Reduce Churn by 15% with This Simple Approach!

00:00 Hello, hello, hello. You read e-zips here for CSN practice. The podcast where we bring you best-in-class practices, what works, what doesn't, so that you can rock your customers' success world, get a practice that actually produces high-level results.
00:18 And today, if you stick around, you'll learn how Dylan Young, a CS veteran and now owns his own company, we'll talk about that towards the end, and worked for a company as a CS leader and turned things around, and what do I mean by that?
00:34 He made it go from about 83% gross retention rate to 98 gross retention rate in a single quarter. That's unheard of, well, he didn't do it by just turning on one thing.
00:50 He actually did a trifecta of things. They're not very difficult to do, so I want you to hang in on to your seats because this is going to be quite a story.
00:58 You're gonna learn a lot. Dylan Young, thank you so much for coming on our show. Thank you for having me, Eerie.
01:04 This story is kind of old. You've been there last year and a half. You've had your own company, but I think this is a story that never gets old and is always true.
01:14 What don't you tell me? What kind of customers did you use to help back then? And what was the size of the team when you just started managing the team and stepping into that role?
01:23 Well, I have historically always worked with enterprise level customers personally. This team that I managed, though, managed the entire gamut.
01:32 So the company I worked for was a mortgage technology company and its flagship piece of software was an intake platform.
01:41 So when you get a mortgage in the United States, it's a lengthy process with more documentation than I think you even need to get married or for a woman change their name after that fact.
01:51 Like, it's a lot of paperwork. work. There is a lot of businesses out there that are trying to make that as easy as possible for a customer.
01:57 This company was one of them. And so they served anything from sole proprietorship mortgage brokers all the way up to some of the big boys.
02:06 So if I can guess you had a very long tail of customers, those would be the sole proprietors. And then you also had very large strategic accounts.
02:16 When we tell this story of going from lower GRR to very high GRR, was this related to a certain segment or a certain cohort of those customers?
02:26 No, we're talking all of them. Wow. Just off the cuff thinking about that. It's kind of crazy because before I was in seat, a lot of the strategy for those long tail guys was like, don't tell them that they're renewing.
02:40 If they want to cancel, then they've got to send us an email. And not as nefarious as that, but it was probably more like well you don't have the time and so you get a lot of GRR uplift just from that and we actually flipped that on a tier and we started talking to everybody maybe not manually some of
02:57 it was automated but we made sure everybody knew when their contract renewal period was coming up. I have so many customers that have the same thing going because they know especially if it's consumption based we don't tell them let's just ever green them or let's just let that old contract ride and 
03:14 hope the customer doesn't say anything that's like agreement in silence just happened so many times so thanks for saying that okay so you flip that on its head and just to give people context at that time sounds like hundreds maybe over a thousand customers maybe thousands of customers but a lot of customers
03:33 what was the team size that you had to work with and you have have any specialized roles within the team.
03:42 So when it came to customer success, I also managed customer support, but let's just talk about customer success because who was managing these motions we're gonna talk about, but it was a team of four when I inherited it.
03:54 If anybody knows anything about what has happened with the economy and the mortgage business over the past couple of years, that got cut in half to two employees by the end of it.
04:05 And just for a little bit of context, we were managing around 250 to 300 customers at the time. So that includes the long tail?
04:12 That includes the long tail. Two CSMs and then about 250 customers, some of them very, very large, some of them very, very small.
04:22 Any kind of systems that you had in your disposal to leverage? Salesforce and a lot of Google Sheets. Did you have any control over the Salesforce?
04:31 Like if you wanted to make any changes, is, did you have the ability to do so quickly in an agile manner?
04:38 You did have a sales ops individual. And so we did have the ability to customize to create fields, which is a part of this storyline.
04:46 But did that happen in a timely fashion? Well, maybe at a large company it was timely, but for our size, it was probably a little bit sluggish.
04:52 Let's go back to the story. You walls in, you think you have four or five team members. there's 83% GRR, which means there's 17% of renewals left on the table.
05:05 Everybody's worried about talking about them even. You walk in. That's the state of the team. What were you thinking? Oh gosh, if we left things the way they are for another two, three, four years, like in your head, what do you think would have happened to the business?
05:18 I don't think anybody was thinking that when I first showed up, myself included because because it was right at the tail end of those glory days, of zero percent interest, free money, throw bodies at it, and sales was still performing like gangbusters.
