"We're cancelling our contract."
This is the second in a series of posts about my observations on MarTech churn. In this post, I focus on your product champion and what happens when he or she leaves the organization. Do you think you've done enough to make sure your whole platform won't go along for the ride?
Churn is a huge issue in SaaS organizations, an issue highlighted recently by Mamoon Hamid, Co-founder and General Partner at Social+Capital, who outlined at SaaStr 2015 that he had passed on companies with larger MRR in favor of those with >4% Quick Ratios. MarTech churn is a unique circle of hell, due to the combination of speed-of-innovation and a talent gap in daily practitioners.
Your End User Has All the Knowledge and Therefore, All the Power
You're a software company; you have a product. That product depends on a human being, most times a highly skilled human being. So often in MarTech, there’s one power user. That power user invests the time in understanding the platform, they love it. It does everything they were promised and they LOVE it. They see it’s easy to use. They see its value. They influence others to believe the same. Maybe they train additional users. Maybe they give executive-level reports that help make decisions. They rock.
And you love that person too! You never have to deal with customer complaints. You get testimonials from them. You're floating along with a false sense of security, not working too hard, because you have this super user. After all, they rock.
They rock so hard that they’re recruited. Trust me. Anyone great at a given technology (especially one not very many people are great at) is recruited. If you know a great Marketo user, for example, I have probably contacted them, or my recruiter has. And eventually, chances are that the grass is going to look too green and beautiful for them to resist.
If you’re in software sales, you’re probably thinking, “Awesome! Our advocate just went to another company and will buy us there!” Yeah, maybe, or probably not. Likely, one of your current customers or partners just recruited him or her. You won’t get a new logo out of it, and insult to injury, you’ll probably get a cancelled contract out of it.
Why This One Person Destroys Your Customer Relationship
That power user is smart. Most smart people have pretty good self-preservation. Being the power user of a system gives you… well, power. Knowledge is power and most power users keep that power for themselves. So, when they leave, even if they’ve taught other people SOME of what they know, a case of full knowledge transmission is EXTREMELY rare.
Instead, what I saw hundreds of times was this series of predictable events:
- A power user leaves
- Their boss thinks someone else can just take over their spot and that person begins to “own” the technology
- Issues arise and everyone starts to understand there’s a LOT that power user took with them when they left (because they didn’t document anything, and even if they did, no one will read it)
- The new owner touts their expertise and new responsibilities and takes another job before the jig is up and everyone realizes he/she has literally no idea what they’re doing
- The damage is already done. Maybe the company asks a company like LeadMD to do an assessment of their system and they find out that they’re up a proverbial shit’s creek without a paddle. They’re going to need to invest quite a chunk of change just to get back to zero
- The company is like, “Fuck it. We’ll start over with another system that’s easier to use” and sends a cancellation notification, maybe stops paying their invoices for good measure
How Education Keeps Churn from Happening
Alright, so I’ve painted a bleak picture here. But not all is lost. What can you do to take some of that churn power away from power users?
- Focus training on the entire team. Most technologies depend on the initiative of their clients to create talent around their product. Don’t do that! Tell them what they need to do and use your customer success and/or professional services team(s) to validate that they’re actually doing it. Stop with all the 1-on-1 conversations, with no real way to validate they actually learned something.
- Train your executive sponsor too! Once the signature happens, many executive sponsors and signers fall off the face of the planet. How often has an executive come back around at renewal time stating they, “Don’t see the value?” Too often. Keep them engaged through education. More on that here.
- Provide recruiting options for your customers. Now this one is outside of the box, but stick with me. Marketers move around a LOT. What if your education department was educating people on your platform BEFORE they work at a company that has your platform? And what if, after you’ve educated and certified them, you MATCHED them with employers who desperately need them? Shameless plug: that’s exactly the process Six Bricks facilitates.
So, you see? There are ways to go from one power user to a team of cheerleaders. You just have to put forth a little effort. You probably ALREADY HAVE a bunch of content that you can simply reconfigure to create curriculum. You can join our revolution below!