Eren Koont, Platform Growth, Ordway [00:00:00] And welcome to today's webinar on low cost ways to reduce churn.
Eren Koont, Platform Growth, Ordway [00:00:09] What our goals for today are really to talk through definitions around turn. Think about who good customers and bad customers are. Some may say there are no bad customers, but we'll just discuss that a little bit and see if we can come up with some ideas there. And then also thinking about ways to measure your customer base and how you can use that data to prioritize your efforts and then really about layering on lots of communication throughout the customer journey. A couple of house keeping items before we dive into the topic too much is we will be sharing a recording with this of this webinar with the registrants and the people who attended after the webinar. So you don't have to furiously take notes. Another one is there is a question, Q&A option, where you can ask questions and we'll save those up to the end. Well, we'll go through whatever questions get submitted. And we'll also do a couple polls throughout the webinar just to keep people engaged on the topic. So let's dive dove right in. My name is Eren Koont and I am part of the Ordway team here on building out the platform. And in a past life, I was part of a team and part of the onboarding process of a company where we five x'ed our customer base and maintained ninety-five percent retention. So some of the content and thoughts are here from my tenure at Ordway, but also from past experiences. But a little bit more about Ordway. We're really a company that is built around understanding how to to get your customers to pay you effectively and all the systems that need to be put in place to bridge the sales to finance workflow. And so we're serving customers around the world that have unique contracts and subscriptions. And, you know, the executive team here, has deep, deep experience building ERP building systems, which are critical, is in that customer relationship that you develop with your customers over time. So the customer journey is really the heartbeat of any business and whether that starts from the evaluation period when people are just getting to know you to signing contracts, to having that value transaction between you and your customers. The important point in time when you invoice a customer at the right time for the right service and expect to get paid for that, how you're actually collecting those payments and reminding people to pay you is very important. And then also having systems in place to upgrade and downgrade your relationship with customers over time as a way to mitigate risks of churn really. For the purposes of this presentation, churn is when people, organizations, your customers fall off their journey with you either partially or completely. So let's talk a little bit about different factors that impact churn and, you know, for most of the folks that registered for this webinar and obviously for Ordway, and we focus a lot on the B2B side. But, you know, there are things to think about when in an organization, whether you're B2C or B2B. And, you know, here's an example that I pulled out of the news recently where, you know, this B2C fashion subscription business is really struggling because of the shift to work from home with the COVID 19. And so I think this is one of the really important differences between B2B and B2C is that and B2C, you're really dependent on, you know, the the moment in time in which we live. The fashion, the trends, also the financial conditions of that customer. Whereas on the B2B side, you know, there is a little bit more permanence and a little bit more resilience to trends and sort of in the moment trends within the economy. But obviously, if your customers can't pay you. That also is a factor that can impact churn. And we're seeing some of that with obviously what's happening now with COVID 19. In B2C, how you configure, activate and train the customer is important, but it's usually a one to one kind of relationship. You know, there isn't a ton of onboarding with Netflix or different different B2C subscriptions. But on the B2B side, you have to deal with other people and organizations and really think through how to make sure that your organization is delivering as much value as possible throughout throughout the process. And obviously, you have to deliver value to the customer or they won't want to renew with you and continue that journey with you into the future. And the last point in thinking about sort of the factors that impact churn is that that aspect of needing to accommodate multifaceted relationships. So, you know, in in large organizations where you might have stakeholders and finance and sales and the engineering team, you have to be able to effectively deliver value to all the stakeholders or else you can become at risk for not being a critical part of of an organization. So, you know, because of the audience and because of who we are, Ordway, you definitely got to focus a little bit more on the B2B side of things for the remainder of the webinar. And I really want us to think about. Customers and good customers and bad customers. And how we we way different attributes of those customers. You know, I think a lot of people say that there are no bad customers. But, you know, when thinking