It’s a key account manager’s worst nightmare: One day, out of nowhere, you lose a major customer.
Sometimes it’s completely outside of your control. But most of the time, if it seems like it’s coming “out of nowhere,” chances are you weren’t watching closely enough—or you weren’t looking at the right indicators.
Customers are harder to engage and easier to lose than ever. Consumers are buried in options and not only do you need to stand out to win them over in the first place, but you also need to provide top-notch customer service and products to keep them around. Having to consistently find new customers costs you anywhere from five to 25 times more than retaining your existing customers, which makes minimizing churn more important than ever. It’s time to take a close look at your major accounts and see whether they’re at risk of churn.
In this post, we’ll tell you where to look for churn, and how to establish a framework to help you assess your accounts.
Where to Look for Churn and How to Combat the Risk
Here are the most common places to tell if your customer is at risk of churn and how to combat the risk:
1. Voice of Customer and SWOT Results
Running a VOC will be your number one resource for keeping track of potential churn. This is an opportunity for your client to let you know what they like and what they dislike about you and your company.
Another helpful tool is the SWOT analysis. While you should always conduct a SWOT at the beginning of a new client relationship, updating the analysis throughout your engagement will help keep an eye on new threats and opportunities that arise.
Your VOC will help you check in with customers—how have their goals and expectations changed this year? Your SWOT will give you a clear sense of internal and external forces working for and against you, so you can adjust your plan accordingly. You can also hop on a call with your customers to update their SWOT analysis. It’s a meaningful and engaging way to get some face time (even if it’s screen time) and demonstrate your commitment to constantly refining your shared strategic action plan.
If you haven’t updated your SWOT and VOC, both internally and with your customers, you might be missing key signs your customers are at high risk of churn—and even if they’re not, you’re missing opportunities to grow the relationship.
2. Your Footprint
Who are you working with inside your client's organization? Are you working with only one person or have you stretched across multiple departments? If you’re entire client relationship is centered around one person, churn could take place if that person leaves the organization.
While one strong relationship might get you in the door, your goal should be to expand your footprint within the organization as a whole, both vertically (all the way up to the C-Suite) and horizontally (across departments and/or with cross-functional teams). In addition to cementing your relationships, and reducing the risk of churn, you’ll also set yourself up to be even more effective with the organization, because you’ll understand more about how things get done.
3. Strategy Plan
If you don’t have a comprehensive long-term strategy for your client that reaches beyond “sell them more things”, your customer is at a huge risk of churning. Without direction and actionable steps, you’re taking shots in the dark that may or may not work out and one bad move could cost you an important client.
Strong account plans are long-term: How will we grow this business over the next 1-3 years?
They are customer-centric: How will we grow this business by helping our customers meet their own growth goals?
And they are strategic: How does this plan address what we’ve seen in SWOT and VOC analyses?
If you don’t have a plan that meets all the requirements above, if the plan isn’t well-documented and easy for cross-functional teams to reference, or if you think there’s a plan but you’re not sure what it is, it’s time to sit down and create a better strategy.
4. Units of Measurement
Are you able to prove your value to your customer? If you’re not keeping track of meaningful KPIs for your customer, they may lose sight of your value and turn to a competitor who can more clearly demonstrate their value.
Revenue is an obvious KPI, but it’s not the only one. Part of the work is thinking strategically and creatively about what matters to that client and how to track it. Once you have these indicators set, there’s the actual work of tracking them. If you utilize a program like Kapta that’s set up to do so, the process should be automated. Finally, there’s the work of interpreting the data to tell a meaningful story to your customer.
If you’re doing all that, you’re lowering your risk of churn. If you’re not, you’re increasing your risk of churn. It’s that simple.
5. Account Health Score
Although everything above contributes to an account health assessment, it’s still worthwhile to call it out as a separate question. To fully understand your risk of churn, you should be conducting regular account health scoring exercises with your team.
Start by establishing a common vocabulary and framework around account health. Account health includes customer satisfaction, but it doesn’t stop there. After all, a customer can be satisfied without being actively engaged.
Engagement means they’re picking up the phone to call you at every step of the journey; they’re saying great things about you to their colleagues within and outside of their organization and they’re talking to you about future initiatives.
There are three main ways to gauge account health, each with pros and cons:
Method 1: Ask your customer-facing teams
Method 2: Method 1 plus track leading indicators
Method 3: Methods 1 and 2 plus track lagging indicators
However you choose to do it, tracking account health scores regularly and comprehensively is perhaps the best way to predict any given customer’s risk of churn.
The worst-case scenario for any account manager is an unexpected end to a client relationship. To keep that from happening, you have to look for the right indicators—and you have to do it often. To see how Kapta can help you update your SWOT and VOC analyses, build customer-centric strategic plans, demonstrate value, and gauge account health, schedule a demo today.