Customer Retention: Negotiation, Discounts, and Distractions
Apr 3, 2024
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This engaging discussion dives deep into handling pushy customers seeking discounts and the importance of understanding their motives. The hosts provide effective tactics for negotiation, emphasizing clear communication and the value of the service over mere discounts. They highlight the necessity for Customer Success Managers to have consistent internal guidelines to empower their negotiations. Practical strategies are shared to turn the pressure into an opportunity for retaining customers, making it a practical listen for professionals.
27:06
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Quick takeaways
Customer success managers must embrace commercial conversations to navigate pushy discount requests effectively and enhance customer retention.
Understanding the underlying reasons for customer discount requests allows CSMs to engage in more meaningful negotiations and find win-win solutions.
Deep dives
Navigating Negotiations with Customers
Customer success managers often face challenges when dealing with pushy customers who request discounts or threaten to cancel. It is essential for CSMs to understand that they are in a commercial relationship, which implies that discussions around pricing and renewals are expected. Developing comfort in discussing these matters can lead to more effective and efficient negotiations, which, in turn, can enhance customer retention. Thus, CSMs should be prepared to have commercial conversations rather than avoid them, enabling better outcomes for both parties involved.
Understanding Customer Discount Requests
Customers may request discounts for various legitimate reasons, such as internal budget constraints, competitive offers, or a perceived lack of value from the service. Recognizing these motives empowers CSMs to ask probing questions that dig deeper into the customer's reasoning, allowing them to respond more effectively. Identifying the root causes behind discount requests is critical since they can range from market pressures to the customer's internal policies. By understanding why customers ask for discounts, CSMs can engage in more meaningful negotiations and find win-win solutions.
Establishing Clear Negotiation Protocols
To ensure consistency in handling discount requests, it is important for organizations to provide clear guidelines and protocols for customer success managers. Developing playbooks can equip CSMs with the necessary knowledge to handle negotiations confidently while avoiding the pitfalls of people-pleasing tendencies. When CSMs know the parameters of what they can offer, they can maintain control of the negotiation process. Employees should advocate for formalized rules if they find themselves frequently unsure about how to proceed in such situations, ensuring every CSM has a solid framework to rely on.
ON TODAY’S EPISODE: In this week’s episode of Impact Weekly, Johan and Lincoln help a Customer Success Manager to navigate pushy customers trying to negotiate discounts. They shed light on the reasons behind it and tactics to handle those interactions. They also share processes and strategies to avoid those situations.
THIS WEEK’S QUESTION: “One of my least favorite things is to deal with customers that are really pushy and want to negotiate discounts. I've had several customers now threatening to cancel unless they get a better deal at renewal. Help me here. What should I do?”
TOPICS BEING ADDRESSED: * Effective tactics to handle pushy customers * Recognizing irrational request * Necessary processes to avoid those situations
QUOTES: Lincoln Murphy (01:52): “We need CSMs to be comfortable with the fact that we are in a commercial relationship with the customer”
Lincoln Murphy (07:18): “Something that was happening inside the company has nothing to do with the competitor’s market forces.”
Lincoln Murphy (11:59): “One of the few times I wanna send somebody to our competitor is when they're being irrational with us.”
Lincoln Murphy (14:04): “You as the CSM should not be having to figure out what to do in the moment”
Johan Nilsson (19:23): “A simple rule of thumb when you negotiate is that you need to communicate clearly”
Do you want more of this? Check out Impact Academy for interactive Customer Success training programs. https://www.impactdemy.com/
Do you have a question you want us to answer? Submit it here.
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