Customer Success: The Key to Revenue Optimization
Your customers are now subscribers. We have shifted to a subscription economy in nearly every facet of our lives. Do you use rideshares to get around town? Get a discount by subscribing to Lyft. Tired of big, expensive software upgrades every few years? Subscribe to Office 365 or sign up for Gmail. Need a fresh cup of coffee to start your day? Get it cheap with a subscription to BK Café.
While the pervasiveness of the subscription consumer mode is intriguing from sociological and economic perspectives, it offers us new challenges and opportunities as we think about how to drive revenue in the B2B world. That’s why innovative executives are building revenue teams, and a key component of the revenue team is the Customer Success team, a group seldom discussed only a few years ago.
“Often it starts not even as a Customer Success organization, but more as part of operations, or support, or sometimes an offshoot of sales,” Bob Slaby, Chief Customer Officer for Altify, said in the recent webinar Customer Success: The Revenue Team’s Secret Weapon.
Sales teams must identify customer pain and the stakeholders looking to solve those challenges, as they have always done. But in the subscriber world, the close of the initial deal is only the beginning. Customer Success professionals work with customers to understand their true goals, share knowledge and best practices along the way, and ensure that customers have positive experiences in all their day-to-day interactions with the products and solutions they purchased. This combination of insight, expertise and focus on customer value delivers a great experience. Only then will customers continue to renew on a monthly or yearly basis.
Done well, Customer Success is a game-changer. Then “the renewal is essentially a non-event, and you’re talking about expansion,” Bryan Hamblin, Chief Sales Officer at Customer Success software company Gainsight, said on the webinar.
Organizations structure Customer Success teams in multiple ways, depending on how mature they are in their adoption of such teams. While Customer Success may initially be an arm of support or sales, eventually groups typically report directly to the chief executive officer, chief operations officer, or chief revenue officer. Customer Success teams are even the topic of board conversations for the most mature companies.
“The subscription economy was born pretty much in tech companies, and customer success has elevated quite a bit as a result of the tech connection,” Slaby noted. Some companies drive as much as 95 percent of their revenues from existing customers, making customer success absolutely critical to their business.
“You’ve got to keep growing and get new logos, expands, upsells, that sort of thing,” Slaby said. “But keeping your revenue base in place is equally, if not more, important.” Subscription-based business models require a focus on customer retention over time, investing in a long-term relationship critical to business success.
With the recognition that Customer Success — not only the initial sale — is crucial to the top line and bottom line in the subscription economy, companies are embracing a new approach called Customer Revenue Optimization, or “CRO.”
“Our focus is really is how do we best serve that customer,” Slaby said. “Everybody who is customer-facing, who is touching a customer, who is creating things that a customer will touch, contributes to the revenue team.”
The CRO sales approach focuses on value delivery to the customer as core to every interaction, combining sales strategy, methodology and technology.
“The challenge with sales methodology is that for a long time it has been a manual process that was not software-enabled,” Aragon Research says in its new report Hot Vendors in Customer Revenue Optimization. “This in itself created problems with deployment. Customer Revenue Optimization represents the next step towards a smarter and more consistent way to sell. Like the shift from the highly inefficient software development process to agile development, CRO is about applying a common way to approach and develop prospects throughout each step of the sale.”
Customer revenue Optimization replaces dated selling methodologies with a digital selling approach particularly attuned for the subscription economy. CRO can lead every group on your revenue team along a process with better win and renewal rates, greater deal value, and larger and better-qualified pipeline. Especially important to today’s executives and investors, everything is measurable, creating consistency in the trajectory and accuracy in forecasting.
“As we think about revenue teams, it’s classically been marketing and sales and now more and more Customer Success. So now you’ve got a prospect that’s become a customer. Well, great. Now, what do we need to do to make that customer successful?” Slaby said. “The reality is, why our CRO discipline is so important in Customer Success, is that it’s a subscription economy today. And even classic manufacturers are starting to think about how they implement a subscription model to make it easier for their customers to interact, to buy, to take what they need.”
Sales is no longer the domain of only the sales team. Your Customer Success team is your secret weapon for revenue optimization. As the subscriber mode of business dominates more and more industries, the value of Customer Success will continue to grow.
To learn more about how your Customer Success team can help you drive revenue, watch the webinar Customer Success: The Revenue Team’s Secret Weapon or contact us to see who we can help your team optimize revenue and delight your customers.