10 Key Points For A Strong Retention Board Presentation Image

10 Key Points For A Strong Retention Board Presentation

I often get asked by Customer Success executives how to discuss retention metrics with their Board of Directors. The focus on retention metrics has been further accelerated in this climate as companies double down on Customer Success. Our Sales peers at most companies do a great job of reporting numbers, targets, and learnings from won and lost deals. The CS community can learn from our Sales peers and bring a unique CS lens to the board’s retention discussion.

Our VP of Customer Success (Kellie Capote) and I presented to the board this quarter, and I think our talk track is valuable as other CS leaders prepare for future board conversations. 

Metrics and names censored for confidentiality.

1. How is Gross Retention Rate (GRR) Trending?

At the start of the presentation, opening with quarterly or annual GRR trends allows the audience to see the big picture before a deeper dive. GRR trend analysis sets up the conversation to investigate root causes for churn and prevention tactics.

2. What Can You Learn From Customers Who Stay?

We often talk about customers that churn. It’s equal or more important to talk about customers who renew multiple times and what trends you can identify across their relationship with your company. In this case, we took three clients as examples and called out how their company-wide CS focus, usage of multiple Gainsight products, and strong executive use-cases (dashboards, mobile/slack usage, etc.) all drove strong retention.

3 and 4. Why Do Customers Leave?

Next, we did a more in-depth analysis of high-level causes for churn:

  1. Segment into full churn vs. Downsells and Contraction; this year, we added the impact of COVID-19 as an added insight.
  2. Further segment into controllable and uncontrollable churns
    1. Controllable would include reasons that can be solved by some function within your company (e.g., product shortcomings, product adoption, services experience)
    2. Uncontrollable would include macro reasons that are outside of your company’s influence (e.g., mergers and acquisitions, customer financial troubles)
  3. Take controllable and uncontrollable churns and identify specific, actionable root cause categories 

5. Churned Customer Examples

For each of the top root causes, show some examples of customers and learnings from the churn. These examples will help the audience empathize and associate with the reasons.

6. What Are The Early Warning Signals (Health Scores) To Identify Risks Proactively?

We spoke about each of our health score measures and how we define the thresholds.

7: How Do These Early Warning Signals Correlate to Retention?

For each of the health scores, show the correlation (or even better causation) to retention. Your health score needs to be strong enough to predict your retention rates. Hence, every measure in your health score needs to justify its place on the overall rating. We weigh each measure evenly because any of them can indicate risk. 

8. What Features Are Sticky When It Comes To Providing Value and Retaining Customers?

Your health scores should also include certain features or integrations that are highly differentiated and drive your customers’ stickiness. This insight drives additional engineering investments into those features to improve adoption and increase stickiness.

9. How Are These Early Warning Signals Trending Across The Business?

We give the CS team planned targets for each health score measure every quarter and track progress versus that plan. This trend report provides management with team visibility into weekly changes.

10. How Healthy Are Your Top Customers?

If a substantial enterprise renewal is a significant percentage of your retention base, you should have a section on those customers’ health. Share high touch playbooks that you are running to show commitment to high retention in this segment.

In times like this, the board will be extremely focused on the existing client base as the basis for a solid foundation as the economy continues to recover.   As Customer Success leaders bask in this larger spotlight, I hope this framework helps guide productive conversations to show the best way to analyze retention. If your CS technology does not offer this level of insight, please reach out for a personalized tour to see how Gainsight can give you the right view of your data for a Board audience.