05:37 It was during all of this in my tenure that that house of cards sort of fell over. So to answer your question point blank, nobody was thinking that at the time.
05:47 So what point were you thinking, oh my gosh, we've got to fix this. I think it's always in the back of your head, right?
05:51 like 83% is not good. You always want to improve about that. But we weren't like, oh, hey, this title wave is coming.
05:58 Why did you fix this? There's a title wave of new clients coming in. The growth is on the horizon. At what point did you say, well, all right, let's deal with this.
06:08 I think from my perspective, I've always been proud of an NRR of 110% plus. Historically, I have managed books of business or managed teams that can achieve that and honestly that's where we want to be in a SaaS business regardless of what sales is doing and that the customer acquisition motion.
06:31 And so for me, that was always going to be a piece of the puzzle. It helped that you talked about this trifecta.
06:37 It helped those other pieces needed the motions that were We're also going to hopefully drive up that gross retention rate.
06:46 Even though the economy was going well, you're like, okay, we can do better than this. I have experience. I know this could be better.
06:53 You have to unroll the executive leadership around, hey, this could be a great go-to-market strategy for us. If I double down on this, our business could grow a lot faster.
07:04 Was everybody signed up to this? New initiative that you were going to put in in place? The conversation didn't go quite like that.
07:11 I'll tell you the way it went. I didn't ask for permission, but I did ask for forgiveness ahead of time.
07:17 In so much as I said, hey, look, I'm going to do this thing. And I did ask the CRO. I needed a little bit of time from the Revops individual, like I was talking about, build some stuff in sales for some.
07:27 You're going to get these newer ports out of it. So I added the value to it. So it was an easy yes for them.
07:31 It was not going to take long. But I asked for forgiveness in as much as I I said, I'm going to roll this out.
07:35 And I hope that it results in higher GRR. It has for me in the past. But to be fair, guys, we're going to start talking to a lot of customers that we were not previously talking to.
07:49 And if they're not happy, and if we can't solve their issues or re-educate them in a timely fashion, then we may see this dip in the short term.
07:59 It should always go up with a process And particularly success planning and things like that, but in the short term, you may see a dip Hey, I just want you guys to be prepared that that might happen.
08:10 Okay. Wow. That was very clever of you What were the three things that you decided to do? What was the mysterious Traefecta so number one is we wanted to Begin a renewal motion.
08:22 That's got a lot of pieces to it But largely what we mean is we want to start asking every single time we're on with a customer would you renew today if you had to make that decision?
08:34 A lot of stuff comes out of that and so that question, a lot of different answers. And so our next piece was success planning.
08:41 We wanted to make sure that no matter what that answer was, if it was anything other than a heck yes, we had the ability to build a plan to turn it into a heck yes.
08:50 And then thirdly, we had the ability to measure that and that means health scoring. We already had a ton of telemetry, But what we wanted was to make sure that we also had the sentiment piece and that's not purely the CSM saying I like talking to this person.
09:06 They'd like talking to me They pick up the phone when I call instead. We wanted to add a sentiment piece that was specifically tied to that renewal Question.
09:14 Okay, so renewals sentiment. Was that the third piece? It is we didn't define it necessarily as renewal because we believe that that is indicative of the entire relationship.
09:26 So a sentiment score? Yes. So all of that, just so we're clear, resulted eventually in how much NRR uplift. So NRR uplift?
09:37 I don't have that number necessarily, since it does feed in from GRR, but GRR was 83 to 98%. We saw a 15% increase in a single quarter, 90 days.
09:47 The NRR eventually got to where you wanted it. Yes? Yes. north of 110 percent you're correct. All right so let's dive into each one of them.
09:56 Where do you think we should start? Did you do all of them at the same time or were you thinking okay one of them is more important than the other and you started with that?
10:04 I consider these to be three legs of a single stool honestly but where did we start? We started with a soft launch of the renewal question and basically telling the team hey start asking this question start taking notes on it.
10:21 So we can start to build this sort of like soft history. We don't have anywhere for you to store it yet kind of like programmatically.
10:29 They start asking that question, they start getting into the habit of asking that question. In the background, we are building the additional pieces to support it.
10:39 So we're building that field in Salesforce where they can track it. And it's very rigid in the way that they can track it.
10:46 We only have four different answers. 10%, 30%, 70%, and 90%. And you're only ever allowed to say 90%. If they said without any hesitation, heck yes, give me the paperwork today.
