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Growing Customer Lifetime Value: Here’s the Secret Sauce…

Your customers are the most important drivers of growth for your business. They’re often the reason new clients seek you out, and they serve as the source for post-sale opportunities and recurring revenue. It’s the simple truth.

But what’s also true is that in today’s digital age and dynamic business environment, where trust and loyalty isn’t what they used to be, maintaining customer health can be challenging to say the least.

So, what’s the “secret sauce” to staying on top of customer expectations and growing the value of your CLV secret sauce (2)installed base?

The answer is all in how you manage your customer data. Clean, actionable data intelligence can help you deliver greater value to the customer, create personalized experiences, accelerate revenue and profits, and serve as the primary catalyst for building customer lifetime value (CLV).

The Ultimate Goal: Expanding Customer Relationships

Growing CLV may mean different things to different people, but I think of it first and foremost as improving the end-to-end customer experience.  It’s the concept of serving customers well beyond that first deal and addressing the full lifecycle across all customer touch points. Along the way, customer satisfaction is improved, and for any sales organization,  there’s no denying that retention is tremendously important. Think about this:

  • Cost: Acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. (Source: Harvard Business Review )
  • Profits: Increasing customer retention by 5% can increase profits by a whopping 25 – 90%. (Source: Harvard Business Review/Bain & Company)
  • Value: 82% of companies agree that retention is less costly to execute than new logo acquisition, supporting the idea that ongoing profit from a customer lifetime is higher than any one single transaction. (Source: Forbes)

Your Greatest Limiting Factor: Bad Data

There are many roadblocks to CLV growth, and poor data quality is the top limiting factor today. Disparate data along with outdated, incomplete or inaccurate records can hurt communications, resulting in customer engagement that misses the mark, or sales opportunities that slip through the cracks.

Growing CLV requires that a sales organization effectively manage the data residing in their CRM, ERP, pricing, point of sale, entitlement and other systems. Aggregating and cleansing these disparate data sources to make the information complete and actionable is critical to providing a full 360-degree picture of the customer lifecycle.  Enriched, actionable data can enable your team to know precisely who to reach out to and when, with a message or offer that addresses the customer’s specific needs at that point in time.

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The We’re Listening Blog Series: Big Data Analytics Drive Faster Time to Services Quotes

Throughout the year, our customers and partners provide feedback to us about their experience doing business with Cisco. We take that feedback very seriously, and are constantly making improvements to address the most common themes we hear and improve the overall experience. In the We’re Listening Blog series, we close the loop to tell you about these improvements and the changes that our customers and partners can expect to see.

One common theme in the feedback is the Services ordering process, so I’ve asked Lars Thorsen, Director, Partner Services, to describe some of the improvements that the Simplify and Optimize Annuity Revenue (SOAR) team has been making in this space over the past year – and what they have planned for this year.

lthorsen By Guest Author Lars Thorsen

We are constantly looking to simplify our quoting and ordering processes, starting with the improvements you’ve told us you most want to see. We’ve been listening to your feedback via surveys and live forums throughout the year, and we heard you say that the Services ordering process can be “complex and cumbersome” and the Services contract tool, CSCC, is a bit “difficult to use.” More specifically, you told us that it takes too many resources and cycles to interact with CSCC. We wanted to make immediate improvements that would decrease the time it takes to receive a quote for Services. Read More »

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Cisco Partner Weekly Rewind – January 15, 2016

Cisco Partners Weekly Rewind Banner-650

Each week, we’ll highlight the most important Cisco Partner Ecosystem news and stories, as well as point you to important, Cisco-related partner content you may have missed along the way. Here’s what you might have missed this week:

Off the Top

On Wednesday, we unveiled Cisco Cloud Consumption as a Service (CCaaS). CCaaS is designed to help busineses address shadow IT challenges by providing visibility into the public cloud services an organization is using.

Robert Dimicco, SR Director, Advanced Services, talked about how this can benefit our partners on the partner blog this week.

Read his post to see how you can get started with CCaaS today.

In the Channel News

Good Reads

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Turbo-Charge Your Cloud Conversations and Uncover New Business Opportunities

I’ve spent a lot of time on the road over the last few months.  Europe.  Asia.  Canada.  Latin America.  And everywhere I go I talk to our partners.  The one constant: frustration over their ability to have a deep conversation with customers about cloud. Partners have told me their customers want to hear how they can leverage applications and cloud services to impact their business outcomes. However, they also say that their conversations are often relegated to ‘box-level’ discussions about speed and feeds and costs of specific technologies at the bidding phase of the deal.

What if I told you that you can discover every single cloud CS-info_blogservice your customers are using and help them understand the potential business risk or compliance challenges they are facing. And, armed with such insight, that you can uncover new cloud, security, and data center opportunities.

Too good to be true?  Partners can do all that and more with our new Cisco Cloud Consumption as a Service. This new product, now generally available, helps customers solve a significant challenge for their business and, at the same time, provides partners with insights and concrete data to help transform cloud conversations with their customers.

Shadow IT: Growing Exponentially

Customers are facing an explosion of cloud use. And it’s becoming a major headache for IT leaders.

