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Why getting rid of this term immediately opens the door to improving retention ⤵ I do not allow this toxic term in my work with customer success teams. Whenever someone uses the term "unavoidable churn," I immediately respond: Define 'unavoidable.' Them: It's churn that couldn't be avoided. Me: How do you know that it couldn't be avoided? Them: The circumstances were beyond our control! Me: But isn't ALL churn the customer's decision and, therefore, ultimately 'beyond our control'? Them: Uh... This is the problem. I'm not suggesting that churn doesn't often happen outside our control. Quite the contrary, I would argue that describes nearly ALL customer churn! My problem with the term 'unavoidable churn' is WHY people use it in the first place. 👉 The purpose of using the term 'unavoidable churn' is to deny responsibility for customer failure. 👈 This toxic mentality undermines the entire justification for Customer Success, and I would argue, by extension, the company and the product itself! Think about it this way: • The company and the product exist to make customers more successful. • Customer Success exists to help customers actually achieve success. If we are not responsible for customer failure, then who is?! [Don't say it's the customer's fault!] Of course, someone will inevitably say, "What about customers who go out of business?" This is actually a red herring. The data suggest the impact of company failure on overall customer retention is vanishingly small. The average company failure rate is just 6.5%, and for several reasons, only a small portion of these failing companies are typically found among paying SaaS customers. But hardly any companies actually track the impact of this on their overall churn, so I have yet to see evidence that this justifies talking about 'unavoidable' churn. Even if such evidence existed, I would still reject it for one simple reason: 💡 If we exist to make our customers more successful, then we can't claim that we have exactly 0% influence over our customers' business failures. It doesn't matter to me if our degree of influence is tiny. That tiny wedge of influence is literally why we exist! 👉 The 'unavoidable churn' mentality is toxic to building a truly customer-centric culture in which we take responsibility for our customers' success. 👈 Instead of looking deeply for every bit of leverage we can achieve over customer results, it excuses us to blame the customer and move on. ► What's the alternative mentality? RESPONSIBILITY. The alternative is to embrace responsibility for driving customer results and view every customer failure as an opportunity for deep analysis and improvement. We should always ask ourselves why customers churned and what that means for gaining more leverage over those factors. My experience is that rejecting this term is a game-changer, not just for CS, but for the entire company!

Back in my college economics days, I stumbled upon a gem called "revealed preferences." This is the idea that what people actually buy tells us much more about their desires than what they claim. 💡Translation? Actions speak louder than words! Fast forward to my career in building high-growth SaaS companies, and I started noticing some head-scratching stuff. Take, for example, customers bidding adieu with a big smile, claiming it was a stellar ride, yet pulling the plug on their contracts. What? This got me thinking – how often do our customers' actions throw a curveball at what they say? 📊 So, I began a deep dive into customer behavior by gathering as much data as possible. Eventually, I started analyzing customer retention and churn data for companies full-time. And guess what? I've now sifted through mountains of data on 1.8 million SaaS customers across hundreds of companies. The results are mind-blowing and challenge some of our most widely held business beliefs! Now, I could write a whole book unpacking this treasure trove of data. [psst… I might just do that! Stay tuned! 👀] For now, here are my 5 BIG TAKEAWAYS → 1️⃣ What customers say frequently does not match what they do. 2️⃣ Retention and churn reveal what actually matters to customers. 3️⃣ Ask customers why they stay or leave, and you'll get a laundry list of reasons. 4️⃣ But the data consistently point to just a handful of causes. 5️⃣ In fact, customer retention largely boils down to one thing: results. This may be one of the most remarkable examples of revealed preferences ever. 📉 The data consistently shows that customer sentiment has absolutely ZERO correlation with customer retention and churn. It turns out that what customers say does not predict what they will do! 📈 On the other hand, customer results are by far the BEST predictor of retention. Customers who achieve measurable results stay 6-10 times longer than customers who don't! Along the way, I've got a rare look inside a few SaaS companies that have discovered this secret and are using it to achieve phenomenal retention and growth! Let me know in the comments below if you'd like me to follow up and share what these companies are doing differently. [NOTE: I've also compiled a bunch of key customer retention insights in an eBook which you can download for free here.]

