Are you are looking for new ways to increase customer retention? You are not alone. In today’s challenging selling environment and economy, 62% of solution providers indicate their top priority is “driving growth through existing customers” (Forrester). It is easy to see why:
- 65% of a company’s business comes from existing customers.
- Companies have a 60-70% chance of selling to an existing customer vs. a 5-20% chance of selling to a new customer.
- If you boost customer retention by 5%, you increase profitability by 25-95%.
How to Increase Customer Retention
Many organizations have special growth reps and assign a customer success specialist to do quarterly business reviews (QBRs) with customers. Adoption and usage tend to dominate these conversations. And that makes sense — to increase the likelihood of upsells, cross-sells, and renewals you have to ensure the customer leverages your solution. Similarly, clients consider high user adoption a sign that their investment has paid off.
But in unsteady economic climates, most executives take a more critical view. They aim to save where they can and do more with less. Business owners and C-suite execs need to understand the value they get from your solution, including the ROI delivered.
How many of your existing customers can connect the dots and quantify the savings, productivity/process improvements, risk avoidance, and growth you are delivering today?
If they can’t demonstrate a realized value, there is a big possibility they will not renew. If you need to increase customer retention and growth, don’t leave the quantification of realized ROI to chance.
Success Story: Okta Value Realization
Okta, a leading security provider that sells solutions as a service, sought to improve post-sale customer success by transitioning post-sale conversations from adoption and usage to cost savings and business value delivered to each customer. Okta value engineers did that through custom realized ROI analyses but struggled to scale the practice beyond a few large customer accounts.
To help overcome this challenge, Okta worked with Mediafly to create a value quantification tool that was easy for every customer success specialist at Okta to use to help drive value into each QBR.
The Okta value realization tool, focused on observable metrics, helped structure value realization discovery with existing benchmarks, desired business outcomes, and key performance indicator (KPI) metrics such as help desk calls, move, add, and change requests.
The tool compares the “before vs. after” to tally realized value across eight different value drivers where Okta provides savings, productivity improvements, and risk avoidance.
Once current value realization is determined, the tool allows Okta CSMs to use the collected metrics to show the customer how much more value they can realize:
- If all the purchased Okta licenses were adopted and used, helping the customer realize additional value without having to invest more
- If additional users from other groups and divisions leveraged Okta
- If additional solution sets or modules were licensed and leveraged
Using interactive tools and shareable reports, Okta’s customer success team quickly moved beyond typical discussions on adoption and usage to value delivered and value potential. As a result of these elevated discussions with customers, Okta significantly reduced churn and discounting and drove more expansion revenue.
Read the Okta case study to learn more and see the value realization tool in action.