11:00 I'll sign an extension right now. Anything else is gonna be that 10, 30, or 70. 70 is a yes, but maybe we still have some issues.
11:08 They hesitated a little bit. And then 10 and 30 are differing levels of, no, I don't think I would. but anything other than a 90% requires a success plan.
11:18 And so we're building this field in Salesforce to track the answers historically. We wanna be able to track more than one every time we ask them.
11:26 We wanna have a timestamp, basically, so we can look at trends as well. But at the same time, I've also got to build an entire success plan motion because the team had never done success plans.
11:35 And so while they're asking these questions, getting in the habit, we're building the field in Salesforce. We're also building an entire success plan motion.
11:42 So we're talking templates. We're talking, how do you communicate that both to the customer as well as internally? We want to get sign off from the customer on every single success plan.
11:52 Hey, if we did X, Y, and Z, the next time I asked you this renewal question, would your answer be heck?
11:58 Yes. You want to get that sign off. So break it down for me. You decided to do a success plan because you did this in a quarter.
12:05 How did you do this so fast? What did you do? How did you do it? Break it down for me.
12:10 Let's be transparent about the fact that we're measuring quarter to quarter. We probably launched in the last two, three weeks of the previous quarter.
12:20 That launches, we gave them all the tools. So they probably started 45, 50 days before that, starting to ask the questions of their customers.
12:28 Would you renew? Would you do this? And so it isn't as stark as on April 1, we're saying, hey, here's all these new tools.
12:37 this entirely new process, change all these things about the way you work. We were a little bit more nuanced in the way we rolled it out.
12:46 So I just wanted to make sure that that's clear before we talk about this next step. I think it's smarter to take it slow and it's hard for them usually to get into new habits.
12:56 And so the fact that you say, all right, just ask that question. All right, then just update this. And when it's like this, then, oh, just do this.
13:06 And so maybe we start, first of all, I like how you summarize, this was our goal. Our goal was to present a plan that the customer signs off on and says, Hey, if we did that, we're absolutely going to renew.
13:20 So that sign off piece is, is so critical, regardless of whether they, when you go to them in 90 days, when they're getting ready to renew and they say, Oh, actually, we're not gonna, at least then you have something to hold them accountable for versus, if it was just this sort of nebulous conversation
13:37 that we all agreed to but we never put anything in front of them. We never got it in writing. It's so much easier for a person psychologically to say like that wasn't exactly what I meant.
13:48 But if you put it in front of them you make them sign off, you make them confirm. The psychology is they want to follow through as well.
13:53 They want to be a partner to you. So that was the big idea here is to get to present a plan that the customer signs off on, and now you have some sort of like, all right, it's a mutually agreed upon plan to get to you to renew so that you get the value, et cetera.
14:10 You had a team of granted to you, but they've never done this before. What did you put in place to make it easier for them to start doing so?
14:18 We had some scripts that we would offer to them for their conversations, but consider that this organization was very small.
14:27 And so we didn't have a ton of structure around like you must do this, you must do that. I don't even necessarily agree with that methodology.
14:35 I prefer to make sure my folks understand exactly what we're shooting for, what their goals are, and we already had in place a bonus structure for NRR.
14:46 So it was very easy to say, well, GRR is the biggest piece of that. So if you bring up your GRR, you're going to naturally bring up your NRR.
14:52 I would provide processes and scripts and success plan templates that help them accomplish their goals, but at the end of the day, if they wanted to do it a completely different way, that's fine.
15:03 All of that being said, we did have one very hard rule, which was 120 days before the expiration of this customer's contract or the automatic renewal date, typically it was the annual anniversary.
15:18 You had to begin asking the question, would you renew or not, and you had to record that in Salesforce in the field we created with a small amount of notes to explain why, why the customer answered in the way they did.
15:35 We on the back end had a process for monitoring those answers, and if anything was less than 90%, then we would look for a success plan, and if that didn't exist, we did have a little bit of a prodding motion of like, you got to put together a success plan, tell us why or how you think you're going to
15:50 bring that up to a 90% the resounding heck yes as a leader when they first started doing that how did you coach them on what is a good success plan versus an okay success plan or you give them any kind of mentorship and if so what seemed to work the best we ran through a number of them typically on team
16:09 calls and what we would do is we'd pull one up and I would simply ask questions well what happens about this or have you thought about that or I try not to say it needs to be done this way.
