Establish your Risk Management Framework Part 3
This is the final post in a three part series on building out a Risk Management Framework for B2B SaaS Companies. The series is broken out into three parts:
Part 1: Truly understand why your customers leave
Part 3: Drive action in mitigating risk (this post)
If you’ve taken action in Parts 1 and 2, you should have a concrete understanding of why your customers churn backed by both quantitative and qualitative data. As a result, you should have a foundational framework for codifying customer risk within your company. This should leave you with a series of risk types, reasons, and leading metrics that are associated in tracking each risk type.
The following is an example of how you can lay out your Risk Management Framework to others in your company. **Note: this is a sample and not comprehensive, but gives you an idea of how you can represent your Risk Management Framework to your CS organization and the rest of your company.
In this post, we’re going to focus on Taking Action. Flagging risk is only good if you’re taking action on that risk. We’ll break that down into 3 actionable steps below:
Analytics: How are we going to track these at-risk customers?
Playbooks: How will the field (CSMs) know the best practices for addressing this risk?
Operations: How will we hold ourselves (CS Management) accountable to these customers in need?
Let’s dive in.
Risk Analytics
“If you can’t measure it, you can’t improve it”
Arguably one of the better quotes in business by Peter Drucker applies to our Risk Management Framework. It’s great to have the Risk Types, the Risk Arcs, the leading metrics, and the descriptions for your customer risk types so your CSMs know how to qualify risk. The next phase of maturity is building the tracking to quantifiably measure the following metrics:
# of customers at-risk (In total + broken down by risk type)
ARR at-risk (In total + broken down by risk type)
% of customers at-risk
% of ARR at-risk
Avg. days customer is “in risk”
There are a number of platforms out there that have the ability to measure these metrics (CRM, CS Platform, BI/Analytics Platform). Building dashboards to measure your at-risk customers allows your team to measure the impact they’re having after flagging a customer that’s at-risk. Focus on building your analytics strategy either within your CS Ops/Analytics team, or your central data team. This is step one in driving action and operations towards mitigating risk. Again, you can’t improve what you can’t measure.
Risk Playbooks
The Customer Success Playbook is the sports analogy-based workflows, processes, interventions, etc. – called “plays” – to run with the customers when something happens. - Lincoln Murphy
The concept of playbooks stems from sports where teams run plays after noticing a behavior from their opponent. For Customer Success, this means providing your team with a “play” when they run into a customer in one of your risk types. After building your Risk Management Framework, it’s up to you and your team to build the common play each CSM should run when approached with a customer that exhibits a certain type of risk, say, Relationship. If your key champion leaves their role, your playbook might answer the following questions:
What is the intended outcome of this playbook?
What are the questions the CSM needs to ask both internally and to the customer?
What data points must a CSM collect & analyze?
What teams should the CSM inform / collaborate with on this risk?
What are the actions that CSM should take?
This list above is by no means comprehensive. Every company’s playbook will be unique based on your maturity, business need, etc. That said, the questions above are a jumping off point to build your first risk playbooks.
Note: Each risk type should have it’s own risk playbook, and playbooks are an ever evolving document. Expect to update playbooks over time as you learn and iterate based on experience with customers.
Operations
The operations surrounding risk speaks to the actions we can take to hold the company accountable to remedy customers who have veered off track in receiving value. Operations may encompass the following elements:
Meetings:
Consider scheduling an operational meeting (weekly/bi-weekly) that reviews the customers that are at-risk. If you have different segments, also consider grouping by those various segments. In the meeting itself, it should encompass CS Leadership with a clearly defined agenda that highlights the key customers at-risk, the actions being taken, the asks of any leaders or other departments, and next steps. Data should be prominent in this meeting to highlight the key metrics (see above) of customers at-risk in aggregate.
For Risk Types in which another department is a key collaborator (such as escalated support, or launch (with PS or onboarding)) consider having a breakout meeting with the senior leaders from these groups, so actions are clear in both departments for moving that customer forward and out of risk.
Readouts / Newsletters:
Evangelizing the wins of CS is a key component of the Risk Management Framework. Consider adding a section to your weekly newsletter, internal site, slack post, or your comms tool of choice that highlights the recent wins of customers who have moved out of risk, and puts the metrics front and center to the rest of the company as to how the business is doing in driving risk mitigation across the customer base. This should be shared as broadly and widely as possible. Risk Mitigation is a company-wide sport.
Office Hours:
Sometimes CSMs need more collaborative brainstorming with leadership to identify next steps with a particularly tricky customer account. Maybe the customer hasn’t responded to any communication we’ve sent (email, SMS, linkedin, carrier pigeon, smoke signals, etc). Perhaps the customer is frustrated with the sales experience. Whatever it is, establishing office hours for CSMs to drop-in and get some collaborative brainstorming done, can make a tremendous impact on those tricky customer scenarios. Make this a safe space for the CSM to be vulnerable in sharing what they’ve tried, what’s worked, what hasn’t, and leverage the time by allowing leadership to get in the mindset of coaching through questioning.
Let’s recap.
In Post 1 we talked about truly understanding why your customers break up with you.
In Post 2, we leveraged qualitative and quantitative data to build your risk management framework complete with risk value arcs.
And in this Post we described the elements needed to make that framework operational in your business.
At this point, we should have a much better grasp on customers at-risk in your company’s portfolio, you’re taking action to mitigate that risk, and you’re driving accountability & action with your CSMs.
This series was meant to establish your Risk Management Framework, how you move this framework forward is up to you. There are many ways you can embellish this framework:
How are you going to improve flagging customers at-risk even earlier in the customer lifecycle?
How are you going to improve the collaboration across teams for risk types that span multiple departments?
How are you going to improve and add to your playbooks over time?
How are you going to improve the predictive nature of flagging customers via quantitative data exclusively?
These are all considerations to think through as you take this framework and improve upon it. We’d love to hear how you make your Risk Management Framework even better. Get in touch, here, and let us know how you’ve improved your Risk Management Framework.
As always, good luck!
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