Customer Success hoje é um dos temas e profissões que mais crescem em interesse e procura no Brasil e mundo. Porém ainda não existe muita clareza sobre o que exatamente ele significa, quais suas práticas ou quais suas principais métricas. No vale do silício, CS começou a ser difundido em 2010, já aqui no Brasil não há cinco anos que as empresas o começaram a adotá-lo. A busca crescente acompanha a explosão do mercado de SaaS e outros negócios de receita recorrente. Ser "customer-centric" é a bola da vez.

Para ajudar a acelerar e consolidar o troca de conhecimento entre todas empresas que estão fazendo CS no país, queremos fazer a maior pesquisa focada de Customer Success.

Precisamos de você para responder a pesquisa!

Objetivos da Pesquisa

Vamos desvendar as principais dúvidas que os times de CS possuem. Muitas vezes não ter essas respostas significar não conseguir investimento e espaço dentro das empresas. Entenderemos como se comportam: Churn, orçamento, salários, tamanhos de time, etc. Vamos além de números e levantaremos quais as estruturas de time mais utilizadas, para quem CS reporta e que métricas são mais adotadas.

Além de uma pesquisa númerica, faremos também diversas entrevistas para trazer as melhores e mais difundidas práticas para um artigo educativo.

O resultado da pesquisa será um relatório completo que dará segurança para todos que estão começando ou aumentando investimentos em CS.

Quem está fazendo a pesquisa?

A pesquisa foi produzida pelo Grupo CS Brasil. Este é um grupo formado há 3 anos e conta com 10 executivos de CS que hoje lideram times bem estabelecidos em empresas como:

• Resultados Digitais
• Salesforce
• Geofusion
• Moip
• TOTVS
• Monde
• Sensedata

Além disso a pesquisa conta com o apoio de divulgação do SaaSHolic.

Esta pesquisa é pra mim?

Se você trabalha com Customer Success ou Customer Experience, seja em uma empresa de SaaS ou não, essa pesquisa é para você.

Mas ela vai além: CEOs e founders, ou investidores podem entender melhor como o mercado se CS no Brasil.

Os números que eu colocar na pesquisa serão divulgados?

Todas as respostas são completamente confidenciais e anônimas. Você não precisará se identificar nem identificar sua empresa. Pedimos que você seja sincero nas respostas e que, caso não tenha certeza ou não entenda alguma pergunta, escolha a opção que permite pular a pergunta.

CLIQUE AQUI, responda a pesquisa para receber o resultado completo!

Pesquisa: Tudo Sobre Customer Success no Brasil was originally published in SaaSholic on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is a guest post by Guilherme Lopes. Guilherme is co-founder and VP of Customer Success (CSM, services, and support) at RD Station. He leads hundreds of people that help thousands of customers to succeed. Follow him on Twitter at @guilhermelopes or connect with him on LinkedIn. Find more great articles like this at https://cs.guilhermelopes.io.

I’m co-founder and VP of CS of an Inbound Marketing SaaS platform. My company has now over 8000 customers. Now, let me tell you a secret: nobody wants to use our software. Moreover, nobody wants to use your software too. There’s no welcoming for yet another B2B tool. What companies really want is to achieve their desired outcome. What you sell may or may not help them with that.

You might defy that logic by saying that a good user interface can make people want to use a B2B software; after all, people spend hours on Facebook or Snapchat. That’s true, but the purpose is entirely different. People use Facebook not because they have a particular desired outcome to achieve — it’s purely low energy entertainment. Nobody wakes up and think “I wish I could watch more funny videos of cats, but it is so damn hard to use Facebook.” Unfortunately, that applies to B2B software.

Think of it as staying healthy and fit. There is no doubt that everyone wants that. So, why do so many people fail to go on a diet and to exercise regularly? Because for most of them those things are difficult, unpleasant and boring. Moreover, not everyone gets what it takes to stay healthy and fit. User Experience is not enough to solve that equation.

Over the last few years, however, a new modality of training has caught on, making people stick to exercises: CrossFit. There are a few concepts within CrossFit that engage people in it: clear goals, shared results, competition (gamification), leveling, etc. Some would call that a methodology; I see it as the Customer Journey.

