Two weeks ago I wrote part 1 of a two-part series on how to use your quarterly retro to fix problems in your go-to-market, focusing on the Awareness, Education and Selection stages of the Customer Journey Framework. In this week’s part 2 we look at the Onboarding, Impact and Expansion stages.

While you can read this post in isolation, I recommend reading part 1 and my earlier post where I shared my template for doing a quarterly retro of your business.

Diagnosing problems in the Onboarding stage

To recap, the goal of the Onboarding stage is to make your new customers feel good about choosing you as their partner and the key conversion metric is the % of Customers Reaching 1st Impact. The other key metric to monitor is the Time to 1st Impact.

• If your % of Customers Reaching 1st Impact is low (<90%), there are 3 possible reasons:

  1. You have not defined your first impact milestone. This is very common when your onboarding stage is overly focused on provisioning system access instead of delivering impact because it causes you to get lost in the weeds. The solution is to define your first impact milestone and re-structure your onboarding process around demonstrating first impact to all the stakeholders who were involved in buying the product. For more on this see my earlier post on demonstrating first and recurring impact.

  2. Your sales team is overselling the impact your product delivers. This is very common when doing business in a new category where there is limited information available on what to expect. The solution is to clearly define what success looks like, ideally in terms of a metric that customers can understand, and adjust your sales pitch to set expectations that are aligned with this.

  3. Your sales team is selling to customers outside your ICP. This is very common when selling to early adopters, as early adopters often like to try new things for the sake of learning as much as for the sake of driving their business.

• If your Time to 1st Impact is longer than your sales cycle, it means your onboarding process is too complicated. Your customer’s patience is generally correlated with scope of what they’ve hired you to do. The greater the scope, the more stakeholders that need to be involved and the longer the sales cycle. If you have 30 day sales cycle for a $5-10k sale, your customer is likely to lose patience and interest if it takes 2 months to see the impact. The solution here is generally to simplify your product so that the core piece can be implemented quickly and the additional pieces can be added on later.

Diagnosing problems in the Impact stage

To recap, the goal of the Impact stage is to create loyal customers who renew and the key conversion metrics are Logo Retention Rate and Revenue Retention Rate (aka Gross Revenue Retention).

• If your Logo Retention Rate is low, its means your customers are not seeing the recurring impact of working with you. What is low? It depends on your customer base: if you sell to SMBs, a low annual logo retention rate is 70%; for enterprises low is 85%. The solution in both cases is to build demonstrating recurring impact into your customer journey.

  • If your customer base is mostly SMBs, served through a self-serve channel, one of the easiest things to do is to send your admin users a weekly or monthly recap of their activity on your value metric e.g. “Congrats, last month you used Chili Piper to book 200 meetings for your 4 sales reps. Here’s the breakdown by date and time.”. Everybody likes a pat on the back and it’s shocking how many B2B tools do not do this and instead just send out a generic newsletter.

  • If your customer base is mostly enterprises, served through a customer success or account management team, the easiest thing to do is to orient all of your customer check-ins and business reviews around your value metrics, ask your customer what they think of the results and use their response as the starting point for a conversation about how it’s impacting their business and what else is top of mind for them. Most people like to talk about themselves more than they like to listen a vendor ramble on and on.

• If your Revenue Retention Rate is lower than your Logo Retention Rate, it means your customers are downgrading. This is a sign that elements of your product are not a must-have, or that your customers are themselves shrinking in size and don’t need as many licenses. While you can stem this a bit by signing multi-year contracts with new customers and re-positioning your product for a different customer segment that isn’t shrinking, it will take several quarters to see the impact on your revenue retention. The more lasting strategy is to build new products that are must-haves for your customers and play to your customers’ desires to consolidate their business with fewer vendors.

Diagnosing problems in the Expansion stage

To recap, the goal of the Expansion stage is to create ideal customers who maximize their use of their product and the key conversion metrics are Expansion to Win CR (aka Win Rate) and Average Contract Value. The other key metric to monitor is the % of Customers with an Expansion Deal.

• If your Expansion to Win CR is lower than your new logo win rate, you likely have limited upside to your current product and you need to understand why. The solution here is to document what you are hearing from customers in a way that your product team can take action on.

• If your Average Contract Value for expansion deals is substantially lower than for new logos, you likely have a packaging issue where you are giving away too much of the product with the initial sale and capping your upside. A good way to test for this is to see which features of your product get used less by new customers than by established customers and turn those features into an add-on that you can charge separately for.

• If your % of Customers with an Expansion Deal is low, your expansion process is not clearly defined. The solution to this is to build an account plan where each of your customer success and salespeople go through each of the customers in their book of business and identify all possible growth opportunities. Then track your progress against these identified growth opportunities on a regular basis to see whether a meeting was held, if an expansion deal was created in your CRM and if the deal was won or lost.