16:21 What I want the success plan to do is to answer any questions that any individual at our organization is going to ask regarding it.
16:30 What it sounds to me is that you did two things that I thought was smart. One, you had visibility. When you have visibility because you were tracking in Salesforce, you're expecting when it's 10, 30 or 70 to have some notes and a success plan, you're probably put some guardrail like how fast do they 
16:48 need to come up with a success plan and what's the process like to present it back to the customer, but you had visibility.
16:54 You probably had a dashboard right out of everybody that's coming up for renewals. How many are 10, 30, 70? And do they have a success plan?
17:02 Yes or no? If they don't, you could go back to your team and say, hey, create one or hey, start the process of success plans.
17:09 And then once they produce one, you reviewed them, you give them coaching so that they start thinking about the right questions to ask when they come up with it, elevate the quantity or the quality of the access plan.
17:21 What else do you think made this initiative successful? I think you outlined it really well. What I think made it grow at home because there's a sort of nexus here of issues that we see a lot classically.
17:35 The entering of data into Salesforce is like the most loathed activity for most folks. In our profession and sales, just nobody wants to do it for a variety of reasons.
17:46 Sometimes Sometimes they're lazy, sometimes they're trying to make themselves indispensable by keeping it all up here and not in Salesforce.
17:54 And the second is perhaps compounding that is, why is this important to me? It's an additional step, why is this important to me?
18:01 But it is largely, we stamp that out by saying, because you're honest on NRR, we are trying to drive a process that helps you reach that easier.
18:13 The second piece, this was more of a stick, that was the carrot that I just talked about. But the stick was, if you have a customer churn and we have no data to show why it is going to be an issue, that's not a threat.
18:27 It is going to put attention and eyeballs on you that you do not want if we cannot explain why that occurred.
18:34 Some of it is always going to be inexplicable. We can't read minds, we can't fix everything. Sometimes a good fit customer turns into a bad fit customer.
18:42 But if we cannot explain that, if we cannot track that, if we cannot analyze the data and share it with our colleagues so that we get better that is going to be a problem.
18:50 Can I ask you Dylan, did you change their comp plans? Not for that. Our bonus had always been and are our based.
18:58 So this was just like here's another tool that will help you get there. There were already unwold in it. You didn't give them any spits for those who did a hundred percent success plans for those like there wasn't any leaderboard or anything like that.
19:12 I would never do a spiff like that because because it implies that it wasn't required already. And the rule was, if you got anything less than a 90%, you got to put together a success plan.
19:24 Now, if they're 70%, and it was like, I just don't have a ton of time to talk about this right now, they sounded like slightly irritated, but it was more related to like, I just got a lot going on right now, but your success plan doesn't need to be 15 steps long.
19:36 It needs to be three or four. And if you've done enough of them, you can type that up in five minutes, not a big deal.
19:42 So we didn't have any hard and fast rules around like what your success plan looked like like we talked about, but you needed to have one.
19:48 And so we wouldn't spiff people just for doing what we said they needed to do anyways and what it takes for us to be successful as an organization.
19:55 Did they adapt to the success plan process fairly quickly sounds like? I wanted to ask you about that sentiment. That was the third piece of your awesome trifecta.
20:05 When did you start looking into that and how did you do it? That came along with, we used the same field within Salesforce, which was their answer to the renewal question and those four possible numbers.
20:20 That became the sentiment, that became the contribution to the health score that we called sentiment. So it could go up and down every single time you updated that field.
20:31 You know, I had another person interviewing on my podcast a while back. She did something similar, not the same, but similar.
20:40 And what she reported is that they got their renewal forecasts really accurate. Like she said, there was like a 2%, maybe like a difference between what they thought was going to come in to what they projected might not.
20:55 And so they got good at it. Did you feel like that was one of those things that as a result of that you got better at projecting what's going to come in and what's not that wasn't going to be hard though because previously the way we were forecasting was taking a snapshot of a Salesforce report that 
21:13 said these are all the prod d**** in Salesforce that should be renewing in this quarter we were downloading that putting it in Google where we could edit it we could control it because we didn't have all these field in Salesforce and And then asking the CSM's to color code it, red yellow green, which
21:31 I hate that method already is everything ends up yellow. And then adding comments of like, well, I think they could, but you know, our champion just got promoted and so I don't know.
