A high customer churn rate is the blinking check engine light of an organization: it serves as a blaring red signal that something isn’t working. Sales is doing a great job of winning customers and deals, but somewhere along the line, the customer experience is failing expectations.

The answer to a high customer churn rate is not to increase sales – it’s a lot better to have less customers that stay longer rather than more customers who keep quickly dropping off.

According to Forrester, it costs 5 times more to acquire new customers than to retain existing customers.

Even more compelling, a co-authored study between Bain & Company and Earl Sasser of Harvard Business School found increasing customer retention rates by 5% lead to profit increases of at least 25% and up to 95% across service companies.

Customer acquisition costs (CAC) include several expenses, from advertising costs to the salaries for marketing and salespeople to the costs of the applications and tools these employees use daily to do their jobs. These costs are ongoing.

But CAC also includes certain expenses – including sales commissions and price discounts (such as free trials for the first few weeks or months of use) that companies only pay once per customer. Retaining customers year over year eliminates these costs entirely, and enables businesses to reap higher profits from customers at a lower expense to the business.

So how can customer success managers maximize customer retention? Below are five strategies for preventing customer churn before it starts and lowering churn rate over time.

Create a seamless onboarding experience for your customers

According to customer success onboarding consultant and advisor Donna Weber, 52% of customers abandon products and services within 90 days due to a poor onboarding experience.

Given that the majority of new customers drop off due to a negative experience at the very start of the customer lifecycle, creating as seamless of an onboarding experience as possible is top priority.

It’s up to product and engineering to build a straightforward onboarding process into the product. But it’s equally important for customer success to simplify this process further through excellent customer service.

A high-touch client onboarding approach that includes a formal sales-to-customer success handoff, collaborative discussions between clients and customer success managers about client goals, client product trainings, and consistent check-ins between customer success and clients helps to maximize customer satisfaction and decrease drop-offs at this crucial juncture.

Client product trainings can include videos, webinars, or web pages explaining product functionality or use case-specific applications of a tool. The fewer steps a customer needs to take to get their product questions answered, the better.

Marketing, product, and customer success teams should collaborate to develop these assets and ensure customers aren’t left wondering how to use certain features or functionality to support their use case.

Build a success plan or roadmap for new customers

Your customers hire your product to do a job for them. As a customer success manager, it’s important to keep in mind that customers often want more than an intuitive interface or a simple implementation process – they want a solution that will drive success toward their unique business goals.

When customer success managers have a holistic understanding of customer needs, expectations, and desired outcomes, they’re in a much better position to deliver a positive customer experience.

Collaborating with both the customer and the customer’s point-of-contact during the sales process to understand the customer’s specific use case and expectations enables customer success managers to map out how the customer can leverage the product to reach their defined goals.

This success plan or roadmap clearly delineates how the customer should use the product to achieve tangible desired outcomes, step-by-step. The client and the customer success manager can then use this guide to track their progress against these goals to achieve value according to the client’s own definition of success.

Monitor and address high-risk customers

There are a lot of ways to identify a customer at risk of churning. Here’s a few signals of an at-risk client and how to respond to each incident to mitigate the risk of losing a customer completely:

• They gave you a low net promoter survey (NPS) score
  

In this instance, it’s key to be proactive. Waiting for the customer to formally complain or cancel will only serve to spoil the relationship further. Reach out to customers who have left a low NPS score or left a negative review online as soon as possible to discuss any potential issues. Start things off on a positive note by expressing appreciation for both the customer's patronage and their willingness to provide feedback. Then, address their concerns with a personalized message or call to show them your organization is responsive and committed to customer satisfaction.

Resolving any issues with their contract or their product experience quickly will greatly reduce the chances they sour to your company or product and terminate the contract.

• There’s been a recent leadership change at your client’s organization, or the main point of contact for the account has changed
  

If there has been a change in leadership – or if the initial buyer has left the client organization – this could spell bad news. The new decisionmaker at the company may come with their own recommendations for a suite of solutions, or they might want to bring products they liked at their last company to your current client.

Worse still, your former product evangelist within the organization may be gone. This kind of change creates the potential for your client to terminate their relationship with your company in favor of a competitor.

