Customer Retention: Proactive, Reactive, and At-Risk Analysis

How often have you found yourself scrambling at the last minute to save an at-risk account, pouring time and resources into what could often be a losing battle? You’re not alone.

Many Customer Success Managers (CSMs) fall into the trap of reactive retention.

It feels like part of the job, right? The truth is, there’s a better way. The trick lies in shifting our focus from a reactive to a proactive retention strategy.

It’s about spotting the risks and addressing them before they turn into problems.

In the dynamic world of Customer Success, being proactive isn’t just a ‘nice-to-have’, it’s a necessity.

The sheer speed at which customer expectations change can turn today’s satisfied customer into tomorrow’s at-risk account.

But with a shift in mindset, a firm grasp of your customers’ goals, and a robust at-risk analysis process, you can turn the tides.

Let’s explore how.

Shifting from Reactive to Proactive Retention

Reactive retention is firefighting. You wait until a problem has surfaced before you deal with it.

But imagine if you could prevent that fire from ever starting? That’s proactive retention. Proactive retention involves understanding your customers so deeply that you can anticipate their needs and wants. You predict potential issues and address them before they become a problem.

In practice, this could involve continuously improving your product based on customer feedback, or implementing training programs to help customers get the most from your product.

Understanding Desired Outcome

At the heart of proactive retention is the understanding of your customer’s Desired Outcome.

Desired Outcome is a combination of their Goal (what they need to achieve) and their Appropriate Experience – AX – (how they need to achieve it). By understanding your customer’s Desired Outcome, you can align your offerings to meet their expectations.

To understand Desired Outcome, communication is key.

Engage your customers in discussions to understand their goals, their key performance indicators (KPIs), and their expectations.

Keep this communication ongoing and dynamic, adjusting your offerings as their goals evolve.

Risk Analysis: Identifying the Signs Early

Proactive retention and understanding their Desired Outcome go hand in hand with at-risk analysis.

At-risk analysis helps you spot the customers who might be veering off the path to success.

It helps you identify signs of dissatisfaction or disengagement early, so you can step in and provide the support they need to get back on track.

Risk signals could be quantitative, like low product usage, or qualitative, such as negative feedback.

Create a robust process to track these signals and ensure timely interventions.

Make risk analysis a regular part of your review meetings, and encourage a culture of learning and adapting from the feedback received.

Turning Risks into Opportunities

Risk signals aren’t just red flags; they are opportunities.

Each risk signal is a chance for you to better understand your customer, provide value, and strengthen your relationship.

When you spot a risk signal, don’t just react; take a step back, understand the root cause, and come up with a strategic solution. Show your customers that you’re not just there to put out fires, but you’re committed to their long-term success.

Join Impact Academy

As we head towards a more customer-centric world, the role of the Customer Success Manager is becoming increasingly complex and demanding. But with the right skills and mindset, you can turn these challenges into opportunities.

Our Impact Academy Customer Success training program is designed to equip you with the knowledge and tools to excel in your role.

Starting again this August 2023, our comprehensive program covers everything from proactive retention strategies to advanced risk analysis techniques.

Join us and take your Customer Success career to the next level.

About Lincoln Murphy

I invented Customer Success. I focus primarily on Customer Engagement. Learn more about me here.