Sales can also prevent churn

Sales can also prevent churn

Customer Retention

cautionIn SAAS, churn is public enemy #1. Yet many times, it seems that sales has very little do do with it. Not so.

Traditionally perceived, the role of sales is to bring customers in, and it’s someone else’s job to keep them. A robust product offering should set the foundation, Customer Service (or the newly minted Customer Success team) should bear primary responsibility. Hopefully your contract was written to have the disincentives for customers to leave. In other words, churn is someone else’s job. Or is it?

But in reality, sales teams have a lot to do with customer churn. We possibly have to do the most with churn. How so?

It comes down to selling the right thing to the right prospect for the right reasons. Many of us wear as a badge of honor that we could sell ice to eskimos. But that model doesn’t work in SAAS. 

Remember, in SAAS we’re asking a customer for permission to service their need one small lump of revenue at a time. And we are making a solemn promise on behalf of our organization that we’ll be there for the duration of the relationship to deliver value. One month at a time. 

Our role in churn prevention starts with developing a deep understanding of what the prospect needs. Can we solve their problem? Is our solution a good fit? Is our company ready for this customer? If any of the answers are “no”, then we’re simply laying out a trap for the company a few months or days into the process.

In other words, sales teams can prevent churn by ensuring that they are selling to the sweet spot customer. And no one else.

How can sales managers prevent churn?

  • With a good qualification questionnaire that weeds out prospective bad customers

  • By breaking down the churn metric into pre-90 day and post-90 day churn, and owning the pre-90 day metric.

  • By changing the commission structure so that it only applies to customers who stay past 90 days

  • By having clear, pre-established guidelines of what “special deal” circumstances would require sales management approval.

What is your experience with customer churn? Please share in the comments!

(photo credit – flickr user colddayforpontooning )

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