Retention Red Flags: How To Tell A Customer Won’t Renew

While customer acquisition is often a sprint, customer retention is a marathon with no clear finish line.

If you’re lucky, it’s a long and satisfying journey. But customers can churn seemingly out of nowhere and for no good reason. Sure, people are unpredictable. But your renewal rate doesn’t have to be.

Read on to learn about some glaring warning signs that your customer relationship is in jeopardy. 

4 Signs Your Renewal Is In Trouble

Customer retention relies on many different factors all going right. While you may think it’s up to the Account Manager (AM) to handle renewals, Customer Service Managers (CSMs) play a massive part in whether or not a customer will churn. 

ZoomInfo CSM Sam Basile gave us some insight into some of the red flags that sales professionals and customer service managers should be on the lookout for:

1. One point of contact = one point of failure

Customers churn for a host of reasons, but if you can’t get your main point of contact at an account to care, you’ll be hard-pressed to get the rest of the company or even the department to buy in either.

In other words, if you only have one point of contact, you have one point of failure. Without a main contact at the account who cares about and is responsible for the success of those using your product, churn is almost inevitable. 

“What we try to do is inform [the customer] of all the value they’re missing out on. We try to get all the stakeholders involved… the people who care that money is being spent is who we then try to go after,” explains Basile.

Think about it this way: Does the possibility of maintaining your largest account depend solely on your relationship with one person? And is that one person someone who doesn’t even use the product/service? 

You see the problem here. 

The Solution: 

If you’ve identified this red flag, conveying value in a new and different way to multiple stakeholders at the account should be your game plan. This is also known as multi-threading.

Multi-threaded sales are deals where your reps have connected with multiple decision-makers on the purchasing side. They have conveyed value to multiple people who are on board with how great your product or solution is. 

A multi-threaded sales approach ensures that if one point of contact isn’t completely sold on your product or solution, there are others at the company who can attest to the value it provides. 

2. An account’s history is a mystery 

In sales, first impressions are everything. 

Retention starts at the very beginning of the customer journey with the initial sales rep. Understanding the entire account history can help you pinpoint where miscommunications occur. 

“Oftentimes, new business sales teams do not set realistic expectations when they are closing the deal, and so then it takes the CSM a little bit of grunt work to realign those expectations,” says Basile. 

For instance, an Account Executive (AE) promises a discount on premium features or services when the account only pays standard pricing. While this may sweeten the deal in the beginning, it might not actually be feasible, and can lead to the CSM having to re-establish expectations down the line. 

The Solution: 

Professionals on the account management side should have a collaborative strategy (as well as a CRM platform) that allows them to look back at the entire customer journey in order to gain visibility into the holistic account history. 

You can even go beyond account history and look for key events that could underscore the health of the customer relationship such as Net Promoter Score (the percentage of customers rating their likelihood to recommend a company, product, or service to a friend or colleague) or cross-selling opportunities

3. An account doesn’t know how to use your product

When your customer isn’t using the product they paid for accurately, churn is on the horizon. 

For example, let’s say an account has 300 licenses, but only 100 are being used. They’re a growing company, so their rationale is that they want to save seats for new team members. Yet time goes by and those 200 seats are left unfilled. This means they are paying for something that they aren’t using. 

This results in a lower adoption rate, lost opportunity for upselling, and potential for non-renewal. 

The Solution: 

Hoarding credits or many unused licenses are usually a sign that their renewal contract won’t be as large, or that they won’t renew at all due to lack of efficient use. 

Re-training and clear expectations set during the onboarding period can help mitigate these scenarios and ensure that users are getting the full value out of the product. 

4. Customer Complaints are turning into patterns 

In today’s buyer market, if you’re not innovating based on customer feedback, your clients will seek a solution elsewhere. Buyers have the power, and they’re not afraid to use it. 

The Solution: 

As a CSM or AM, recognizing the types of complaint patterns and who they are coming from is key to innovation and thought leadership. For example, maybe you have a few enterprise customers asking for a feature that you don’t currently offer. And while it would be a huge task to bring that complaint to the product and development teams, those accounts are bringing in over $25 million in revenue. In essence, it’s a $25 million complaint that might be worth looking into. 

“I need to quantify the concern and get as much information as I can, or else the product team will not prioritize it in the right way,” says Basile. 

Minimizing churn, maximizing success

As Sam Basile explained, the modern CSM is now becoming a product generalist, but more of a relationship expert. And understanding what that relationship looks like holistically and at each stage of the customer journey is the key to getting those renewals. 

Because people want to buy from people they like, but people want to renew from people who genuinely understand them and care about their success.