An Executive Sponsor typically holds a VP+ title and is a critical component in maintaining a strong client relationship. S/he typically has a deep understanding of your solution and its benefits and understands the value and impact of ROI. What to do when the Executive sponsor change?
Over the past few years, you’ve spent a significant amount of time and energy building a relationship with your Executive Sponsor on your account. You’ve spent hours (if not days) of time on the phone, in your office, helping them realize the value of your solution. You spent time navigating the landscape of your company and team structure. It has helped them achieve their goals, and of course, it has helped them solve a problem or two.
Why does this change/exit happen?
For a variety of reasons, champion exits are one of the most common causes of churn in SaaS companies, as beneficial as they can be. The following are a few of these reasons:
- The executive sponsor’s departure was unannounced until after s/he had already left.
- The product has a low or non-existent perceived value.
- A substitute executive who prefers a different approach.
- Insufficient interaction with the company’s other decision-makers
Check out: A Guide for VP of CS to achieve 125% ARR!
You get the news that your executive sponsor is leaving for another company, now what? That may be great news for him or her. However, it can be a huge setback for you and your business if you don’t work proactively to ensure a smooth path.
When an executive sponsor leaves your company, it means a replacement will be made (hopefully before your sponsor leaves). That replacement has different preferences, processes, goals, KPIs, or KBOs, and may have even used one of your competitors in the past.
Extra Resource: How to do effective account transitions in Customer Success?
For sponsor departure, there is a lack of proactive and reactive playbooks.
There are tried-and-true methods for mitigating the effects of an executive sponsor’s departure in these situations. Develop playbooks that prevent churn before and after an executive sponsor leaves. This strategy can also help in avoiding downgrades and opening up new opportunities for growth.
Without a proper plan and quick execution, your account may be at risk and you may lose footholds in ongoing conversations about upselling products or services or even the renewal itself.
So when the inevitable happens (and it will at some point), how should you prepare and act when you get the news?
Guide: All you need to know about churn!
Prior to an Executive Sponsor’s Departure
Reacting to the departure of an executive sponsor is ineffective. Especially when the new executives are eager to make changes. Surviving the transition necessitates laying the proper foundation and leveraging your champion’s relationship to generate additional advocates who recognize your worth.
1. Establish clear expectations.
Emphasize the importance of executive involvement throughout the sales and onboarding process. Set clear expectations for this engagement and the executive sponsors’ roles and responsibilities. Carrying out the QBR effectively is aimed at building strategic relationships with the sponsors. You can ask executives or key customer contacts to participate, and you can reinforce their roles at QBRs, assessments, and other touchpoints. Demonstrate the value you have provided and give an estimated ROI at QBRs, this will showcase what your product & partnership means to them. This will provide hard evidence of the value that your solution offers. No one, even the new executive sponsor, can’t deny it.
2. Make Contact with a Variety of Executive Stakeholders
Establishing champion retention, churn, and down-sell strategy is one of the most effective ways to prevent the champion loss, churn, and down sells. Relationships with your client’s other key executives and users begin by identifying strategic personas who influence renewal decisions and assigning your CSMs the task of acquiring them as sponsors. The following are examples of personas:
Users with a lot of power
- VPs of functions that use your solution
- Team managers who can promote adoption
- CEOs or COOs who have a direct influence on your purchasing decision
By simply asking or suggesting who else should be involved, Customer Success Managers can gain more strategic sponsors at QBRs. Request that your current sponsor recommends and contacts other personnel who are qualified to use your solution. CSMs should strive for at least one of these sponsors per customer organization.
Single-threaded relationships have only one point of failure, and if the executive sponsor leaves, everything falls apart. All of the preliminary advocacy efforts will have to be redone. Establishing multi-threaded relationships allows other executives to take over responsibility if a champion leaves the company, and it provides a more reliable source of information about customer goals.
