Greg “The Churn Whisperer” Daines has made a career out of taking the traditional customer success playbook and chucking it out the window.
After spending 20 years in the enterprise SaaS world, Greg came to the realization that the old approach to customer success is seriously flawed. And some of our most deeply held beliefs about what makes customers renew are flat-out wrong.
We were lucky enough to have Greg drop by the Drift office a few weeks back. OK, fine, he didn’t just “drop by” — Julie our VP of Customer Success has admittedly been stalking him. And when she found out he’d be in Boston, she told him he couldn’t leave without coming to Drift. ?
Greg taught us about the ideas, fallacies, and insights that are shaping customer success today. And because we love to share everything we learn with the Drift community, we recorded his entire presentation so you can watch it right here, right now.
In a hurry?
I’ve pulled out seven key takeaways from the Churn Whisperer’s presentation that you can read below.
1) “If you want conventional results, follow conventional practices.”
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Throughout Greg’s career, he noticed a trend when it came to applying customer success best practices…
They never worked.
I’d struggle with my clients and my customers over different things and I’d get to a point where I had to have something new. So I’d go out in the world, I’d look for what people were saying, the smart people, get the best practices, bring it back, apply it, and it wouldn’t work. And that happened over and over again. And I’m very dense, so that took a long time to get to the point where I understood that actually there’s something fundamentally wrong with the best practices.
Greg realized that because the SaaS business model is so different from anything that’s come before it, the conventional wisdom around customer success will only get you so far.
If you want conventional results, follow conventional practices. They’ll get you those. And that’s fine, in some cases. It gets you a certain amount of basic predictability and performance, but it has a really low ceiling.
2) “Customer happiness doesn’t pay.”
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Customer happiness doesn’t pay. It’s a statement that challenges one of our most cherished, core beliefs in customer success: that happy customers are the ones who are loyal and renew.
Whoa. Let’s take a second to let that sink in.
What Greg is suggesting here is that your happiest customers aren’t necessarily your best customers from a retention perspective. Here’s a thought experiment that helps illustrate his point:
If you’re a customer success person or if you deal with customers, raise your hand if you’ve had a customer leave but on the way out, they say very nice things about the company and how happy they were with the experience. Now, raise your hand if you’ve had a customer who’s been frustrated and miserable and unhappy but keeps renewing.
What gives, right? What’s that about? When I experienced that it drove me crazy, because it challenges something that I just knew to be true, which is that satisfied happy customers renew and unhappy customers leaves. But that hasn’t been my experience. Not in SaaS B2B.
3) “There’s no statistical relationship between satisfaction and loyalty.”
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Greg backed up his notion that customer happiness doesn’t pay with real-world examples and data. And one chart in particular got everyone’s attention.
We know that more satisfied customers are more loyal, and less satisfied customers are less loyal. But here’s what the data looked like when they plotted it out: there’s literally no statistical relationship between satisfaction and loyalty.
Here’s how Greg explained this strange customer success phenomenon:
Think about your unhappy customers who keep renewing, someone we wish would cancel. Why do they keep renewing? I mean they have plenty of reasons to leave. Some of them have lists of them. What’s going on?
Think about what a customer’s signaling when they call to complain. They’re engaged! That word, actually, is kind of interesting. It’s like being married versus dating: suddenly the flaws matter a lot more. If I’m dating I can just go away and I can be happy about it. I can even say it was a great experience. But I wasn’t very engaged, was I? That’s the point. When a customer’s frustrated about something, it’s probably because it matters.”
4) “We need to get away from this obsession with customer delight.”
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So it turns out our happiest customers aren’t necessarily our most engaged customers. And while that doesn’t mean we should stop delighting customers, Greg does argue that we should end our our obsession with it.
Think about those customers who are happy and say, “It was a great experience, it just wasn’t for us.” Did they ever really get into it? They’re just not that into you. We need to get away from this obsession with customer delight. Now, am I saying we shouldn’t make our customers happy? Of course not. Absolutely we should make our customers happy and shame on us if we don’t. But it’s not going to be enough.
Ultimately, you need to remember that in B2B we’re selling to other companies. Focusing on making individual people at those companies happy isn’t a recipe for lasting success.
As Greg explained:
It isn’t enough to drive exceptionally high levels of retention year after year after year after year. And it actually makes some sense. Because if you think about it, our customer isn’t a person, it’s a company. Now I know they’re filled with people and we deal with people, but pinning our business model on the emotional experience of a person? I wouldn’t invest in that business.
5) “People don’t leave because they have a reason to leave. They leave because they no longer have a compelling reason to stay.”
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According to Greg, the most important factor when it comes to customer retention isn’t happiness — it’s whether a company is succeeding (or failing) with your product.
Help a company become more successful, and you’re giving them a reason to stay.
Or, as Greg put it:
Companies can’t technically experience delight or joy. But they are wired to experience something very exquisitely: success or failure.
An organization knows when it’s succeeding or failing. If we can produce that result, it almost doesn’t really matter all of the other things we do. Remember, people don’t leave because they have a reason to leave .They leave because they no longer have a compelling reason to stay. And that’s more important than all of the mistakes we make.
6) “Customers succeed when they change how they work.”
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One of the more controversial moments in Greg’s presentation was when he declared that a company’s products don’t create value for customers.
Here’s the thought experiment he used to explain it:
If you turn on your product for a new customer and nobody changes anything and no one does anything else but flip the switch on the product, are they going to get any value? I would love to be invested in your company if there’s a chance that you can get value with no changes — not looking at it, not doing anything else.
The reality is, in the vast majority of cases, they have to make some change. They have to pay attention to it. They have to incorporate the data in their decision process. They have to use it. They have to do something with it.
Greg’s point: Technology alone doesn’t produce the results customers are looking for. So what customer success teams really need to be focusing on are the changes required to make a product work for an organization.
I like to say technology doesn’t transform organizations, process change transforms organizations. Technology makes it possible and scalable.
So it’s important to understand that if it’s not just turning the technology on, what other behavior changes are important? What process change? What workflow change? What decision-making criteria? What are those other things that they have to do? In customer success I consider that to be the central guiding factor for everything we do: How do we get leverage against the customer’s behavior? Because customers succeed when they change how they work.
7) “Your customer doesn’t want your product.”
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This one was another one of Greg’s concepts that initially left us scratching our heads. But as soon as you hear Greg explain it, it’ll make perfect sense:
In tech we’re in love with our products, but in reality, who here wants to buy technology? What company wants to go out and source something and negotiate the deal and set it up and configure it and manage it and administer it? Nobody wants that.
So, what do customers want instead?
They want what your product promises them. They want the benefits. Someone much smarter than me said it this way: People don’t want to buy a quarter-inch drill. They want a quarter-inch hole. So we’re always talking about our drill and it’s shiny, and it’s easy to use, and it’s amazing, it’s got a chrome handle, but in reality, I don’t want a drill. I want the outcome.
We need to always remember how important that is in customer success. Should we have great technology? Of course we should and shame on us if we don’t. But it won’t be enough. We’ve got to build an offering, a complete set of services to help those companies get the results they want. It isn’t enough to say, “Here’s the technology. You’re welcome.”
Thanks for reading my recap of Greg’s presentation.
Want to watch the entire thing? You can check it out on our YouTube channel here.
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