I had the opportunity to moderate the “Grow Revenue Faster with Cross-sell and Upsell Best Practices” panel last week. I wanted to highlight some of the great tips on client retention strategies shared by Cisco Director of Sales Operations, Peg Nicholls and ServiceSource Senior Vice President of Customer Success, Ryan Thomas.
Before jumping into the Q&A, let me set the foundation for the panel discussion. As we are all aware there is major disruption happening in B2B organizations caused by the digital age and the associated velocity of technology change. It’s impacting every industry—from hardware to software to life sciences. The disruption comes with a number of challenges and requires more than just a new approach to pricing and product delivery. Everything is shifting and B2B enterprises face huge revenue challenges, including:
The most important thing while transforming your business to embrace these disruptions is that can’t take your focus off of the customer. Client retention strategies that only prevent churn are not enough. You must also reimagine how you engage your customers throughout their lifecycle to maximize Customer Lifetime Value (CLV).
While most companies realize the importance of CLV, unfortunately, upsell and cross-sell efforts are quite often done in functional siloes. The marketing team might initiate a cross-sell and upsell campaign, while at the same time the account management or channel partners are engaging the same customers trying to win a deal. Often, customer success and service teams are engaging the customer with little insight or coordination with what is going on with the expansion efforts being done by other functional groups.
There is really no synchronized method or program for customer expansion strategies from your existing base. And your customer ends up feeling “sold to” during critical interactions. This puts you at risk of alienating your customers by giving the impression that you don’t care about their business results, only about their money.
Any approach to growing CLV must be part of your customer expansion strategies to strengthen customer relationships and foster customer loyalty.
In order to ensure a synchronized approach to engagement and expansion after the initial sale, you need a holistic framework that includes a unique and precise mix of:
…to optimize customer success, revenue growth and retention.
We invited Peg and Ryan to get their expert view on how to drive customer expansion strategies through cross-sell and upsell initiatives. But keep in mind that your customers will not be ready for upsell and cross-sell campaigns until you have started to deliver the value and the outcomes your customer was promised from the initial sale. The webinar focused on the overall customer retention strategies, along with questions on people, process, technology, data and KPIs.
Q: How do you get started with a customer expansion initiative?
A: Ryan – “…Expansion starts with a great customer experience. Ultimately, if your customers feel that they are getting value from their investment, they are obviously more apt to spend additional money with you. But more specifically, to get started you have to understand at a deeper level how customers engage with their end-users at each stage of the lifecycle. It’s really important that you understand things like how the product is being used…and whether or not adoption is strong. As you work to build your knowledge around usage and adoption, you can then use that information to inform your upsell and cross-sell approach. Lastly, having customer expansion strategies that are purpose-built for upsell and cross-sell allows your team to engage much earlier in the customer lifecycle and be much more effective and ultimately more efficient for your sales effort.”
A: Peg – We look at lifecycle starting from incremental customer revenue—meaning how do we get new customers to expand, either from upselling or cross-selling to your existing installed base of customers or most importantly to keep an annuity revenue stream…we start with splitting customer acquisition into two main segments. One is those big Cisco customer deals, where we have relationships with customers from another business unit, and going down into our competitive base and selling department line of business applications. Then we move into how do we address the value realization for our customer base, and through our partners. Value realization covers everything from implementation, onboarding right on through to adoption. So we focus on empowering our partners to do that for our customers. Then the value realization leads to upsell and cross-sell deals.
Q: How do you ensure consistent and aligned customer engagement across various teams?
A: Ryan—“…It starts with what is the outcome that the customer expects from the partnership?” Then once we are clear on that, it takes mapping those outcomes back to the things we do for that client day to day. And then measuring those repetitively to make sure we’re consistently delivering at expected levels. And we do that through a process that we call ‘Customer Performance Targets’ where each quarter we sit down with our clients to get a clear understanding of their goals. Then those goals become the center of our universe, so everything we do revolves around exceeding those goals for our clients.
Q: What KPIs do you utilize? A: Peg—“Ryan covered it great. The only other thing that I would add is the attach rate—meaning attach rate to other services that we offer…are they leveraging all the capabilities that we offer.