Eight Things the Customer Success Team Should Do in a Recession – Part 1

Proactively Offer Your Help

Eight Things the Customer Success Team Should Do in a Recession – Part 1

Overview

There were a lot of great points made in my recent interview with Nick Mehta, CEO of Gainsight, but there was one aspect of the interview in particular that I think was particularly important. This was the part of our conversation when we discussed the role of the Customer Success Management team during a recession, or during any period of uncertainty where businesses are tightening up budgets and only performing essential activities due to fear of an impending recession, which I think is a good description for the situation we find ourselves in right now.

This article is partially based upon my recent discussion with Nick Mehta, and describes eight practical steps that almost any Customer Success Management team should be able to take when faced with a recession or period of uncertainty. In fact, to be exactly accurate we will discuss seven things to do and one thing to avoid doing. The original interview that inspired this article was recorded and the recording is available from our website here and from our YouTube channel here.

Proactively Offer Your Help

One potential way to avoid a customer telling you they no longer want to renew their contract with you is to hide away from the customer and keep as quiet as possible, hoping they will forget about you. After all, if they don’t get reminded about you, then they won’t think to cancel that auto-renewal, right? And if you assume everything is going OK then they will also make the same assumption, right?

Wrong! Customers (and therefore the customers’ stakeholders) are busy, and indeed in difficult times they may well be under even greater demands and higher levels of pressure to perform than in normal times. That being the case, there is only so much that each customer is likely to proactively do. In order to best prioritize their time, they will spend their time on the most essential aspects of their role. If your product or service is not something they absolutely need to think about then chances are they won’t. But that doesn’t in any way, shape, or form mean that you shouldn’t be proactive.

Typically what happens during a difficult time is that revenue streams from sales will start to dry up. If this happens then of course profits will start to drop, and because the profits is “the small bit left at the end once all the expenses has been paid” it is entirely possible that even a smallish drop in revenues can lead to a much more significant decrease in profits.

In the example shown below, in good times our business manages to gain an income of $50m. In less good times this reduces to $40m and in a full-blown recession this goes down still further to $30m. Whereas the company can grow during the good times and survive the uncertain times, it will not take long during the hard times before this company goes bankrupt… unless of course they can reduce their expenditure.

This means that quite naturally, all companies who cannot grow their revenues will be looking to trim their expenses, as of course this has the same effect for them. Far better therefore for you as a CSM to be proactive with the customer at this time. Contact your stakeholders and offer your help. Tell them that you realize that times are tough and that your company is willing to be flexible. Find out their situation and see if there are ways you may be able to help them – for example by deferring payments for an agreed period of time, or by dividing a large payment into a number of smaller ones that can be spread over time.

By proactively offering help, your company’s contract becomes less likely to be slated for non-renewal. Additionally, you will build up loyalty with your client, who will appreciate that you were willing to proactively assist them when times were tough, and this may well assist you in future negotiations with this particular organization.

Stay tuned for the next parts of the “Eight Things the Customer Success Team Should Do in a Recession” article which will be published monthly.

Go to Part Two of the “Eight Things the Customer Success Team Should Do in a Recession.”