How Finance Can Help Drive Customer Retention with Nick Tarnoff, VP Finance, SupportLogic
Apr 24, 2023
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Nick Tarnoff, VP of Finance at SupportLogic, discusses the importance of customer retention and how to improve it. They also explore the challenges of transitioning to a consumption-based pricing model and the significance of humility and expertise in fostering successful business relationships. Additionally, they emphasize the importance of finding a balance between precision and storytelling in finance and accounting.
Customer retention is a crucial metric for finance leaders to prioritize, especially in the current economic climate, as it is more cost-effective to retain and nurture existing customers than to acquire new ones.
To improve customer retention, finance leaders should conduct cohort analysis, study behavioral trends, and collaborate with sales, customer support, and product teams to gather qualitative insights and develop strategies.
Deep dives
Retention is Key for Finance Leaders
Retention is a crucial metric that finance leaders should prioritize, especially in the current economic climate. Nurturing customer relationships and ensuring their long-term value is essential for the success of subscription-based and SaaS businesses. Acquiring customers requires significant time, effort, and investment, making customer retention even more valuable. It is more cost-effective to retain and nurture existing customers than to acquire new ones. Additionally, satisfied customers become advocates for the business, contributing to free marketing through word-of-mouth. Finance leaders should focus on analyzing cohort data and customer feedback to understand behavioral trends, customer satisfaction levels, and potential areas for improvement.
Starting the Journey to Improve Customer Retention
To improve customer retention, finance leaders should begin by conducting cohort analysis and studying behavioral trends. By analyzing data related to customer acquisition, usage, and satisfaction, valuable insights can be gained about how to retain and nurture customers. Collaborating with sales, customer support, and product teams is crucial to gather qualitative information that complements quantitative data. Understanding the challenges and opportunities uncovered through data analysis and customer feedback can drive the development of strategies to improve customer retention.
Challenges and Roadblocks in Customer Retention
One of the challenges finance leaders may encounter in customer retention is the delay in renewal processes. Delays in renewals can impact retention metrics and require closer examination. It is essential to understand the reasons behind these delays, whether they are related to negotiations, upselling, or other factors. Open communication with sales, customer success, and renewal teams is necessary to align quantitative data with qualitative information from customers. Collaboration and asking the right questions can help finance leaders gain a comprehensive understanding of challenges and effectively address them.
Collaboration Between Finance and Customer Success
Building a strong collaborative relationship between finance and customer success teams is crucial for long-term success. Finance leaders should approach the partnership with customer success by bringing informed perspectives while remaining open to learning from experts in the field. Recognizing the value of qualitative feedback from customer success and aligning it with quantitative data analysis is essential. Approaching the collaboration with humility, asking questions, and valuing the expertise of the customer success team helps foster trust and effective collaboration.
In times when a growth-at-all-costs mentality, companies funneled as much money as possible into customer acquisition. Retention was always important, but not the primary focus.
But now, as companies get more cautious with their capital, there's a brighter spotlight on customer success and retention. Great customer retention is key to efficient, sustainable growth.
In this episode of The Role Forward, Nick Tarnoff, the VP of Finance at SupportLogic, gets into the importance of customer retention and how to improve it. Nick and our host Joe Michalowski discuss the metrics for retention analysis and some of the challenges with retention.
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Guest-at-a-Glance
💡 Name: Nick Tarnoff
💡 What he does: Nick is the VP of Finance at SupportLogic
💡 Company: SupportLogic
💡 Noteworthy: Nick brings over 15 years of financial leadership experience across technology, e-commerce, and financial services industries, focusing on financial planning and analysis (FP&A), strategic planning, and capital allocation. Most recently, Nick led finance for SAP SuccessFactors, directly supporting C-Suite leaders. He brings a highly collaborative approach to SupportLogic, focusing on designing a streamlined and efficient finance function.
