From Despair to Delight: A Turnaround Story
“Trust is the only thing in Life that takes a Lifetime to Earn and only a Second to Lose.”
The best way to keep someone’s trust is not to lose it in the first place. But it happens, and it’s not uncommon that we end up responsible for improving stagnated or troubled customer relationships.
Turning around a strained relationship that is rooted in a pattern of poor relationship management is one of the most challenging scenarios in sales. It is a delicate process. Once a trust relationship and brand perception are damaged, the odds of recovery are not in our favor. It's a time-consuming process. Not to mention, there’s no telling whether our stakeholders will be willing to invest their time to help us understand the issues and extend us an opportunity to resolve them. If afforded the opportunity, it requires a balance of empathy, patience, remorse, and, of course, the right action.
These situations require the swift evaluation of several things and throughout my years in turnaround situations, I’ve noticed that they all share most, if not all, of the following commonalities:
A Trust Deficit: At the heart of this are usually broken promises, inconsistent behavior, lack of transparency, poor communication, negative experiences, breaches of confidence, and the palpable air of generally obvious self-serving behavior.
Emotional Buildup: The trust deficit is compounded by negative emotions, such as anger, resentment, frustration, and disappointment, which become intertwined with professional expectations. When it gets emotional, an escalation of conflict isn’t far behind.
Mutual Deflection: When trying to get to the bottom of the issue, reading into the root causes is challenging. Not uncommon, in both internal and initial customer calls, everyone involved is sensitive to the optics and diverts attention away from their responsibility for the status quo to avoid accountability.
Risk of Further Damage: Any misstep can exacerbate the relationship problem, leading to further damage and potentially irreparable harm.
Guarded Optimism: There tends to be a strong skepticism but at the same time, a rotation in the account team tends to create some level of willingness to look forward while the cautiousness and discernment remain at center mass.
To lead our company successfully out from under these circumstances, we must lead with empathy, honesty, and a mindset grounded in servitude. This gives us the best chance to turn a strained relationship into a thriving partnership.
I am on heightened alert if I take responsibility for a customer relationship and pick up on even 1 of the above-mentioned elements. I mean, On Notice immediately. I assume immediately they are looking for alternatives.
And that’s exactly how this story starts…
Customer Profile
Description: This customer is transforming the shopping experience by making it easy for consumers to earn cash back on everyday purchases through a single smartphone app. The company partners with leading brands and retailers to offer rebates on groceries, electronics, clothing, gifts, home and office supplies, restaurant dining, and more.
Industry: Technology, Software
Employees: 501 - 1,000
Revenue: $300 - $500M
Ownership: Public
Technology Use Cases: Security Operations (TDIR) | Fraud Detection & Compliance
Existing Contract: < $180K, 12 month Term
Time to Expand: 6 Months
New Contract: $853K, 36 Month Term
Internal Knowledge Transfer:
Before I discuss the specifics of an account during a transition, I want to learn as much as possible about the person it’s coming from. So, I tend to sit back, pretend I know nothing, and do as much Q&A as they will entertain about them personally, their role, their year, etc. As I facilitated my inquiry into the type of person and role this account was coming from, I discerned 3 very important things:
This person was managing a portfolio of over 300 commercial accounts.
By how he spoke, it was evident his client’s outcomes with our software were not his #1 priority.
He did not have a dedicated technical SE to support his customers; he had to leverage pooled resources.
So immediately, before we even get to the specifics of what I need to know to facilitate an effective transition, my loose lean is there will be some salt in the air. But I table it.
By the end of my internal conversation, the overarching characterization was that this was a "pleasant" customer team with "no CSAT” issues. One of the details that stood out to me in particular: In their last renewal cycle, the customer moved their contract from a VAR adding relatively little value to an MSSP who would perform some MSS services.
Ok very good. Based on the above, we mutually agree that the current rep will introduce me, and I’ll parlay that into a transition call. Nothing too out of the ordinary…yet.
Client-facing Transition and Discovery:
After the warm intro, the client was responsive to my request for a call. After meeting with the customer a few times, it became clear that beneath the surface lay a much more nuanced view of the partnership than I got during the KT. A myriad of issues had gone unacknowledged and unabated, building up a pretty tangible interest in looking at alternatives.
Zero Relationship Continuity (Trust Issue) - The team described working with my company for about three years, with a new sales rep every year. Not great from a Cx standpoint.
Exploitative Sales Behavior (Trust Issue) - The team carried a healthy fear of breaching their current soft license limits in fear that any even temporary overage to serve experimentation would be used to exploit them for an unforecasted upgrade.
Anti-channel Behavior (Trust Issue) - Additionally, at the time of the renewal, the MSSP partner was forced to resell the software at a pass-through rate, leaving the partner extremely dissatisfied. This type of thing is a significant miscalculation in any channel business.
Lack of Value Realization (Value Issue) - The decreased satisfaction led to compromised loyalty. The preconditions for churn were omnipresent.
I hadn’t even gotten to the partner yet, which I knew would be a loaded conversation. Sure enough, it was. The partner piece of this situation was a major miscalculation on my company’s part. The rep had built a strong personal relationship with the customer. And it was completely dismissed. So the customer started feeling like they were screwing over someone they cared about by purchasing my companies software.
Furthermore, the partner had even gone so far as to escalate to a VP of sales at my company during the past year to request the account be moved to another rep because of the under-engagement and poor rep-account fit. The response was no. And this person, whoever it was, did not take care to understand the issues and help resolve them. So, if the above isn’t enough, count on the Emotional Buildup factor as present after the dismissal of a Vote of No Confidence.
