• Read Time 3 min
Why Customer Success is your best investment during an economic downturn with You Mon Tsang and Punk CX
When a financial slowdown approaches, the smartest businesses look for areas where their investment has the best leverage. Today, the greatest opportunity for efficient growth lies with Customer Success (CS) teams—the purveyors of customer loyalty.
Find out how Customer Success builds financial fortitude and resilience in the latest Punk CX podcast, featuring ChurnZero CEO You Mon Tsang.
Get You Mon’s insights on what subscription businesses should do now to navigate a downturn, and learn the factors that put customers at risk of churn, what most people get wrong about customer satisfaction, and why “agility” is about more than process.
Double down on customer retention during a downturn
“In good times, a lot of investments that a company makes are really focused on new sales. But even in good times, studies will show that it’s about five to seven times more costly to acquire a new customer than it is to keep one. When it gets rough in a downturn, that 5x multiple probably expands even more. New leads slow. Win rates narrow. Deals take longer and longer to close. And of course, retention rates will also suffer a little bit. In the downturn as a CEO, I’m going to try to find every dollar investment that has the best leverage. […] That leverage advantage moves even more to customer retention.”
Focus on your customers’ top three churn risks
“Think about the main reason why your customers will churn in this day and age. What are those reasons? Name the top [three reasons] and create proper repeatable plays to react to them as quickly as possible.”
Prioritize delivering customer results over satisfaction
“There’s two reasons why you want to be a revenue team rather than a happiness team. Happiness doesn’t always lead to business success, [and] it certainly isn’t a driver to it. What is most important for a business is driving revenue. You always want to be a revenue center, not a cost center.”
Build product adoption to get to value
“Usually, [product] usage and value are somewhat related, but not always. Usage you can see; are [customers] in [the product]? Are they taking advantage of everything that we’re offering them? If you focus on that, it often will lead to value. If it doesn’t lead to value, then you have a product problem. CS can be helpful. But if you have good product adoption, it will lead to value.”
Prepare for a mobile workforce—and employee turnover
“I’m planning for the impact of remote work on building a company. It gives you a lot of advantages. Talent acquisition is way more interesting and way better. But remote work is tough. There are some people who believe that the increase in employee churn over the last two years will be systemic. It’s what you can expect from here on out. Because all I have to do is log off of one Zoom and log into a new Zoom, and boom, I’m in a new company. It’s as simple as that. Companies have to plan for an increase in employee churn no matter what you do. […] Be the best at onboarding. Find a way to create a great culture over Zoom and Slack that’s different from the next.”
Share customer stories across your organization
“Be transparent with your metrics and your [customer] stories, and use them. When people [say], ‘We don’t really have a customer-centric company. What do you do?’ Start sharing [customer] stories. Start sharing every NPS score, every comment that [customers] have. […] You can never do enough of it, and it will always help your company.”