On both SaaStr University and Twitter, we had 30+ founders, CEOs and execs share their top, tough learnings from losing one of their top customers. There are some great teachable moments here, and also some deja-vu if you’ve been through it!
“I should have been onsite with them + made sure they had my cell number.” — Tyler Hogge, SVP Product, Divvy.
- Indeed this was also my #1 mistake and the #1 I see from so many startups learning to go upmarket. They don’t show up in person. You just close more, and churn less, and upsell more, when you show up. More here.
“For large enterprise customers, your stakeholder map is almost always too small” — Alex Farmer, VP CS, Cognite Data
- Another top mistake SMB folks make trying to sell enterprise. They just don’t map out all the stakeholders. It’s always much broader than you think, and whoever inbounds originally is rarely the #1 most important person in the deal. You lose enterprise deals when someone that knows the playbook outsells you by getting to all the stakeholders. And you lose renewals when you didn’t engage enough of the stakeholders.
“Transition founder led relationships carefully” — Jeremy Berman, Good Unitedio
- A good one. Enterprise customers tend to love having that relationship with a founder-CEO. You have to be careful to pair that with someone strong to manage the relationship, that has more time and that also can be trusted. As a founder, you’ll just run out of time to properly manage key customers and partners yourself. Hire that person, and make sure they are someone the top customers can really trust and count on.
“That it was much easier to do more in order to keep that customer than to get a new “top” customer. That you can’t have a majority of your revenue dependent on one customer. And if you inadvertently do, then you need to take urgent action in the interim to mitigate that risk.” — Ankit Sindhi, Founder, Spurt
- We all know this, but we forget about it, especially when the Hot New Deal and the sales team’s wants and needs consumes all of management’s resources. We all underresource customer success vs. sales.
“Many things other than product quality or support capabilities can influence the decision. Lost a bank customer we had served well for 5 years and up to .5M in ARR b/c we were too small a co and compliance dept blocked renewal (shoulda raised price I guess…)” — Jared Hansen, CEO Thrilling Foods
- A good reminder than as you go upmarket, having the slickest product, best UX, etc. isn’t enough in the enterprise. You have to run the full enterprise playbook, from security on down, to close the bigger deals.
“If it’s a surprise, then you’re doing something wrong. If not, then let it go and keep on growing.” — Margot Schmorak, CEO & Co-founder Hostfully
- This is the right way to think about it. A customer you lose that you never expected to lose is worse than one you saw coming. If you didn’t expect it, you didn’t build a strong enough relationship with the right people at the top customer. If you got a long heads-up, you know why, and what to improve next time.
“1. Never let your top customer be more than 10% of rev 2. Treat every customer like your top customer 3. Know if you did have a top customer but you lost em, you can get another top customer with effort” — Phil Castro, founder, Kamp Events
- Customer concentration is definitely a risk, but sometimes one worth taking. More on that here. But it’s stressful. Point #2 is key. Staff customer success so every customer feels and is important. You have to segment CS to achieve this. If you don’t, the smaller customers never get the attention they deserve.
“A harbinger of internal product gap ranking needing a re-rank.” — Echeyde Cubillo, Co-founder and CTO, Acme Ticketing
- A good exercise to do after you lose any top customer. Did we prioritize the roadmap right? Are we sure? Because you’ll lose another, and/or not close enough key prospect, due to that gap.
“We have a complex supply and demand problem, and it showed us that we needed 10x the supply. Very frustrating to see our revenue dip *and* have the client say “we love your product and your team, but we’re leaving. TLDR: make sure the fundamentals are correct .” — Chris Dean, CEO Treasury Prime
- It’s entirely possible to lose very happy customers when they don’t get the full benefits they’d hoped for — even if the software itself works well. Again, far better to not sweep this under the rug, and just address it head-on from Day 1, and over time.
- Get on a jet the minute you hear another vendor is being “looked at.” The next day. And especially if you hear they’ve also shown up in person.
“Build a multi-legged table not a pogo stick” — Mark Grimes
- A different way of seeing the same critical point — you have to build relationships with all the key stakeholders in any key enterprise deal. Not just the 1 or 2 folks you generally interact with.
- This point is so, so important. We view customers as … customers. Folks that take a deal about as seriously as we do. That’s wrong in the enterprise, especially. Your key champion might buy just 1 or 2 new products a year. And have their career judged on its success. Almost no vendor I know takes the success of their stakeholders as seriously as they should. Remember if nothing else how much of a risk they may have taking deploying you.
“Dig deep about their business model before sending them a proposal.” — Vinish Garg
- This sounds so basic, but again it often isn’t, especially if you are using less experienced and/or SMB trained sales reps to sell into the enterprise. A generic proposal doesn’t close in the enterprise. It has to be tailored to their needs, their pain, and the exact solution they need to a big problem. If your team is sending over generic proposals and generic presentations, slow things down and make a change here.
“Your team will take it harder than you” — Paul Canetti, Columbia Business
- This can be true. When the company takes a tough blow, you have to find a way to absorb some of it. Put some of it on your shoulder. Get the team together, revamp the product roadmap so it doesn’t happen again, hire a great VP of CS if you don’t have one. And go close another big customer.
