One of your customer’s renewal dates is just around the corner. Their engagement metrics look good, and their recent feedback has been positive. It looks like the renewal will go smoothly. Unfortunately, there's an unpleasant surprise around the corner.
A decision was made to switch to one of your known competitors “below your radar.” It turns out they were trialing another product behind your back, leading to an imminent churn.
This situation is shocking, especially when a seamlessly satisfied customer switches vendors when they have no reason to do so. Despite the reasons leading to this unfortunate
decision, you can spot and manage these risks as a Customer Success Manager.
How do you know when your customers might be moving away from your product “behind the scenes”? The article presents three non-obvious indicators of competitor assessments and the steps to retain the client.
A significant stakeholder change.
A change in stakeholders comes with a new set of opportunities and threats. The newly appointed stakeholders have their agendas and ideas of what success looks like to them. They may have had a positive experience with your competitor in the past, which led them to stand out and be successful. Because of this, the new stakeholders are confident they can replicate the same accomplishments. As a result, your competitors will take full advantage of this to win them over.
Your company might already have a stakeholder change playbook for this situation. When detecting and mitigating potential churn risks, make sure also to include the following activities:
Conduct a background check. Use your network, your colleague’s network, and any available online “footprints” related to the new person running the show to find out anything that can help you assess the situation.
Approach your new stakeholder as soon as possible. The earlier you initiate the first meeting, the quicker you know their objectives and see if your product fits their plans.
Knowing about the stakeholder’s intentions can help you better assess the risks and benefits associated with your engagement. In the best-case scenario, their expectations align with what you can deliver, and you can adjust your efforts accordingly. In the less favorable scenario, you may realize that the risks are too high and that you need more time to plan and execute a mitigation plan.
Stakeholders ask questions about features you don't offer or plan to add.
If you're experienced with your product, you should be able to anticipate the common questions that customers usually ask. The frequency with which users ask these questions can indicate their engagement. At this point, you can use your expertise to guide your customers to achieve their desired outcomes.
It may all look good. However, this can also be tricky.
You may receive multiple questions from your customers about features and functionality you do not offer. This could signify that they consider a proof of concept (PoC). They may inquire about capabilities your product does not support and, in parallel, fill out a feature comparison matrix as part of their evaluation. Competitors will emphasize their uniqueness while promoting features your product does not support and your customer's needs.
There is no easy way to detect if these questions are based on natural product curiosity or something more alarming.
This "magic" question can help you probe deeper when faced with these questions.
“Can you describe the requested feature in more detail and explain how it will best serve your business?”
If their answer is unclear or vague, then it’s possible that a new feature may not be needed. You may need to reinvestigate if similar questions continue over the coming days or weeks.
Here are a few tips when you’re faced with suspicious questions.
Know your product very well. Your professional advice and guidance will be the first “line of defense” in case of a PoC with your competitor.
Know your opponents, their USPs, and how your product is positioned in the market. Use this knowledge to remind your stakeholders about your product differentiation.
A knowledgeable and competent CSM will be important in creating sufficient doubts in the customer's mind before the critical decision is taken.
They start using features that they have never used before
If your customers ask about features they haven't used before, it might be a sign that they're considering your competitors. But if the inquiry is coming from a genuine interest in expanding their usage of your product, it's a good sign! The challenge is to distinguish between curiosity about unused features and comparison shopping.
Similar to the earlier example, you can spot this pattern by qualifying the use case and underlining the need. Suppose they requested a report they haven't used before to meet a new operational, financial, or legal requirement. That's a positive signal and outcome.
Alternatively, if customers can't explain why they're suddenly interested in this report, they may compare your features to a competitor's.
You will uncover these critical details by asking probing questions. Here are a few other tips when clarifying a sudden variation in feature usage.
Familiarize yourself with the different use cases your product supports.
Understand your customer’s environment, objectives, and challenges. When the questions are asked, you can promote additional usage and verify the true nature of these inquiries.
Now that you suspect that your customer may consider alternative solutions, you can consider the following three steps to keep the engagement on the right track
.
Leverage your position as a trusted advisor
Evaluating a competitor’s solution is often an additional burden to your customer. Suppose your product has delivered measurable value, and you’ve built a solid relationship with your stakeholders. In that case, you have more influence to change their direction than you may think.
