Game On!

To win the new game, you must smash through the old walls that stand between your cu- stomers and recurring value realization. To do this, create a revenue growth and profitability strategy centered on the core mission of customer adoption. This will:

Increase the likelihood of acquiring new customer revenue

De-risk the possibility of failing to retain that revenue

Increase the number of opportunities to expand that revenue.

Customer adoption is not simply achieving the customer’s usage of your product.

Customer adoption is the ongoing achievement of prescriptive Value-Based Outcomes. Value-based Outcomes serve as adoption milestones that can be repeatedly achieved across your customer base.

Why prescriptive? To achieve scalable, predictable and profitable growth in the new game, standardized ways of delivering recurring value realization are needed. Sales teams squeezing the square customer into the round product does not create a customer that can be retained or expanded. Instead, a customer expecting outcomes that can’t efficiently or effectively be delivered is left. These customers will churn.

Using your team’s expertise in your technology and target markets, define prescriptive Value-Based Outcomes for each of your customer segments. Once defined, Adoption Methodologies can be created to achieve these outcomes on a repeatable, scalable and measurable basis.

Adoption Methodologies consist of interdisciplinary processes, activities and roles that synthesize customer acquisition, retention and expansion. Such standardization enables your sales and customer success engines to be integrated across the customer lifecycle, starting with customer acquisition.

Successful Adoption Begins During Acquisition

Execution of your Adoption Methodologies starts the moment a customer enters your sales funnel as a new prospect. Design your sales qualification, discovery and presentation/demo processes to fully align with your Adoption Methodologies. By doing this, you are creating alignment with how your Customer Success Organization is going to deliver, maintain and measure adoption.

Through this alignment, you are also providing the prospect with a high degree of clarity on how they will realize value with your product. This clarity will serve as a competitive differentiator. It will de-risk the investment for the prospect enabling larger upfront investments to be sold and sales cycles to be accelerated.

In the new game, Customer Success is accountable for ensuring that the path to value realization for customers is fully planned and achievable BEFORE that customer is acquired. Enter the Customer Success Architect.

Customer Success Architects are part of your Customer Success Organization. They are incentivized accordingly. This could be a new headcount. This could be an evolution and transition for your current pre-sales resources. This could be a new dimension for your Customer Success Manager role that will also be overseeing the execution of the adoption plan anyway. Regardless, it’s a role that will increase new revenue, reduce revenue churn and sow the seeds for future revenue expansion.

The Customer Success Architect serves as the bridge across which the customer will pass seamlessly from Sales and into your Customer Success Organization. The customer who is greeted with a lengthy list of questions related to discovering their goals and requirements on Day 1 of their subscription is a customer instantly on the High Churn Risk list.

Customer Success Architects focus on working with the prospect to:

1) Agree, quantify and document their desired Value-Based Outcomes

2) Achieve customer sign-off PRIOR to deal closure on the plan to enable realization of these outcomes and so successful adoption. The buildings blocks for these plans are predefined in your Adoption Methodologies.

The new game requires an original approach to sales opportunity governance in your business.

Ring the Bell for Expansion

In the new game, your revenue expansion strategy is more important to the long-term success of your subscription revenue business than your new customer acquisition strategy. Studies have suggested a 65% increase in cost of customer acquisition over the last five years. The unit economics of your subscription revenue business will fail if there is a reliance on new customer acquisition.

When your solutions’ Value-based Outcomes are predefined and mapped in your Adoption Methodologies, paths to expanded revenue for your business are clear. This not only includes what expansion path should be offered to the customer next but also when the offer should be made to the customer. In the new game, your teams are well placed to:

Identify the next customer ready to invest in achieving new Value-Based Outcomes

Understand what Value-based Outcomes would next drive the highest value realization for that specific customer

Understand what Value-based Outcomes would be most efficiently delivered based on the adoption journey of that customer to date

Leverage strong customer relationships rooted in the success of achieving past Value-Based Outcomes

These four steps will lead to a customer investment decision to acquire additional users, access to additional parts of the solution or access to new products.

The debate over whether Sales or Customer Success should lead expansion selling in the new game is raging. The answer for your company can be found by asking which of your roles or teams is best placed to successfully and efficiently execute these four steps.

Insight and Foresight

The new game is not simply data-driven and analytical. It’s predictive. As a Revenue and Customer leader, you should know what is most likely to happen next in your customers’ lifetimes. This will inform what action should be taken next. You need to know which customer is next going to express reluctance to renew their subscription or demonstrate an interest in expanding to your new product line. To win in the game, you require foresight not just insight.

Key to achieving foresight is analysis of product usage/consumption data in the context of customer progress towards achieving their Value-based Outcomes. Because your Adoption Methodologies are standardized, leading KPIs can be created that will apply to both individual customers and cohorts.

To create these leading indicators, your Adoption Methodologies should map product functions to user roles with frequency of action. These formulas will define how customers need to use your product to achieve each Value-based Outcome. This enables the scalable production of predictive insights highlighting where a customer is failing to achieve or maintain successful adoption; or where a customer is heavily adopted and possibly prime for an expansion.

Providing your Sales, Customer Success AND customer stakeholders with this predictive insight enables proactive interactions to be had between all parties. Time can be spent with your customer actioning the triage plan designed to mitigate the churn risk already identified. This is opposed to spending precious time simply finding out whether there is a churn risk through conversations that are hard to schedule.

Your Revenue Transformation Opportunity Is Now

There is a new game impacting the top and bottom line of software solution providers of all sizes and ages. This new game is being played in the rising subscription economy. This economic paradigm reverses the traditional perpetual license revenue model in software companies.

As Revenue and Customer leaders quarterbacking your companies to greater revenue, profitability and valuations, your playbook must evolve to meet the demands of the new game.

By evolving your customer acquisition, retention and expansion strategies to focus on achieving repeatable Value-based Outcomes, your teams will:

Leverage strong customer relationships rooted in the success of achieving past Value-Based Outcomes

Leverage strong customer relationships rooted in the success of achieving past Value-Based Outcomes

Leverage strong customer relationships rooted in the success of achieving past Value-Based Outcomes

I help leaders in B2B SaaS companies and their partners build scalable, repeatable and predictable recurring revenue and lasting profitable customer relationships. The companies I work with increase Net Revenue Retention by double-digit percentages.

How? I align and integrate their Sales and Customer Success strategies, teams and systems through a focus on selling and delivering Prescriptive Value-based Outcomes to their Ideal Customers.

With over 15 years of leadership roles in B2B software go-to-market strategy, sales engineering and customer success, I’ve successfully smashed through the walls that separate sales strategy from post-sales strategy in so many software companies.

If you are a B2B SaaS business or partner seeking profitable growth through positive net revenue retention and improved CAC:LTV ratios, reach out and I’ll share my proven strategies and methodologies.

Website: www.valuizeconsulting.com
Email: ross@valuizeconsulting.com
Phone: 778-986-7811

Ross Fulton

Founder & Principal, Valuize Consulting