Contact Center Solutions Featured Article

Creating Customers for Life

September 18, 2014

All businesses aim to have a high rate of repeat customers, but especially in subscription-based enterprises this is integral.  The ability to target a potential up sell or cross sell with intelligible data and extend the customer lifecycle is a beautiful thing. Enterprises with this ability hold a distinct advantage in today’s business environment.

One company embracing this notion is Service Source - with a new formula for success in the subscription based economy.  TMC had the chance to sit down with James Dunham, senior vice president of Product Management and Ariane Lindblom, vice president of Solution Marketing to discuss the customer lifecycle and explore Service Source’s solution to it.

The first step in the customer lifecycle is acquisition. Enterprises aim to acquire as many target customers for as little cost as possible.  To keep costs low, they advised taking advantage of both low- and high-touch engagements.  Also, using automation to engage low-touch targets and interacting with high-touch engagement with ‘high’ hopes – since they present a ‘juicier’ opportunity. This can also lead to freemium or trial customers or prospective customers showing interest through behavior.  The five metrics used at this stage for analysis include lead conversion rate, trial/freemium conversion rate, close rate, average sales cycle duration and average contract value.  Remember, it is always far more cost effective to earn revenue from existing as opposed to new customers.

With the on boarding stage, an enterprise can start to live up to the promises made while making the sale, so it is vital to monitor and be ahead of issues as quickly as possible.  That means tracking deployment, prioritizing ‘needier’ customers, giving customers an understanding of success to reveal the value in your solution and rewarding implementation services and customer success for meeting deployment goals. 

 The adoption phase is where an enterprise can lock in a customer for life.  By monitoring product usage, personalizing adoption, incentivizing customer success and promoting some of your most innovative and useful capabilities, it’s possible to can stay ahead of the game of retention.  Key metrics for success at this phase include the percentage of active users at 30, 60 and 90 days; frequency of usage; and breadth of usage.

Next up is the delivery stage, where the rubber, as they say, truly meets the road.  This is when customers experience true value of the solution.  In this phase, quantify value received by talking with end users and reporting usage and adoption data.  If there are any fluctuations in customer, intervene and engage.  As customer demand and needs change; strategies of product usage must adjust to customer trends.  Metrics used to measure success at this phase are customer ROI, service level agreement attainment and customer satisfaction.

At this point, the enterprise has a customer base, but how does one keep that base long-term?  One way is through up selling.  A good solution will monitor subscription counts, popular features and overages to notify sales as to where and how they should be proactively putting their energy. Use pricing as a tool, and target rate plan changes or target annual price increases.  Through report usage and value selling one can meet their up sell objectives.  In this phase success is measured through the metrics of average contract value (ACV), up sell quota attainment, conversion rate, customer satisfaction and average ACV per customer.

Aside from the up sell, another method is the cross-sell.  To successfully cross-sell a client one should promote strategies that promote high value-add and premium features and proactively report cross-sell opportunities.  By promoting targeted offers to end users displaying the desired behavior and monitoring the end user usage and patterns of purchase new product offers will illuminate themselves. Measuring cross-sell success can be done by looking at cross-sell quota attainment, conversion rate, compliant subscription percentage, average ACV per customer and, of course, customer satisfaction.

A key demographic are those at-risk customers with low usage rates who are underutilizing the solution.  By identifying this group through personalize plays to the end user based on usage, create and maintain a customer health scorecard and monitor for underutilization and declining usage it becomes clear when and how intervention is necessary.  Measurement in this phase is through the metrics of usage rate, discount rate and conversion rate.

Another group to be keenly aware of are those coming up for renewal.  Give that group opportunities and quotes to renew far in advance of their expiration date—make sure to reach out 90-120 days in advance.  Each segmented group of “renews” must receive a personalized plan of action by ensuring the key bases are covered and train account managers on the strategy of the up sell and cross-sell—and when they are appropriate. The metrics of success used here are final renewal rate, resolution rate and in-quarter renewal rate.

Finally, a paramount piece to the puzzle is advocacy.  By identifying who one’s most active users are, and seeing who is gaining the high value from your offerings, it creates the opportunity for walking, talking advertisements.  Communities of users can be developed to create best practices, and by fostering these relationships the door is left wide open for a very profitable long-term partnership. Referrals earn these advocates entrance in a loyalty program.  To measure levels of advocacy, the metrics employed are percentage of reference-able customers, positive/negative or neutral sentiment and a customer’s net promoter score (NPS).

Analytics can seem a bit overwhelming, unclear and like quite a bit of hot air at times, but the team at Service Source is leveraging them to offer enterprises repeated success and revenue throughout the customer lifecycle. Its solutions offer data in an executable fashion that’s not overwhelming - giving a sales force solid footing and direction by letting the analytics engine gives back targeted, clear and concise information.

Edited by Stefania Viscusi