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All non-renewals lead back to adoption (follow up to 10 reasons why customers cancel)

As a SaaS vendor, all non-renewal reasons lead back to adoption.

The way my team looks at a client is three fold and each plays a part in the client’s ability to adopt our product.  The three things we must understand as we begin working with clients are their commitment, capacity and experience.  These are defined in the following manner:

Commitment  – The level at which clients are organizationally dedicated to complete the activity that will enhance their efforts

Capacity – A client’s ability to provide staff resources to complete the activity that will enhance their efforts

Experience – A client’s knowledge and skill level

For a non-renewal to happen one or more of these will be an issue.  This is where Client Success teams shines.  They can quickly identify the root challenge and course correct accordingly.  By addressing each issue the Client Success Associate can turn the client around quickly and save the client.

While there are company interests at hand, the end goal is to have the client successfully engaged and adopting your product so they can see tangible results.  If that’s the case, why would one lose a client?  If my CEO came to me and said, “I’ve decided to not renew our Salesforce.com agreement,”  I would fight tooth and nail to keep it.  It’s the same with our clients…if our product is ingrained into their business they will renew.  Bottom line…all roads lead to adoption.

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Want to learn more? Read the original post on 10 other reasons why customer cancel and what can be done to prevent it.

Stephanie Rodriguez

  • Robert O. Asscherick

    I disagree, this is a simplistic view and one I would strongly caution against. While adoption is critical, it by no means is an absolute predictor of renewal/churn. It does serve as a decent proxy for Value Acknowledged but clicks don’t always equal Value.

    Then there’s the other factors that account for a high level of churn regardless of usage/adoption… loss of sponsor, M&A, business downturn, etc.

    If you want to be great at mitigating churn and expanding accounts you have to have deep understanding of your customer’s adoption coupled with a platform that allows for real-time visibility into external churn predictors. Well, those and a highly skilled and capable staff and having a sticky product sure help a lot.

  • Robert O. Asscherick

    I disagree, this is a simplistic view and one I would strongly caution against. While adoption is critical, it by no means is an absolute predictor of renewal/churn. It does serve as a decent proxy for Value Acknowledged but clicks don’t always equal Value.

    Then there’s the other factors that account for a high level of churn regardless of usage/adoption… loss of sponsor, M&A, business downturn, etc.

    If you want to be great at mitigating churn and expanding accounts you have to have deep understanding of your customer’s adoption coupled with a platform that allows for real-time visibility into external churn predictors. Well, those and a highly skilled and capable staff and having a sticky product sure help a lot.

  • PaulMHinz

    Robert, I think Stephanie covers your point within “Commitment”. Client Success Teams can watch for those other indicators including loss of sponsor, biz downturn, M&A, etc. Even an M&A should be seen by a Success Team member, allowing them to know to reach out more during the transition – or am I missing the point of how Stephanie defines a Client Success Team?

  • PaulMHinz

    Robert, I think Stephanie covers your point within “Commitment”. Client Success Teams can watch for those other indicators including loss of sponsor, biz downturn, M&A, etc. Even an M&A should be seen by a Success Team member, allowing them to know to reach out more during the transition – or am I missing the point of how Stephanie defines a Client Success Team?

  • Bonnie Smith

    In my experience, these are all real reasons to be worried that your customer is not going to be around for the long term. It’s not the only reason, of course, there are these other little items that can get in the way such as “budget” or “functionality” – but it makes for a catchy title. I would agree that this is a solid profile of a typical “high churn risk customer”, however.

  • Bonnie Smith

    In my experience, these are all real reasons to be worried that your customer is not going to be around for the long term. It’s not the only reason, of course, there are these other little items that can get in the way such as “budget” or “functionality” – but it makes for a catchy title. I would agree that this is a solid profile of a typical “high churn risk customer”, however.

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