A SaaS technology provider in the learning and development technology space.  This was an established brand with a strong sense of identity, having carved out a niche as a bit of a ‘rebel’ within the sector.  The initial growth of the company was high, mainly due to the fresh thinking that the product delivered.   At the point of joining the organisation, there was well established new business function, a strong client base with a mix of smaller and enterprise level organisations and a turnover of roughly £8M per annum.

Despite the strong brand identity and presence within the marketplace, the organisation’s growth had stagnated.  Leads were flowing in and deals were being closed.  However, customer churn was extremely high at roughly 30% year on year.  This meant that any new business was only filling the void left by exiting customers.  So the real challenge was to stem the outflow of customers from the business and thereby allow the success of the new business team to be recognised for the value it was actually delivering.

Understand the root cause

We conducted an in-depth investigation into the reasons for the abnormally high level of churn.  This included speaking with the Customer Success representatives aligned to each account as well as to the customers themselves.  In some cases, we dissected previously churned accounts.  We also engaged heavily with the product team after realising that a substantial part of the problem was a perception around roadmap delivery.  Finally, without the existence of an account management function, it was difficult to understand any commercial conversations that had taken place.  In many ways, the absence of any information here was the biggest indicator of failure.  No commercial conversations, no accountability over contracts and little visibility of the future risk made it clear where we needed to focus.

Create an account management function

With so many of the issues stemming from the lack of a commercial conversation or ownership of an account, we needed to put a team in place that could handle these issues.  Key to the success of this team was how well they worked with other key business functions such as CS (Customer Service) and the product team.  Some examples of their day-to-day responsibilities included:

Establishing immediate risk

One of the first actions was to understand which accounts were at risk and why.  This was a collaborative effort between the newly formed Account management function and the CS team.  The result of these conversations was each and every account mapped to a RAG status based on several criteria.  These included CSAT scores, frequency of communication, number of key stakeholders, level of seniority we are connected to, reliance on roadmap features, number of outstanding tickets, special clauses in contracts, failure to meet SLAs, etc. 

Action change

Now we knew where to focus the account Management team could start to deal directly with their accounts.   Priority was placed on those in the ‘red’ status and a variety of techniques were used by the team to nurture better relationships with these accounts.

In many cases, the simple act of having someone dedicated to them to talk about commercial issues was all that was required.  This had the added benefit of improving the relationship of the CS team member also aligned to the account.  they could now act as a consultant or a trusted advisor leaving the sometimes prickly commercial conversations to the accounts team.

In extreme examples where the conversations had broken down the account managers pulled in senior resources to repair the relationship.  They also leveraged other sales and marketing efforts to reinforce the idea that a new leaf had been turned.  For example, webinars where customers could be showcased, panel discussions, invitations to the customer dev community, early access or visibility to roadmap features, etc.

There was also a simultaneous effort to make our lives easier.  Standardising contracts, record keeping and general use of Salesforce would increase the ease of delivery in years to come.  We needed to create new processes and codes of practice to improve in these areas.

We were also able to establish several ‘green’ accounts where we could grow revenue immediately.  These accounts proved to be valuable in both revenue and advocacy for the product.  They were also low-risk proving grounds for our new approach to account management.

These results were delivered within a 1 year period

£1.8M saved -100% retention of at-risk customers

We managed to retain all customers who had been flagged as a risk for churn and who had not yet served notice.  The impact of that was a saving of roughly £1.8M and for the first time in a number of years, allowing the business to show growth rather than stagnation.

£1.2M growth from existing accounts

82% of accounts saw growth.  The majority grew through price raises we made in line with inflation.  However, there were a number of the aforementioned ‘green’ accounts that yielded significant increases with the largest customer increasing their ACV by almost 55%

Multi-year contracts

Multi-year contracts are the norm within the learning technology sector.  However, poor performance led to a situation where contracts were renewed for only a year at a time. Effectively limping on to the next year to avoid business disruption by implementing a whole new learning system.  The team managed to build bridges to the point where 37% of customers renewing increased their contract term to at least two years bringing a guarantee of run rate revenue and providing more time to deliver value.