I’ve always had a hard time thinking about how our customer journey at RD should be. There are so many different authors writing different concepts about it; also, there are so many different things a customer can do with our software that every time I started thinking about our Customer Journey, it seemed too big and too complicated; until I started thinking about it as a methodology.

A methodology is what helps people who want to achieve something difficult. Either it is learning a new language, staying fit or achieving a company desired outcome. It offers a baby-step path, shortcuts, specific learning methods, leveling and clear goals.

Designing the Customer Journey to be a Methodology

As I said, I like to see the customer journey as a methodology. A simple journey is a path, while a methodology is a path and much more. A methodology presents a form of leveling the customer, so not everyone has to start from the beginning. It defines the best format for the customer to do or learn each one of the steps. It defines how to assess if a milestone has been achieved.

Here’s an overview of our methodology:

4 Different Phases

Because each phase is related to the company maturity stage in Inbound Marketing, it usually takes time for enterprises to evolve from one phase to another: months, years maybe. By defining those 4 Phases we are helping our customer to see the long run perspective and setting the right expectations. They can see how a company needs to change its structure and processes along the way.

Success Milestones

Each Phase is divided into an array of Success Milestones. A Milestone is something meaningful for a customer to achieve; when a real value is perceived. It’s not too big: one milestone does not fulfill all customer’s initial expectations. It’s rather a building block of value, a result towards the desired outcome.

Task Lists

Consequently, a Success Milestone is divided into Tasks. They are a set of relevant and sequential steps, that do not add value themselves, but need to be carried out in order to reach the success milestone.

Milestone Assessment

One Success Milestone can be an abstract “stepping stone” in the customer journey. However, to benefit from a defined Customer Journey we needed a strict way to assess if the customer had achieved it or not. So we established a group of actions the customer had to carry out inside the software, and minimum values for certain KPIs the customer should achieve, for us to consider he had reached the milestone.

How we run the project

Creating the whole journey was a long process.

Before designing the journey above, we ran a project to understand what success really meant, from our customers’ perspective, in their own words. We created a ten people focus-group; including all the VPs, the CEO and some experienced CSMs, to run one hundred hours of customer one-on-one interviews. I’ll write more about that project in a next blog post.

After we had understood what “success” meant to our customer, the same focus-group worked together to define the path to reach it. This time, however, we used our own experience, rather than more customer interviews to determine the path. It’s ok to ask clients what their problems and needs are, but the vendor is the one who is the expert and have to define the best path to solve them.

We counted mostly on the experience we had had at RD to design the methodology. After all, RD had walked through a path of hyper growth, going from zero to thousands of customers solely using Inbound and our own software as customer acquisition strategies. The group was experienced and knew the details of the path which had been taken by our most successful customers. Ultimately, we had every knowledge we needed to design the best customer journey possible.

Probably the same holds true for your company. The knowledge is already in the minds of your leaders and employees. People just need to sit at the same table and use some sort of creative process to design a customer journey. There’s no need for something fancy or too complex.

Phases

As I said before, phases represent the stage of maturity of the customer with Inbound Marketing. The least mature company is the one who doesn’t use Inbound Marketing strategies yet. In such stage, all that matters is to Prove the Channel: that’s why this is the first phase. Usually, the ones who buy our software are people who want to prove that Inbound Marketing can be a new channel for deals, either to grow a company faster or to close deals more efficiently. No further or bigger investments will be made unless they prove it to their bosses, to their company or to themselves.

Phases also define requirements to start, and usual time frame to complete each one of them. The objective is to set the right expectations. Nowadays, even our sales reps show the prospects the Phases before closing a deal. Before that, it was common to see customers churning just because they had unrealistic expectations about the results. The customers need to fully understand what it takes to overcome each phase.

Success Milestones

Zooming in the first phase, you will see 4 Success Milestones. These milestones were designed to be perceived by the customer as a moment where they get real value out of the software. The goal is to show the customer that they achieved something to be proud of, that they are getting closer to their objective.

Aligning 1st Milestone with the Onboarding

The first milestone we designed is actually the value we expected to deliver during our onboarding time. An Onboarding must be more than configurations, integrations and training. A good Onboarding goes beyond “Go Live”, it delivers a first value. In our case, the first value is to launch a lead generation campaign.

