Tim Riesterer built his career helping companies apply decision science to customer conversations. I was lucky enough to hear him speak for the second time at a conference in Boulder last year.
His talk centered on “status quo bias” and its role in B2B customer acquisition and retention.
Let’s examine status quo bias and how you can leverage it to improve retention and boost renewals…
Churn is the enemy of growth, and the old playbook isn’t cutting it. The future? Customer-led growth.
On March 25, 2025, at 9:00 AM PST (12:00 PM EST), join Michael Harnum, CEO of ESG, and Chris Dishman, SVP of Global Customer Success at Totango, for a powerful session on how to pivot from an acquisition-first approach to a customer-first revenue strategy.
Stated, the status quo bias refers to our human preference for the current state of affairs.
It’s why we choose the same toothpaste over and over.
It’s why we go to the same grocery store every week.
It’s why we stay in dysfunctional relationships.
Status quo bias causes us to resist change for four reasons:
Preference stability. We tend to like what we are already doing versus trying something new.
Cost of change. We know that new projects involve upfront costs and change management, while what we have today is “free” by comparison.
Selection difficulty. Most people have so many choices that it becomes difficult to choose the best one. Products are much less differentiated from one another (just visit any local supermarket aisle for a slew of examples).
Anticipated regret and blame. Finally, we worry that a wrong decision will negatively impact us somehow.
This powerful force influences our personal and professional lives — sometimes working to our advantage, others against us.
Unsurprisingly, this issue appears in B2B SaaS far more frequently than most people recognize.
When acquiring new customers, we must overcome status quo bias. Sales execs must prove beyond a reasonable doubt that change is necessary and sensible and that the risk of maintaining the status quo is greater than the risks associated with change.
They must help their prospects answer the all-important questions, “Why change?” and “Why now?”
This means we can also use status quo bias to our advantage regarding customer retention. Teams are wise to reinforce their customers' natural tendency toward the status quo when fighting for renewals.
They must help their customers answer the all-important questions, “Why stay?” and “Why now is not the right time?”
Customer success, renewal, or account managers can highlight the costs and risks of change. They can also commit to quick improvements and adjustments in business processes versus starting from scratch with a competitive solution.
The question is, when and how do we make this case to our customers?
Every year, the customer success community claims the death of the business review. But rather than kill business reviews altogether, perhaps we need to return to the first principles of what we’re trying to accomplish.
The goal of every customer success professional [1] should be to reinforce their customer’s natural inclination toward the status quo and claim what MacMillan and Seldon dub as the incumbent’s advantage:
The source of [the incumbent's] advantage is threefold: First, you should have deeper insights into the various needs of the customers you serve than any potential invader does. Second, you should better understand the profitability of serving them and, therefore, be in a stronger position to invest resources to capture and retain the best of them. Third, and perhaps most important, your knowledge of the needs and profitability of your customer segments is far less susceptible to imitation than are the features and functions of your products.
Harvard Business Review - October 2008
To this end, Riesterer outlines three simple elements of the customer relationship we need to communicate as we prepare customers for renewals…
Another human bias is toward sunk costs. We continue an initiative once we invest money, time, or effort. So, we must remind our customers how we got to this point. It’s crucial to show new stakeholders the business’s cumulative investment in the partnership (and investment is not just money).
Business impact is measured in three ways: 1) impact on the project, 2) impact on the business unit/department, and 3) impact on corporate strategic initiatives.
Impacts are measured in direct (financial), indirect (qualitative), or strategic returns, enabling the company to pursue its strategic initiatives.
We get to work with hundreds of companies in our industry, and as a result, we can formulate benchmarks and best practices and identify trends to share with our customers. Customers are hungry to see what’s happening outside of their narrow view of the world, and we become trusted advisors by sharing unique insights that only we can possess because of our deep, day-to-day exposure to our customers.
How we document and deliver business reviews will continue to evolve. However, getting this information into decision-makers hands is key to using status quo bias to retain our customers longer and make them more successful in the long run.
Are you communicating with customers in ways that will invoke their status quo bias? If not, what should you change this week to start?
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[1] My definition of "customer success" continues to broaden, and here, I'm referring to any role that interacts with the customer to help them achieve better outcomes and retain them (e.g. account managers, renewal managers, services, support, executives, etc.). It's all customer success.
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We’re grateful you choose to read each week.
When you’re ready for more, there are a couple ways we can help:
» Cover Your SaaS is a financial literacy course for go-to-market leaders. Grab your copy here.
» Promote your product and services to over 4,000+ senior SaaS Sales, Marketing, and Customer Success pros by sponsoring our twice-weekly newsletter and podcast.
