Customer Growth: How To Increase Revenue From Your Current Customers
The traditional buyer’s journey, or marketing/sales funnel, is just the beginning of the process for a B2B company. Smart companies, especially in SaaS, are realizing that the funnel now extends beyond an initial purchase point with new opportunities to capitalize at each stage of what’s known as the customer journey. This new vision has morphed the conventional funnel into an hourglass shape that looks like this:
Only 5-30% of company revenue comes from the initial sale. This means businesses must shift their focus beyond the initial marketing and sales funnel to focus on what happens after a sale is complete. That’s where customer success comes in. It’s critical not to ignore your customers as a viable source of revenue growth. Driving value and ensuring success at each stage of the journey—adoption, retention, expansion, and advocacy—leads to a wealth of benefits for your organization.
Benefits of Success at Each Stage
- Adoption: Successful product adoption means customers understand product value and have fully implemented the product into their work.
- Retention: High retention rates (or low churn rates) are a good indication that customers are satisfied and receiving value. It means they are continuing their subscription each month.
- Expansion: Increases in expansion revenue mean customers are spending more beyond their initial purchase through upsells, cross-sells, renewals, and subscription upgrades.
- Advocacy: Advocates are customers who share their positive experiences with your product with others (word-of-mouth marketing), which fills the top of your hourglass with new, more qualified leads.
Successfully guiding customers through each of the four stages of the customer journey is called customer growth and it leads to maximized customer lifetime value, churn reductions, and ultimately increased revenue. To build a foundation that allows your company to accomplish this, your customer success team needs three basic tools: user intelligence, customer health, and targeted engagements.
In order to help customers succeed with your product and help your team stay ahead, you need high-quality data. You need to know which features your customers are using and how they are using them, which features they might be missing, if their subscription is up for renewal, if they’ve added new users or if the product champion has changed, what their customer health score is, what NPS group they’re in, and so much more. This is the best way to decide on the appropriate course of action to take to keep them on track and ensure they’re successful at each stage of their journey.
We often hear that the number one challenge customer success teams face is a lack of visibility into key metrics like adoption rates, promoter identification, and customer health. This lack of actionable user intelligence leaves customer success teams unable to deliver consistent value to their customers and stunts their ability to move quickly, develop processes that would allow them to be more proactive, and focus on driving revenue.
Visibility into customer health with an at-a-glance dashboard view is the best way for Customer Success Managers to decide how to spend their day. Are there any high-value accounts in the red (at risk for churn)? Are there any sudden changes that might warrant a call or a new engagement campaign? You’ll need standard churn indicators in place—like login frequency, sentiment, financial and technical/help desk data—and you’ll want to be able to slice customer health by segment. This will allow you to see how your engagement campaigns are performing across segments regardless of which account a user is connected to.
Monitoring customer health is a key piece to facilitating growth because healthy, successful customers are the ones who stay longer, spend more, and tell their friends.
The actionable piece of having great user intelligence is being able to deliver highly-targeted, data-driven engagements. In the same way that marketers and salespeople have tools that allow them to send messages contextual to a prospect’s stage in the buyer journey, customer success and product teams need tools that allow them to send messages contextual to a customer’s stage in the customer journey.
A good engagement tool will offer a variety of in-app engagement types (like guided tours, feature callouts, surveys, and alerts), powerful segmentation abilities, personalization options, and should be directly informed by user intelligence (like behaviors, demographics, account statuses, and much more) to ensure the right message is sent to the right user at the right time.
Once your team has these three functions working for them, they can begin to create data-informed strategies for driving success at each stage of the customer journey. User intelligence will help them to understand how customers move through the stages, offer insight into points of contention where targeted engagement could alleviate hangups, and provide a basis for developing dynamic processes that help customer success teams get ahead.
Why customer growth is the future of business
Modern customers expect companies to treat them as individuals, and why shouldn’t they? Data collection methods and the capabilities for contextual and targeted messaging are vast, and customers know that. And as more companies get better at proactive customer success approaches, they raise the bar for those without it.
Gary DeAsi of the Customer Journey Marketer Blog puts it this way, “The modern customer demands to be treated as an individual; for their digital experiences and communications to be personalized and highly-relevant, and catered to match their specific needs, interests, and preferences. And while customer expectations are increasingly reaching all-time highs, their patience and tolerance for sub-par experiences are at all-time lows. As a customer, if you don’t give me the quality experience I expect; exactly what I want, how, when and where I want to experience it, I’ll simply get it from someone else who will.“
In order to drive users through each phase of the customer journey and grow revenue through adoption, retention, expansion and advocacy, it’s critical to create timely, highly-targeted, and data-driven engagements letting the customer know that their success is your top priority. Doing this well leads to:
- Better-fit customers because product value is communicated clearly from the beginning
- Lower churn rates (higher retention) because customers are receiving what they need in the way they expect from the product and the company
- Increased revenue because customers are staying longer, expanding their accounts, and sending in new leads through advocacy
- Greater opportunities for sales and marketing because successful customers are more willing to share their knowledge and successes with others
Customer growth isn’t just a new way of looking at the sales pipeline or the marketing funnel or customer happiness; it’s a whole new way of thinking about growing a business. It requires the entire company operating on the philosophy that customer success is the ultimate goal in order to ignite growth beyond what has traditionally been possible.
Download The Complete Guide to Customer Growth to learn more about how to ignite customer growth in your organization.