A small lead generation campaign makes the customer try the full potential of Inbound Marketing and our software. Lead generation is also the core of the Inbound Marketing strategies and will be present in many future projects.

By aligning the first milestone with the onboarding project we simplified things. Our implementation services team not only works to set up the software for our customers, but they also help them hit the first success milestone.

The way we chose to chain the sequence of milestones was not necessarily to maximize end results. We crafted the methodology to maximize the throughput. The primary objective of a customer methodology must be to make customers engage with it and follow it until the end. If customers get stuck at some point, or if it takes too much time to see any real value, they are very likely to churn before they complete it. Particularly in the beginning of the journey, where time to value is crucial.

If you look at the first three milestones we defined, it might not seem the most logical sequence. The first step is a first lead generation campaign, a small batch of leads is expected, not enough to close deals. You might think that the next logical step should be a content plan to keep on generating more leads until it’s enough to close deals. But the truth is, a content plan is hard to do, it takes time and most of our customers get stuck in such a task. That’s why we defined Email Campaigns as the second step. Even though the customer doesn’t have enough leads yet, it’s easier to send good email campaigns for a few leads than trying to generate more. By doing so, they can get a sense of how they will nurture the leads they are still willing to generate. The customer sees value fast, they feel they are evolving, not stuck. Besides this, they also get engaged faster with different features of the software, which increases the lock in and commitment with the tool.

You must deliver some value before asking your customer to attempt harder tasks.

Task Lists

We broke milestones down into tasks with small objectives. A task list is a step by step to do list to complete a particular milestone. Tasks don’t add value per se but they are necessary to hit the milestone. The Task List for each Milestone gives the customer a plan. A plan minimizes decisions they need to make, making them focused on a straightforward path.

Does one size fit all?

There is one thing that freezes companies the most when designing a customer journey This was the strongest objection we faced during the project and even now, several months after it was launched, the idea that:

People often say that customers are not all equal and there should be a different journey for each persona at each stage. That’s true, one size does not fit all and the methodology we’ve designed is not the most appropriate for each one of the thousands of customers we have. However, you have to start from somewhere,and simplify otherwise the complexity will freeze you and eat you.

Consider the analogy with CrossFit I made at the beginning of this article. They may customize the plan for every CrossFit practitioner, but the methodology is the same for everyone. That’s what defines a good methodology: simplicity and success for the highest number of people who use it.

If you could design a lot of customized journeys, would it work better for your customers? Certainly, but that’s not what a SaaS is. A SaaS is not a consultancy company, or a product with a customized roadmap. The first thing you learn when building a SaaS software is not to add features just because someone asked. You try to build only one version of the software that fits the customers’ needs the most. The same holds true for a Customer Journey.

That’s why we started with a single path, only one journey. We may customize it in the future, maybe by persona, or by product plan. Even though, you can be sure that this Journey already works fine for at least 80% of our customers. Every customer thinks they are special and need something unique, but at the end of the day, if they have discipline and stick to a standard methodology they will achieve the results they expect.

Mapping customers along the Journey

After defining the Customer Journey, my engineer mind wouldn’t be satisfied if we didn’t have a way to assess which milestones each customer had achieved accurately.

That’s where the fun begins. If you automatically assess where the customer is on the journey, you can automate every message you send to him, or even customize the software interface, based on the Success Milestone he is at.

However, it’s not easy to setup such automatic assessment. A Success Milestone is often an abstraction and not a crystal clear definition. Take our first milestone for instance, “Lead Generation”, what defines a successful lead generation campaign may vary in different situations. We had to decide what we were expecting from a Lead Generation campaign to consider it completed. We ended up with a group of minimum actions and results like this:

Actions inside the software:

• Install the RD Station tracking code
• Create and Publish one Landing Page

Results:

• +15% conversion rate on the Landing Page
• +50 Leads
• +3 Qualified Leads

That may not be enough in some cases, or too much in others, but it is a crystal clear definition and it’s measurable. It’s a ‘checklist’.

We defined a similar ‘checklist,’ for every Success Milestone we had created.

Every morning Gainsight runs a rule (script) that assesses which customers have completed the ‘checklist,’ then it tags those customers with the correspondent milestone tag. It also, records the day when the “checklist” was completed. This process is critical, so we know, for every customer, what milestone they’ve achieved and when.

