Five Ways to Increase Customer Share in the Subscription Economy
We’ve reached the midway point in 2016 and now’s the perfect time to reevaluate – or even re-think – your current growth strategy. Traditionally in our industry, business growth has been built around gaining market share: adding new logos, making more deals and fueling the sales pipeline.
“Being successful in this new economy increasingly requires that companies actively manage their customers during their engagement relationship, instead of just focusing on making the technology sale.” – Forrester Research
But we all know it’s more costly to land new customers than it is to retain existing clients. Experts say it’s as much as 15% more costly. And as the subscription economy continues to transform the world around us, “customer share” is emerging as the growth strategy that makes the most business sense today.
What is customer share? It’s a growth plan geared toward earning more revenue from fewer customers — as opposed to looking for growth from more new clients. Instead of focusing your sales team on new logos, the emphasis is on expand selling and growing customer lifetime value (CLV).
Initial Sale = 5-30% of revenue
Post Sale = 70-95% of revenue
– Source: Totango, Customer Success Putting the Pieces Together
As trust is built with existing customers, new and more valuable opportunities often arise with them during post-sale engagement. In fact, Totango says up to 90% of a company’s revenue can be generated in the post-sale phase. That’s because the ability to upsell, cross-sell and expand a client relationship becomes much easier when a trusted partnership is already in place.
Expanding relationships with customers isn’t always automatic, however. We have to work at it and stay focused on how our technology can help the customer achieve their preferred business outcomes. With that in mind, here are five tips for increasing wallet share with existing clients:
- Focus on product adoption: The key to selling more with existing clients begins with driving value realization and encouraging successful product usage. Effective and complete product adoption enables you to build trust, and it opens the door to new opportunities.
- Build value realization across all stakeholders: Opportunity is driven by the value the customer feels they are receiving. Not just the value of the product, but also the value you provide as a trusted advisor. Value realization should extend across all stakeholders in the client organization. Think CFO, CMO, Call Center and more. The more stakeholders see value, the more growth you’ll see with clients.
- Conduct more effective, more frequent business reviews: Although the traditional Quarterly Business Review has its place, customer relationships grow faster when they are less about formalities – and more about trust. In a value exchange model, decisions are made using information that is current and timely, which means having more frequent and more meaningful, outcome-based conversations with your customers is essential.
- Use data to uncover additional opportunities: We all use a variety of tools that capture data. This data can provide actionable insight to help you grow wallet share, too. Through access to your customer’s Smart Net Total Care portal, for example, you can interpret their data and conversationalize it to anticipate their needs and offer solutions that support their desired business outcomes.
- Use automation: To successfully address the opportunity at the bottom tier of the pyramid, it’s important to use data-driven, automated selling solutions. Automation helps you connect more effectively with clients—from the moment a product or service is purchased; to the point that it is adopted; and across the upsell, cross-sell, renew and refresh phases. An intelligent and automated approach to digital engagement puts you in position to deliver more value, be more proactive, discover untapped opportunities, and find new ways to scale your sales practice for increased profitability.
As you rethink your growth plan, it comes down to this: when picking a strategy, do you want to invest in acquiring more customers, or in making sure that your existing customers keep buying more from you?
To find out more about growing customer share, visit SuccessHub.