Everyone knows that it is cheaper to retain a customer than acquire a new one.


VCs, entrepreneurs, and executives have hammered home this point in blog posts, articles, books, speeches, you name it. And nearly every SaaS company now has a customer success team that is paid out based on successful retention.


Yet for all the supposed commitment to retention, most recurring revenue businesses & subscription businesses have a surface level understanding of their customers. These companies have little idea what makes their customers tick or how their product creates value.


What’s worse, they want to develop a deeper understanding. But they lack the tools needed to find out more. That leaves these teams reacting to customer problems when they flare up, instead of proactively solving issues. When customer success becomes firefighters, churn will follow the burn. 


What these companies fail to understand is that they are sitting on a goldmine of data. This treasure trove can provide them with the insights they need to better manage each customer account. And with this data, they can proactively manage each account with personalized attention. That allows them to solve problems quickly and uncover more value in their own service as well.


If you want to develop and execute a proactive customer retention strategy, you’ll need to go back to the basics. There are three components of a proactive customer retention strategy – nailing the business case, identifying the right people, and optimizing the product experience for retention.


statusquota proactive customer success pyramid

Lucky for you, there’s nothing magical about putting these pieces together into a winning retention strategy. We’ll walk through each step of the process so you can implement this for yourself.


Identify your customer’s ROI model


The biggest reason customer success failure comes down to a fundamental lack of understanding of one thing: “What is customer success?” The mistake too manycompanies make is thinking of customer success from their own perspective rather than understanding what that means to their clients.


A pervasive example of this is reaching out to customers when you notice that product usage has dipped. You’ve probably received one of these emails today and deleted it immediately without really registering it (assuming it wasn’t sent to spam automatically). These notes look the same and reek of desperation, with lines like:


  • “I noticed you haven’t been in the product for a while so wanted to check in.”
  • “What’s the matter – is there something going on?”
  • “Let me know if you’re having issues with the product and we can find time to talk.”


From the perspective of a customer success manager, it is totally natural to see declining usage stats and react with concern. But using your product isn’t the number one priority for any of your customers. Heck, it probably doesn’t break into their top 10. So if you want to get them to respond to your outreach, you’ll need a different hook.


That’s why a clear ROI model for each of your customers is so vital. A simple ROI model has just two components: 1) activities & 2) desired results. By linking product activity to desired results, you can continuously re-sell customers on the business value of using your solution. But while most CS teams have a good visibility into the activities, they struggle to link that to a customer’s desired results.

Click to Download StatusQuota Churn Metric Visual Guide

To do an ROI model well, you have to learn about your client’s goals and align them with your solution. This process begins during the sale, continues throughout onboarding, and is sustained through the ongoing customer success relationship. Identifying goals is straightforward – one powerful & popular framework for doing so is using SMART goals. SMART goals satisfy the conditions of being:


  • Specific: make sure the goal set is concrete and easily understood
  • Measurable: choose a goal that can be conclusively proven to have been achieved
  • Achievable: if the goal is completely impossible, it won’t feel real
  • Relevant: the person setting the goal should have a personal and professional stake in achieving the goal
  • Time-bound: make sure there is some urgency in achieving the goal. If there’s no deadline, you can’t fail or succeed.


Setting SMART goals is only half the battle – the next step is actually linking stated goals to product activity. The difficulty / ease of doing will vary based on what your product does. One exercise you can do to make this connection is list out product features and all the quantifiable benefits for each feature. Finally, map the benefits back to the stated customer goals.


You can also survey existing customers to understand how they get value from your product and translate that into a more generic ROI model. HubSpot does a great job of this – if you check out their customer ROI page, they clearly link product usage to more visitors, leads, and customers.


statusquota hubspot roi model

HubSpot’s marketing product then reinforces the connection between activity & results. The product homepage starts out with the trended performance of these three desired outcomes.


statusquota hubspot marketing dashboard

By focusing on what the customer wants most, HubSpot makes it easier to motivate the desired behaviors throughout its platform.


Keeping track of the right people


The next piece of proactive customer success seems obvious, but is often poorly executed. It is impossible to understate the importance of monitoring key individuals at client accounts. But to take a proactive lens, it is important to shift how you define the people to focus on.


Customer success managers often focus solely on the people who will directly impact the next renewal. That list includes the champion who pushed for your solution, the economic buyer who approved budget for the product, as well as other members of the “buying committee”.


Actual product users are ignored. But that’s the wrong approach to take. Why? Power users are a critical group of people who form the “shadow” buying committee, and have significant sway in product adoption & future renewals.


Power users are vital for your product because these are the people who see the light, who live & breathe your solution. If a single individual is driving >50% of all product activity at an account, you can bet that they have a deep understanding of what the product is good for and how it creates value within their organization (so you should ask them!). When budget is being allocated for the next year, they’re the folks who will pound the table for your solution.


Identifying power users should be easy with basic product usage stats. But the most important thing to note when monitoring power users is not just WHO they are, but rather WHEN they leave.


If a power user stops usingyour product, the alarm bells should be ringing. These people are the internal advocates for your solution, and their usage is a strong signal that the customer is bought into what you’re doing.


If the customer is divesting their most engaged people from your product, the dollars will follow them out the door.


So what do you do when a power user’s activity drops off? You’ll want to reach out to them directly to check-in on the situation (remember to focus on value, not just their activity dip). Additionally, you’ll want to make sure there are other high activity users still engaged with your service. If not, you’ll want to prioritize creating some new ones – that can be as simple as talking with your main point of contact to ensure there is a new “solution owner” within their organization.


However you do it, recognize that power users are vital to your success, even if they don’t have a budget they manage.


Optimize the product experience


Last but not least, you’ll want to spend time thinking about building a better product experience. Two key elements here to consider.


First is identifying what your stickiest features are. If you see that usage of certain product features is strongly correlated to account renewal, you should figure out why and guide more customers to using those features themselves.


But rarely is a single feature highly predictive of overall retention likelihood. Instead, it is customer behaviors, multiple actions taken in within your product, that will yield the most insight into who is at risk of churn. Figuring out what set of customer actions in concert predict retention is a challenging problem, and typically involves a lot of data science & machine learning modeling to sift through all of your data. But these are the most important signals you can find when it comes to determining which customers will stay or go, so it is worthwhile to do it right.


One famous example of this is Facebook, who discovered that new users who added 7 friends within 10 days were going to stick around and become highly engaged. Figuring out your product’s own “a-ha moment” is key for driving continuous, predictable growth & engagement. Once identified, you can get the marketing, sales, customer success, and product teams aligned around nudging users to these important milestones in order to tee up long term engagement.




Proactive customer retention is not impossible. It just requires a lot of work.


By building your strategy around a clear customer ROI value case, monitoring the power users who will be internal advocates, and then identifying the most important user behaviors, you can take control of your customer’s success journey.


Reactive customer success doesn’t work. If you’re waiting for customers to tell you something is wrong, you will lose money to preventable churn and hurt your growth. Proactive strategies are an investment in sustainable success.

statusquota churn metric narrow cta


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About the Author

Remen OkoruwaCEO
Remen is a co-founder and subscription strategist at StatusQuota. He is passionate about helping SaaS businesses reduce customer churn, and loves chunky guacamole.