In a recent engagements, as with every company, there were challenges in both tapping existing customers for additional growth (NRR) and maintaining those customers in general (GRR). One customer in particular stood out to me. The customer had several open tickets, would not renew beyond 90 day terms (several quarters over) the general tone was negative. For all involved.
This was especially frustrating for the sales and CS teams because this customer was a smaller subsidiary of a much much larger entity, and without getting this division up and running successfully there was little hope of getting “higher and wider” with their products for the benefit of both the company and customer.
Here is a step by step outline of how we addressed these issues:
- Take a step back: The first thing that was needed was for the account team to step back and take a breath. I observed a lot of (understandable) frustration with the customer among the team members. I couldn’t blame them - the customer was never happy. Conversations invariably got bogged down in ticket review or constant asks for updates on feature enhancements.
- Learn about, and from, the customer: We implemented a workshop (used across the company with each customer) that allowed the customer to share their processes and how they used the company’s tools. This process was conversational, with a lot of discovery done by the sales and CS team members to identify pain points, where possible quantify the impact of that pain, and more generally evaluate how the customer was using their tool against best practices. The most valuable outcome of the workshop? The customer felt “heard”.
- Huddle: Once that workshop was complete, the team met internally to evaluate what they had learned. While they were able to capture many areas where either growth in use of the existing product or purchase of another product would benefit the customer, the lowest hanging fruit was simply revising the processes where the tools were being used.
- Current state, target state: Once they identified what they wanted to focus on, and having already documented the customer’s “current state” they were able to create a “target state” vision for the customer, should the customer adopt their recommendations. The target state included both the recommendations for process improvement and a quantified projection on impact in productivity the customer would see within 90 days.
- “The EBR”: Prior EBRs hadn’t been received well by the customer, and so a new template was used with sole focus on both quality and the customer (in line with "lean" thinking). The presentation had no vague documentation of “accomplishments”, no reporting on ticket status improvement, or any of the other agenda points often used to "justify themselves". This template had substance. Clear and succinct, customer focused, visually documenting both current and target states, and a business case projection.
The result:
- The next renewal (which was pending) the customer signed wasn’t for a few months, it was a multi-year commitment to each other.
- Champion/mobilizers stepped up from the customer side.
- Executive relationships were established.
- Access to this particular group’s peers (wide) and to the parent company (high) was unlocked.
- And more importantly, the relationship between the account team and the customer was "reset", picking up momentum with a focus on value and growth.
To sum it up - Impacting NRR/GRR and thus ARR growth, while challenging, can be addressed customer by customer by taking time to understand the customer’s business and use of your product, collaboratively identifying pain points (in this case via the workshop), stepping back to assess how those pains can be addressed, presenting back a current and target state format with a value projection associated and finally, execute in cooperation with the customer. Measure, iterate and repeat.
"Dustin completely changed how our Sales and Customer Success teams work together, giving us the vision, direction and tools to transform customer relationships from high risk of Churn to high potential for growth" - Jessica Navarro, SVP Customer, autoRABIT.
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