Effectively Handling Customer’s Renewal Objections in Customer Success Management
Customer objections are a common occurrence in Customer Success Management. A customer who objects against renewing their contract definitely has a reason for doing so. Some clients may be unsatisfied with the value they received or lack thereof, while others may have seen a better offer or service from other companies. Others may be looking for a specific function or capability which they believe is missing from your solution and which they can get from a competitor’s offering. Yet others might simply feel that they cannot afford your solution or cannot justify its cost based upon the ROI they have calculated for it.
Ineffective management of these objections will result in unnecessary churn and revenue loss. Not only is that bad for you, but it is also not even a good result for your customers, and we are effectively doing our customers an injustice if we do not help them to understand how in many cases, they may actually be wrong, and the best thing might be to continue to renew their contract with us. Is this going to be the case every time? No, of course not, but nevertheless, every customer objection should be explored first, rather than just being accepted as gospel truth and legitimate grounds for not renewal at the first glance.
Multiple factors contribute to the customers’ decision to decline our proposal; these obstacles remain only as a challenge and not the end. Here are the three steps on how you can do it in practice:
1. Listen and Acknowledge
Before planning to convince customers to remain with your company, it is your role as a CSM to identify their specific needs. Ask questions and listen attentively to their answers. Please do your best to find what they wanted that you failed to provide. Your customers are less likely to leave if satisfied, and you must acknowledge that they aren’t happy with how they are progressing with your products and services. As you listen, continue to be empathic and try to be in their shoes while thinking of how you can help them with their real concern.
It is important to verbalize your understanding after finally seeing where the issue lies. Doing so lets your customers perceive the gap between their needs and what you do to help them. If you have difficulty understanding the customer’s point of view, don’t be afraid to ask questions, and don’t get defensive. Keep in mind that no matter how they act towards you, they are paying customers, and you must provide them only the best you can offer.
2. Negotiate outcomes
After understanding the customer’s concerns, you would be able to find a way to solve them and offer the right solution. Do not stop after the client says no; instead, propose a way forwards together wherein their issues can be resolved. Let them feel heard and important. If the company is at fault, it would be best to apologize and offer a way to resolve both the initial concern and the resulting consequences. After all, customers trust companies with integrity more. An example dialogue would be:
“If I can deal with each of the issues you have raised with a response that satisfies you that all of your concerns are fully dealt with, would you then be in a position to proceed with [the proposal]?”
3. Seal the deal
Now that you have offered the solution to their issues, it’s up to your communication skills and the depth of your relationship with the customers you have built that will decide whether they will choose to remain or not. Let them see the value in your proposition and that there is a way for them to reach their goals with you rather than outside. Emphasize the risks of leaving your company as they are beginning again from the very start, trying to familiarize themselves with a new product and service they aren’t even sure to provide their expectations. You know what they need, and this conflict became an opportunity that provided you an insight into what more they want; hence they are in a better position staying than leaving.
In summary,
Customers are purchasing your products and services to achieve your promised outcomes. But only when you truly understand their needs will you be able to move toward them, which is why a thorough and complete assessment of their requirements is necessary to identify the best strategy to help them (or if you are even able to do so). Understand their motivation, help them see your value, and how you can help them cross the gap between where they are right now and where they want to be.
However, keep in mind that you are there as a CSM to help them, not replace all the work necessary to achieve their expected outcomes through your company’s products and services. There’s an expected effort from the customers’ side to develop expertise in the products and services they are availing to begin generating value. Should they insist that they aren’t supposed to be putting in the time and effort, it’s time to set boundaries. Let them realize that they, too, are responsible for their success, and only when they start acting upon it would they be able to achieve their expected outcomes.
Handling objections truly is strenuous but necessary as it is inevitable. Learn more about the best practices in Customer Success Management and handling difficult situations in our Certified Customer Success Management Practitioner Certification program here.
