Google “how many ways to break up with someone,” and you’ll find over 5 billion search results. There are many available options, ranging from the inconsiderate “ghost them” to the somewhat more respectful “be honest but not brutal.” Regardless of how the message is conveyed, the outcome is the same: The relationship is over.

While there are various reasons that customers provide when they end a relationship — poor fit, competition, need — budget is the most ubiquitous. It is a catch-all reason, one that rarely gets challenged. Customers say “Budget was cut” or “We just don’t have the budget this year” because they’re confident that there won’t be deeper probing, saving them the discomfort of telling the truth: that it is YOU and not ME. At least they didn’t convey the news by way of a post-it note.

The real reason for the breakup? Lack of perceived value. Current macroeconomic conditions aside, I believe that, except for a company completely going out of business, the majority of churn boils down to that one thing. Those customers didn’t see a demonstrated ROI in terms of the value and impact of the solution to justify the price.

And if you want numbers, ChurnRX CEO Greg Daines’ research on customer churn shows that the most predictive factor for long-term customer retention is whether the customer has achieved measurable business results. If the value of the firm’s solution was appropriately positioned against the customer’s desired business outcomes, the next steps would be to help the customer achieve the outcomes they expected. So where would that breakdown occur? There are two areas to consider:

  • Failing to invest in customer onboarding. Customers who invest in your product are excited about the solution’s potential and most willing to put in the time and effort to get going at the start of the relationship. A successful onboarding program capitalizes on that excitement, cementing the relationship and building trust by setting a clear path to value. Absent a successful onboarding program, customers take longer to build a critical mass of users, struggle to adopt key features, and usually fail to turn the solution into business value.
  • Focusing on activities vs. business outcomes. Too often, CSMs overemphasize activities such as product training and regular “check-ins” with customers but fail to identify the customers’ desired outcomes. CS teams must ensure that they focus not just on capturing outcomes but also tie those activities to objectives, typically through the use of joint success plans. The ability to measure outcomes achieved is more impactful and enables the customer to justify budget for the product in business terms and, ideally, to tie it to one of their key company metrics.

Customers who feel empowered to achieve success and see tangible results are less likely to end the relationship. They will find a budget to keep your solution because they have seen business value and clear ROI. Preventing churn comes down to giving your customers a compelling reason to stay, and realizing demonstrable business value is a great reason.

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