And how they changed my entire perspective on customer success → 👀 Once you see it... Many years ago, I led customer success at a tech company in the Bay Area, regularly meeting with the most important customers. One of these (a world-famous tech company) became the worst customer I ever had! They were unreasonably demanding, constantly complaining, and no matter how much we did for them, they were impossible to satisfy. I came to dread our frequent meetings. 😣 The problem was that they were also one of our most valuable customers. There was no way to ignore them, and so my frustration steadily grew. After a few years of this, I was sitting in a meeting at the customer's HQ when my frustration boiled over. I heard myself say, "If you're so unhappy with us, why don't you just cancel your contract?!" [SIDE NOTE: This should definitely be on a list of things NEVER to say to a customer! 🤐] But I was unprepared when the customer responded with a devastatingly simple question of their own... 👉 "Why would we cancel when you get us such good results?" 👈 My immediate reaction was to feel embarrassed 🥴, not just because of my foolish outburst but for a more important reason... It suddenly hit me that my view of the customer relationship was incredibly SHALLOW! ❓Why did I ever think we were working together to achieve "happiness" or "satisfaction?" ❓Where did such a ridiculous notion come from? The simple answer, of course, was... that's what EVERYONE believed! My perspective was based on an idea that had become the dominant business mentality of our age: ► HAPPY CUSTOMERS STAY, AND UNHAPPY CUSTOMERS LEAVE. But with one simple question, this customer had utterly demolished this idea. Whether they were "happy" was irrelevant; all that mattered was their results! This experience changed everything for me... ✅ I examined the research that purported to show that customer satisfaction causes customer loyalty and discovered it was shoddy and worthless. ✅ I analyzed my customer data and found absolutely zero connection between satisfaction and retention. Since then, I've expanded the research to show the same result using huge data sets across many companies. ✅ I also learned this customer wasn't unique: Customers who complain actually tend to stay much longer than customers who don't! ✅ But the most important discovery was that this customer's way of thinking reveals the TRUE DRIVER OF CUSTOMER RETENTION. My research shows that customers who achieve measurable results stay on average 6 to 10 times longer! I'm now incredibly grateful to this horrible customer for opening my eyes. 👀 Once I could see through the hollowness of the "customer experience" mindset, a whole new landscape opened up to my view. This is how my "worst customer ever" inadvertently unlocked for me the astonishing reality that will inevitably transform the entire world of business... 👉 Welcome to the age of RESULTS-LED GROWTH! 📈

THE MOST TOXIC CHURN EXCUSE OF ALL: STOP BLAMING THE CUSTOMER! Why we do it, and how to take ownership of customer behavior ↓ I've been writing recently about the toxic excuses for customer churn and how we blame the product, sales, and a lack of resources. But one excuse is more insidious than all the others: blaming the customer. The logic goes like this: ⓵ We give every customer the same product and provide them all with the same support. ⓶ But customers get wildly different results. Some succeed and stay, while others fail and churn. ⓷ The only explanation for the variability is the customer! Some customers do what it takes to succeed, and others don't. CONCLUSION: That's why failure is ultimately on the customer. This logic is sound, but the conclusion is not. Here's why... 📊 Research shows conclusively that the dominant reason customers stay is because they achieve results. Customers with measurable results stay 6 TIMES LONGER! ✅ It's clear that customers achieve measurable results because they CHANGE THEIR BEHAVIOR in key ways that take advantage of how the product produces benefits. That means... CUSTOMER BEHAVIOR CHANGE IS EVERYTHING! But we need to ask the right question: The question is not: "Is customer failure driven by their own behavior?" Obviously, the answer to this question is YES. The right question is: "Who's responsible for ensuring the customer changes their behavior?" THIS IS WHY BLAMING THE CUSTOMER IS NOT A VALID EXCUSE... ► The purpose of Customer Success is to ensure that customers change their behavior in ways that are essential to achieving measurable results. We cannot blame the customer for their failure to make key behavior changes when that's what we exist to accomplish! 🛑 Now, I'm not so naive as to suggest that we can totally control how customers behave. We obviously can't. But... 👉 Changing customer behavior is the primary function of customer success, and it cannot be done effectively without taking direct responsibility for it. 👈 When customers fail because they do not make the key behavior changes, we should study the situation closely to determine what WE could have done better. Wherever we have influenced customer behavior effectively, WE need to standardize what worked in the playbook. That's why it's so toxic to blame the customer. Until we take responsibility for customer behavior, we will never discover how much more leverage we really have! And that has been the most exciting part for me → ✅ As soon as I resolved to "own" customer behavior, I immediately started discovering ways to improve it. Ultimately, I've found that we have vastly more opportunities to drive customer behavior change than I ever thought possible. 🔑 The key is to operate as if the customer's behavior is our responsibility. This approach has been transformative for my customer success practice and for the teams I lead.

