Finding Success in Chaos: Preparedness in Times of Corona and Post-corona
COVID-19 has caused disruption across the business landscape. Weathering this economic fallout is hard on some companies, causing their sales to slow down. Whereas, others see their existing user base expand as they onboard new customers. Customer success teams need to quickly adapt, align, and change their strategy as they cater to customers impacted differently. To emerge stronger, we asked Arundhati, Director of Customer Success at Chargebee, to throw light on the current scenario, so that customer success teams can tackle this situation head-on.
In this podcast, she paints a picture of how the SaaS industry is impacted and draws pointers on how to deal with these challenges. She covers the key areas important to customer success teams: retention, product stickiness, expansion and how they vary across industries who’re impacted differently.
You can listen to the entire podcast. But if you prefer reading, scroll down for the key takeaways from the interview.
Tackling the Uneven SaaS Industrial Landscape
The SaaS industry is affected unevenly. Businesses serving sectors like hospitality, food, travel, and transportation have taken a huge blow. Whereas the ones that enable remote working – productivity, collaboration, conferencing tools- have seen huge growth. And businesses that serve a part of the revenue engine have hit stagnancy. Since the seesaw looks imbalanced across the SaaS landscape, the key to stay afloat is to have strategies that can help you come out stronger.
“The industries that are impacted negatively are events, travel, tourism, and restaurants. we’re also seeing a variety of marketing applications being impacted, which is mostly tied to reducing cash-burn as marketing is a contributor to that. In lieu of this, the good news is that e-learning and remote work industries are seeing an upside. For example, industries that are into video-conferencing, employee monitoring, and e-signatures are doing well. With an explosion of sales, which they never expected, they’re having their own bunch of strategies to handle this situation. ”
For instance, some customers might have grown their user base exponentially and might need extra support and upgrades, others might have seen their sales dwindle and will want to cancel their subscription. The range of challenges varies greatly by customers’ and so do strategies to deal with them.
Key to Finding Success in Times of Corona
Customer success teams not only have to deal with panicking customers but also need to sustain their revenue goals. Empathy is important in these moments because everyone is locked down and are clouded with the fear of “What next”. With uncertainty hanging like a dark cloud, the main thing businesses should do is to get in touch and help your customers.
“The important objective for success teams right now is to extend the utmost empathy to our customers and help them out in every way possible. The first thing we did at Chargebee was reaching out to our customers and offering assistance. Being in the billing space, our product acts as a spinal cord for businesses of different sizes. We wanted to throw light on how our product can help our customers effectively manage their customers and situation.”
Dealing with Businesses Impacted Negatively
For businesses that are facing a downturn, the key objective should be “customer retention”. Because once the pandemic is over acquiring the same customer is going to cost you 10x more. Remember that retaining existing customers by 5% increase your profits by 25% to 95%.
“One main thing we’re doing right now is sharing knowledge on how to handle our customers who’ve been impacted. For example, retention is the ultimate objective right now. To not lose customers we’re helping our customers with deferred payment terms, as cash-flow seems to be the main constraint. This gives our customers and prospects some relief in terms of paying us a little later. In that case, allowing your customers to pause their subscriptions indefinitely till things stabilize seems to be a better option instead of them churning out. ”
Here are a few things your business can do to support customers’ who’re negatively impacted:
- Defer payments: Offer deferred payment terms, allowing your customers to pay you later, relaxing their financial stress. Buffer allows payment delays for its customers and prospects.
- Offer coupons/add-ons: Giving discounted prices and offers to your existing customers so that they can try add-ons and premium tiers at reduced rates. Hubspot is offering discounted prices for its prospects and customers.
- Extended trial/free offerings: You can extend your trial or offer your service for free and onboard your customers later. Freshworks is offering free and unrestricted usage of its customer engagement tools, for companies with lesser than 50 employees.
- Pause subscriptions: Instead of letting your customers churn and cancel, you can allow them to pause their subscriptions indefinitely and renew when they’re in a better place. Sky sports is allowing their customers to pause their subscriptions so that their viewers can temporarily halt payments.
Dealing with Businesses Affected Positively
Some businesses like video/audio conferencing and remote working tools such as Slack, Zoom and the likes have seen huge growth during this pandemic. But, there is no guarantee that they will be used to post the pandemic. These industries need to focus on translating their existing user base into a permanent user base, to sustain their growth.
“For customers whose sales have exploded, which is a good thing, but it’s also scary as they’ve not prepared themselves for it. The immediate thought is how do you handle this kind of scale, but also it is important to reflect on long term measures. Long-term measures in the sense, to prevent churn once the situation reverses and goes back to normal. Here is where we have shared our knowledge and measures on churn prediction based on past data so that they can have ready-made insights and strategies to tackle these situations when they arise.”
How to Predict and Mitigate Churn?
To mitigate churn once normalcy returns, you need to have sustainable strategies that’ll keep your revenue afloat. For instance, giving your customers previews to modules with higher features at discounted prices will enable them to use your product to its fullest. This, in turn, will increase their interaction with your product and after the pandemic, they might be willing to purchase higher-priced tiers.
“Retention is key. In order to increase retention, businesses in the SaaS space get customers on long term contracts. From our data, we know that churn is mitigated in long-term contracts. When you increase the LTV of your customer with you, you get to show the value of your product thereby increasing the stickiness with your product. Once your customer falls in love with your product, they’re not going to leave you. In this case, that is customers’ in the remote workspace, the industries should look at how they want this behavior to be more permanent. Right now, we’re being forced to adopt this working style. They should see how to leverage this working style. For example, in remote-work, there is no geographical barrier and you’re available to world-class talent. Here is where you make use of helping your customers understand the value proposition of remote work and changing their perspective on how they look at it.”
This is a rare opportunity one of those times to show how much you value your customers. It is about putting them first and building relationships that’ll sustain after the pandemic passes.
In this podcast, we’ve covered the crucial areas of importance which at the moment will help you battle this pandemic with your customers. If you have more questions or would like to get in touch with our team write to me at [email protected]. We have pooled a lot of questions and got them answered by experts. Find them here in our knowledge sharing series around surviving the corona.