Customer satisfaction is at the heart of any business, and for good reasons. A satisfied customer, who is getting optimal value from your product or service is not only more likely to use you again but they will also recommend your products and services to others.
However, we often see, particularly in the Software as a Service (SaaS) sector, that when customers haven’t got to grips with the product, they are unlikely to continue subscribing.
In this blog we explore how customer success can boost the growth of your business by looking at:
- The benefits of focusing on existing customers vs onboarding new customers
- Who should be responsible for upselling and cross-selling
- How to point your customer success (CS) team towards growth
Existing customers vs new customers
Existing customers cost less and spend more
In a recent poll, 58% of our clients stated that growth came from existing customers when 42% said it came from new customers. It’s no surprise, considering that existing customers are 50% more likely to try a new product and spend an average of 31% more than any new customers.
On the other hand, onboarding new customers requires considerable investment through marketing and advertising, making your early relationship with a new client unprofitable in most cases.
But in time, the cost of retaining and serving customers decrease while they may begin to purchase more, or more expensive products, making their repeat custom highly profitable. In fact, increasing customer retention rates by 5% was found to increase profits by 25% to 95%.
This trend is even more evident in the e-commerce sector, where customer onboarding can be up to 40% more costly than for traditional retailers.
Loyal customers become brand ambassadors
For your customers to remain loyal, it is not enough to offer them great products or services that provide effective solutions to their problems.
It is essential that they get the service and support required to get the best out of the product. Sales is only the start of your relationship with your buyer, and how you nurture them makes a huge difference.
When customers are well supported and have a positive experience with your brand, they are more likely to recommend you to their colleagues, friends or family. They’ll want to share that experience and, in some cases, claim their belonging to your tribe. And, with social media, a customer can become a true evangelist for your brand in just a few clicks.
Upselling and cross-selling – Who should do it?
So, we’ve established that looking after your customers can be the most significant driver of growth. But this is only effective if you’ve got systems in place to identify opportunities for cross-selling, and upselling, throughout the customer journey.
Traditionally, the CS team takes over from the sales team once a new customer’s been onboarded. It is their role to offer support, provide solutions to problems that may arise, and generally help your customers get the most value out of their investment.
Over time, they should build a rapport with your clients and become their trusted adviser. For this reason, your CS team is best placed to understand your customers’ business needs and offer additional products and services when they see an opportunity. Yet, most of the organisations we work with want their sales team to be responsible for upselling and cross-selling.
However, it could be detrimental for them to pitch at this point. This is because they haven’t built that close relationship with your client. Palming them off to the sales team could add friction, particularly if they have to repeat conversations they’ve already had with the CS team.
Friction is the last thing you want to introduce in a process that should be as seamless as possible.
How to point your customer success team towards growth
When asked what customer success meant to them, 65% of our clients replied that it was about delivery excellence, while 35% favoured a “land and expand” approach. And while customer retention should remain your CS team’s main focus, a commercial growth mindset shouldn’t be exclusive to your sales reps.
A. Train and inform
We’ve seen businesses across a wide range of sectors grow their revenue from existing clients successfully, by training their CS teams in consultative sales methodologies.
Once they have built on that perception as a trusted advisor, and have enough insight into the client’s business requirements and challenges, they can suggest adequate solutions and close new deals.
It’s also crucial to define the exact scope of their responsibilities and ensure there are efficient systems of communication in place. That way they can start every new negotiation with all the information they need.
B. Motivate and empower
There are a number of incentives you could introduce to motivate your CS team to think a little more commercially.
But when developing a compensation plan, make sure to keep in mind six key principles for success: simplicity, transparency, affordability, feasibility, consistency and cadence.
For more on sales compensation planning, take a look at our blog, where we explore these six principles into more detail.
Beyond financial motivation, your CS team will feel empowered to make growth-minded decisions if they are given free rein to serve your customers as they judge the most appropriate. They know your clients best. So, with the right training and mindset, they should be trusted to operate effectively and independently.
In summary
While onboarding new customers continues to be vital for future growth, focusing on your existing customers, who are more likely to buy again and spend more, will have a huge impact on your bottom line. And with the privileged relationship that your CS team have with your clients, they are the best people to spot opportunities for upselling and cross-selling throughout their journey.
For a more in-depth look at the success principles of customer success and the roles and responsibilities of key people in your team, you can watch a replay of our webinar here.
To discuss how we can help with your customer success, please get in touch by emailing info@sbrconsulting.com or call us on +44 (0) 207 653 3740.
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