about how you prioritize your time, effort, internal resources, there are both good and bad customers. And here is a framework that helps think through who are good customers and bad customer. So a good customer definitely has skin in the game. You know, they want it to succeed as much as you want to succeed. And whereas, you know, a customer who doesn't have a ton of skin in the game, they are less likely to respond to engage on important milestones within a project. You know, you have to make sure that there is an alignment of goals and values to make that relationship work. A good customer obviously needs your your solution and a good customer can have other beyond just pure revenue, like are they a big brand? Is it something that would help you get connected to future investment? So there are strategic things to think about with your customers and then, you know, a good customer. Ideally. Takes up some of your time, but it doesn't take out a disproportionate amount of your team's time to to to make sure that they are successful. And this is this is, I think, where I want to just stop and and spend a little bit of time, because it is a tough, tough concept to get over as a bad customer. Could be one of your big, big revenue customers, but they are don't have skin in the game. They don't really need your solution. They may be paying you a lot of money, but they are taking up a ton of your time on on maintenance requests. And and but they don't really have a tremendous need for your solution. You may have to to weigh, you know. Is that is that revenue as important? How much how much effort do you need to put into saving a bad customer? And obviously, you don't want any customers to turn, but you want to make sure that all of your good customers stay with you on that journey. So how are some what are some ways to measure signals of customer health? I think this is something where, you know, your organization is unique and you have different signals that you're monitoring with your your customers, but don't overcomplicate it if you're if you're trying to build practice and build a capacity to really understand the health of your customers. You may want to start with something like the Net Promoter Score, which is a survey that gets sent out and people rate you on a scale of one to 10. And, you know, you can identify all of the customers that are really big advocates for you and the ones that are really struggling to get on with their relationship with you. And, you know, you can hire a firm to do this. You can create surveys and Google forms to do this. There's lots of different ways to do this. But getting that pulse of of the customer is very important. And then, you know, I think you also make sure that you spend time actually talking to your customer scheduled check ins. Just waiting to hear feedback from your buyer, from other stakeholders within the organization. And then the other thing is to use your data, your key performance indicators. That and the thing that I'll stress here is make sure that they're sort of easy to understand, easy to explain, and something that the entire business can rally around. You know, one example, Linode is a hosting company out of Philly here in the United States, Philadelphia. And they came up with this metric. They had, you know, all sorts of data and dashboards, but they realized that if customers are active, are activating more projects than they're canceling, they're going to stay a customer. And that was a simple ratio that that the team there, everybody, whether they were in customer success or an engineering or in sales finance, they could understand that metric and and sort of understand, you know, when customers started to fall off the journey with them. And then, you know, here at Ordway, obviously, we help customers with their billing and revenue recognition. And so that, you know, if accounts receivable are continuing to increase and revenue is passing through the system, that's something that is a good sign for us here at Ordway. So I'm on a pause here for a second and do a poll. So the question is, do you have customer? Keep your eyes at everyone in the business rallies around and I'll give folks.
Eren Koont, Platform Growth, Ordway [00:12:31] A. 30 seconds or so to answer the question.
Eren Koont, Platform Growth, Ordway [00:12:47] Give people another five. Four, three, two, one.
Eren Koont, Platform Growth, Ordway [00:12:56] It looks like.
Eren Koont, Platform Growth, Ordway [00:12:58] Most people said no or I don't know, but a few of you definitely, and you guys are ahead of the game, said yes. And so congratulations to you on that. OK, so how are what are some of the ways to act on signals that you're that you're seeing from your customers? It's really about layering on automated and manual communication throughout that journey. So, you know, from the time a contract is signed through implementation configuration all the way through to the renewal up cell, there are things that you want to be thinking about and ways to to make sure that you're communicating effectively with your customers so that they do perceive you as a partner throughout that entire process. And you're not just sort of popping up at the end of the journey and saying, time to pay me again.
Eren Koont, Platform Growth, Ordway [00:13:56] So.