3. Take advantage of executive sponsorship programs
Determine which members of your organization are best suited to maintaining the relationship with your customer’s champions. An Executive Sponsor Program aligns your company’s executives with those of your customers. Depending on their account segment, your CSMs, Account Managers, and other top-level executives can be mapped to executive sponsors.
For example- You can map your CEO to enterprise sponsors, your Customer Success Managers and Directors to SMB, and mid-touch customers.
4. Examine Sponsorship Relationships with Executives
Review the number of sponsor relationships you have in your customer’s organization on a regular basis and use it to calculate your health score. Track your executive champion’s engagement metrics with your team. Assess the strength of your relationships across various organizations. The health score should also take into account your CSM’s perception of your relationship.
When an executive sponsor leaves, treat that as a red flag. Set aside resources to prevent churn and down sells. If the sponsor is replaced, demonstrating value to the new executive is a good place to start.
Strategic Next Steps Once You Know Your Executive Sponsor Is Leaving
Here are the strategic next steps to stay ahead of change, and perhaps the event will benefit from it:
1. Request an introduction
If your Executive Sponsor’s replacement is announced before s/he leaves, ask for a direct introduction to your new contact (if you don’t already know the replacement personally). This helps build trust and ensures contact is made first and foremost.
If your relationship with your Executive Sponsor is strong, you can ask them to brief your replacement with documents, credentials, and best practices you’ve gathered to ensure your replacement has what they need to get off to a good start with your product or service.
2. Make a meeting appointment.
Schedule an on-site meeting with the new executive to demonstrate your product’s consistent value. Reiterate your client’s concerns and how you’ve addressed them. You can use the cost of switching to a new product as a churn deterrent. Also get updates on new initiatives and business goals. Learn about new capabilities and set strategic goals for the next EBR.
Suggested Reading: Check out how to get your executive sponsors to attend QBR.
Pro tip: Check out this QBR framework Template
3. Carry out a knowledge transfer
Your executive sponsor has a lot of valuable information about your company. Ask your sponsor if they’re willing to have a “handover” call with you. That would be to make sure you have all the information you need to move the relationship forward. The Executive Sponsor will want to leave with the best foot forward if the relationship is strong. S/he will want to be sure that the company is set up for continued success with your solution.
4. Understand the new vision
Understanding your new sponsor’s personal goals, department goals, or company goals is critical. It is not safe to assume that your goals are the same as those of the previous executive sponsor. They’ve likely had different experiences, worked with different vendors, and have completely different experiences than what they’re getting.
Due to the change in goals, there will likely be a change in the new Executive Sponsor’s KPIs and KBOs as well. Even if these don’t change, be sure to go through them one by one with your new sponsor. Ask questions and interact with each point to ensure you have the full story. Ask them how they see your product, solution, or service aligning with their goals.
5. Provide a Value Framework
You have done some incredible work together but quantifying value, especially for a customer success department is a monumental task. Understand that no replacement can deny the ROI/value you have provided to their company. Even if the agendas of your new executive sponsor and your company do not match, showcasing a value framework will be a sure-shot way to retain this client. Make sure you provide a projection of the future value too.
6. Create an action plan
During the last few days or weeks of interacting with your new executive sponsor, you’ve likely learned a lot. Your previous executive sponsor has done a knowledge transfer, talked on the phone or met in person with your new sponsor, learned your new sponsor’s goals, KPIs, and KBOs, and maybe a few red flags in your mind.
It’s time to create a revised action plan for the client account since you know how to move forward (or at least identified the gaps). Be sure to think about how the learnings will affect events like upsells, pipelines, renewals, and other customer milestones.
Summary
The loss of a customer executive sponsor is a risk factor for customer success. But it doesn’t have to spell the end of the line. Preventive measures mentioned above can pave the way for a long-term relationship, even if a major sponsor leaves. When the champion has departed, reach out to them as soon as possible, and demonstrate value. Use existing advocates to build a strong relationship with the new executive.
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