All too often, customer/vendor relationships are anchored around two milestones in the customer lifecycle: the initial sale and renewal sale. Typically, these two points in time experience the greatest, if not only, customer outreach and engagement. With
the rise of the Cloud and Subscription Economy, it’s easier than ever for customers to switch providers at a moment’s notice. As such, the one-time sales approach is now replaced with a value-driven approach anchored in customer lifetime value (CLV). Today,
customers only want to pay for what they use, and they only use what is considered to be of value.
Rather than focusing on points where the money is made – initial sale and renewal – vendors should take a “pay it forward” approach to customer success across the customer lifecycle.
How do you pay it forward with your customers to keep them loyal?
In today’s society, “paying it forward” refers to an act of kindness to a stranger – never expecting anything in return. For example, paying the toll for the car behind you or dropping spare change in a Salvation Army donation bucket. Through a singular
selfless act, a chain reaction of additional goodwill will ripple through the world.
Customer relationships should be treated in a similar manner: Vendors should continuously engage and demonstrate value throughout the customer lifecycle, without the expectation of an immediate add-on sale, benefit or even perhaps an expression of thanks.
Through these ongoing acts of customer commitment, companies will be setting the stage for deeper customer relationships and advocacy.
Here’s three steps to pay it forward and sell the value:
1. Understand your customers through usage data
Data on how often and at what capacity customers are using a product or service (their usage data) is critically important information for sales to strategically leverage for value-based engagement. Based on usage data, identify key metrics for customer success
throughout the customer lifecycle – not just whether or not renewal was achieved by expiration, by which time it’s often too late to convert non-renewals. Don’t you want to know if they are actually using what they bought from you?
It’s important to recognise certain traps when analysing and leveraging usage data, including not differentiating between customers, products, and sometimes even individual users.
2. Build the right team with the right tools
While usage data gives unprecedented insight into your customer base, you need a well-trained team in place to analyse and act on what the data reveals. Switching from a low to high-touch model is too great of a strain for most companies, resulting in in the
estimated $600 million in renewal dollars left on the table each year. However, providing the proper tools and analytics not only allows teams to act based on customers’ needs, but also helps prioritise, even automate, efforts.
3. Introduce customer success value-plays
Research shows that customer loyalty is built within the first 90 days of provisioning, after which there’s only a 10% chance of ever establishing loyalty. Since time is of the essence, tracking key success metrics across the customer lifecycle allows
vendors to quickly identify when, where and which value-based play to trigger.
For example, when data indicates a customer isn’t utilising a product capability that would be beneficial based on other capabilities being used, spend an extra 30 minutes on the phone to ensure the feature is fully understood – even if it doesn’t result
in a monetary reward. By doing so, you’ll not only score the renewal, but also have a higher tendency to tap into growth opportunities like cross-sell and up-sell when the time is right.
My parting words of advice are simple: base engagement and outreach not on how it benefits you in the short-term, but how it benefits the customer in the long-term.
Blog updated: 29 May 2015 13:53:25