This content is currently only available to TSIA members.

If you believe you are seeing this message in error,
please let us know.

Join the conversation!

Customer Growth and Renewal

How to Grow Your Customer Base In House

Taking Control Of Your Expansion and Revenue Growth Goals Without Calling in the Calvary

4 min read
By Jack Johnson
Do you have a customer growth problem?

Whether you sit in Sales, Support, or Customer Success, the fact remains that it is easier to grow revenue off an existing customer base than it is to hunt down new acquisitions. Yet too often we see growth plans focused on market conditions, propensity to buy, segmentation, and solution mapping. The expansion plan however...well, not so much detail.

Sales will handle it when they are not chasing big deals. Customer Success Managers or Renewal specialists will grow it somehow. Everyone owns this miscellaneous expansion opportunity, but no one really does. And as the saying goes: Failure to plan is a plan for failure.

Why You Need a Customer Growth Strategy

We speak with many Customer Success and Support leaders annually that say they exist somewhere between ineffective support attach performance and savvy procurement officers bent on reducing the cost of support. They can’t load the “bucket” on the front end with enough net new revenue, and they struggle to defend the “leaky holes” in the bucket on the back end.  This proverbial rock and a hard place can seem hopeless.

Then, you come away from an executive planning meeting and learn that you’ve impressed everyone so much with your leadership that you get to grow Service or Customer Success revenue by double digits next year. You're going to be a hero.

After all, look around the market.  The only place that revenue is really growing double digits is in Services–either traditional services or technology subscription services (see figure below).
Revenue projections showing service growing, as discussed above
Service vs. Product Spending and Revenue

In these conditions, growing your customer base and expanding it should be possible, but how?

5 Levers for Customer Growth You Can Do In House

Through data collected from years of benchmarking, we have identified a number of practices and strategies that drive superior growth. When these levers are coordinated across the Land, Adopt, Expand, and Renewal lifecycle between Sales, Customer Success, and Renewal Specialist, growth happens. In fact, when Customer Success Managers initiate expansions mid-cycle and are rewarded for growing revenue, renewal rates go up double digits. Let's have a look at the customer growth process.
The 5 Stages of Engagement
The 5 Stages of Engagement
  1. Gather and leverage account intelligence.

    The first step in growing your own “food” is to start looking at what data and information you have available to you right now. This is not an act that requires a million dollar consulting firm to provide market analysis and customer surveys. If you want to know how well customers perceive the services and goods sold, just ask your Support and Customer Success teams. They work with customers daily and have tons of data for consumption, utilization, and more. Simply collect, organize, and operationalize the data right in front of you today on things like:
         - Support cases.
         - Usage or utilization data.
         - CSM documented notes.
         - NPS surveys.
         - Product downloads.
         - Education classes taken.
    All of these sources provide insights into how to grow your customer base. The trick is converting pain values to revenue opportunities. This means working with sales to translate the information into lead opportunities.
  2. Participate in the sales process.

    If your Support or Customer Success organization is 100% focused on customer sustainability or adoption with no expectations for helping the customer move to the next horizon of value, you are missing a huge opportunity. Add revenue thinking into the organization charter and then team up with Sales to become actively involved in the process. They will LOVE you for providing qualified leads and you can become a critical partner in connecting value gaps to sales opportunities. Helping will Sell.
  3. Generate leads.

    Classic lead generation places the emphasis on understanding budget, authority, need, and timing. For expansion motions led by Support or Customer Success, instead focus on who is having what problem and what is their sense of urgency to solve this problem. We are looking to identify gaps a customer is experiencing in their desired outcomes (what pain are they feeling) and translating that into sales terminology. Then, record this information in a formal platform that places the lead under responsibility for a sales person to follow up. This also should track the lead for performance and compensation recognition. In mature situations, the Customer Success Manager may go to the next phase…
  4. Close the Deal.

    Having Support close a deal is not a typical scenario, but it is common for Customer Success organizations to participate in closing upsells or expansions that are simple in nature. These deals will generally not require a significant new budget, new decision makers, a significant change in need, or unusual timing circumstances. When Customer Success is closing deals, they will typically also have specific targets, goals, and linked compensation directly tied to the achievement of the goals. It is key to have a very clearly articulated and aligned sales strategy. As the saying goes, “support a swim lane.” Customer Success has a swim lane; Sales has a swim lane. When businesses close prescribed conditions then the work moves to the best resource to effectively take action.
  5. Renew the Deals.

    Renewal starts at onboarding and adoption, not 30 days prior to expiration. The account is managed along the lifecycle and increasingly it is the Customer Success Managers that not only owns the Adoption, but the Renewal as well. As complexity grows, the renewal phase will be specialized in Customer Success or moved to a sister organization dedicated to the renewal of the business. When adoption and expansion are done well, renewals will close at higher rates. Having Customer Success own the process allows for reduced handoffs with better awareness of the customer’s condition.

Benefits of Participating in Customer Growth and Expansion

Growing your own customer base requires advanced business capabilities in terms of KPIs, best practices, skills, and compensation. It is not an endeavor to be casually laid on top of a Support or CS organization. Companies that are investing in building these capabilities see improved revenue growth and long term customer value achieved.  

Today, we see more and more post-sales organizations stepping forward to share in the responsibility for driving company revenue and growth. Sales, as good as they are in net new customer acquisition, can not attend to the entirety of the revenue opportunities as primary owner. When sales opens the field of play for Support or Customer Success to step forward in the sales strategy, companies grow faster.

 

 September 30, 2021

Jack Johnson

About Author Jack Johnson

Jack Johnson is the vice president of customer growth and renewal research for TSIA. In this role, he works closely with member companies to deliver research and advisory programs focused on helping them grow and renew services revenue effectively. Throughout his career, he has held Renewals, Customer Success, and Operations leadership positions at technology companies providing enterprise software or hardware, or in business services companies helping technology companies growing recurring revenue.

Topics discussed in this post

Recommended Reading