There were different focus over the years on what is the most interesting source of revenue for B2B start-ups. It started with Sales: why and how to focus your efforts on acquiring new clients. We also talked a lot about Marketing: how to come up with the best advertising strategy to promote your product towards the right target.
But recently, the focus has shifted from these traditional sources of revenue to new ones. Customer Success is one of them. We're convinced it's the newest most important source of revenue for B2B Saas. We're here to explain you why, through a data-driven strategy with churn and upsells at the core of your priorities, as they should be.
Before considering your Customer Success department to be one of your main sources of revenue, you must make sure your CS strategy is strong and efficient. We've covered a few topics in the past in our blog, such as how to anticipate your customers behavior or how to make the most of your CRM.
These tools all serve the purpose of adopting a data-driven strategy within your customer success team. By anticipating your clients' actions thanks to the right KPIs, you will be able to avoid issues and give them a product that perfectly answers their needs.
Once your clients are satisfied with what you have to offer, there are two different options you can go for. The first one is going out in the field, acquire new clients and thus increase your customers base. The second one is focusing your efforts on keeping your existing clients and increase the value they represent to you. Which option would you pick? Whereas the first one might be the most obvious one, at Nalia we'll go for the latter and here's why!
First of all and as you can imagine, losing clients means losing the revenue they represent. Add to that the amount of money you will invest in Sales and Marketing to find and secure new accounts to replace the ones you lost. It already is a valid enough logic to focus on keeping your existing clients. You will avoid yourself some stress and some money loss.
But to go even further (that only if you're not convinced yet), Bain & Company concluded that improving customer retention by only just 5%, can increase a company’s profits by as much as 95%.
That's it. We got ourselves an explanation on why reducing churn and improve customer loyalty should be at the core of your priorities!
So instead of investing in Sales, Advertising and so on, why not start working on your customer retention? Here are a few ideas you can begin with: start by finding the exact reasons why your customers churn. It is actually quite difficult to narrow these reasons down to 4 or 5 main accurate ones.
Once you're done, go even further: what would be a good enough offer to make for your clients to keep your relationship going? Do you have a valid and structured process on what offers your company can allow itself to make your clients stay?
Although it already is a whole piece of work itself, we also suggest working at the same time on how your clients can become more valuable. You got it: it's upsell we are talking about!
Through nurturing your existing accounts, you will naturally drive renewals. Indeed and that's a first acknowledgement, clients who subscribed to additional options generally tend to churn less than clients who kept their original subscription.
You will obviously also generate revenue that will cost you less money than acquiring new clients and you'll benefit from a faster close rate. The clients you're trying to sell something to, they already trust your company, your product and your team. 75% of the job is actually already done. The remaining 25% is showing them additional products that can help better answer their needs. Easy, right?
Depending on your strategy, you can also totally make the decision of reducing the commitment they're facing when subscribing to your options. Even easier. You can play with seasonality for example and create an urgency feeling. Let's say it's December and you launch a special offer on some of your products before Christmas. We bet your upsell revenue will be higher at the end of the month!
We hope you understood the vital importance of having a strong and data-driven customer success strategy ! It's the only way you'll reduce your churn rate: by using data to understand your customers and preventing them from leaving you. And that is the first way Customer Success will help you avoid losing money. In addition, start thinking about how to make your customers more valuable. Upselling is key! Selling something to clients you already sold to is twice as much easier. They trust you so go make the most of it and make Customer Success your new top source of revenue!