There’s a lot to talk about in customer success about churn, and about upsells. Together, they are one of the most critical topics in recurring revenue business models.
To all that, I wanted to add one very tactical insight: of the 1000s of customers we closed when I was running Adobe Sign / EchoSign … while we lost a few over time for many reasons, indeed we lost some great customers … we never lost a single one I actually visited. At least not on my watch. Not one.
Why is that? Was it my scintillating conversation? My electric personality? No, and no.
It’s because we generally, naturally, misunderstand why we lose customers, and where to spend our time. My somewhat non-obvious learnings:
- Complaints are not, directly, an indication of a customer at High Risk. Whiny customers will stay. It can be alarming, blood-pressure raising, when a critical customer complains about your product, your features gaps, your team, or even, ahem, talks about switching to the competition. But it turns out, complaints = engagement. Your customers that complain, they do care.
- On the other hand — satisfied customers will “mysteriously leave”. Some of your highest-utilization, least-complaining, never-raised-an-issue, maybe even gave-you-a-testimonial customers … will leave. Seemingly out of the blue. Maybe your competitor sold over your champion’s head. Maybe there was an RFP you never even were a part of. Maybe change came from the CFO’s office, or the CIO’s office, or the GC’s office, or somewhere you don’t have great ties. You turn around, and your reasonably — or even super happy — customer is gone.
It can get even more extreme than this. At Adobe Sign / EchoSign, in particular, we had a lot of customers that bought us together with Salesforce, SAP, or other systems at the time they were implementing them. They’d buy Salesforce, buy us inside of Salesforce … and then a year would go by, and they’d never deploy Salesforce. Because of that, they’d never use us. And yet — they’d all renew. Often even for the third year.
So what’s actionable here, if you can lose happy customers without a hint of notice, and magically keep both angry ones and ones that never even deploy? I don’t have all the answers. Measuring everything helps (and luckily we now have software tools to do this for you). Building deep relationships across the organization with your customers helps too.
But it turned out for me, at least, one thing always worked, as a founder CEO. Flying to visit the customer.
Because in the enterprise, customers aren’t just buying bits. They’re not just buying software, as it exists today. This isn’t on-prem software. It’s SaaS. It evolves. A little every quarter, a lot every year, and dramatically over time.
So when your prospects and your customers actually meet you, they’re buying you. Not just your product as it exists today. But also — your vision, your strategy, and your commitment to making the product better and better over time. And they’re buying, and getting, your social contract to deliver for them over time. So they get a win in the organization. Not just some tool.
If you get on a plane, I can’t guarantee you’ll win the deal. But I can guarantee two things. First, your odds of closing it go up if you show up and your competitor doesn’t. And maybe even more importantly, given how critical second-order revenue is in SaaS … if you go there, and you present your vision, passion, and commitment … and you maintain that connection over time … I don’t think you’ll ever lose that customer.
(note: an updated SaaStr Classic post)