I often get asked who should own churn analysis for SaaS companies. It's a tough question because the discipline of customer success is still being defined, and many companies are just establishing customer success departments.
In the 'old days' of license-based software, we argued over who owned win/loss analysis. And we still argue over that! Sales is often put in charge of win/loss, but isn't that a bit like letting the fox monitor the henhouse? I've always argued that Product Marketing or Product Management should own win/loss analysis. I like Product Marketing to own it, because they ideally have a birds eye view of the entire buying process, and are often responsible for sales enablement.
But what about Churn? In the SaaS world, we have created a new function called Customer Success, which is usually responsible for onboarding, measuring and monitoring customer health, and intervening proactively if customers are having difficulty. If those bases are covered, Customer Success gets bonus points for being more proactive; they can look to drive adoption, identify upsell and cross-sell opportunities, and so on.
Should Customer Success be in charge of Churn Analysis?
Certainly, CS has to measure customer success and do first-level diagnosis on why customers renew, cancel, adopt, or fail to thrive. And we recommend they also do exit interviews when customers leave. Those are important inputs into full Churn Analysis, but they're probably not the whole picture.
There's a worse problem, however, if we give it to Customer Success: If customers churn, it's likely an issue related to the product or other systems outside of the control of the CS team. If CS identifies the product as the problem, it can look like they are casting blame away from themselves and onto the product.
To take a systematic look at churn, retention, product adoption, and even upsell, you need a separate effort that is removed from Customer Success. The function should be similar to what Product Marketing does for sales: they enable the function, but they don't perform it. I'd like to see an independent person or group own the actual assessment of Churn and Retention, for the same reason that an independent group needs to analyze Win/Loss in sales.
I would put Product Marketing in charge of Churn Analysis
Product Marketing in the SaaS world needs to evolve to look at the whole customer lifecycle, from awareness through customer acquisition through onboarding, through the long-term customer success cycle, and maybe even 'offboarding', if that's a goal.
All of the skills that we honed in product marketing apply in shaping and driving customer success:
- buyer and user personas
- use cases, goals, buyer and customer journey maps
- ROI and measuring success
- qualitative profiling and interviewing
- systematic thinking about process
What I see in practice is all over the map. Most times Customer Success is owning churn analysis, but as I point out above, Customer Success isn't empowered to fix things outside their own group.
This area is still evolving. I'd be interested to hear your experience and your view.
By the way, I will be talking about this issue and more at Gainsight's Pulse 2017 event. You can get a discount code here: http://info.eigenworks.com/pulse2017