Think about this from your customer's point of view—they are being asked to analyze a product they don’t want while keeping it quiet. There is a good chance they wish the evaluation was over so they could return to what they did before.
You can take advantage of the situation and put your soft skills and the stakeholder relationship to the test by soliciting more information.
Keep these principles in mind:
Choose this stakeholder wisely. Ideally, they are a power user or a technical person with a more profound knowledge of their company's tech stack. Above all, they should be someone who trusts you, as they are more likely to share insights than a senior stakeholder.
Ask indirect questions that will trigger a deeper and open discussion. Monitor their comfort level when sharing answers. If your gut says they are open to sharing, keep asking questions. If you feel like they are getting uncomfortable, it might be time to back off. You will have to assess this on the spot.
Here are a few sample questions you can ask them as you dig deeper:
❓ “Lately, I have noticed a few questions about features not used before. Do you have any new requirements that I am not aware of?”
❓ “Lately, I have noticed a few questions about features our product does not support. Do you have new requirements? Or other team members with additional needs?”
You are taking a calculated risk. If the stakeholder feels comfortable, you will collect insights, gauge their “appetite” for changes, and gather valuable information necessary for your next steps.
If you were over “suspicious” and it is a “false alarm, " your approach should be perceived as a proactive CSM interested in the customer’s challenges and priorities.
Avoid the health score “trap” and lean on your instincts.
It's standard practice for customer management to keep track of client interaction and take action when health scores are low. At the same time, assessing the client’s renewal sentiment isn't easy based only on their satisfaction, usage, and relationship indicators. They could all be positive even if the client is unhappy with the product and is trialing another product behind the scenes. Therefore, the health score framework should be taken seriously but always with caution.
Following good prediction tactics is best practice, but you shouldn't limit your view to metrics and dashboards. To predict a non-obvious churn more effectively, you must trust your instincts and experience by "reading between the lines" and proactively listening to your stakeholders.
Set a mitigation plan with leadership’s involvement
In most cases, spotting one or two of the signals listed above should create sufficient doubts regarding the customer’s intentions. This will be the time to act and follow a plan with one objective—retaining the customer and avoiding churn.
Sharing a few steps from Playbooks I used before and were instrumental in executing a mitigation plan:
✏️ Your product has delivered much value, so now is the time to double down on that. Some stakeholders (especially new ones) might not be aware of your partnership's impact, so switching the narrative from product capabilities to business outcomes is essential. Your competitors might have better features, but they lack proof of value. You have that proof, so make the stakeholders feel the potential pain of switching to a different vendor.
✏️ You don’t need to fight this battle on your own. Therefore, you should immediately raise this issue with leadership and arrange a task force with senior managers and executives who can enter the “battlefield” to protect your assets.
✏️ If you know which competitors are being evaluated, check with your product or sales team to see if they have an up-to-date competitive analysis.
✏️ Review their health score. Look for any deviations or warning signs. For example, has there been an increase in their escalated support tickets?
✏️ Utilize stakeholder analysis and any inputs you gathered to plan your approach to the primary influencers.
It is not an Impossible mission.
As a customer success manager, you should be alerted to the signs that a customer is evaluating a competitor's product. This way, you can take preemptive action to keep the customer interested in your product. Sometimes, you may notice this early on, during the planning stage, but not always. Sometimes, it may happen during the latter part of the competitor comparison. Regardless of when you notice it, it would be best to be confident in your ability to impact and keep the customer engaged.
Then, it’s time to take action. My philosophy is simple - “Never Give Up”.
Difficult circumstances, such as the one described in this article, present new challenges, and CSMs must rise to the occasion. You will sharpen your instincts, practice leadership skills, and improve your ability to assess and respond to challenging situations with customers.
I'm inspired by the Mission Impossible movie series. In it, Ethan Hunt accepts a job and hand-picks his A-Team. They overcome obstacles and succeed against all odds. CSMs aren't movie stars, but they can gather their team, lead the charge, and take on the challenge. They can also make the most of their capabilities and successfully complete a complicated yet achievable mission.
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