Eren Koont, Platform Growth, Ordway [00:13:57] Let's leverage the honeymoon period. This is, you know, when when the contract is signed or is in the process of being signed, some things you want to think about is that this is probably going to be the happiest year. Your clients will ever be with you in many ways. But, you know, you obviously want to be continuing to provide value and drive value into the future. But, you know, when when you're in this process trying to negotiate prepayment of of service is important, you know, getting contracts that auto renew and that allows that that relationship is established upfront, that this will continue if everybody's providing value. We're going to continue this into the future and then go ahead and invoice immediately. You've got to make sure you have systems that, you know, once that contract is signed, you want to be able to get that invoice into the person's hand or to the buyer's hands that they can they can pay it immediately and it doesn't linger. And, you know, you get into issues that your aging report will will will show that your your lots of invoices passed. Do you want to you want to make sure that your your systems can can really get that that invoice into people's hands quickly. So to do that, you know, on the automation side of things, figuring out ways to get your CRM, whether it's Salesforce HubSpot, to get all those contract details like the service start date, the billing start date, the invoice, the payment method, all of those things, if they can easily get from your CRM to the tier one way that you generate invoices, that is certainly half the battle. And obviously we here at Ordway, I think we can help organizations do that very seamlessly. And so that is one thing to do that you can you can certainly be you can automate. But the other piece, and this is more systems and processes and manual in many, many instances is make sure that you have a smooth handoff from the sales process to customer success. So whether that's an internal provisioning system that that provides the customer success team all of the required information, or it's a formal meeting to sort of do background on on the client and make sure that all the use cases are understood. You know, that that is something that is free to quote unquote free. I mean, it takes people's time. But, you know, making sure that you don't you just don't throw a contract over the over the transom and hope that a customer is implemented successfully. That's something that you can do to really help with the process. The other thing is, you know, you definitely want to overinvest to get customers to value. So that whole in the B2B worlds, the implementation activation configuration at that time is very critical. And you want to get your customers to receiving value as quickly as as they can. And so, you know, some ways that can sort of automate this is make sure that you have good documentation and good frameworks, both for internal customers as well as for your external customers, making sure they're a good welcome kit materials and that sort of thing. And then, you know, I'd say the piece that sort of sometimes doesn't always happen is when, you know, the day one of the service, oftentimes you're having to resell within an organization as well to new stakeholders, new users. Make sure that everybody at that point time really understands why the two organizations are working together. And that will help get get to value as quickly as possible. And I think really, depending on the maturity of your organization, hiring people that are problem solvers, it is really something that is important because no no customer is exactly the like. There are patterns there. There are ways that that you can sort of get customers into similar buckets. But, you know, you need smart people to help troubleshoot the any any kind of issues that inevitably will come up. And then here are some things to think about when when you're. Thinking about churn is switching costs. And, you know, you want to if you think about how your how valuable your system is to an organization, are you further away from the core of their business or are you close to the core of their business? And that's going to really affect sort of how you interact with people. So, you know, if your customer has low switching costs, you need to make sure that customer success is is know, well-fed and well oiled machine. And, you know, like if a. Marketing automation tool for us. You know, we do have it here at Ordway. You know, we do use tools to help with marketing automation. But, you know, unless we're all the entire team is really trained and really deeply, our process is all built around specific tools and specific features. It's very easy for us to switch from one tool to another or, you know. And so but whereas organizations that, you know, are helping deliver the actual service to their customers, that those switching costs become higher. So things to think about here, really automating good documentation for four organizations and then really making sure that you have the capacity to scale with your organizations. And the flexibility to scale with your organizations. And then, you know, some things that you can do that are ongoing in this world of coding, 19 and lots of virtual events, lots of, you know, doing user virtual user conferences, making sure that your support systems are solid. And, you know, really making sure that you are perceived as the leader in the space is very important when you're thinking about that. And then the one other thing you want to do is definitely remove payment friction throughout the process. And the this is an example where I personally had to spend many hours with Microsoft trying to get a billing issue resolved. And obviously, you know, we think we at Ordway know what good frictionless payment should look like. And, you know, even even large companies like Microsoft struggled to get this right. And, you know, some things that you want to think about with this this payment friction is can you get paid by credit card? Can you do electronic ACH? One of our clients recently with COVID 19, they were used to getting printed checks in the mail, but there is nobody in the office to receive those. So they were able to quickly get their customers over to doing electronic payment. And that both reduced friction internally and externally with their clients and made them stickier because they were able to get a little bit of that payment friction out of the process. Some with some other things that you can do to automate here is if you have a way to let customers know about expired credit cards before they happen so that you don't have to deal with failed payments and retrials and that sort of thing. And then also making sure that you have a system in place, whether it's through some like Ordway or if you've got spreadsheets in aging reports that allow you to prioritize how you're sending