Which selling skills should account managers focus on building?
How can you increase long-term customer retention?
What are the key retention metrics you need to measure?
On a recent episode of the Reveal podcast, we connected with MJ McCarthy, VP of Account Management at Everbridge, for answers to these and other questions that are top of mind for revenue leaders.
Key Points to Remember
- Selling skills matter just as much for account management, just in a more subtle way.
- The account management function is a critical driver of long-term retention.
- You and the customer need to have a mutual understanding of their goals and expectations.
- To maximize retention, strive to have at least three different customer contacts at three different levels within the organization.
- Focus on staying ahead of churn. Measuring churn rate means you’re too late.
Selling Skills and Account Management
I think [sales and account management] feed very closely off of each other. Based on my personal experience as an individual contributor—as well as having led sales and account management teams now for the past 12 years or so—I think a foundation of pure hunting sales benefits any role that anyone’s going to do in their career.
Learning to be crisp and articulate with a value proposition. Learning how to deal with rejection. Learning how to be creative and getting through to all levels of people within an organization. All of that is truly what you learn in a hunting role.
I think it sets a person up for success in any customer facing role. Those types of hunting skills carry through to account management. They are still needed, just in a more subtle way.
The resilience and communication skills that a person learns in sales come in handy if you’re ever trying to save a customer that’s at risk. Things aren’t always going well in a customer relationship, so you need that resilience.
The prospecting skills learned with new business carry through to how you find new opportunities for new products and upsells to your existing customers.
Then all the negotiation skills that you learn in sales carry through to the renewal process. Because renewing, especially in SaaS, is pretty much selling. At the end of that contract, you’ve got to sell it again.
The AE is dating the customer. An AM—you are married to them. So it’s through the good and the bad, the ups and the downs. You and the customer are linked.
The Focus on Retention
I love the buzz being published recently about retention being the new growth. And especially in the SaaS world, I think that’s really, really true.
The more successful customers are with the solutions they initially buy, the more likely they’re going to buy more.
So that underscores the importance of the account management function. Of having dedicated teams who look after long-term customer relationships. And making sure those teams are measured very clearly on keeping those customers. And also to make sure that there’s a team that feels the pain if you lose a customer—if that customer cancels or downgrades.
The world as it stands today has made doubling down on a customer’s success, and the value that they get out of your solution, even more important.
Now more than ever, the account management teams are having to step up, and make sure customers are getting what they need and what they bought from you.
Driving Long-Term Retention
First and foremost, in the initial implementation of whatever that customer is buying, they need to be eager to meet that implementation timeline out of the gates. You and the customer need to have a mutual understanding of the goals and expectations that the customer is trying to get out of your solution.
And then they need to also agree on an ongoing basis to come together and see how you’re tracking against those goals and expectations. That’s really important for the long-term success of the relationship.
I think also making sure that there’s an engaged executive sponsor that cares about your solution, and it might not be the person you’re working with day to day. Ideally, it’s an executive sponsor that also has cross functional influence throughout the organization, because they become your conduit or your path to hopefully trying to find more business.
The more engaged they are with what you’re doing to help make them successful is the best indicator that they’re going to be a successful customer for the long term.
Connecting with people is probably the most important aspect of any customer facing job.
Why Multithreading Matters
[It’s important to] never stay single threaded within an account. To have three different contacts at three different levels of an organization that you’re working with. To build those multiple relationships with multiple levels of an organization. To get your coaches, and your champions, and your technical users, and even procurement.
Because at the end of the day—when you’re trying to retain an account, or there’s a risk situation, or you’re looking for upsell and cross-sell—having those relationships to go back on is going to help you in the long run.
The more deep and wide your contact points and touch points are within the organization, the much stickier you become as a partner for that customer.
Data Breakout—Retention is the New Growth
In March of this year, Gainsight surveyed CEOs, CROs, and CCOs of late stage private cloud companies (e.g., Forbes Cloud 100) and publicly traded SaaS companies, to hear how they expect the rest of 2020 to shake out.
There were 12 takeaways from the full survey, and here are the three that resonated most based on our conversation with MJ:
- 37 of 41 of the CXOs surveyed said preventing churn is very important—compared to somewhat and not very important—a trend that we think will stay once the economy bounces back.
- MJ discussed that she has playbooks based on verticals and personas. It sounds like those are going to be especially helpful since survey respondents said they’re wrestling with concession conversations.
- Something tells us that customer success and account management is going to elevate in status because of this recession, and their importance in SaaS organizations will only continue to rise.
Learn more about customer retention management software here.
Key Retention Metrics
We’ve been laser focused on retention since I started eight and a half years ago. So gross retention has really been what I and my team is measured on.
But we also have a focus on net retention, because that ties into the growth that we’re selling into the customer base (and not losing them).
Some new metrics that we’ve started to zero in on are more products per customer. I think that ties to how your customers are adopting their initial deployment.
So we’re trying to figure out ways to better measure adoption. Not just using it like “Check the box, they accessed something,” but “How are they using it? How are they adopting it? How are they measuring value? And how can we get better metrics and dashboards in place so that we can better show our customers the value they’re getting?”
We’re trying to get much more prescriptive in mapping out for a customer what good adoption looks like, and then helping them get there.
I’ve got to be ahead of the churn. I think there are pretty typical warning signs that we look for. Like reduced usage, obviously. But the softer stuff is less engagement with the folks that we’ve been engaged with. Or if they’re not coming to the table to talk to us. Or if they’re not agreeing to a quarterly business review.
So when we get those warning signs, we want to dig in. We’re going to be all over that customer. We’re going to maybe use a different voice or a different title—maybe I get involved—to try to get the customer to take it to the table to have an honest conversation with them as to what’s going on.
It’s important to try to head it off at the pass and have a direct conversation about, “Okay, where do things stand? And what can we do? And what needs to happen?” And then take it from there.
We want customers for life.
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