With most macroeconomic events, the tech industry is impacted in some capacity. The current climate in the U.S. following the Silicon Valley Bank, First Republic, and Credit Suisse bank runs, continued inflation, interest rate hikes, stock market volatility, and lingering COVID-19 pandemic era impacts, like supply chain disruption and over-hiring, have resulted in a significant pivot for tech companies. Spending is minimized and teams are being reduced. This is particularly challenging for tech companies who sell software to tech companies in a business-to-business (B2B) commercial motion. It’s a vicious  cycle that means increased requests to cancel or reduce software subscriptions of which its recurring revenue is the very lifeblood of successful software-as-a-service (SaaS) business models. These aggregated circumstances are putting extra pressure on customer-facing SaaS teams and their leadership to protect the revenue that they have by retaining customers. 

Although there are varying charters for Customer Success (CS) teams in B2B SaaS, CSMs are unanimously responsible for driving software adoption, retention, and loyalty with their customers. CS leaders are therefore responsible for nurturing and enabling their teams in the service of customer retention. However, when there are widespread economic challenges, and customers are requesting to cancel, reduce their licensing footprint, modify their payment terms, or are increasing demands for software development feature requests, CSMs feel overwhelmed. Leadership does too and will often try to play the hero to save the customer relationship (more on that below). Handling these escalations can be stressful and challenging, but with the right approach, they can also be an opportunity to build stronger relationships with customers, while also enabling your team. Below are tips and best practices for CSMs to handle customer escalations, and also included are insights for CS leadership.

As a CSM: 

Listen to the Customer

When a customer reaches out with a concern, the first thing to do is to listen. Allow them to express their concerns fully and take note of all of the details. It is essential to let them know that their concerns are being heard and taken seriously. Often, customers just want their needs to be acknowledged.

Show Empathy

Empathy is essential in any true human-first interaction, but it is even more important in customer escalations. Put yourself in the customer’s shoes and understand their perspective. Show them that you understand their frustration and are committed to resolving their concerns as quickly and efficiently as possible.

Take Ownership

When a customer raises a concern, it is easy to pass the issue along to another department or team. However, as a CSM, taking ownership of the issue can go a long way in building trust with the customer. Even if you cannot provide an immediate solution, assure the customer that you will work to find a resolution and keep them updated on your progress.

Be Proactive

In some cases, a customer may have raised a concern that has not yet affected them, but they are anticipating an issue. In these cases, you should be proactive and provide solutions before the issue becomes a problem. One of my favorite quotes said by Dean Stoeker of SaaS analytics company, Alteryx, is “Give them what they want before it becomes a need.” This approach shows that you are committed to the customer’s success and are actively working to ensure that they have a positive experience.

Keep the Customer Updated

Most important is keeping the customer apprised of progress and providing regular communication on the status of their request. An empty update is better than no update at all. Continue to track the issue internally and assure the customer that their concern is still actively being addressed. This approach can help to reduce the customer’s anxiety and be another trust building mechanism. 

Provide a Timely Resolution

Providing a timely resolution to the customer’s concern is essential. If the issue cannot be resolved immediately, provide a timeline for when the customer can expect a resolution. Be sure to follow up within the promised timeframe and ensure that the customer is satisfied with the resolution.

For CS Leaders:

Empower Your Team

Ensure that your team is empowered to handle customer escalations. This means providing your team with the necessary training and resources to handle customer concerns effectively. Questions to consider:

• Is your team clear on their roles and responsibilities? For example, I’ve always told my CS teams that externally, they are the ambassador of our company. Internally, they are the customer’s advocate. It’s a dual role that requires different strategies for each.
• Do your CSMs have training opportunities to learn new skills like “The Art of Nojitsu”? Are they capable of having a crucial conversation with a customer, one where perhaps they actually have to tell the customer “no” and do so in a way that still protects the relationship? 
• Does your team understand the company’s mission and values and how they relate to their role in nurturing customers? 

Set Clear Expectations

Provide guidelines for how to respond to customer concerns and ensure that your team understands the escalation process. Establish clear timelines for resolving customer concerns and hold your team accountable for meeting deadlines. I also recommend publishing CSM empowerments – a guide for what concessions CSMs can offer to escalated customers. For example, if a customer communicates economic hardship, can a CSM offer to adjust the customer’s invoicing to semi-annual rather than annual? Defining and documenting these standard operating procedures (SOPs) removes the guesswork and guides your team to successful outcomes. 

Get Out of the Way

Once your team is equipped with the know-how to effectively manage customer relationships, including the uncomfortable situations, allow them to work autonomously. Leaders who jump into the escalation situation with a customer prematurely are doing a disservice to the customer, the CSM, and to themselves. Here’s why:

• Leadership involvement may seem like a good idea, and your customer may feel more special to have a service provider’s Manager, Director, or VP+ engaging with them. However, it isn’t scalable; it sets false expectations about to whom they need to go to satisfy a request, and it hurts your team.
• Leadership heroics also does your team a disservice. It can impact the rapport and trusted partnership that the CSM and customer have. This is especially true if a CSM upholds a company policy or program, and upon escalation to leadership, the customer suddenly is met with approval for the request. This undermines the CSM and reflects poorly on your company, resulting in both a frustrated employee and lack of professional polish for your organization. 
• Leaders jumping in to solve the problems also hinders their ability to focus on strategic initiatives. Here’s an extreme illustration to demonstrate the point: On average CSMs have 100-250 accounts across SMB SaaS companies. Let’s say that each company has 2,500 accounts spread across 14 CSMs, and on average, there are at least five customer escalations per week, per CSM. That means that a leader has potential to be involved with up to 70 escalations each week. Give your team what they need to be successful and get out of the way.

Foster a Culture of Empathy

Empathy should be a required leadership trait. By fostering a culture of empathy within your team, leaders are indirectly nurturing customer empathy (this ties into my philosophy of building up your team to build out the customer experience). This means encouraging your team to put themselves in the customer’s shoes and understand their perspective. It is also important to model empathetic behavior yourself and to provide regular feedback and coaching to help your team develop this skill.

Address Root Causes

Leaders should continually monitor for trends and other key telemetry data that drives business process enhancements. This includes root cause analysis and it may involve working with other departments within the company to identify systemic issues that may be contributing to customer escalations. By addressing root causes, you can prevent similar issues from arising again in the future.

In general, customer escalations are going to happen. That is just the nature of working in a customer-centric subscription space. However, how CSMs and leaders are prepared for them will make all the difference in protecting and growing recurring revenue. By CSMs demonstrating true partnership to customers, and as leaders, showing true partnership to CSMs, customer needs will be met, and friction will be reduced.  To do this, empower your team, set clear expectations, foster a culture of empathy, and address root causes. Customers who are feeling the economic impacts, will be thankful for your attention and will remember the differentiated support that they received when they needed it the most.