“Record breaking results != Renewal Truly identify the decision maker. Sometimes the person you think is the decision-maker is merely a order taker” — Himanshu Jain, Vice President Product Management, CommerceIQ
- A good reminder of a point also make above, that the “order taker”, or really, the person that you most interact with, often isn’t the decision maker. It’s also why you need an outbound strategy in the enterprise, not just inbound. So you can target the real decision makers.
“We didn’t end up losing the customers, but both of them had the same complaint: you make it too difficult to buy more licenses from you. This led us to go from annual paid up-front licenses to self-service hourly usage based licensing.” – Amitabh Sinha, CEO, Workspot
- The easier you make it to buy, the more folks will buy from you.
“I’m always surprised how much customers will stay with you and NOT leave if they perceive you are doing everything possible to fix the problem and work with them. I’ve seen this over and over as both an operator and within the costanoavc portfolio” — Jim Wilson, Operating Partner, Costanoa VC
- Such a key insight. Show up when there are problems. Be honest in QBRs. Promise to fix it — and deliver. If you have a critical feature gap, at least solve it in the next few quarters. Come up with an interim, partial solutions. Customers don’t want to leave after investing so much time in you, no matter how much they gripe. Don’t hide from problems. Embrace them, own them, and commit to doing more.
“Switching vendors sucks” — Michael Martocci, CEO Swag Up
- A variant of the prior post and a few others. Remember customers don’t want to switch, 95 times out of 100. To you it’s just a lost deal. To them, it’s a huge, huge pain to switch. Try harder. Do more. You may get them to defer a switch for now, and then often never do it all, if they see improvement coming. Even if it’s not there yet today.
“If you cannot get them to production quickly , prove business value, and maintain multi-threaded champions, any customer can be at-risk.” — Daniel Rose, Customer Success, Imply.io
- So many good learnings here, especially the first. The faster you get a customer into production, the more likely you retain them — period. Drive-up actvation rates and track days-to-deployment, and drive it down.
“Always give your top customers IRL love” — Srivats Sivanandan
- We hit this above, but it’s another good reminder. You gotta visit your top customers. Ideally, at least twice a year.
“Never over promise.” — Blythe Morrow, Microsoft Data Platform
- Few things are worse than churn-and-burn deals. They consume so much time, and when they don’t renew, they were worse than never having the revenue and customer at all. A bit more here.
“The executive sponsor probably wasn’t close enough to the account team and/or exec team and business value has to be proven and communicated constantly” — Lauren Holiday, Senior AE, Pendo
- We talked a bit about this above, but the point about constantly communicating the value proposition to all the stakeholders is so important. There will be turnover at your customer, and promotions, and lots of change. You need to socialized your benefits and value regularly to everyone in the enterprise related to the project.
“Front-load all difficult conversations.” — Siva Narayanan, Co-founder/CTO, FyleHQ
- This is a good one and one I’m not sure I understood myself as a SaaS CEO. Not really, not until I started buying more SaaS software myself. Too many vendors hide from bad news, from feature issues, from downtime, etc. Goodwill and high NPS is lost forever if you do. Let your customers know where and when you can’t fully achieve their needs upfront, and find solutions together to work around them. At least they will know. Surprises are no fun at all. Getting a customer to buy a product that doesn’t really do what they think it does feels like a win that month, but it often ends up a painful loss.
“That closing the deal does nothing more than kickstart the relationship and it takes double the effort to drive value and meaningful adoption.” — Vivek Menon, Product @ Cisco DNA Spaces | VP of Marketing @ July Systems
- Another great way to look at some of the points above. Sales takes up so much energy, so much oxygen at many startups. But it’s really just the start of a 3, 5, 10, even 20-year journey together. Put even more time into customer success, customer marketing, and customer happiness. A bit more here.
“Have better Onboarding.” — Amrit Rupasinghe, Wallstrank
- We touched on this above, but it really can be the #1 source of losing your hard-earned customers. Improve your onboarding this year. It’s always worth it.
“Never take the nice/top customers for granted even though they aren’t the loudest!” — Naqqash Jaleel
- A really good point. The customers that complain — 8 to 9 times out of 10, you can still save them. They are complaining because they want to stay, or at least feel like they have to stay. Worse are customers than have issues that never complain. They quietly move on. Use QBRs and more structured, proactive outreach to find the quietly unhappy.
“Exit them well, stay in touch, continue building – they come back.” — Arno Sosna
- So true, and such a huge mistake I made as a SaaS CEO. Make it easy for them to leave, and they really might come back. Often, in fact. The other vendor them move to may not be as great as it seemed. More here.
“Culture fit is a major risk for the client, no matter how much you support and bend over for them, it’s a precarious position all along. Don’t over extend if it isn’t a good culture fit. If it is a good fit, stay super connected every quarter so you can ensure they remain happy.” — Paul Tyrell, Founder, Field Insight
- Indeed, some customers just get along better with some vendors. Be aware of it.
“If a customer does not complain it is not a good thing.” – Yair Weinberger, Co-Founder of Alooma (acquired by Google)
- Yup, see above. Complaints hurt, but they’re a sign of an engaged customer. Crickets and non-responses are often worse.
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Jason Lemkin, Khareem Sudlow
