Recurring revenue businesses are now more valuable and sustainable than ever. The Covid-19 crisis has led to an increased focus on revenue retention, with renewal business proving more resilient and predictable than new business in the downturn.
In our invitation-only Masterclass on customer-led product development, Go-To-Market strategy and client success, I had a very rich discussion with Victoria Mellor, Co-Founder of Kademy, and Paul Thoroughgood, Director of Go-To-Market Effectiveness at LexisNexis UK.
Here are my main takeaways:
1. The $100,000 Question: Meeting Fundamental Needs
The product you’re offering has to address a problem that your customers would pay to solve. Ask your clients: if you had an additional budget of $100k to solve your biggest challenge, what would you spend it on?
2. Unassailable Customer Relationships
Hire enthusiastic, smart and empathetic people who get close to your customers, and make the customer’s voice core to your internal meetings. These people might cost you more in salary, but you will see ROI quickly.
3. The Velvet Rope
Make your customer group a club that everyone wants to be part of, and nobody can contemplate leaving.
4. Pipeline Realism, not Pipe Dreams
It can take twice as long to close a Closed Lost opportunity than to win a deal. And if you can’t get your customer to provide a decision timeframe, most likely you won’t have a deal.
5. Decision Making Group Analysis
Identify the individual stakeholders, grade them as detractors / neutrals / promoters, and build a decision and influence chart that shows who owns the business goals, initiatives and obstacles. Ask about their pressures and politics. This won’t just help you to sell, it will give you the chance to show your client a new perspective on their business.
6. Think Principles and Prohibitions, not Regulations
Client success is not about being regimented: it’s about having engaged teams who are able to show initiative and passion within frameworks: so write and continually develop your Client Success Playbook.
7. Onboarding, Onboarding, Onboarding!
You can never spend too much time and effort on onboarding new trialists and customers. In fact, engagement during a subscription trial is a strong predictor of future renewals. So: focus on your onboarding process, even before you have converted a prospect to a paying customer.
We also talked a lot about the ‘how’ in the Revenue Retention Masterclass. Whether you’re already running a recurring revenue business, or looking to build one, I’d be happy to hear about your own journey, and share best practices.
Collingwood’s Scaleup Masterclass series is for its clients and partners. To find out more, please enter your contact details here
Nick Fallon
Senior Adviser
Collingwood Advisory
nick.fallon@collingwood-advisory.com