I’m pretty sure you can setup a similar workflow in a different tool if you’re not a Gainsight customer as well.

The Success Funnel

Now that we could segment customers based on the Success Milestones, the first report we created was a funnel to map the distribution of our customer base along the journey. It was something like this:

The graph above shows the Success Funnel. We used it to find the bottlenecks in our journey, and where our customers got stuck the most. That way, we could focus all our Customer Success efforts on removing that bottleneck. By doing so we could maximize throughput of the funnel, which means more of our customers will achieve success faster.

We also compared the milestones with churn rate and the result blew our minds:

The Milestones were (and still are) strongly correlated with higher retention and therefore customer success. That changed everything! Our obsession became making the customer hit milestones faster. A much more noble objective than firefighting churn, yet, still yielding concrete results.

When we compared Milestones with Health Score (product usage) the result couldn’t be different:

Aligning the Journey with the CSM work

One of the most important tasks of a CSM is to keep up with the Quarterly Business Reviews (QBRs) for their customers. A good QBR depends mostly on the CSM experience and talent. Every good business review should end with a plan for the customer to follow. To create such a plan, first an analysis of the customer must be done. A good CRM can help by summarizing the customer profile and history. Then, in our case, an analysis of their last inbound marketing campaigns and current results is needed. With these in our hands the CSM can put the puzzle together, and use his experience to suggest the best actions to take next. These actions can vary a lot given that Inbound Marketing strategies are broad and complex.

Before we launched the Success Methodology we depended solely on the CSM talent to run great QBRs. They could literally do whatever they wanted when doing proactive outreaches. We needed very experienced CSMs, with extraordinary Inbound Marketing background and sharp analytical thinking, to expect good results from him. This is a profile of a CSM that is very difficult to hire or train.

Now the Customer Journey helps with the analysis and the plan. The CSM just looks at Gainsight and knows which Milestone the customer is at. For each milestone there is a standardized success plan for them to take (the Task List for that specific Success Milestone). It’s an extremely productive and scalable process. Training got much faster too, now we just need to certify our CSMs in our methodology so each one of them become an Inbound Marketing consultant. They get more confident in dealing with customers, and all of our customers can count on a standardized quality of the service.

It’s common to use Gainsight to generate CTAs (tasks) to the CSMs automatically. The most common rule is to generate CTAs for the CSMs to run QBR for every customer every quarter. With the Success Milestones we’ve been doing something different lately. We don’t generate random QBR CTAs every quarter, we only generate EBR CTAs for the customers that are stuck in the Milestone 2- our current Success Bottleneck. An EBR is an Executive Business Review, similar to the QBR but not tied to a quarter. We now tie EBRs to Milestones.

In the next month, we plan to configure Gainsght to generate CTAs when a customer gets stuck in any Milestone for more than three months. So CSMs can make proactive outreaches only to the customers that are falling off the track, at the time they are falling off the track. This is a much more productive process, that is also more relevant to our customers.

The Rule that generates daily CTAs (tasks) to the CSMs:

• Before: QBRs for every customer that hasn’t had one in three months
• Now: EBRs for customers that are stuck in Success Milestone 2
• Next: EBRs for customers that are at the same milestone for more than 3 months

Education

A good Customer Success Methodology always counts on excellent educational resources. As an Inbound Marketing company, we are never short of educational resources. We have a dozen of eBooks, videos, webinars and thousands of blog posts. That volume of content works great for marketing, while for customers it gets them confused. Blasting customers with every content produced by our marketing team make them lose focus. There are infinite possibilities in Inbound Marketing, but if a company tries to do a bit of everything it achieves a bit of nothing.

Our Success Methodology is helping us organize content to present to the customer only what is best for them to learn, in the best possible format. We created a methodology portal with all Success Milestones organized as a chain of projects. There is training content for every step of these projects. We try to block customers from campaigns with content not related to the milestone they are at. That way, they get focused on overcoming that Milestone.

The methodology portal also works as collateral material for the CSM job. It’s easier for them to train customers in our methodology, they just need to refer to the right content.

Product Team Objectives

The Product team must also be accountable for making customers hit the Customer Success Milestones. Today at RD, every time they modify the product, an increase in the Success Funnel conversion rate is expected. That’s one of the ways we’ve been measuring the effectiveness of software improvements.

