How to drive more growth from your existing customers
Focus on demonstrating impact
This post goes into the details of how to drive more business from your existing customers by building a growth motion into your go-to-market strategy. A growth motion has 3 phases:
Getting to first impact
Demonstrating recurring impact.
Unlocking additional impact.
Many companies think of growth as #3 only (e.g. “expansion sales” or “upsells”), however you won’t get the opportunity to unlock additional impact without first demonstrating recurring impact (which in turn is dependent on getting to first impact).
The common thread connecting the 3 phases is “impact”. This requires a shift in mindset from being reactive to being proactive as you can’t guarantee customers will see the impact on their own, even if your product is amazing. You have to be proactive and lay it out for them.
1. Getting to first impact
Most of us call this phase “onboarding” or “activation” and orient it around giving end users access to the product, providing training and answering getting started questions.
However, the two missing pieces in many onboarding phases are 1) a first impact milestone, and 2) demonstrating the first impact to the buying team.
For example, if you were selling a product like Salesloft/Outreach, your first impact milestone should be showing salespeople having actually booked meetings through the tool. It shouldn’t be having the tool integrated with Salesforce, salespeople having been given access and having sat through training.
If you don’t have a clear first impact milestone for your product, you run the risk of your customers blaming a lack of impact on your product, even if you are not to blame. After all, you are the only thing that has changed. It’s critical to define your first impact milestone and to ensure that your marketing, sales, customer success and product leaders all agree on it.
The best way to structure your onboarding phase is across 3 types of meetings:
Kick Off—the key things to accomplish in this meeting are to introduce team members from both sides, recap the buying criteria (pain, impact and critical event), lay out the timeline for achieving first impact in time for the critical event and set expectations for who will do what on either side.
Training—the key with training is to make sure it is objective-based rather than feature-based. Going back to the Salesloft/Outreach example, this would mean showing salespeople things like how to personalize a cadence to make it relevant to their customer and showing sales managers how to pull and interpret reports need to measure impact. For this reason it often makes sense to separate the training for end users and managers.
First Impact Review—the goal is in the title. Recap the buying criteria (pain, impact and critical event), what has happened since signing the contract and show the data from your product that demonstrates impact being achieved. Ensure that the buying team (including the exec sponsor) attends this meeting as you want them all to feel good about having selected you.
Given the importance of the First Impact Review, it’s a good practice to get it on the calendar (along with the Kick Off and Training) as soon as you have signed the contract to give execs enough lead time on their busy schedules. It also creates momentum to keep moving forward.
From your side, this phase should be owned by an account manager or customer success manager, with the account executive kept informed and on standby to support if needed.
2. Demonstrating recurring impact
Companies have lots of ways to describe this phase, such as “account servicing”, “renewals”, “ongoing”, “day-to-day” and so on. While the format varies by industry and use case, the missing piece in many SaaS companies is demonstrating recurring impact.
It starts with mistakenly believing that your product can speak for itself. After all there’s a dashboard, right? With metrics on it, right? That speak to impact, right? So everyone must be logging in to it, right? Wrong. While you may get the day-to-day person to log in semi-regularly, its very unlikely the exec sponsor will think to do so.
This leads to many account managers and customer success managers falling into the trap of “single-threaded” communication—where they only speak to the day-to-day contact and lose touch with the rest of the buying team.
The problem with this is that the day-to-day contact tends to be a junior or mid-level person who has limited power internally yet becomes the funnel (gatekeeper) for all communication (problems) between (to) you. After all, the day-to-day contact bears the brunt of your product’s shortcomings.
The inevitable outcome of this is that you drift away from being proactive in demonstrating impact and fall back into simply being reactive to customer issues. You therefore need a process to maintain multiple points of contact—“multi-threaded” communication.
The ideal process for this is to have regular impact reviews with the broader set of stakeholders, including the exec sponsor. Many of us call these Quarterly Business Reviews (or QBR’s). I prefer calling it an Impact Review because its more customer-centric—if you were an exec would you rather go to a “Quarterly Business Review with SalesLoft” or a “Prospecting Impact Review”? I know which one I’d show up to.