This week's Newsletter: Article: Stop blaming sales for customer churn What kind of churn do you have?: Find Out Now Article: Stop blaming a lack of resources for customer churn Quote of the week: All successful customers are alike... STOP BLAMING SALES FOR CUSTOMER CHURN! Here's another toxic excuse in customer success - and why you need to stop it ↓ Last week, I wrote about how blaming the product is a destructive excuse we use in customer success. (link below) Customer Success is hard. Making excuses only makes it harder by obstructing our view of real opportunities to improve things. Here's another destructive example: ► BLAMING SALES 😬 And this one genuinely makes me cringe because of how many times I used it! BUT WAIT! We KNOW that sales frequently sets customers up for failure in myriad ways. It happens all the time! So how is it an "excuse" to call that out? It's true. Obviously. And how we sell matters so much because: 👉 To succeed, the reason customers buy must match the reason they'll stay. 👈 Customers struggle, fail, and churn when these get out of alignment. BUT EVERYTHING CHANGED FOR ME WHEN I ASKED THIS QUESTION: ❓ Why are they so often out of alignment? ❓ Why isn't it clear precisely what target sales should be aiming customers toward? When I asked myself this question, my heart sank because I realized that I had not done everything I could to define the customer results bullseye clearly and in a way that sales could deploy. Actually, I'd hardly done ANYTHING. I spent so much time putting out fires and "working IN the machine" that it felt like I had no time left to "work ON the machine." I saw that sales relied mostly on marketing messaging and collateral focused on features paired with vague promises of success. What made me feel even worse was that I knew nobody else in the company was in a better position to solve this problem! ❗️WHICH MEANS IT WAS MY PROBLEM! Who else could correctly identify EXACTLY what results our successful customers achieve that actually cause them to stay? THIS IS WHY IT'S NOT VALID TO BLAME SALES ↓ 🤷🏻 How can we blame sales for misaligned customers when we have not sufficiently defined the target? 🎯 I consider this one of the most important reasons for customer success to exist at all. → ✅ Customer success must take responsibility for scrutinizing and clearly identifying the measurable results that consistently drive customer retention and expansion. Ditching this toxic excuse opens our view to how much more we can do to solve this problem. Stopping excuses is always about the power of taking responsibility. HOW TO STOP: 🎯 An urgent priority for EVERY CS LEADER must be to build the clear map of proven results that marketing and sales should use to attract and align new customers. I help clients do this using my Customer Results Strategy Framework. (Leave a comment below if you want me to share it with you) I'm amazed that I've not yet encountered a customer success team that has done everything it can to ensure marketing and sales have a clear bullseye for aligning new customers to results. Until then, I simply won't accept this excuse. The Key to Reducing Churn is Knowing What Kind You Have There are different kinds of churn, and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024. STOP BLAMING A LACK OF RESOURCES FOR CUSTOMER CHURN! Why you don't deserve more CS headcount, and how to scale impact ↓ Lately, I've been writing about the customer churn blame game, such as blaming the product or sales. Another toxic excuse is blaming churn on insufficient resources. This one is highly relatable to me because it's ALWAYS TRUE! As a leader, I've never had enough people, time, technology, and support. For the last few years, I've been working daily with teams so severely under-resourced that they can accomplish only a tiny fraction of what is expected. So, if it's true, then why is it NOT a valid excuse? Here are 3 reasons why insufficient resources should not be your focus... 1️⃣ A LOT OF WHAT WE ARE DOING IS INEFFECTIVE Unfortunately, there's no proof that most of the "best practices" of CS are worth doing. We now have compelling data that show just how pointless many of the most time-consuming CS activities are: 🛑 QBR's are a waste of time. 🛑 Driving adoption is futile (not to mention frustrating!). 🛑 Customer rescues suck up massive amounts of time and rarely succeed. 🛑 Live user training is ineffective. 🛑 Customer "cadence calls" almost never add value. 🛑 Constant fire-drills sap time and energy. Before we ask for more resources, we must reclaim the time and energy currently being wasted on ineffective activities. 2️⃣ FOCUS ON CUSTOMER RESULTS NOT SATISFACTION The data are clear → 🙂 Customer satisfaction has zero impact on retention. 📊 The primary driver of customer retention and expansion is the customer's achievement of measurable results. 