Revenue Retention is the Key to Scalable Growth in 2023

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(image credit: Totango)

Retaining customers has always been less costly than landing new ones, but in today’s economy, retention, renewal, and expansion have become the most predictable, scalable growth on which your business can depend. Amid tightening budgets and shrinking teams, customers still expect your business to deliver value at every interaction – making the customer journey one of your company’s most essential products.

As a customer success leader with almost 20 years’ experience in SaaS, I believe the companies that thrive in 2023 will be those that act on a customer-centric mindset and make their current customers a priority over securing new ones.

Yesterday’s Business Model Falls Short

In a decade that’s proving to be one of continuous change, 2023’s headlines reflect ongoing cost-cutting among major tech vendors.

With businesses scrutinizing their budgets, new logo acquisition can be a challenge and no matter how hard you work to retain customers, layoffs and budget cuts may lead to a reduction in subscriptions.

In this climate, revenue retention has become both essential to your success and more challenging to accomplish. That’s why it’s vital to have a customer success practice that puts customer outcomes at the center of every decision and the right processes, systems, people, and technology in place to pivot quickly in the face of change.

In a cloud-based environment that relies on subscriptions and renewals, the traditional sales acquisition cycle falls short because the closed-won deal is no longer the finish line. It’s instead a milestone in an always-evolving customer journey. Even in the best of economies, if a big customer buys in but isn’t successfully onboarded or supported through any part of their journey, they won’t have a reason to renew, let alone expand.

That is why the customer journey is your company’s most important product and must be iterated and improved upon as you would any other product.

The Journey As Your Product

There is often a misunderstanding that customer success is the same thing as customer support, account management, or enhanced customer service. What I love about customer success is that it centers around the singular focus on supporting outcomes for the customer. While this is led by the “Customer Success” team, it requires all teams to bring their unique expertise to creating value at each stage of the journey – from sales to customer success, from support to engineering, and from marketing to product.

The customer journey is the product of your customer success practice, and also how your customers holistically experience your company. Creating consistent, scalable growth means leveraging all your telemetry and all your teams to compose journeys that deliver so many moments of value that your customers can’t consider leaving.

In addition, when you deliver value to your base, your customers will become advocates, which further supports new business growth.

Starting Your Customer Success Journey

While there is no time to waste in delivering value to customers, there is also no time to panic. Creating scalable growth means building your customer success practice in a scaled manner, piece by piece, so that you are always building and improving that journey.

Start with a single challenge or friction point, determine how to tackle it in the right way – and then measure, iterate, and make it even better. This will not only grow your practice so that you create a consistent experience for customers and strengthen your brand, but it will also keep your company agile as your customer’s needs shift and change.

Where You Can Take Action Today

To get you started, here are three actionable points in the journey that you can evaluate and tackle now.

Onboarding: When your customer enters onboarding, they are filled with hope and excitement! Remember, they just finished making a decision to leverage your product, so it’s critical you seize this opportunity to show value. As you design, build, measure, and iterate your onboarding process, make sure you are engaging and supporting your customers so that they achieve their first value as quickly as possible. Automated processes and systems that help streamline this essential part of the journey are key to creating a great customer experience, as are those that provide visibility into how customers are using your product so you can continue to deliver more value.

Adoption and Customer Health: Once your customer is onboarded, it’s important to track how they are doing so that you know where you are delivering value – not to mention where you need to improve. This can seem an overwhelming task, but once again, the key is to start simple and iterate. Pick a couple of areas that clearly indicate that a customer is healthy, and start tracking those. Then review, adjust, and sharpen your focus to build out the overall health profile for your customers.

Renewal: Ideally, when a customer reaches this stage, you’ve kept your eye on customer health and have succeeded in driving value throughout the relationship such that there’s no question about whether they’ll stay. But when that’s not the case, it’s time to look back at your journey and identify areas where your processes need to be improved.

Each time you identify a place where friction exists, you’ve found a new part of the journey to design, build, measure, iterate, and improve – and the journey continues!

Chris Dishman
Chris Dishman is Vice President of Customer Success at Totango. After spending nearly 20 years of progressive customer success leadership at ON24, including playing a central role in the company’s IPO, Dishman is focused on elevating how Totango customers maximize the value of their CS programs and technology purchases. He also leads the post-sales support and customer training and enablement department to help ensure a seamless customer experience after purchase.

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