Do you hear that sound?
That’s the rumbling of a long-overlooked source of growth for recurring revenue businesses.
And it’s about to erupt.
For so long, new acquisitions have held the attention of CEOs. Billions have been spent in the last 15 years to learn everything about our prospects. More prospects mean more customers mean more revenue.
It’s a company-wide celebration when the sales team lassos in another contract. There are pats on the back and an applause. Then, the sales process repeats.
But, what about that customer who just signed on?
They’d been held on a pedestal all the way through the sales funnel, however, now are feeling a little abandoned.
General Manager EMEA at Gainsight, Dan Steinman, has been cognizant of this unrest for years now. He’s generous enough to fill us in on the solution in our latest episode of B2B Revenue Acceleration.
The Subscription Economy
It’s no secret that the subscription-based business model is effective. More and more companies are moving to the recurring revenue design instead of selling one product for one payout. Examples of companies carrying out the subscription method include:
You get the idea. Although we talk mainly about SaaS companies here, the subscription model translates to a whole ecosystem of businesses.
Here’s the problem:
The subscription-based business model is so successful and is becoming so mainstream, that many companies are scrambling to fully understand their current customers and retain subscribers.
If we understand more about our customers, will we not be more successful in giving them value?
Customer Success is Business Success
Plain and simple. Dan has been in the tech game for over 30 years and this is the mantra he’s set on: Business success requires customer success.
Customer success teams are beginning to pop up in more companies whether that’s the term they use or not. However, Dan is concerned that CEOs still aren’t totally grasping the need for more investment in customer success. The movement towards retention does not negate the importance of acquisition, although there has to be a change in mindset.
You can no longer acquire your way to success.
Luckily, Dan identifies two main hurdles that need to be crossed before your business can optimize the recurring revenue model.
- Take current customers as seriously as potential ones.
This can be hard to hear. Of course you appreciate your current subscribers! But, are you addressing all of their needs? Are you collecting as much information on them as you are on prospects?
There should be the same drive to delight your customers as there is to impress leads. You can put all your resources into acquiring new customers, but unless you have the retention capabilities needed to keep them, it’s a loss.
In other words, customer success is absolutely critical to the longtime viability of a recurring revenue business.
- Understand that customer success CAN be measured.
Just as we touched on before, it’s imperative to collect information from your current client base. You have the ability to track every click, upload, session length, and more. Are you using that data to its full potential? Are you creating benchmarks to see how your product’s value improves?
Once you find a way to effectively mine through your user data, put it to use improving customer experience. Depending on how healthy your customers are, you can intervene, offer them more value, and ultimately affect the bottom line.
Customer success… has to become a process-driven, data-driven organization in order to deliver the results that we want.
Acquisition and Retention, Working Together
Sales and customer success can live harmoniously. Dan has experienced it. All the same, he has expressed frustration with CEOs who take a lax approach to customer success. There is still a great amount of educating that needs to occur to finally give customer success its rightful place.
For years the business mindset has been to gain as many customers as possible. Now, teams dedicated to post-sale processes are more important than ever. Those teams are adding value to the customer’s experience and making the work sales has put in, worth it.
Not to mention, satisfied customers are the greatest salespeople. Keep your customers happy and they will do the rest. Better yet, use data to predict what your current customers want before they even ask.
Don’t get left in the dust when your competitors implement a customer success system. Take advantage of the information you’re receiving from customers right now and show them the true value of their subscription.
This post is based on an interview with Dan Steinman at Gainsight.
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