👉 Every particle of energy we have at our disposal must be focused on identifying, driving, measuring, and materializing customer results. 👈 This is a big shift because the dominant "personality" in customer success has always been the "people-pleaser." Adopting a results culture requires abandoning the reactive/responsive approach in favor of proactive/prescriptive actions that ensure customers get results. 3️⃣ SCALE IMPACT NOT PEOPLE Customer success has long been steeped in a "bespoke" mentality where "every customer is unique" and "everything depends on the customer." This is not only anti-scalable, it's also DEAD WRONG! Customers differ in myriad ways, but not in what it takes to get good results with your product. Borrowing from Tolstoy, I like to say... 👉 All successful customers are alike; each unsuccessful customer is unsuccessful in its own way. 👈 The key to scaling is measuring and identifying what works and building standardized processes to make each effective intervention repeatable. Every product only produces a small number of key business results, and the customer behaviors necessary to achieve each result are consistent. Scaling impact is about standardizing customer processes to drive key customer behaviors, and systematically measuring and materializing the customer's results. QUOTE OF THE WEEK: All successful customers are alike; each unsuccessful customer is unsuccessful in its own way.

This week's Newsletter: Article: 9 Ways Pricing Impacts Churn New Podcast: IAM CX Podcast - The 4 Playbooks of Customer Loyalty What kind of churn do you have?: Find Out Now Quote of the week: You can't expand a customer... DATA REVEALS 9 WAYS PRICING IMPACTS CHURN: How pricing influences customer retention and what pricing works best! ↓ 🏢 Every company is a complex "system" in which nearly everything is interconnected. Make a change in one area, only to see an effect pop up later elsewhere. This is especially true for customer retention. Many things that appear to have nothing to do with churn are actually connected. That's why it's essential to consider the impact on churn of everything you do. I recommend that companies standardize asking a simple question before making any decision: 👉 How will this impact churn? 👈 Our research reveals that pricing is a good example of this principle. Here are 9 WAYS PRICING IMPACTS CHURN: 1️⃣ High vs Low Price: ↑ Price = ↑ Retention Higher prices are consistently associated with longer retention. One obvious reason for this is that bigger customers (who can afford higher prices) retain longer than small ones. However, the data shows that the effect remains even when you compare similar customers. Those who pay more for the same product tend to get better results and stay longer than those who pay less. 2️⃣ Discounting: ↑ Discounts = ↓ Retention A similar effect shows up in discounting, where customers who received a significant discount from the list price (greater than 25% off) had significantly higher churn than those with little or no discount. 3️⃣ Monthly vs. Annual Billing: ↑ Annual > ↓ Monthly Customers who pay the entire price upfront stay significantly longer than those who don't. It's a signal that the customer is more serious about achieving the expected results, and the results are more important to them. 4️⃣ Contract Length: ↑ Longer Contracts = ↑ Retention The same effect shows up when customers commit to longer initial contracts, and likely for similar reasons. 5️⃣ Trials, Opt-outs, Pilots: ↑ Trials = ↓ Retention When similar customers purchase the same product, those with a short-term exit option have significantly higher churn. Easy getaways drive lower customer effort, which leads to worse results. 6️⃣ Paying for Implementation: ↑ Paid Implementation = ↑ Retention Customers who pay an explicit amount for onboarding/implementation stay longer than those who get the same services for free. Even when the total cost is the same, deals that list the onboarding as a separate amount retain better. 7️⃣ Paid Services: ↑ Paid Services = ↑ Retention Customers who pay an explicit amount for extra services consistently stay longer than those who don't. 8️⃣ All-In-One Pricing vs Modularized: ↑ Expansion = ↑ Retention Customers who purchase an All-In-One pricing model have higher churn than customers who only purchase the functionality they need to start and upsell more modules later. 9️⃣ Downsell Option: ↓ Deal Size = ↑ Retention Customers who reduce their spending at any point have consistently higher retention than customers who never change. The Key to Reducing Churn is Knowing What Kind You Have There are different kinds of churn, and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024. IAM CX Podcast - The 4 Playbooks of Customer Loyalty, It’s Simpler than you think! March 6, 2024: Dive Into SaaS Mastery with Greg Daines on the IAM CX Podcast! Customer Satisfaction Surveys Be Like: QUOTE OF THE WEEK: You can't expand a customer you no longer have.