Start Creating Your Own Journey Now

We’ve just scratched the surface of the possibilities a Customer Journey offers to the CS organization. I am a big advocate of it and I hope that this story can help you to build or improve your own Journey.

Start simple and create one path with a few steps. Use your experience and a white board, customize it later. Remember, you don’t have to make it perfect for every kind of customer. It only has to engage customers and get them focus on the next step.

Make it measurable. The best benefits of designing a Customer Journey comes when you start using it as a Success Funnel. Knowing the conversion rate of a funnel makes you able to predict its throughput. Focus on these conversion rates, remove the success bottlenecks, and you will turn your CS organization into a “machine” that delivers success in a predictable and measurable way.

If you like this article, please recommend it to help others find it!

Customer Journey: Turning it into a Methodology was originally published in SuccessCOACHING on Medium, where people are continuing the conversation by highlighting and responding to this story.

When a customer leaves you

You have probably seen this scene before, perhaps you have even played a role in it. A customer cancels his service’s subscription, either the gym or the language classes, anything related to a goal he had wanted to achieve for some time. The clerk asks him the reason why he is leaving, and if there is anything he could do to change his mind.

The customer answers that everything was all right, the service has been great and he’s leaving just because his money is short. Or because he hasn’t had enough time to show up lately. He may even say he’ll come back in the future. The classical excuses for a break up.

“It’s not you, it’s me”

I’ve seen this scene over and over here at RD, my company, or in other companies I’ve worked with. 60 percent of the customers who churned lied about the reasons.

I don’t know about you, but my day has 24 hours as everyone else’s, and I do choose how to spend it. Also, when the cash flow is low, either you go bankrupt, or you choose how to spend the money you have left. Certainly you’ll keep the employees, tools and services that you care the most.

So, when a customer says such things what he’s actually saying is that he doesn’t want to spend the money or the time he has on you anymore and he is obviously avoiding your attempts of persuading him to change his mind. That’s why all churn surveys are poor and mostly useless.

That’s because churn had actually happened months before. The reasons that led to it had run through the customer’s mind several times before and now he has finally made up his mind. At this moment, something psychological has changed that will make it very hard for you to persuade him otherwise.

The cohort analysis

The reasons for churning occur months before the actual cancellation, so it makes difficult for us the vendors, to figure out what and when we’ve screwed up. A cohort analysis of churn rate helps us to evaluate faster and better the efficiency of the changes we’ve been making to prevent churn. It also helps us to figure out the most common periods in which customers are churning.

The chart seems complicated to understand but it is actually easy and very helpful. The rows represent the customers cohorts, or the group of every customer you brought in each month. The columns represent the number of months after the initial sale. The cell values represent the percentage of customers from that cohort (row) that remained paying for the service on that given month (column).

You can discover different things when you analyze columns or rows. On this figure for instance, if you look at the columns, you can see a drop on the retention rate for every cohort on the sixth month. Something is happening there and you can ask yourself why. Is that the contract period? Is it the end of the implementation phase? What else could be happening on the sixth month?

In that same chart, looking at the rows, you can also see a drop in the retention rates after June. You can ask yourself what you did in June that made that happen.

Something similar has occurred to us here at RD. A few months after we implemented the minimum contract period we saw a drop in the retention rates of new customers. It was easy for us to see it because we were looking at the cohorts separately and not to single churn rate. The drop in the retention rate affected only the cohorts that entered after that change. Easy to see, easy to fix.

Now, you may be thinking that using cohorts is the key, but as you can observe it took us four months to realize the problem. To realize that a project we had rolled out to prevent churn was actually delivering the opposite result, more churns. Four long months.

The cohort analysis is really helpful, but the problem about using it is that you’re still assessing the same metric: the churn rate. We already know that the reasons behind the churn occur way before the actual cancelation.

“The churn rate is a lagging indicator”

What you need are leading indicators. You need numbers that will help you to predict churn. Numbers which point to reasons that might lead a customer to churn in the future.

Leading Indicators

RD is the leading Marketing Automation Platform in Latin America. We help our customers to do Inbound Marketing to attract visitors, convert them into leads and nurture those leads. The same industry where you will find Marketo, Hubspot or Eloqua. We’d been growing 3x a year and had already raised two rounds of capital in Brazil when we decided it was time to play on the A League. So, last year we started fundraising in the Silicon Valley. Just to find out that the best VC funds in the bay area are far less condescending with churn rates than any other.

