Customer churn is an unavoidable fact of business, but it’s important to keep it to a minimum to facilitate revenue consistency and business growth. When churn increases, maintaining steady revenue becomes an uphill battle.
It’s more costly and less efficient when there’s a constant need to replace departing clients with new customers. This is especially true when it comes to top-tier accounts. These accounts are not only a large percentage of your base revenue, but they also offer revenue stability, partnership, and growth opportunities through expansion and referrals.
So, it’s essential to identify at-risk key accounts early while you have time to improve the situation, if possible, and retain the account. Otherwise, you risk losing a sizeable percentage of your revenue and an advocate, partner, and referral source. And, if you don’t recognize the signs in time, their departure could come as a painful surprise.
Recognize the Signs and Identify At-Risk Accounts Early
Teach all stakeholders who engage with key accounts to recognize at-risk accounts. Then add another layer of prevention by implementing ways to identify at-risk key accounts so you detect them early. This gives you sufficient time to turn the situation around, retain these customers, and minimize churn.
Schedule a Routine At-Risk Review Meeting
Plan a monthly internal account review meeting and designate a portion of each session for at-risk accounts. Prior to each meeting, notify stakeholders of the at-risk accounts being discussed during the upcoming meeting. In the notice, including the signs that these top-tier accounts are potential churn risks along with other relevant details.
If you have a key-account-management-specific solution, like Kapta, the team will have easy access to all the information that needs to be reviewed prior to the meeting. Otherwise, you need to share relevant reports, metrics, or analyses with team members to help them prepare for a productive session.
Conducting an At-Risk Review Meeting
Establish a risk review process for each account to be discussed. This prevents confusion and results in a more worthwhile meeting. Here’s an example of how to proceed:
1. At-risk account recap
The key account manager (KAM) should lead the discussion with the team. Start by recapping which signs of potential churn have been detected and how they were discovered. Make sure you have all relevant reports, documentation, metrics, and analyses handy, as well as the current account plan, for easy reference during the meeting.
If you have Kapta, it can act as a handy reference and guide since it contains all relevant information including:
- The org chart and client profiles
- Voice of customer (VOC) responses
- SWOT analysis
- Account plans
- Customer and internal success metrics
- Contracts
Relevant additional insights pertaining to the customer’s business, industry, marketplace, and financial situation can be recapped by the KAM and should also be documented on the client profiles.
2. Identify the root cause
It’s essential to determine what precipitated the churn risk in each account. Otherwise, you won’t be able to address and improve the situation.
Although there may be multiple signs and influences at play causing the customer to be a churn risk, it’s essential to identify what’s at the core of this situation. There are many factors that can cause customers to become a churn risk, like:
- Poor onboarding experience
- Lack of value perceived
- Customer support issues
- Product shortcomings
- Lack of self-serve resources or additional product training
Encourage open discussion with the team to help identify the main cause(s) that lead to this potential loss. Allow all stakeholders to share their individual observations and experiences with the account that relate to the issues at hand to help the group arrive at an educated conclusion.
3. Brainstorm solutions
Once the group agrees on the underlying cause, you need to determine if it is something you can influence. Let’s face it, if a client is going through a merger or has already signed a contract with a competitor, it may be beyond your control.
But, if you detected the churn risk early on, and the situation is something you can effectively change, you need to decide how to proceed. A great way to determine the best solution is by brainstorming as a group.
4. Create a plan of action
After identifying the best approach to address the situation, it’s time to create a plan of action, complete with milestones, assigned tasks, and designated success metrics.
Document the plan in a central location and share it with all team members to ensure everyone is on the same page, working together to right the ship and retain the client.
5. Schedule an update
As you wrap up the discussion of each at-risk account, schedule a date to reconvene, discuss progress or setbacks, and fine-tune the plan accordingly.
Minimize Key Account Churn
Some level of customer churn is inevitable. Keep it to a minimum by educating all stakeholders who engage with key accounts on the signs of potential churn. Establish repeatable processes to proactively identify at-risk accounts. Meet routinely to determine which churn risk accounts you can influence. Then create an account-specific retention plan to address the root cause to prevent the account from churning.
Interested in more strategies to minimize key account churn? Register for our upcoming webinar, Risk Management Strategies for KAM Teams.