March 6, 2024 Dive Into SaaS Mastery with Greg Daines on the IAM CX Podcast! Join us for a groundbreaking episode as we chat with SaaS wizard Greg Daines, CEO of ChurnRX. Known as "the churn doctor," Greg is the go-to expert on slashing customer churn and sparking sustainable growth. This episode, "The Four Playbooks of Customer Loyalty," promises to revolutionize your approach to customer loyalty. With his unique blend of experience and insight, Greg challenges the norms, armed with pioneering research and strategies for solid growth. With top-tier credentials from MIT and Cambridge, Greg's expertise extends beyond theory. As a celebrated speaker, writer, and consultant, he's reshaping how we think about customer success and SaaS innovation. Prepare for a session filled with aha moments as we unpack customer loyalty secrets and explore how to turn customer experience into your growth engine.

CS100 2024, Sundance UT "Using Results to Hold Your Customers Accountable" presented by Greg Daines, ChurnRX

CS100 Live Replay Webinar Series: Greg Daines Nov 15, 2023

This week's Newsletter: Article: Stop blaming the product for customer churn What kind of churn do you have?: Find Out Now Article: How to avoid the dreaded hand-down Quote of the week: Technology does not produce results... STOP BLAMING THE PRODUCT FOR CUSTOMER CHURN! Why it's a toxic excuse in customer success, and how to turn it around ↓ Customer Success leaders too often rely on excuses to deal with our challenges. The problem is that blaming blocks our ability to see the full scope of opportunities we actually have to gain control of our world. In my experience building, running, and advising customer success teams, I've seen three specific excuses so toxic that they obliterate effectiveness. The first toxic excuse is: ► BLAMING THE PRODUCT. This one is first because it's so common. And the reason it's so prevalent is because it is TRUE! There are NO perfect products. And it's undeniable that product problems matter. So if it's true, then why is it a false excuse? Two reasons... ⓵ The first reason is that when something is always true, then it's disqualified as an excuse and is instead simply the context in which we work. If the product was perfect, would we need customer success? But there's a much more critical reason why blaming the product is wrong: → ⓶ IT'S NOT THE REAL PROBLEM! To understand why, consider the following question: 🔎 If the product is fatally flawed, then why do some customers succeed? 🔍 Somehow, there's a group of customers who've achieved fantastic results. How did they do it? Why didn't the product problems prevent their success? This is a powerful question if we go looking for the answer. When we take the time to understand exactly what our best customers did to succeed, a whole new world comes into view. We ultimately realize that the pathway to big improvements in customer results doesn't run through waiting for product updates. Here's how I articulate the principle: 👉 Technology doesn't produce results. Customer behavior change produces results, and technology makes it possible and scalable. 👈 When we study our successful customers, we discover that there is a reliable pathway to achieving results. The central opportunity in Customer Success is much bigger than we appreciate. → ⭐️ The purpose of Customer Success is to ensure customers change how they work to achieve measurable results. ⭐️ I've repeatedly seen how abandoning the excuse and shifting to this approach creates breakthroughs! The Key to Reducing Churn is Knowing What Kind You Have There are different kinds of churn, and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024. HOW TO AVOID THE DREADED CUSTOMER HAND-DOWN! Why it's so bad for success, and what to do about it ↓ Most companies make the decision to purchase at a high level in the organization and then hand off the task of implementing it to someone else. The problem with this is that leaders then nearly always assume they can safely disengage until everything is up and running. But this is bad for success for at least two reasons... ⓵ Their involvement is usually critical to get things up and running. We need them to make key decisions and to use their authority to drive the process change necessary to get good results. As a result, we lose access to their ability to make important things happen. ⓶ When leaders check out, getting them to check back in is tough! This loss is a big deal when it comes to demonstrating value, staying aligned on what matters, and motivating renewal and expansion. That's why I say: 👉 For customers, there's no such thing as a handoff, only a hand-DOWN! 