At that moment, we realized that we wouldn’t be able to reduce the churn rate that much within the time frame for the fundraising . So we invested a great deal in creating a good set of leading indicators that could help us predict our future churn. Those leading indicators should show us if customers were extracting value from our software and willing to stay. They should show us that we were on the right path to reach our target.

Below I’ve outlined all the creation process of this incredible leading indicators report. A report that was praised by most of the VC funds we talked to, most of which said it was the best customer success report they’d ever seen. The report was crucial in the fundraising negotiations, helping us to close the investment deal with TPG in the last quarter.

Start with correlations

Getting back to the fact that churn is a lagging indicator and that you need leading indicators, one question comes to mind. Is it possible to predict churn? Yes, it is! It all starts with correlations.

You can look for any piece of data that correlates to churn. It’s quite simple, just gather all the data you can about your customers. Then break customers down into two different buckets along with their data, the ones that have already churned, and the ones that have not. Next, compare the average of each data in those two different buckets. When you see a significant difference it’s because you found a correlation.

Software Usage

The most common data that correlates to churn is the usage of the product or service. Most of the times when the customer is about to churn he’ll stop using the product before he actually cancels. So, if you’re frequently looking at the customers’ usage levels, you can act right after a drop happens. That’s when you contact this customer to prevent the cancelation. In other words, you try to get him back on track.

Sticky Features

Usage is good, however it’s not any indiscriminate use that will make customers stay. You can track the usage of every different feature of the product. That’s what we did here at RD. By doing so we noticed a huge difference on the email marketing usage between customers that were staying and customers that were leaving. The difference was so huge that it became obvious to us that the customers who were not sending email campaigns were about to leave. Therefore, email marketing was a sticky feature and we had to encourage them to use it to prevent churn.

On the other hand, there were certain features that both types of customers were using with the same frequency. Our SEO Panel for instance. We realised that adding more or less keywords to it had nothing to do with the probability of churn. So, if a customer was using the software a lot, but if he was using only the SEO Panel, he could still churn because the SEO Panel wasn’t a sticky feature.

Customer’s KPIs

It took us some time to realize the importance of the lead management feature. When we looked at the usage rates we saw no relevant correlation to churn. Both customers that churned and stayed were using it with the same frequency. So it made us think that it wasn’t an important feature. But it was only when we started analyzing the results the customers were having with that feature that we found out we had been misguided.

Customers that were staying were generating 10x more leads than the ones that were leaving. Thus, we had to encourage lead generation and pay close attention to customers that were not generating enough leads.

Support Tickets

Something interesting puzzled us when we checked how many times customers were filing support tickets. We assumed that the customers who were leaving had had trouble with the product and complained about it. But, as it turned out, 70 percent of the churns had never talked to anyone in the support team, not a single word.

The leading indicator there was silence. Exactly, silence is the most anguishing leading indicator. If they are not willing to talk to you, they are probably not using the service, or they simply don’t care.

That was it. After all those analysis and correlations we’d done we had now a whole bunch of concrete leading indicators and we knew exactly what to do. I gathered the team, all the CSMs, and gave them a clear mission: attack the leading indicators. Make the customers use the product, have them sending more emails, help them generating leads, encourage the support tickets, check for anyone off track. There was no doubt the retention rates were bottoming out; except for the utmost failure that came upon us a few months later.

You need a focus: Customer Success

The lack of focus was certainly a problem. You cannot tackle everything at once and expect decent results. But there was still a bigger flaw on the whole strategy with those leading indicators: the correlations themselves.

“Correlation does not imply causation”

It’s obvious that a customer will stop using a service when he is about to cancel it. And he is certainly not seeing the results he’d like to drop out of it. And since he’s decided to go, he’s definitely not willing to invest time trying to solve everything through the support channels.

The problem with those leading indicators was that they were too much focused on the numbers themselves, on the company’s problems and not on the customers’ problems. Even though they were predicting churn in some way, they were still part of the symptoms and not the disease. So, we started it all over again with the reasons that were leading to the churn.