The ideal structure of an impact review should be as follows:
Introductions—I’ve done hundreds of impact reviews in my career and I can’t think of a single time when there wasn’t at least one new person in the room either from my side or theirs. In big companies you even find yourself introducing people from the same company to each other.
Insights—if you have cohesive group of customers using your product, you will have a superset of insights that are very relevant and interesting to execs—things like trends and competitive benchmarks.
For example, what sales manager wouldn’t want to know how the length and response rate of their outreach cadence compared to other companies? Its the difference between a Salesloft QBR and a Prospecting Impact Review.
I like to get to insights early on in an impact review because it a) frames the impact you are delivering in a language that you can control, and b) gets senior execs to start talking—which leads to c) identifying opportunities to unlock additional growth.
Impact—after recapping the impact your customer is looking for, the most effective way to present the impact they are getting is through data, ideally a metric that your customer can control by using your product more effectively.
The most effective way to present recurring impact is through trends (which is why you need to pick a metric you can control). The more you maximize the use of data and minimize the use of words, the less room you leave for misinterpretation and debate. Words belong in conversations, not in slides.
Be prepared to explain why a trend is moving in a certain direction and give credit to your day-to-day contacts for their role in making the partnership successful.
Updates—ask your customer to update on what’s new on their end. Often this will come out organically as you are reviewing insights and impact but be sure to ask about changes in roles and responsibilities and these frequently lead to changes in strategies and initiatives, which in turn creates both opportunities to grow and risks to churn.
Based on what you hear, respond with relevant updates from your end. Whatever you do, don’t just pitch everything new as all that will happen is people will start disengaging.
Recap—Within 24 hours of the meeting, send a summary email thanking everyone for attending, recapping the key insights and impact and outlining action items.
The impact review should be driven by an account manager or customer success manager and supported by the head of the CS team or most suitable peer to the most senior person on the customer team (if you are a small startup, this could be your CEO). It’s also valuable have someone from the product team attend so they can hear how customers describe problems and see how they react to insights. Don’t just invite them to pitch the new product.
3. Unlocking additional impact
If you demonstrate recurring impact, you will earn the right to ask, “what else can we do together?”. In many cases, your customers will ask you the same question. Nobody wants to add another vendor if they don’t need to. It’s a hassle.
Companies have various names for this phase, including “expansion”, “upsell”, “cross-sell”, “growth” and so on but they all boil down to the same thing: unlocking additional impact.
Unlocking additional impact comes in 3 flavors:
Same buyer + same product. E.g. a growing team needing more seats. There’s not much persuasion needed as the pain, impact and critical event are clear.
Same buyer + new product. E.g. a module of features. Requires more persuasion as it needs to be tied to a new pain point.
New buyer + same or new product. E.g. a new team within an existing customer. Requires a lot of work as new decision makers need to be identified in addition to identifying pain, impact and critical event.
While the decision of what to sell to whom varies depending on what you are selling and to whom you are selling it, the biggest challenges companies run into in this phase are usually who “owns” which flavor.
The answer depends entirely on the skillset of your customer success team.
If your CS team’s skills index more towards customer support, project management and troubleshooting, the harder it will be for them to handle flavors 2 and 3 and the more you will have to rely on your salespeople to drive.
While this can work ok when you are small, as you grow your business your salespeople will become farmers rather than hunters because it’s easier to sell to an existing account than to land a new account—which will ultimately lead to your new logo growth slowing down.
If your CS team’s skills index more towards proactive account management, you can comfortably have them own 1 and 2 and leave your salespeople to focus on 3 and new logos. This why the era of customer success as a reactive support function is over and investing in your CS team is so critical to win in 2022.
The best way to jumpstart your CS team’s skills is by building processes for getting to first impact and for demonstrating recurring impact, as it directly improves the likelihood of your customers wanting to unlock additional impact from you.
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