Net-net: It’s a customer with a great business, growing and on the cusp of IPO. That takes Security & Compliance seriously. That has an appreciation for our technology. That has had a horrific service relationship experience and on top of that is coping with our alienation of the partner who they trusted. So it’s a turnaround.
Engineering the Turn Around:
The positive in this scenario is that all of these things can be remedied. They are self-imposed damages, and they are all controllable. My natural tendency is to focus on controlling the controllable wherever possible, so this scenario is a good fit for my personality and style.
It was clear to my SE and I that restoring trust was our number 1 priority. In response to the things above that we were able to isolate over a months time or so, we aligned to the following priorities in response to each one.
Create intimacy through frequent and focused attention | Zero Relationship Continuity (Trust Issue)
Be non-defensive and show remorse for they’re experienced + commit to remedy | Emotional Buildup (Trust Issue)
Return the focal point to what the customer believes is right & important to them (Restore Their Control) | Exploitative Sales Behavior (Trust Issue)
Acknowledge, apologize + commit to remedy the Partner Commercials | Anti-channel Behavior (Trust Issue)
reAccelerate value through good discovery and tactical resolution of adoption gaps | Lack of Value Realization (Value Issue)
We bypassed the MSSP and engaged directly with the customer’s key stakeholders. This allowed us to start to establish a more direct and transparent relationship. We shifted the focus from upselling to delivering tangible value by identifying gaps in maturity, prioritizing them, and increasing their adoption and maturity. We established open communication channels via Slack and regular cadences, ensuring momentum never waned. We slowly differentiated ourselves by addressing concerns with clear and trustful responses, and the trajectory shifted towards trust and credibility.
The Resolution:
Entering June, my SE had made material gains, advancing the customer’s readiness for more to the point where some expansion was important if they were to broaden the scope of their service to the business effectively. Around the same time, some structural changes were rolling out internally. I saw an opportunity to leverage that internal context as an opportunity to structure a proposal that would do several things for each party involved:
Customer Value Objectives
Increase license capacity by 200%
Create a Lower 3-year TCO than a 100% increase
Partner Value Objectives
Remedy the Partner’s pass-through concerns
Provide an opportunity to increase their scope of services
Our Company Value Objectives
Pull forward existing renewal by 6 months
Increase iACV and TCV
So, with the above conceptualized, I contacted our VP Executive buyer and floated the concept to gauge her interest. She responded, “if there is a material benefit, yes I will thoughtfully review it.”
And so, I ultimately laid out the value narrative as described above with a TCO Scenario Analysis
She recognized the advantages of the business case and the effort I was making. After a lengthy conversation with their finance department and some concessions on delayed payment terms, we mutually moved forward.
In short, I embraced the past challenges I needed to set right on this account and took the initiative to recognize a moment internally when I had the discretion to resolve both the partners’ and the customers' concerns. It required putting my own short-term self-interests partially aside. But that was the right thing to do to resolve the past issues and create a new context from which both companies could move forward feeling fulfilled.
It was a Win-Win-Win Proposal, and that was how I designed and narrated it.
Customer Perspective
“Chris and team have been instrumental in helping us build out our [vendor] deployment. This is the first time in our 4 year relationship with [vendor] that we've felt actively supported in the work that needs to be done. We're very grateful to have them in our corner.”
“Chris and team have been great to work with, very proactive and making sure we are optimizing how we use [vendor] and very responsive to requests. We value this relationship and look forward to continuing to work with them in the future!”
Partner Perspective
“Less than a year ago, we talked with the [customer] team about leaving [vendor] for good. They were frustrated and discouraged, but we reassured them that [vendor] was still the right technology for them, even if the relationship was strained. Fortunately, Chris Peres has been an excellent answer to those challenges and has proved to be a valuable and trustworthy advisor. It is crazy to look back and think that in 2024 they have gone from evaluating other vendors to signing an early renewal and multi-year contract extension. Chris deserves enormous credit for his creativity within the deal and his commitment to restoring the relationship.”
What’s the Takeaway from a Story Like This?
A strong sense of urgency is required in any turnaround situation. Not panic, but resolute confidence and clarity of mind. Discern the issues, acknowledge them, and make them right. We have to earn a continuation in the relationship every day. Being a high-integrity person who has the ability to sensibly call issues to the forefront in a way that leaves others feeling like they want to work with us will always get us further than the absence of acknowledging the obvious.
This story ended well.
I had another account this year that I took over under similar circumstances, and it did not. I did my best over 6-7 months, but the damage was done. When this CSO notified me of non-renewal, he gave me the courtesy of a follow-up call and provided ample context. I appreciated that, and in the end, all I could say was that I understood. The tone was amicable, a product of my efforts and a signal that some impact was made. Needless to say, too little, too late. My company collectively let them down and it couldn’t be resolved. So, I apologized that I couldn’t rebuild his confidence and thanked him for the opportunity. I had to let them go.
Account changes are part of the game. It is really important to correctly tease out any turnarounds and precisely articulate the variables that I listed above with your management so there is an appreciation for the circumstances you are tasked with overcoming. Managing up, beyond a disciplined plan to turn things around, is crucial in these situations.
Disclosures:
This content is intended in the spirit of experiential knowledge sharing. I do my best to accurately describe strategies and techniques I use in the field for creating great customer interactions but I am not responsible for their use or misuse nor the outcomes that result from either.
I use GrammerlyAI to: 1) proofread for spelling & correctness 2) make changes/updates to grammar, sentence structure, etc. to improve clarity and readability and 3) ensure my writing is absent of any plagiarism
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