Yes, I said most of the churn surveys are useless and that customers lie. But now we did something different. We created a survey for the CSMs to answer. They’d point out what happened based on the customer history and the negotiations they had before the cancelation. Another great way to survey customers who churned, is sending it two or three months after the cancelation and making the customer anonymous. So the customer feel more confident that there is no one trying to convince them to buy the product again.

Those surveys showed us that 60 percent of the churns were happening, either because lack of adoption/implementation or expectations failure. Which means 60 percent of the churns were linked to the very beginning of the customer lifecycle. Either they were expecting something the product couldn’t offer, or they had failed trying to implement it and extracting a first value out of it.

Yes, there were other 40 percent of customers that were leaving because the product had had some bugs, the competition was cheaper, the service had been poor, etc. But each one of those reasons represented too little, and they were very different from one another. We needed focus, focus on the one thing that would solve 60 percent of the churn rate. That focus was the initial value the customers were not seeing.

Onboarding Success

When you think about the initial phase in the customer lifecycle, you think about the onboarding phase. It’s funny that a lot of people in the customer success industry say you can’t accurately measure the success of an onboarding project or the impact of it on the churn rate. I also used to think like that. But it turns out it is actually easy to measure the impact, all you need is a checklist.

First you need to understand the purpose of any onboarding phase, which is to remove the future barriers (configurations) and to deliver a first value. Those two objectives must be broken down into a task list that will be used in the implementation project. Make sure the completion of every task is represented by an action the customer must do in the software. Either the task is the action itself, or the task will enable the customer to do some action.

Since you can measure any action done in your software, you can verify when all the customer’s “checklist” has been checked. This means the onboarding phase was successfully completed.

Now you can assess the impact of unsuccessful onboarding on the churn rate. Separate the customers into two buckets: the ones that have fully completed their “checklist”, and the ones that have not. Next verify the churn rate for these two different buckets of clients.

When we did that at RD, we observed that a successful onboarding was reducing the chances of churn by one third. That was a huge impact. To make it more critical, only 60 percent of RD customers were successfully completing the onboarding phase. “Completing the checklist” became a really important leading indicator to pursue.

The funny thing was, the RD Services Team was doing a pretty good job on the implementation projects. More than 90 percent of the onboarding phases were being successfully completed on the estimated time. We dug into the numbers and discovered that the “mandatory” onboarding package was being sold to less than 60 percent of the customers. When we asked the Sales Team why that was happening, they said that some customers already knew how to implement the software and didn’t need to pay for the implementation. Certainly, that wasn’t a fact. Then, only completing onboardings was not enough to us, the rate of how many customers were buying the implementation package became another leading indicator to pursue.

The Customer Journey

We were dealing with the problems the customers were facing in the initial phase of the customer lifecycle. So we thought to ourselves we should go beyond the implementation phase and think about what the second logical step for the customer was. Thinking about logical steps on the customer lifecycle means thinking about customer journey. There are a lot of complex methods and models to design the customer journeys. We just used our own experience and our guts to define the second step. That would be sending email marketing campaigns.

Yes, you can bet we chose that because email marketing was a sticky feature as I wrote before. But there was a bigger reason. RD is a Marketing Automation platform, the customer has a whole world of possibilities to use our software for. We could have defined that the best step for him to take after the onboarding was content production. After all, almost every action on an Inbound Marketing strategy relies on the content strategy. But content planning is hard to do, it takes time, it needs focus. When you’re designing the steps of a customer journey, you must balance the value the customer has got so far with the effort you’re asking him to put on the next step. A lot of our customers were freezing in front of the content planning task, they’d postpone it the most they could, and months after, they would blame our software for the lack of results.

We’ve decided for email campaigns because they were easy to do, then, quicker the customers would be realizing value from another part of the software. That would increase lock-in and raise the customers’ commitment to trying other harder tasks in the future.

With the second step of the customer journey defined, we’ve drilled down into some of the email campaign indicators to better understand how to make the customers stick to it. The numbers showed that sending a bunch of email campaigns was not enough. Frequency was essential. Customers that were sending at least one email campaign per month had a 0.3 percent month over month churn rate, while customers that were sending one campaign every five months had a huge 10 percent month over month churn rate.

The email quality was also a leading indicator. Customers that were having poor email campaign results, with high spam report rates, bounced email messages and low open rates were churning faster than customers sending good email campaigns.

