to quarterly installments.

Carl and his boss thank you for putting everything together and take all of the information and pricing options to present to their finance team.

You follow back up with Carl, to see if there’s been any headway with the subscription renewal decision. You are relieved to hear that your work of putting together the business case paid off. They agreed with the points laid out and saw your willingness to work with them on price during their financial strain as a sign of a true partnership and were able to make cuts elsewhere to save the renewal. Carl and his team are glad to be able to continue to work with you and your company and are excited about sharing their success via the promised testimonial and case study.

Fast forward another year, Carl’s company was able to stable out after a combination of cutting back expenses and smart growth strategies and are looking to backfill the previously lost team members. They re-hire those positions and purchase additional seats to your platform as well as training courses.

Since their last renewal you have also had a new product launch that you think the team could really benefit from. You set up a walkthrough of the new product with Carl, and he is really impressed. Given the improved financial situation you are able to lock in the product upsell prior to the renewal.

You are in a much better place than you were a year ago with Carl and the account. You fought the cash-strapped churn monster head on and won!

P.S. If you missed the first post of the series, read here to find out how you can fight a disengaged churn monster.

Churn Monster Playbook: Your Definitive Guide to Fighting Customer Churn

In this playbook, we will catalog the twelve common monsters that attack customer retention. For each churn monster, we will give a description of what its churn risk looks like, so you can easily identify it within your customer accounts. We will also give you actionable tips to help you combat each churn monster, and insight into how ChurnZero can help.

Download this playbook now to learn how to fight customer churn.

Download Now

Upcoming Webinar

Customer Success & Finance: Get Aligned! Getting a Customer to Retention and its Financial Impact.

Wednesday, August 22
2:00 – 3:00 PM ET

Customer Success is from Venus, Finance is from Mars, but both understand better than anyone else in a corporation the importance of retaining customers. This webinar is designed to show the process and impact of the renewal from both the Customer Success and Finance point of view.

Join this webinar to learn:

  • Processes that can help drive customer retention
  • SaaS metrics the CFO and CS leader both need to know
  • The total financial impact of customer retention


  • Josh Carlson, Director of Customer Success, SaaSoptics
  • You Mon Tsang, CEO, ChurnZero

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Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.


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