Forbes finds focus on Revenue Lifecycle Management is key to revenue growth strategies
I recently had the pleasure of working with Bruce Rogers, Chief Insights Officer for Forbes Media, to present the findings of a wide-ranging study Forbes had undertaken on behalf of ServiceSource, to understand how successful B2B companies are using revenue growth strategies to manage the increasingly dynamic and exacting demands of their customer bases.
The results were very interesting, highlighting a common trend that applies to successful revenue growth strategies across a number of diverse industries and markets, from Healthcare and Industrial Systems companies in Europe and Asia, through to SaaS and software leaders in North America. This common thread is what we’ve described as Revenue Lifecycle maturity, and those companies that score highly are amongst the most successful and profitable on the planet.
Revenue growth strategies matter
Revenue growth from existing customers is rapidly emerging as one of the most important measures by which to judge successful companies. The rationale behind this is simple:
- Many industries have matured beyond the “land grab” phase of maniacal focus on new customer acquisition to the exclusion of all else. A good example of this is the mobile telephony industry, where getting new customers in mature markets like the US and Western Europe is no longer the objective. Everyone who wants and can get a phone these days has one. Fighting over taking existing customers from competitors is expensive and can be relatively unprofitable, but extracting maximum value from the customer base you have built is directly accretive to the bottom line. Put simply, it makes sense to prioritize extracting value from the investment you have already made in acquired customers
- We all know that the cost of acquiring a new customer is between 5 and 7 times that of keeping an existing customer. The real challenge, however, is to understand which of your customers drive most profit to your business – and then to prioritize keeping them – versus spending your resources on acquiring new customers or keeping unprofitable ones.
Overcoming these challenges
Faced with these challenges, the principles of Revenue Lifecycle Management – focusing on the customer journey throughout the lifecycle of their engagement with you, from onboarding and adoption through to cross and up-selling new services, retention and renewal – are seen as evident best practice for customer-focused organizations. In the Forbes research, which canvassed over 300 senior executives who are deeply engaged in plotting and delivering revenue growth strategies on behalf of their organizations, a clear correlation was found between high-performing companies and those with relatively high RLM maturity.
One of the questions that Bruce and I were most often asked when sharing these results was “How do I start to implement a RLM-type approach?” Whilst there is clearly deep complexity in most businesses, and no one size fits all, there are some common key steps to help you get started:
- Map your customer journey. Trace how and with whom a customer interacts with your organization from the moment they purchase through their entire lifecycle consuming your products and services. The revealed complexity, and dissonance, may well surprise you!
- Identify your customers’ value drivers and how and when they receive these from you. Understanding what is important to your customers and how good a job you are doing at delivering a great customer experience, is vital. Be honest and call out the gaps you see.
- Make a conscious effort to engage your customers OUTSIDE of the selling event. We found that most companies focus primarily, and in some cases exclusively, on the selling-related customer activities to the exclusion of vital engagement in onboarding, adoption and retention. These three areas will likely be where you will see the biggest returns most quickly.
- Finally, be prepared to experiment, take risks and try different strategies even if they fail. Incorporating or leveraging investments in tools and technology that you may already have made to help better understand your customers can be very helpful, but having the courage and tenacity to question the status quo and to drive changes that deepen customer engagement at the expense of the received organizational wisdom of “this is how we’ve always done it here,” marks out those companies and individuals who have been particularly successful in this area.
Authored by Mark Hennessy, Senior Director - Customer & Regional Marketing for ServiceSource. Mark joined ServiceSource in 2010 and in his current role is responsible for the company’s customer marketing on a global basis and for regional marketing in EMEA and APJ. He has more than 20 years business-to-business marketing experience including product, solutions and channel marketing, marketing strategy, marketing communications and PR, sales enablement, marketing planning and integrated campaign management for a number of international technology companies. He has specific expertise in the software, services and business process outsourcing (BPO) spaces.