The frequency and the quality of email campaigns became two strong leading indicators to pursue.

The Plan That Worked

Now we had leading indicators that were clearly more correlated to the customer’s success than the customer’s churn. Also, they were all linked to only one focus, which was the customer lifecycle initial phase. So we had the foundation to create a structured plan to attack the problem and improve the leading indicators. And so we did.

The best part of the plan we created involved practically everyone in the company, not only the Customer Success Team. Cross functional customer success alignment inside the company is essential for any churn prevention plan. Every team must know how their work affects the customers’ success and what they can do to increase that success.

Our plan set leading indicators for almost every team, and those leading indicators were linked to the teams’ goals and OKRs.

The Sales Team had to sell paid implementation packages to 90 percent or more of the new accounts. The Services Team had to successfully complete 90 percent of the implementation projects in the estimated time. CSM Team had to increase the number of customers sending good email campaigns. The Product Team had to reduce the number of steps and time spent on software configuration and on email campaigns. The Engineering Team had to increase the email campaigns deliverability.

Although the plan seemed solid, CSMs were really concerned. They asked me how they were supposed to reduce the churn rate by half when it had been increasing consistently over the last few months. They weren’t confident about what to expect. Here is what I said to them at the time was: give me the leading indicators — they were more important than the churn rate itself. I told them it wouldn’t be any good to miss the churn goals again. But it would be way worse not to be confident about the future, not to be confident that the customer base was getting healthier and the customers were having success. So they did that: every team achieved its leading indicators goals consistently month after month. Thus, achieving the churn rate goal seemed easier and easier, until it had dropped by half of what it was a few months before.

The lower churn rates increased the confidence the VC funds had on us, but more than that, they increased the confidence on the excellent leading indicators results. These indicators showed that we would keep improving retention rates and our SaaS business was solid. Exactly what they needed to close a 20 million dollar investment round.

A similar plan can be made on any kind of company. The fundamental logic for that plan to work is: Stop firefighting the churn and start working on leading indicators to your customers’ success.

You can check my blog manifesto here. I'll share more experiences like that, so stay tuned. Follow me and the publication below.

Leading Indicators: How we learned what to do today to prevent churn tomorrow was originally published in Customer Success Experiences on Medium, where people are continuing the conversation by highlighting and responding to this story.

Those were the early days of our startup, we began studying about that awful thing called churn when we discovered "Customer Success". My partner and CEO at RD (Resultados Digitais), Eric Santos, asked me if I wanted to drop my position as Head of Product and start our CS division. At first I thought he was kidding, I hated that name "Customer Success". It seemed like a fancy term to make the traditional software post-sale operations a cool thing.

Well, I've been running our CS division for more than 5 years now and I am totally passionate about it.

I've learned that customer retention is the single most important metric on a SaaS business, and there is no retention without success. I've learned, that it is impossible to make B2B software companies with zero human interactions. Even though customer success is not merely about human interactions, getting in touch with your customers is the most important thing you can do to create a strong software company.

I've learned that making business is making relationships, and relationships are made of people.

We've grown from a dozen customers to more than 7 thousands. From 2 people firefighting churn to a complex 130 people CS organization. We've reduced the churn rate by one tenth. And we've made friends with tons of successful customers.

In that period I was glad to meet and make friends with some inspiring CS thought leaders, such as Lincoln Murphy. Guys like him encouraged me to create a lot of the things that make our CS organization thrive today. However, in that period I’ve also failed many times. I’ve learned how to implement the CS concepts I was reading about by trial and error. I always thought there were few practical examples of the CS concepts being shared to help me on those moments. That’s why I’ve decided to start this blog.

I want to share my practical experiences in depth. I am not here to re-write concepts and I will not offer silver bullets for common CS problems. But I'll share details of how our Customer Success organization is run and why some projects worked really well for us while others didn't. By doing so, I'd love to start conversations and get to know people on similar roles or with similar challenges. So please, share, comment or connect.

My plan is to write a long blog post once a month. The first one is about how to create Leading Indicators to predict and prevent churn. Stay tuned, follow me and the publication above.

Sharing Customer Success Experiences was originally published in Customer Success Experiences on Medium, where people are continuing the conversation by highlighting and responding to this story.