21:42 And so that just turns into that CSM sentiment, that red yellow green sentiment that where everything's yellow, nobody knows anything.
21:48 It's as good as useless. And so our ability to instead weight it within Salesforce against that sentiment that field that answered that renewal question, it immediately got so much better.
22:02 Now was it 2% accurate? I don't know, because we were still pretty early on in our motion. And I think the CSMs were always going to veer towards the positive side of things.
22:14 The 70 or the 90% like they had happy ears, so to speak. I imagine if I had stayed there much longer I would have wanted to analyze what that delta was between what actually happened and what we were predicting would happen.
22:26 A lot of great story and what a great outcome for the team, for the company to be able to see exactly what's going on, have a deeper understanding around the renewals.
22:38 When the team started flagging customers that are a maybe they didn't give me a heck yet yet. Were you able to start seeing a certain trend around why customers might be at 10 or 30% and did you change anything in the renewal strategy itself, meaning incentives, things that they can offer?
23:01 What should they be included in success plan? New services. Did you get sophisticated with that or maybe you didn't have the time to do it?
23:08 We didn't have the time, but it was going to be the next step is understanding was a a certain size of customer that was given us that 10 or 30% was it a certain age of customer because I think we all know that over time typically your customer product fit shifts.
23:26 And so we're re-seeing that occur where we just not catering enough to those folks. We didn't yet have a ton of detail around features that they had requested that had not been implemented yet.
23:37 We didn't have a ton of data on tickets. those are all things that should be juxtaposed against those trends to understand where we were seeing the shift in behavior from our customers.
23:49 I think that's a natural next step. I definitely think that this what would have happened if you stayed there, but you didn't because you decided to start your own business.
23:58 So shameless plug for Dylan. I am such a geek for people that go out and go against the current. Start their own business, put all their chips in.
24:09 I just love that. Maybe it's because I did it myself. I know how hard this is. Mad respect for you, Dylan.
24:16 What does your company do? What kind of clients do you work with and what kind of problems do you help them solve?
24:21 The Lifetime Value Media is a company that spawned out of my podcast that I just love doing so much that I decided I wanted to make it a full-time gig.
24:31 So what Lifetime Value Media does is it focuses on media production and it helps individuals and companies reach a larger audience for their message, whatever that might be.
24:43 So if anybody has here a startup or a SaaS company or a software company, whatever, and they want to double down on their long tail, they have to have a good media strategy to do that one to many channels for their broader audience, their end users versus just You can't hire enough CSMs.
25:05 Is that kind of like what you were thinking when you set that up? The way I look at it is there are conversations going on all the time.
25:13 There are these strings of thoughts that evolve over time. Like think about like AI, where was that two years ago?
25:20 And now it's this huge trend on Google trends. Everybody's talking about it. It's in every third social media post, whether that's linked in or it's TikTok Instagram.
25:30 It spans business and consumer. The important piece of what I just said is that the channels differ. So YouTube is a huge channel.
25:38 Podcasts are a huge channel and so are social media. Most businesses, folks that are in business, individuals, consultants, businesses themselves, are largely sticking to LinkedIn, blogs, newsletters, the written word a lot of times.
25:56 You're starting to see folks branch out in the podcast, like yourself. But it is my belief that every single person who wants to engage in those conversations because increasingly that's where people are is on social media.
26:11 It's in video, it's in audio. If you want to be a part of that conversation you have got to be entering the arena with those mediums.
26:20 So who are your customers? Are they mostly software companies or consultants like me or just runs the gamut? It runs the gamut I work with networking groups that are trying to spotlight their members as well as build an audience within their community.
26:35 I live in Philadelphia so I work with one specifically that's with Philadelphia entrepreneurs. I work with individuals who are running podcast channels and I also work with a number of companies in building out those channels as well.
26:49 Thank you so much Dylan for coming in sharing your incredible story. I got a lot out of it. I hope everyone that was listening did too and that they would go check out your website and Either work with you or connect people that they think should be working with you.
27:07 What's your website Dylan? LifetimeValueMedia.com and you can find me on LinkedIn too. Thank you so much. This was super super interesting Here you go.
27:17 Here's how you can do in a few months revamp your renewal process get better at tracking the sentiment using a field essentially and hold people accountable to creating success plans, the drives, heck yeah.
27:31 Thank you, Erie. And with that, it's a wrap. I'll see you on the next podcast episode.