Your customers are now subscribers. We have shifted to a subscription economy in nearly every facet of our lives. Do you use rideshares to get around town? Get a discount by subscribing to Lyft. Tired of big, expensive software upgrades every few years? Subscribe to Office 365 or sign up for Gmail. Need a fresh cup of coffee to start your day? Get it cheap with a subscription to BK Café.
While the pervasiveness of the subscription consumer mode is intriguing from sociological and economics perspectives, it offers us new challenges and opportunities as we think about how to drive revenue in the B2B world. In a recent webinar, Customer Success: The Revenue Team’s Secret Weapon, Bob Slaby, Chief Customer Officer for Altify, said that customer success “starts out not even as a Customer Success organization, but more as part of operations, or support, or sometimes an offshoot of sales.” That’s why innovative executives are building revenue teams, and a key component of the revenue team is the Customer Success team, a group seldom discussed only a few years ago.
“Sales and marketing teams must identify customer pain and the stakeholders looking to solve those challenges, as they have always done. But in the subscriber world, the close of the initial deal is only the beginning. Customer success professionals work with customers to understand their true goals, share knowledge and best practices along the way, and ensure that customers have positive experiences in all their day-to-day interactions with the products and solutions they purchased. This combination of insight, expertise and focus on customer value delivers a great experience. Only then will customers continue to renew on a monthly or yearly basis.
Organizations structure Customer Success teams in multiple ways, depending on how mature they are in their adoption of such teams. While Customer Success may initially be an arm of support or sales, eventually groups typically report directly to the chief executive officer, chief operations officer, or chief revenue officer. Customer Success teams are even the topic of board conversations for the most mature companies.
How Did This Get Started?
The subscription economy was born in tech companies, and the customer success function has elevated with more competition and innovation. Companies now have to continuously reinvent themselves to keep up by developing new logos, expansions, upsells and more. Subscription based business models require a focus on customer retention over time, making investment in a long-term relationship critical to business success. In fact, according to Slaby, some companies drive as much as 95 percent of their revenues from existing customers, proving how customer success absolutely critical to their business.
With the recognition that customer success — not only the initial sale — is crucial to the top line and bottom line in the subscription economy, companies are embracing a new approach called Customer Revenue Optimization, or “CRO.” The CRO sales approach focuses on value delivery to the customer as core to every interaction, combining sales strategy, methodology and technology.
“The challenge with sales methodology is that for a long time it has been a manual process that was not software-enabled,” Aragon Research says in its new report Hot Vendors in Customer Revenue Optimization. “This in itself created problems with deployment. CRO represents the next step towards a smarter and more consistent way to sell. Like the shift from the highly inefficient software development process to agile development, CRO is about applying a common way to approach and develop prospects throughout each step of the sale.”
CRO replaces dated selling methodologies with a digital selling approach particularly attuned for the subscription economy. CRO can lead every group on your revenue team along a process with better win and renewal rates, greater deal value, and larger and better qualified pipeline. Especially important to today’s executives and investors, everything is measurable, creating a consistency in the trajectory and accuracy in forecasting.
However, the key difference with CRO is how executives should look to build their revenue teams. Classically, it’s just been focused on marketing and sales. Now it’s all on customer success, all thanks to the subscription economy. Companies that typically only saw themselves as B2B are now realizing this is an unavoidable shift. As such, even classic manufacturers are starting to think about how they implement a subscription model to make it easier for their customers to interact, to buy, and to take what they need. The goal is to help the customer find value on their terms.
Sales is no longer the domain of only the sales team. Your Customer Success team is your secret weapon for revenue optimization. As the subscriber mode of business dominates more and more industries, the value of customer success will continue to grow. Optimizing revenue is a long game, and it requires everyone on the team to be connected and aligned to deliver outcomes and revenue. In the subscription economy, customer success is critical to long term growth.