How to Beat Growth Targets Using Customer Lifecycle Management

In a previous post on customer lifecycle management, we covered the first stages from acquisition through delivery. Looking at the next stages, did you know that it’s 81% less expensive to upsell to an existing customer than it is to acquire a new customer? [Source: 2013 Pacific Crest SaaS Survey.]

The secret to sustainable growth for SaaS and subscription businesses is to focus on maximizing customer lifetime value.

Let’s take a look at results from a $500M+ leading online meeting company using ServiceSource’s Customer Lifecycle Management. They have achieved:

• 21% point decrease in customer churn


• $6M in upsells


• $2.7M in cross-sell bookings


• 91%+ renewal rate

How can you quicken your time to profitability and realize the high revenue potential from your existing customers?

UPSELL AND CROSS-SELL

Based on analysis of customer trends and buying behaviors, your account management teams can uncover upsell and cross-sell opportunities to drive higher customer lifetime value and reduce time to profitability.

In fact, a survey conducted by Pacific Crest in 2013 found that of SaaS companies with annual revenues greater than $10M, the highest-growing SaaS companies outperform the lowest-growing in upsells by an average of 14 percentage points.

RETAIN

By consistently monitoring usage data, your customer success team can identify at-risk customers and proactively engage them before you lose them. Cloud companies should seek to achieve 95%+ customer retention rates

RENEWALS AND ADVOCACY

As customers recognize real value from your solutions, they are more likely to renew. We’ve found it takes three to five touches per contract renewal at least 120 days in advance of the renewal event to maximize close rates. By monitoring data, you can develop and run sales plays tailored to each customer segment – and identify high-usage customers known as power users.

Ultimately, power users can be nurtured to become marketing references or advocates that evangelize the value of your products. Once customer success and marketing teams have defined these power users, you can cultivate them by developing user communities and creating loyalty programs.

Delivering customer value starts with measuring and understanding usage.

With a focus on driving growth, not only from new customer acquisitions, but also from your existing customer base, your customer data volume will grow exponentially. You need to make sense of all this data and turn it into actionable insight.

This is why it’s so important to have a system that allows you to capture and monitor ongoing user and customer usage and predict the next best action to take. Informed with these predictive insights, your customer success, account management and marketing teams can run the right play at the right time.

How to Beat Growth Targets Using Customer Lifecycle Management