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What to do with a ‘Watermelon Customer’?

*Julie, a Customer Success Manager, with ABC corp (a B2B SaaS firm) is excited about the upcoming annual conference. Her CEO has asked her to nominate a customer who could talk about the value they have realized from the firm’s solution. She instantly thinks about Mr. X, who has been the focus of numerous previous case studies and whose product usage has been positive. She is sure that he will accept her invitation. So, she calls to make the request right away. However, the actual response by Mr. X, on the other hand, is rather different. 

Mr. X tells her that he is sorry that he won’t be coming in for the talk and that he’s not going to be renewing when the current contract is up! Not to say, Julie is in for a shock. She realizes that all the indicators pointed to a mutually beneficial relationship. He was a “safe” customer. So, how could he possibly be leaving? How did she ignore the red flags? How will she explain this to the CEO? What other “healthy” customers might be actually at risk?

This scenario precisely presents the “Watermelon Effect”. And, such customers are the “watermelon customers”.

Customer Health Score Template

Who is a Watermelon customer? How to identify one?

Everything about your customer appears to be green and healthy on the surface, but dig deeper and you’ll find that the landscape is nearly all red, and the relationship is in danger. So watermelon customers are those customers who appear to be happy on the outside but are not truly very happy. 

Now, the concern here is that as a CSM, you could easily overlook a ‘green’ customer account thinking it to be a healthy one!. They’re a BIG churn risk. How will you identify clients experiencing this problem and what can you do to help them?

To identify a watermelon customer, the metric that would help you the most is instead the Customer Intent Score. But what does it tell? Let’s find out. 

Suggested Read: How to do customer health score in 2022?

What is a Customer Intent Score? 

The Customer Intent Score is a metric that measures a visitor’s willingness to accomplish a conversion goal, for example- a request for further information. The score is determined by their website visit behavior, entry channel, and other contextual data. A figure between zero and one represents the score.

Customer Intent Score tells you ‘why’ and not ‘what’. Customer Intent is a customer’s genuine motivation for engaging with your brand. It is critical to understand what prompted the prospect to buy in the first place. Examining a client’s intent can assist you in identifying situations where you are uncertain of how to continue.

Compare your Customer Intent score with the Customer Health score

Yes, comparing both the scores will show how both are different and which one presents a nearly accurate picture of the customer’s real intention. 

Customer Health Scores are critical in bringing these data sources together and generating an overall signal that demonstrates the robustness of the customer relationship. The notion that the higher the product usage, the higher the product value is widely held, yet it is fundamentally flawed. Even if adoption looks to be strong, this does not always imply that your customers are benefiting.

However, consolidating many data points that reflect the relative health of a customer is a huge problem for anyone in Customer Success. Out of 1000 data points, a mere 10-20 are monitored. Just imagine the enormity of untracked data. This data can uncover the underlying intent of the customer. Possibly, it can present a more accurate picture of the account’s health.  Moreover, the rule engines are not calibrated frequently and as result the signals are false.

This is why the current customer success tools are failing. 

Now Julie can see that the subjective (manually recorded) health score (for Mr. X) was totally green. Yet, intelligence determined that the objective score was Red after reviewing the emails, zoom discussions, and support tickets. No wonder, the customer wasn’t looking forward to renewing the contract.

Evalauting Customer Success Software Template

What’s wrong with existing Customer Success Platforms?

Not all of your customers are going to engage with your product in the same way. This is exactly what the current customer success platforms are failing in. They’re unable to provide customer-specific engagement data.

  • Only data and NO insights. CS platforms track each and every data point. However, the insights derived are based on rule engines that CSMs set. Since its humanly not possible to comprehend all data points, CSMs still depend on their guesswork to reduce churn and increase their recurring revenue. They believe that at least this time they will hit the ball out of the park. Yet, out of 4 CSMs, only 1 is able to do this. 
  • Increased dependency on CS Ops. Unfortunately, technology suppliers are now adopting the approach of deploying people at a problem. However, technology adoption should save time and make the org more efficient. In addition, increased dependency on people increases costs for the firm. 
  • Based on rule engines. The rules for determining customer health in the existing CS tools are configured manually. These rules have a threshold for upsell or risk signal generation. This leads to false-positive and negatives. Hence, CSMs are forced to depend on such unreliable indicators. 
  • Regular recalibration is required. To keep the signals meaningful, you must reconfigure alerts every time there are new product changes.
  • Too much data.  It is impossible for a human to grasp all of the information. However, only about >1% of data is ever used.
  • Human Bias. With human intervention happening frequently, it’s almost impossible to not have a human bias involved. 

How do you identify a watermelon customer? Once identified, what next steps will you take?

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With Customer Success Intelligence (CSI)! This should be a no-brainer because how can you otherwise predict and avoid a churn without a predictive and prescriptive model? CSI takes into consideration thousands of data points that a manually configured rule misses out on.

It gives account intelligence and also prescribes the next step intelligence to give the best recommendations that proved to be the best course of action in the past to drive retention. 

Customer Success intelligence, at its core, takes all of:

  • CRM’s Metadata data, 
  • Subscription and Helpdesk data,
  • Engagement data from calls, emails, QBRs, meetings, engagements, and even support tickets!
  • Product telemetry data.

All of these, i.e. thousands of data points and millions of monitored feature events with renewal history, are correlated to learn what actually drives these renewals and upsells. Powered by its

advanced Artificial intelligence (AI) and big data analysis model, it learns once and keeps learning with every new renewal, upsells, and even churn.

CSI has given you the real insight, identified the watermelon customer, and prescribed the next best action. You just need to take those actions and see the results for yourself. 

Key Takeaways. 

Keep a laser focus and make sure that your client achieves a high ROI from using your product today and in the future. This is the most effective weapon in defeating the “Watermelon Effect.” Examine your internal systems for monitoring customer health and see whether they are providing you with accurate results. Investigate churned clients who appeared to be in good health in the past to determine what lessons may be learned to prevent this in the future.

Don’t assume and guess things. Use Customer Success tools like CustomerSuccessBox that can provide customer intelligence to stop the guesswork and get real and actionable insights!

Content marketer at CustomerSuccessBox | An avid reader, a passionate writer and a life long learner | Writer @ Hacker Noon | B2B SaaS & Customer Success enthusiast |