On average, large organizations are now using 1,220 individual cloud services, largely without oversight, which leads to increased risk and spiraling costs. And it’s growing by leaps and bounds. The average number of cloud services used has grown 112% over the past year, and 67% over the past six months.  Additionally, the hidden cost of public cloud services is four to eight times higher than billed costs.

Cloud Consumption as a Service helps customers discover and monitor which cloud services are being used across the organization. It helps customers mitigate cloud risks, uncover redundant services to reduce costs, and compare providers and benchmark usage. Ultimately, it helps organizations strategically manage their cloud use and gain insight to inform their cloud roadmap.

If this sounds interesting, make sure to watch our Cloud Consumption overview video.

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Executive Insight: Q and A with SVP Wendy Bahr

Cisco Partners Executive Insight QA Bahr

Today on the Partner Blog we’re kicking off a new Executive Insight series, where we’ll be visiting with Cisco executives to gain insight into key focus areas, themes, and topics that pertain to our partner ecosystem.

And what better way to start than by having Wendy Bahr, SVP, Global Partner Organization, join us for a discussion?

Wendy became head of Cisco’s Global Partner Organization in July. She’s been extremely busy in her first few months, travelling across the globe to spend time with partners, hear their stories, and see first-hand how Cisco partners are driving innovation with customers. We got a chance to catch up with Wendy this week to chat about her new role, what she’s been hearing from partners, and what she’s most excited about as she prepares to host her first Partner Summit on February 29.

Darek Rensing: Wendy, thanks so much for your time. I know you’ve been quite busy since day one in your new role. Most of that time has been dedicated to partners, as you’ve travelled all around meeting with them and listening to what’s top of mind for them. What are your personal takeaways from these experiences, and what are the top asks of Cisco coming from partners?

Wendy Bahr: Well, to answer the first part of your question: we have, without a doubt, the best partner ecosystem in the world. I spent nine years in the channel before coming into this role, and this has allowed me to gain a deep understanding of the challenges that our partners face. It has also given me the opportunity to meet face to face with hundreds of partners – most recently during my listening tour in Asia Pacific, U.S. and EMEAR. I am – as always – impressed with the versatility, the innovation, and breadth of expertise that exists within our partner ecosystem.

Many of the conversations I’ve had with our partners over the past few months have been about the challenges around the breadth of Cisco’s portfolio, our sometimes complex processes, and the transformation of our business to a more software-centric, ‘as a service’ model. It’s clear that we need greater simplicity across our entire portfolio and better alignment between our partners and our field sales organization.

DR: Cisco has had quite a few announcements in the last few months – from acquisitions to major strategic partnerships announced with Apple and Ericsson. What do these moves mean for partners, both in the near future and over the long term?

WB: Cisco and our partners know first-hand that finding the right partner (or partners) is critical to deliver business outcomes to our customers. Our partners also know that Cisco is always looking ahead and moving fast as a company in order to capture market transitions and stay out in front of the competition. This is nothing new – we’ve been doing this for years.

What is new, and what these partnerships mean, is that we’re investing in Cisco’s market leadership for the next decade and beyond. A changing market means new opportunity, and we want to continue to foster growth, profitability, and customer success across our partner ecosystem. That means being bold and innovative and taking risks, but also positioning ourselves – and ultimately our partners – to be able to act quickly and adapt when new opportunities arise.

DR: There has also been a decent amount of change within Cisco and also within the Global Partner Organization. What’s your message to partners about why these moves had been made?

WB: As you’ve heard Chuck and members of our new leadership team discuss, every country, city and business is becoming digital. Cisco continues to evolve our business in the digital era to bring even greater value to our customers. As we do this, we must ensure that our partners are making this transformation along with us, capturing market trends and delivering what our customers need most, all while driving growth and profit.

Chuck’s vision for Cisco, our partners and customers in this digital era, along with what I’ve heard from partners globally, created a perfect opportunity to look at what we are doing in GPO and ensure we are focusing on the right priorities.

Based on all of the conversations that I’ve had with partners over the past several months – as well as my previous experience working with our channel partners – I’ve created a set of guiding principles designed to help provide the best resources, programs and experience for partners. These are centered around simplicity, alignment, and evolving our value exchange.

DR: Can you tell us more about these principles? Specifically, what do they mean for partners?

WB: Simplicity is about taking complexity out of the system; simplifying how we do business so we can spend more time helping our partners address market changes and capture new opportunities.

When I talk about alignment what I mean is increasing alignment between partners and the Cisco field to help them move faster, drive greater agility, and increase growth. I’ve heard from our partners that one of their main objectives is to be in sync with our sales teams. We need to facilitate this alignment, as well as provide growth opportunities specific to our partners’ respective regions. We also need to expand our connected partner ecosystem so that partners are prepared to capture unprecedented opportunities that will arise as we capture new market transitions.

Finally, the foundation of any good partnership is a mutual exchange of value where both sides feel rewarded. As our technology landscape continues to change, we need to revisit our incentives and how we reward partners. What has worked previously is not necessarily what will work today or in the future. Our value exchange needs to keep pace with the market dynamics and needs to accommodate different partner types and roles. It also needs to reflect, as I mentioned earlier, the transformation of our business to a more software-centric, ‘as a service’ model.

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