Rules for Increasing Retention and Creating Growth Within Existing Accounts
If you’re in business today with a recurring revenue model, of the biggest questions you must ask is “where are the gaps in my revenue engine?”
You may also be seeing an all-too-common trend: customer churn and/or a slowing trajectory of revenue growth.
I talk to CEOs about this topic all the time, and the patterns have proven to be pretty consistent. Most companies have revenue engines that run on delicately intertwined gears of new logos, retention and upsell/cross-sell.
If one gear isn’t working effectively, the others have to work harder and exude more effort in order to make up the difference.
How We Did this at Influitive
I spent over five years on an amazing journey with Influitive where I had the privilege of seeing this process in action. And let’s be honest, Influitive isn’t the exception – it’s the rule.
Companies all over the map have experienced retention issues that cause new logo teams to have to push harder and close more revenue in order to close the gap. This is the kind of problem that everyone in Customer Success stays up all night thinking about how to avoid.
It’s one of the worst problems to have – an old leaky bucket with holes you have to close up to stay afloat.
My goal at Influitive was to systematically increase retention and to create growth opportunities within existing accounts. I also wanted to find a better way to help customers see value and quantify what they were receiving.
The real mission here was to ensure that the incredible effort and dollars that were put towards winning new logos were not only worthwhile, but were returned at an even higher multiplier.
Here’s how we tackled the problem:
First, a few of us got together began to scrutinize the problem. We did this until we fully understood our customer segments, our typical customer journey, and the critical touch-points at which we needed to engage a customer. It was critical for us to take a step back and understand the big picture of our entire customer base and it’s unique “personalities” in order to best manage them.
Pro tip: Once you reach 30+ customers you can no longer afford an ad hoc approach, you must look at as much data as possible (i.e. customer growth metrics, on-boarding times, retention metrics, company sizes, customer LTV, overall time spent in support and managing customers) so start tracking data now! One major goal is to find common stages that every customer must follow along your customer lifecycle. For example with on-boarding, you may find 6 key steps that every successful customer has gone through. While timing might vary, these 6 steps don’t. This is an exercise that needs be done once you reach about 120+ customers again for the purpose of segmentation and becoming more efficient and focused when managing your customers.
The more you can track and learn from real data, the better outcomes and confidence you’ll get from experiments and changes.
Armed with this info, we began to formalize the key questions we would need to Go to the full article.