You want your customers to get value from their purchases but are you delivering an experience that’s designed for success?
I’ll tell you this much – nothing kills momentum like chaotic internal processes that prevent customers from gaining traction with your company. Insufficient or confusing interactions lead to poor customer experiences and, you guessed it, churn.
Let’s take a look at the three major problems companies face when they lack clear and consistent internal processes:
- Poor Onboarding & Implementation
- Lost Customer Value
And we’ll give you actionable solutions to address them so you can improve retention, streamline operations, and ultimately boost long-term customer value.
Poor Onboarding & Implementation
I had a client who hired me to fix their renewal problem. They wanted me to evaluate their email sequences, their renewal decks, etc. After I finished auditing their business one thing was clear.
They didn’t have a renewal problem.
They had an onboarding problem.
Internal process issues can cause problems in lots of places, but they almost always show up when you’re onboarding new customers. One of the most common indicators is a poor handoff from sales to customer success.
Here’s why this is a problem:
Your first interactions with a new customer set the stage for the relationship. If you deliver a poor onboarding experience you’re going to deflate your customer’s enthusiasm for their purchase and erode their trust.
If customers don’t gain traction during onboarding and implementation, they may never take the time to learn how to use your products and services. They won’t experience the value you provide. And when renewal comes around, if your users aren’t using, they’re likely to churn.
That’s especially deadly for B2B recurring revenue companies like yours.
How to fix it:
- Clearly articulate the steps required to successfully adopt and implement your products and services. Look at requirements with two lenses:
- What does your team need to deliver so the customer has a clear path to success?
- What does the customer need to do in order to be successful with their purchase?
In B2B implementations there’s generally work required from both the company and the customer.
- Document those steps to create a customer journey map so everyone knows their respective roles and responsibilities. Use that map to manage expectations early and often!
- Consider the cross-functional experience for retention and growth. Be ruthless in finding places where internal chaos is degrading the customer’s experience and potentially leading to churn.
Lost Customer Value
Anything that erodes the customer experience is likely to decrease the overall, cumulative amount of money a customer spends with you over time. Maybe they’ll churn sooner. Or maybe they’ll skip an opportunity to add a feature or invite another department to buy your product.
Customer Lifetime Value (CLTV) is the total revenue a customer is expected to generate over their relationship with your company.
Any time you’re dealing with internal process problems, you risk eating into the lifetime value of your customer.
Here’s why this is a problem:
Even if processes don’t cause a customer to churn, per se, a lower CLTV basically leaves money on the table.
Your team is still spending time serving the customer, in fact, if you’re suffering from the internal problems outlined in this email your team may be having to work harder with your customer for less reward.
And none of this is going to help your brand reputation. The last thing you want is customers (or ex-customers) putting negative word-of-mouth into the marketplace.
Any of the above are going to make it even harder to scale your business and hit your revenue targets.
The effort you make to improve internal alignment can lead to better retention and growth, which will ultimately increase your CLTV.
Here’s How To Fix It:
- Examine your customer’s journey to discovery where you’re leaking long-term customer value.
- Track CLTV and evaluate trend lines in aggregate and across segments of your customer base.
- Listen to your customers: Set up feedback loops or a customer advisory board so everyone at the company has an opportunity to listen directly to customers.
Simple Customer Lifetime Value (CLTV) Calculator
Customer Lifetime Value (CLTV) calculates the total revenue a customer brings to your company over their lifespan, considering average purchase values and frequency.
Instructions:
- Enter the average purchase value per period (e.g., monthly, yearly).
- Enter the average number of purchases per period.
- Enter the total number of periods (months, years) the customer stays with you over their lifespan.
- Click on Calculate to see the Simple CLTV.
Simple CLTV:
$0
Customer Lifetime Value (CLTV) Calculator with Gross Margin
Calculate the Customer Lifetime Value (CLTV) considering gross margin and customer churn rate.
Instructions:
- Enter the average revenue per customer per period.
- Enter the gross margin percentage (as a decimal).
- Enter the average customer lifespan (in months or years).
- Click on Calculate to see the CLTV.
CLTV:
$0
Customer lifetime value is one way to evaluate customers for the long-term, but there’s an additional element many companies miss – and it costs them!
Mistake #4: Underestimating the Financial Impact of Long-Term Loyalty will help you avoid this common pitfall and maximize for your most lucrative, loyal customers. Do this work yourself
OR
Partner with Alignmint! Optimizing for long-term loyalty is what we do best, and it begins with an Audit. Check out the Churn Slayer Audit to learn more.