👈 Once our level of engagement in their organization has fallen down, it's extraordinarily difficult to get back "up"! Here's my Pro Tip for fixing this situation: ✅ DON'T ALLOW THE HAND-DOWN IN THE FIRST PLACE You must ensure that you maintain engagement with the buyer/owner in the account at all costs. Don't allow their hand-down to isolate you, which will invariably make things difficult down the road. The most effective way to prevent hand-downs is to establish a separate cadence for checking in with leaders right from the beginning. I know what you're thinking: that's what QBRs are for! But, QBRs are very ineffective at maintaining executive engagement mostly because they are not really FOR the executive. You need an EXECUTIVE BUSINESS REVIEW, an engagement approach targeted precisely at the key leader/sponsor. Here are my 3 SIMPLE STEPS FOR ESTABLISHING THE EBR: 1️⃣ Promise that every time you meet, you will show them what they are most interested in → their MEASURED BUSINESS RESULTS! 2️⃣ Tell them you’ll teach them what they can do to improve their results. 3️⃣ Finally, pledge to take very little of their time: all you need is 15 minutes! The EBR is your chance to keep the critical sponsor tuned in to what really matters (results) and maintain an open line of communication you can leverage when you need their help to drive customer behavior change. QUOTE OF THE WEEK: You don't have to measure every customer's results, just the ones you want to keep!

This week's Newsletter: Article: Are you afraid to show your customers their results? What kind of churn do you have?: Find Out Now Article: How to use churn to identify your true ICP Quote of the week: You don't have to measure every customer's results... ARE YOU AFRAID TO SHOW YOUR CUSTOMERS THEIR RESULTS? The dirty secret why some companies don't measure customer results Last week, I posted my top 3 reasons companies don't measure customer results, and the brilliant Jeff Breunsbach replied with an insightful addition to the list ↓ "Or they have the ability and the results aren’t good so they hide behind them…" He's absolutely right, and this dirty secret is depressingly common. I've personally experienced it... 📖 A STORY: Several years ago, I arrived at a wildly successful 'unicorn' to lead Customer Success. Although churn was high, I was attracted by the product, which appeared to produce amazing results and, more importantly, could DIRECTLY MEASURE those results! But when I asked to see them, I was told they weren't available. When I pushed, I was told, "Customers don't care. They don't ask to see them." WHAT?? 🐂 💩 I kept pushing, and eventually, they admitted that they didn't want the customers to find out how BAD their results actually were! WOW. 😳 HOW IT ENDED: I immediately ordered fresh results metrics to be prepared for every customer and shown directly to customer leaders. And yes, it turned out that many of them were legitimately terrible. But my team was astonished when we didn't lose a single account as a result of this "bad news tour," and churn went down overall! They shouldn't have been surprised. What did I know that they didn't? → ► The fundamental reason customers stay is to GET RESULTS. And it only works if the results are MEASURED: how else will the customer know? But it turns out that simply measuring on its own is valuable to customers. 📈 Our research reveals that customers who are not getting good results stay TWICE AS LONG if you measure and show them their bad results. (It goes up to 6 TIMES LONGER if the results are good and 10 TIMES LONGER if the results are superior.) HERE'S WHY YOU SHOULD SHOW CUSTOMERS THEIR BAD RESULTS ↓ 1️⃣ Showing customers their bad results proves you are serious about making them successful, rather than just stroking them for renewals and higher NPS scores. That's how you build Customer Bonding! 2️⃣ If they don't know they're getting poor results, they won't understand why they need to make the key changes in how they work. When they keep doing the same thing, they'll keep getting the same (bad) results. 3️⃣ If you don't continually measure and show customers their results, you lose engagement from key customer leaders. Lack of leader engagement consistently leads to failure and makes you especially vulnerable when key leaders change. It's only a question of when. HERE'S THE LESSON: ✅ Truly committing to becoming a customer results-led company requires overcoming the fear of revealing bad results. Do it now. I like to say: 👉 You don't have to measure every customer's results, just the ones you want to keep! 👈 The Key to Reducing Churn is Knowing What Kind You Have There are different kinds of churn and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024. HOW TO USE CHURN TO IDENTIFY YOUR TRUE IDEAL CUSTOMER PROFILE There's so much confusion about how to define the Ideal Customer Profile (ICP) because there are so many false ideas about what “ideal” means. 