3 Essential Steps for a Robust Risk Management Process

One of the most important things we talk to a lot of customers about is their risk process and what great looks like. We want to catch it early, action it and of course - prevent churn.

Oftentimes we see Customer Success teams and Renewals teams put parts of a process in place like a “heal desk” for CS risk customers or maybe a “get to green call” with their cross functional and exec teams, but they’re not always thinking about the entire process holistically and therefore, missing some opportunities to really impact the risk that you’re facing. 

There's 3 main parts to a great risk process:

Identifying the Risk

• There are two major inputs that feed into identifying customer risk. The first is a reliable, data-driven health score that can surface risk signals well in advance, ideally up to 180 days before renewal. The second is CSM sentiment, gathered through ongoing customer interactions across calls, emails, and meetings.

• The trick here is to create a process that spots risk early, otherwise you can't influence it and you end up in a reactive motion, chasing risk too close to renewal. Technology can be a great help here. Take a look at Hook’s risk prediction as an example. 

• A common pitfall with health scores is that they’re only accurate at the point of renewal which defeats the purpose. If your score can’t reliably predict risk 180 days out, it’s not helping you take proactive action. Ask yourself (and your team): How accurate is our health score six months ahead of renewal?

• If you can’t trust it that far out, it might be time to revisit how it’s built and whether it’s truly enabling you to stay ahead of churn.

Actioning the risk

• Once you've identified the risk, what do you do about it? Here’s where you create standardized plays for your core risk reasons that your CSMs can run. But this is also where your health score and supporting technology comes back into play. They should highlight the risk and recommend (or automate) the next best action to take to mitigate it. Define what internal collaboration looks like: who owns what and in which scenarios?

• What additional services and products are you willing to throw in to mitigate risk?

Accountability for the risk

There are multiple layers to the accountability piece but it ultimately boils down to: how are you seeing risk and creating internal visibility, how do we know people are actioning it in the right way, and how do we get help when our standard plays aren’t working?

• Do you have a process for regularly reviewing open risk for future quarters including how it's affecting your forecast and reviewing what the team is doing about it?

• Are you having team, segment and global risk calls to raise awareness of key risks and get help?

• What conversations are leaders having in 1:1s about risk in books of business and steps taken/planned to improve? This is where you drive accountability for the action plan and ensure the steps agreed on were taken, as well as find out where they’re still getting stuck.

• Are your team's targets aligned to saving risk? E.g. do they have a GRR target? Or do they have KPIs on how much red renewing ARR they need to turn around?

Then lastly and very importantly… How do you know when a customer is no longer at risk? When can you remove them from your process and rest easy?