Founders and VCs share 7 secrets to beating B2B churn

Lerer Hippeau
Aug 9 · 5 min read

In this series, “Founder’s Field Guide,” we tackle topics that are top-of-mind for entrepreneurs and offer candid, tactical advice from our founders (who have been through it) and our team (who advised along the way). Previous posts discussed setting and scaling company culture, lessons for raising a seed round and how to deploy early-stage capital.

When it comes to making customers happy, selling to consumers and selling to businesses isn’t so different. A focus on the customer journey, offering hands-on support, and providing a best-in-class experience are all key factors in winning (and keeping) their loyalty. Retaining loyal customers is a lot easier than acquiring new ones.

For B2B companies, sales cycles are longer and customers are typically making a larger financial commitment. Because of the work that goes into signing on new partners, especially for early-stage companies, leaders at any B2B organization will obsess over one key indicator of how well they’re doing: churn.

How can entrepreneurs take proactive steps to reduce customer churn? To help business leaders develop their own churn strategies, we asked our founders to share their breakthroughs to beating customer churn.

Here’s what they said.

From our founders

Liz Wessel is the cofounder of WayUp, a career discovery platform that connects students and recent grads with job opportunities. Some WayUp customers include Unilever, L’Oreal, and KPMG.

Her advice: Use data to launch products aimed at enhancing stickiness.

At WayUp, the majority of clients who had down-sold or churned were doing so because they didn’t get enough hires from WayUp. When we looked at the data, it turned out that it was because many of the candidates we sent them were never even being looked at in their applicant tracking systems. Meaning, our candidates weren’t even being given a fair chance.

We ended up launching an offering that is much deeper in our clients’ funnels (much more sticky, as well) called Source, Screen & Coach, where we screen every single candidate for a client. It has made us much more sticky, has driven many more hires, and we’re seeing incredible renewal and upsell numbers as a result.

Andrea Breanna is the founder of Rebelmouse, a social-first content management system solution supporting high-traffic publishers. Some Rebelmouse customers include Axios, The Dodo, and United Airlines.

Her advice: Integrate technical people into client-facing conversations.

The most important change RebelMouse implemented to reduce churn was putting technical people in client-facing account management positions. We had a much higher churn rate when the entire process and workflow was based on having clients speak with “relationship” people instead of “technical” people. Our Chief Creative Officer has a diverse team of account managers located across the globe that are both technical and charming. Their dual role has made a night-and-day difference in how our clients feel about their relationship with us.

Simon Lorenz is the cofounder of Klara, a messaging platform connecting doctors and patients. Some typical Klara users include OBGYNs, chiropractors, and dentists.

His advice: Understand the customer journey from all angles.

When we started measuring our leading indicator for customer success, we actually saw the biggest improvements, as we were still able to influence the customer journey. At the end of the day, once the customer has decided to not use your product anymore, it is very hard — if not impossible, 90% of the time — to win them back. The earlier you realize that the customer is not doing well, the more you can do to change it.

A major takeaway for us was also to have everyone in the company contributing. Customer Success / Product needs to inform the rest of the organization why customers are not doing well. Sales and Marketing should then determine whom they reach out to, if they need to disqualify customers early in the sales process, if you should only target certain customers with a specific technical setup or size, etc.

John Saroff is the CEO of Chartbeat, a real-time traffic and analytics provider for publishers. Some customers include The New York Times, CNN, and The Atlantic.

His advice: Find opportunities to offer proactive support.

The biggest challenge with churn is that it’s a lagging indicator. It tells you something is wrong, but it doesn’t tell you what is wrong. So, we’ve found that working hard to develop leading indicators is crucial. We cohort our client base all sorts of different ways (size, geography, business type) and look for churn differences within the cohorts. We work hard to link churn to usage data to see if there are any signals inside a client’s habits where we need to jump in and help.

Milena Berry is the cofounder of PowerToFly, a recruiting platform connecting large companies and startups with women on the job hunt. Some PowerToFly users include Fidelity, WeWork, and Cloudflare.

Her advice: Be laser-focused on customer experience.

It’s been transformational for us to embrace the services component of SaaS and subscription businesses. Many people think SaaS is supposed to solve everything in a platform, and while that works well for some businesses, others need services on top of that to be successful. If you’re struggling because your customers don’t fully understand how to get what they need, adding a services component can be really helpful.

From us

Graham Brown, Partner at LH, works closely with our early-stage B2B companies across sectors including digital health and marketplaces as they land important early customers.

His advice: Perfect your onboarding process.

Focus on onboarding and early impressions, because the first 30 days are a critical period. A strong first impression can form the basis for future confirmation bias, so it’s crucial to surprise and delight customers throughout the onboarding process and really get to know them early. With a positive opinion, you’ll likely be given the benefit of the doubt with future hiccups and, on the flipside, it is very difficult to regain trust after a poor onboarding experience.

Joe Medved, Special Partner at LH, advises both early and later-stage B2B companies across our portfolio looking to secure and maintain clients with significant scale.

His advice: Empower your internal champion.

Arm the person who owns the product internally with the ROI story and give them the tools to communicate that payoff to key stakeholders at customers’ companies. Work to build out materials and tools to enhance the feedback loop in order to convey the value the product or service delivers. That way, you’re in a better position to renew or grow your contract with the client. Customer support should be considered as an extension of your sales team. They should be equipped with the proper incentives to maintain and build out the relationship. It’s a lot easier to keep your customers than acquire new ones.

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Lerer Hippeau

Lerer Hippeau is an early-stage venture capital fund based in New York City. As founders and operators ourselves, we see returns in relationships.

Lerer Hippeau

Written by

Lerer Hippeau is an early-stage venture capital fund based in New York City. As founders and operators ourselves, we see returns in relationships.

Lerer Hippeau

Lerer Hippeau is an early-stage venture capital fund based in New York City. As founders and operators ourselves, we see returns in relationships.

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