🛑 It’s tempting to focus on your “happiest” customers as measured by customer satisfaction scores like NPS. However, the data shows that satisfaction has nothing to do with customer retention. (link to research in comments below) 🛑 Another option is to go with the customers in your most attractive target market. But just because you want certain customers doesn’t mean that they want you or that you can make them successful. 🛑 How about focusing on the customers who DO want you: those who are most likely to purchase? The problem is that a lot of these buyers don’t end up sticking around very long. Ultimately your ICP isn't a decision that you make; it's what you observe in reality. Let me explain... CHURN IS THE TRUTH The growth of any subscription business is ultimately a function of customer retention. And by far the best predictor of retention is measurable customer results. 📈 Customers with measurable results stay 6 TIMES LONGER on average! So, here's the simple principle to apply: 👉 YOUR IDEAL CUSTOMERS ARE THE ONES WHO ACHIEVE THE BEST RESULTS. 👈 ❎ NOT the happiest customers. ❎ NOT the wealthiest customers. ❎ NOT even the customers who are most likely to purchase. WHAT DO WE REALLY KNOW? The reason ICP is so difficult to define effectively is that we are not great at predicting things. 🍔 Clayton Christensen famously demonstrated this when he showed McDonalds that they didn't know who or what their products were REALLY for! They imagined their ideal customer, rather than observing it. 🥤 Too often, we think we "know" who we are FOR when we have only imagined it. THE SOLUTION The good news is that churn and retention sort this out because the customers who achieve the best measurable results against the most important business objectives stay the longest. Getting your data in order and building the right analytics may take some real effort, but the resulting insights are invaluable. (Let me know if you need help getting started) The goal is to use retention data to identify the customers that stay the longest. Rank them in order, and start with the top group. These are your "BULLSEYE" customers. Now use that group to answer 3 KEY ICP QUESTIONS: 1️⃣ What are the most important measurable business results these customers care about? 2️⃣ What kind of customers do these key results matter most to? 3️⃣ What attributes enable these customers to achieve the best results? The result is a new clarity that enables you to target and attract more high-retention customers and helps your existing customers achieve more. QUOTE OF THE WEEK: You don't have to measure every customer's results, just the ones you want to keep!

This week's Newsletter: Article: Top 10 Reasons to Measure Customer Results What kind of churn you have?: Find Out Now Article: 3 Reasons Why Companies Don't Measure Customer Results Article: Clayton Christensen Unlocked the Secret to Retention Quote of the week: The most essential practice for customer success is... THE TOP 10 REASONS TO MEASURE YOUR CUSTOMERS' RESULTS: 📶 Our research shows that customers who achieve measurable results stay 6 TIMES LONGER than customers who don't, and for customers who get good results it's 10 TIMES! That's why measuring customer results is the most important thing companies can do to dramatically reduce churn and reignite growth. 👎 But, astonishingly few companies actually do it! ✅ That's why measuring customer results has to be the TOP PRIORITY in 2024. HERE ARE MY TOP 10 REASONS TO MEASURE CUSTOMER RESULTS: 1️⃣ Customer results are the ultimate indicator of account health and are essential to predicting and preventing churn. 2️⃣ Measuring results is a powerful way to reestablish and maintain customer leader engagement. 3️⃣ Measuring the customer's results builds trust by demonstrating that you’re sincere about partnering for their success. 4️⃣ Measuring results is its own result because it enables customers to track important outcomes they often haven't been able to measure previously. 5️⃣ Measuring results motivates the customer to make the key behavior changes that are necessary for success. 6️⃣ Regularly reviewing measured results lets you hold customers accountable for their behavior change commitments. 7️⃣ Measuring results empowers your champion to demonstrate value to their leaders. 8️⃣ Measured customer results are the best protection you can have when customer leaders leave and new ones arrive. 9️⃣ Measuring reveals your ideal customers by demonstrating which customers you can make the most successful. 🔟 Measuring customer results provides invaluable insight into your product's real value to share with your product team to guide the product roadmap. There are many more good reasons, but that's a solid start. The Key to Reducing Churn is Knowing What Kind You Have There are different kinds of churn and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024. WHY DON'T COMPANIES MEASURE THEIR CUSTOMERS' RESULTS? Here are the TOP 3 REASONS I've seen ↓ Companies that systematically measure their customers' results vastly outperform others in customer retention and growth. Results-Led-Growth is hands-down the ultimate winning strategy! 