When this occurs, it’s key to identify new points of contact within the organization and establish contact with the incoming decisionmaker. To make contact with a successor, reach out on LinkedIn. Build a rapport with this new decisionmaker within the company and strengthen your relationships with existing product champions that remain at the client company.

This will help you establish new points of contact and enable you to familiarize new leadership with the features and functionality of the product. Detail how the product helps the client organization achieve desired outcomes and discuss ways your product has helped the company achieve success in the past.

• The client is submitting a low number of support tickets
  

At face value, this seem counterintuitive. But when ResDigital did a study of its own churn trends, they found that customers who submitted fewer support tickets were more likely to drop off. They weren’t bothering to fix problems within their instance of the product because they simply weren’t using it enough to warrant a complaint.

When customers are using your product so little that they no longer care to fix bugs as they crop up, it’s time to look at your customer’s success plan or roadmap and see which features or actions they’re not using or doing that could increase product stickiness and help them achieve their desired outcomes.

Send product emails or personalized messages outlining how an underutilized feature, new product update, or process could take your client’s experience with your product to the next level.

Initiating contact to reignite your engagement with the customer and offering suggestions they can use to get greater value from your product could save some customers from the brink of churn.

• Usage metrics within your product or service are dropping
  

Similar to the last indicator, a significant drop in user engagement within the product is a bad sign.

If you haven’t reached out to this customer in a while, their use case has changed, or they’re failing to derive value from your product, reaching out and initiating a conversation could rekindle engagement.

Inform the customer about different features that would help them hit their goals, and prompt existing customers who are not currently using your stickiest product or feature to take the next step in the customer journey.

Offering resources about product functionality and different use cases for familiar features that relate to the customer’s success plan could also improve the experience for customers who are finding features unintuitive or hard to use.

Gather quantitative and qualitative customer feedback

Establishing a closed feedback loop between you and your customers ensures nothing comes as a surprise. NPS scores and customer satisfaction surveys offer a high-level understanding of a customer’s level of satisfaction with a service or tool, but contextualizing these scores by asking customers directly about their experience makes these stand-alone numbers more actionable.

Regularly checking in with your account’s point of contact ensures you can address any issues that have cropped up. It also enables you to identify potential opportunities for growth, upsell, or  better understand how your customers are using your product.

These discussions can reveal whether your customers are using your product in a way that maximizes value for their business. They also allow you to discuss certain features and functionality customers may be neglecting that could deliver better results.

Here are a few topics customer success managers should touch on during check-ins to maximize customer value and reduce the likelihood of churn:

• Current use case: How did you expect your customers to use the product when they first onboarded or since your last check in? How are they actually using it?
• Pain points: Are there any areas of friction? Are there aspects of the UI or product experience that are causing frustration? Have they issued support tickets? Are they happy with how problems are being resolved?
• Customer delight: Are there aspects of the product that are delivering exceptional value or an exceptional customer experience? Are there opportunities to further improve this experience?
• Customer outcomes: Is the product helping the customer achieve their desired outcomes?

In combination with automated in-app surveys, email surveys, and NPS scores, conducting personalized, regular feedback meetings with your customers can ensure your organization has a complete understanding of the user’s experience with your product and establishes strong, ongoing relationships with existing customers.

Invest in personalized relationships with your high-value customers

All customers are valuable, but some are exceptionally important to company revenue. It’s important to know who your most profitable customers are and pay special attention to at-risk indicators for those accounts.

Segmenting customers based on profitability and investing extra time into those accounts reduces the chances someone with a big impact on your company’s bottom line will fall through the cracks.

Review interactions with these companies to identify and surface any potential issues they’ve had with the product, maintain regular check-ins to proactively nurture feedback loops with your points of contact, and offer free services or promos when available to maximize customer satisfaction.

The cost of small efforts to nurture positive relationships with high-value customers is a lot lower than the cost of losing them.

Coming to meetings prepared and confident is also key to optimizing the customer experience for your clients.

If you’re swamped with meetings, wasting time tracking down information, and losing track of notes and action items during follow-up, try Classify. It’ll help you stress less.