communications out to customers to get them to pay you. That is super critical. Obviously, with a system with Ordway that can all be set up and automated and running in the background. And but there are some manual things that you need to think about in terms of removing payment friction. Obviously, an agent report to show the past due invoices is certainly important. But, you know, today with we've covered many, many clients and many companies out there having to do one off, one off changes to the their payment relationships with their customers, whether it's deferring payment for 90 days or, you know, getting creative with certain free months to maintain that customer relationship and making sure that your systems can handle those kinds of changes. And and and curveballs that are thrown at you and your team are important. And then I'm gonna go ahead and start another poll here. So for the folks out there, have you had to make any special accommodations with customer payments during this pandemic? But I'll give folks a few more. About 20, 30 seconds to respond. People, another five, four, three, two, one. Wow, this is everybody said that, yes, they they've had to make a special accommodations because of. So, again, making sure that your systems are flexible. Hopefully that didn't project too much pain. And for either you or your customer. And then, you know, here is definitely a low cost way to reduce churn is talk to your customers. You know, if you find that with your net promoter score there, there are customers that are angry, you know, make sure that they hear from you and you work with them to resolve whatever issues are outstanding. And then also look at those those keep your. And I think you want one thing that people worry about as well if they're not really angry with us. And there's a false positive in the data that we're sustaining with a false positive in our data. Don't worry about that because it's you know, the worst thing that can happen is that they will actually just hear from you unexpectedly. And it's still a good way to build that personal personal relationship. And then the last area that I was talked for here is over communicating to identify risk. And so you can have those touch points based on NPS, but making sure that you've got systems in place to let people know that people are that your terms are that your contract is upcoming. You know, this is an example. We use HubSpot here at Ordway. They have a sophisticated e-mail campaign and account services campaign to make sure that the the. That I'm well aware that the renewal is coming up and they're able to spot any issues in my pleasure or displeasure with them as an organization. Now, not every organization has the resources of HubSpot. So I don't think you can just sort of adopt their process. You'll have to create your own. But making sure that systems are in place to be able to, you know, 60 days out, go ahead and send a send a note saying, hey, we've got a renewal coming up. Let's let's talk through it. Making sure that you are doing quarterly business reviews with your organizations is something that is another great thing, making sure that you've got during this renewal process ways to let people know about value that they are using, but also value that you could offer them that that they may not even know about. So identifying those up sell cross-sell opportunities within this process is important. And, you know, like if 60 days out, you get a I don't know if we're going to renew that can spear spur your team to really think through how you're going to make sure that that that doesn't come to fruition, that you actually ultimately end up renewing with them. So, you know, it's somebody want to turn the tables on turn, you want to fight to keep your good customers. You want to empower your team to solve problems. You want to be measuring, but also not overcomplicating your data analysis so that you can really get the entire team to rally around the the easy to digest. Keep your eyes around churn and then making sure that you're overly communicating internally and externally. And that comes from process and people. But it also comes from systems. You know, obviously we feel like Ordway is one of those systems that can help you fight churn. But we we definitely know that it's not one tool. It's a it's a system of systems that you ultimately need to to build. So with that, I'm going to answer some of the questions that have come in. And obviously, if you want to ask some more questions, please do so through the Q&A. You'll start with.
Eren Koont, Platform Growth, Ordway [00:28:04] Let's see.
Eren Koont, Platform Growth, Ordway [00:28:06] This is from an earlier slide. What advice do you have for hiring good customer success professionals? So that's a tough question. I think I, you know, mentioned it's a tough question, but I mentioned you over indexing for problem solvers and people who are, you know, want to be have the results to make their clients success successful is important. One thing that we do here at Ordway, which I think is very helpful in the process and sort of a behavioral interviewing technique, is we ask final candidates to teach us something and doesn't have to be something related to the actual business, but something in their personal life. And we've had some really good success seeing who are effective communicators and who have the capacity to teach others. So I would definitely recommend that as something to do. Let's see what else is in here. Will you be sharing a copy of this? Yes. All registrants to the webinar will be getting a copy of this tomorrow. And so the archive. And we'll also publish a transcript if if anything is important to you in that. And then let's see. How early do you recommend starting the renewal process? So this is really kind of dependent on your particular business. You know, I think 60 days, 90 days is probably somewhere in between. There is probably right. Depending on how big of a sale and how many stakeholders there are. It's really an ongoing process. So the renewal process really starts the day after you start. You sign the contract. But, you know, a lot of the formal kinds of emails and and, you know, letting people know that something's coming, coming, you know, no later than 60 days would be a good recommendation.
Eren Koont, Platform Growth, Ordway [00:30:08] Let's see? Are there any others.
Eren Koont, Platform Growth, Ordway [00:30:12] Looks like that is the last question. Definitely appreciate you spending some time here today with me and I invite you to sign up for the next in the series. And next, coming up in a couple of weeks, is moving beyond straight-line revenue recognition, which will be a great topic to get into exact days and all sorts of different nuances. And why why certain companies want to use certain methods for revenue recognition. So definitely looking forward to seeing it at the next one. And thanks for your time today.