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The LAER Effective Company
Most TSIA member companies have utilized our LAER framework and best practices to improve their Service and Customer Success engagement models. Unfortunately, this innovative approach hasn’t permeated into Sales teams or their processes to the same degree. At most companies, selling to existing customers looks exactly the same as selling to new customers. The Sales team handles everything; there’s no difference in compensation, and there’s no difference in process. Marketing doesn’t even change their approach or messaging.
Putting your existing customers through the same process as your new prospects is massively inefficient. It would be like my wife and I trying to make dinner plans by using Tinder. Would it work? I guess so. But we already know each other, we already have regular lines of communication, and have a pretty good idea what the other one probably wants. You have those same assets with existing customers, and if you want to drive more revenue with them (and provide better outcomes in the process), it’s time to stop treating them like you don’t already have a relationship with them. Here are three ways to approach the problem:
Not too long ago, companies didn’t have useful data on how their offerings were being utilized and consumed by their customers. Now, with the proliferation of XaaS and IoT, companies have more data and information than they know what to do with, but they need guidance on where to start. Here’s a compelling finding from TSIA’s recent survey on the topic: Did you know that companies who examine their consumption data to find upsell and cross-sell opportunities grow their accounts at an annual rate 2.5x greater than those who don’t?
Fortunately, we’ll be covering this at our upcoming Technology & Services World conference in Las Vegas, in our session called “Uncovering the Hidden Opportunities You Already Have but Don’t Know Where to Look.” In addition, Mark Leff from Cisco Systems will give us some insight on the ways that Cisco has been able to find new upsell opportunities by mining their own data. If you’re going to make your sales process more efficient and help Services become a bigger part of selling motions, then actionable data needs to be the foundation of that enablement.
Companies who examine their consumption data to find upsell and cross-sell opportunities grow their accounts at an annual rate 2.5x greater than those who don’t.
Sales teams will talk to customers only a handful of times between the initial sale and the renewal, and usually in the hopes of selling them something else (by the way, utilizing the data you already have can help you avoid having your Sales team waste their time cold-calling your install base). Your Marketing team will send your customers emails on a regular basis, but these get opened less than 20% of the time, with actual click-throughs on the “call-to-action” on only 2%. But, as one TSIA member put it, “There’s no such thing as a click-through rate on my support line”. It’s a guaranteed connection.
The customer interactions with your Services and Customer Success teams are not only frequent, but also wanted and, in many cases, initiated by the customer. These interactions can be utilized to find and document leads for new opportunities, but also to deliver key messages and reinforce value propositions. To grow existing customers, you need a plan for making good use of these frequent, meaningful, and wanted interactions with Services.
If you’d like to learn more, or connect with one of our researchers at TSW, reach out to a member of our Member Development or Member Success teams to set up a personal discussion in Las Vegas. Not only can you meet with TSIA experts, but you can connect with other companies who have successfully utilized Services touchpoints in the sales process. Companies like Microsoft, Cisco, HP and others have told their stories publicly, and we encourage everyone to take advantage of the connections they can make and wisdom they can gain in this unique community.
Did you know that only 54% of Sales reps made their quota last year, according to Miller-Heiman’s CSO research group. Even worse, the average tenure of a vice president of sales at technology companies is somewhere between 19 and 24 months. What does this mean for Services? It means that if you want Sales to sell your offerings, you need to make them look more like products—standardized and repeatable -because if it’s too complicated, they won’t even try. Sales teams won’t slow down for you to create beautiful, unique, one-of-a-kind statements of work. For them, the clock is always ticking.
Only 54% of Sales reps made their quota last year.
CSO, a division of Miller-Heiman Group
The first step toward empathy is understanding, and at TSW Las Vegas, TSIA’s Martin Dove and I will lead the session, "An Introduction to Sales for Non-Salespeople”. Once you have a better understanding of the language, culture, and world of Sales, you’ll have a better chance of working well with them to grow customers. Also, be sure to hear the keynote from Andreas Heckmann, SVP, Head of Support Delivery, SAP Digital Business Services called, “How SAP is Maximizing Recurring Revenues Through New Service Models and Why Services are Driving Sales.” When the account grows, everyone wins (including the customer).
When Services, Marketing, Sales, Customer Success, and Sales Ops are all working in harmony, you’ll have a customer engagement model that is optimized for cost-effective growth. In fact, that will be the topic of J.B. Wood’s keynote on day 1 of the TSW conference, “Cross-Functional Strategies for Cost-Effectively Improving Your Customer Engagement Model”.
Companies that use Services and Customer Success teams to close upsells grow their accounts at a rate almost double of those who don’t.
So many good things happen when you focus on utilizing Services teams as part of the sales model. The leads they generate for upsells cost around 10-20% of what you’ll pay for leads through Marketing, and sales with existing customers close more than 40% faster than similarly-sized deals with new customers. Most importantly, companies that use Services and Customer Success teams to close upsells grow their accounts at a rate almost double of those who don’t.
In the meantime, remember the words of Lewis Carroll: “If you don’t know where you’re going, any road will get you there.” Attending TSW will help you form the road map for growing revenue from your existing customers. See you in Las Vegas.
Post Date: August 16, 2018
Steve Frost is the vice president and managing director of revenue research and advisory for TSIA. He also serves as TSIA's vice president of subscription sales research. Throughout his career, he has held various leadership and business development roles at companies like Google, Netscape, and Loudcloud, helping them define their go-to-market strategy and business development tactics. Steve is dedicated to helping technology organizations grow their services, subscription, and XaaS revenue by optimizing their practices for growth throughout the customer lifecycle.
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The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.