🏆 🤔 Which is why it boggles my mind how few companies actually do it! After many years of helping companies measure and materialize customer results at scale, here are the main reasons I've seen why companies aren't doing it... ⓵ THEY DON'T KNOW THEY SHOULD BE TRACKING RESULTS The vast majority of companies are unaware that this is something they should be doing because most still believe in the myth of "customer satisfaction." They don't know that research reveals "happy" customers stay no longer on average than "unhappy" customers, whereas customers with measurable results stay 6-10 TIMES LONGER than those without. They don't know that the real cause of most customer churn is the failure to achieve or perceive results. I regularly see companies quickly and dramatically reduce churn when they switch their focus from satisfaction to results. ⓶ THEY DON'T KNOW WHAT THE RESULTS ARE As soon as a company realizes it needs to measure customer results, it faces another obstacle: most companies don't have a clear understanding of the true business results that the product produces. 📈 Business Results are → measurable benefits that are important to the success of the business. 💵 No product consistently produces more than a small number of true business results for customers. Yet, remarkably few companies have articulated their results clearly enough to operationalize measuring them. The best place to start is with the most successful customers, many of whom are measuring their results independently. Study these customers to understand what the key results are, how to measure them, and what it takes to achieve them. I help my clients do this by creating what I call the "Customer Results Framework." (Click "Contact > Free Consultation" above if you'd like me to send you my template and show you how to create one for your company.) ⓷ THEY DON'T HAVE THE ABILITY TO MEASURE THEM Knowing what your key business results are is not enough to win. You ultimately have to measure them - continually - for every customer. 📊 Research shows that measuring results is even MORE IMPORTANT than achieving results. Customers who are measuring but achieving poor results still stay TWICE AS LONG as customers who aren't measuring at all! The problem is that most products were designed for their FEATURES and not with measuring RESULTS in mind. (No, a "report module" is not the same thing.) 👉 The most important feature of any product is to measure the results it produces for customers. 👈 But even if the product is lacking, companies can often build effective customer results tracking using available data and tools. 17 YEARS AGO, CLAYTON CHRISTENSEN REVEALED THE SECRET TO CUSTOMER RETENTION → Legendary business professor Clayton Christensen is famous for his "jobs to be done" concept. But few understand how profoundly he answered the question, "Why do customers stay?" It only took him 3 SENTENCES and 57 WORDS to reveal the simple secret: There's a metric ton of insight in this pithy statement. Here's how I break it down... ⓵ CUSTOMERS COME TO GET RESULTS Customers DON'T sign up to achieve SATISFACTION, HAPPINESS, DELIGHT, or any other emotion! That's why NPS and other surveys of those feelings don't predict retention at all. ⓶ CUSTOMERS STAY TO GET RESULTS If your customers achieve their results with your product, they'll stay to do the "same job" again. My research on millions of customer retention data points shows this is the WHOLE GAME! Customers who achieve measurable results stay 6 TIMES LONGER than those who don't. ⓷ CUSTOMERS LEAVE WHEN THEY NO LONGER HAVE A COMPELLING REASON TO STAY It's a waste of time asking customers why they canceled. The truth is that they nearly all leave for the same reason: they aren't getting results, or they are not anticipating getting more results. ⓷ THE IDEAL CUSTOMER IS WHO GETD THE BEST RESULTS Only one simple question is needed to identify your Ideal Customer: 👉 Who can get the best results with your product? 👈 This is the ICP. Whatever type of customer gets the best results will pay the most, close the fastest, and stay the longest. Every other customer contributes to your churn and costs. The winning strategy is not broad; it's narrow: DOMINATE YOUR ICP SEGMENT! Clayton passed away four years ago, and I sincerely miss both his immense intellect and his truly inspiring goodness! QUOTE OF THE WEEK: The most essential practice of effective customer success teams is systematically measuring and materializing customer results.