It is human nature to look at things from our own points of view. But it’s restricting our thinking in those ways that blinds us to things that are changing around us, threats, opportunities, challenges, disruptions.
Retention, renewal, expansion is key to our success with customers. We want to create customers for life! We want to have the continue to buy from us. It may be upgrading to our latest product, for example going from the IPhone 15 to the anticipated IPhone 16. It may be renewing subscriptions to current products, keeping them using our products forever. It may be expanding the products our customers use or expanding the usage of our products within the customer. Retention, renewal, expansion, in all business models is critical to our continued success and growth.
But somehow, we tend to think of retention, renewal, expansion differently from how we look at net new customer acquisition. The things we do, the attention we pay, how we engage them is, somehow different than how we won them in the first place.
We create great models of how to acquire net new customers, then how to retain.renew, expand. We create “bowties,” and other graphics do describe what we must do in each step of the acquisition, renewal, retention, process. We define/track metrics at each phase, we have specialized roles to support each phase.
We want to keep customers happy or satisfied, then they will keep doing business with us—supposedly. We support them, we fix any problems they might have, we make sure they are realizing the value they expected when they originally bought from us.
We develop good relationships with them. They tend to answer our calls because they know us. We learn about new opportunities with them. When we want to introduce a new product, we leverage those relationships. Access may be easier than if they were a net new customer or prospect. We circumvent their natural aversion to talking to sales people, by calling them customer service/customer care reps–anything different. We even have very different skills for those sellers, and at the account level we call them “farmers.”
We want to “rock the boat” only enough to see if they will buy more–more subscriptions, more services, other products.
But largely we become defenders of the status quo. Because it’s the status quo that drives retention and renewal.
Anything that disrupts this, becomes a threat to us and our relationships with our customers.
Ironically, the status quo is the enemy of change. Our customers must continually improve. They must adapt, they may need to change directions or discover new ways of doing things. It’s the work we did to help them to change that caused them to become our customers in the first place.
But we look at retention, renewal, expansion differently than we look at acquiring net new customers.
Ironically, our competitors look at our customers as “net new logos.” So while we are looking at retention, renewal, our competitors are looking to help the customer change, to find a new way of doing things, to improve, and grow.
The selling strategies we adopt, the programs we put in place, the people we put in place are different than those we put in place for net new customer acquisition. When we go after a net new customer, often we are displacing an incumbent supplier.
Yet with our customers we become the incumbent supplier, and our competitors seek to acquire a net new customer. We each, approach the selling process very differently. One proactively introducing new ideas and change, the other defending the status quo and “why change?”
So while we are engaging in our retention, renewal, expansion strategies; our competitors are implementing their net new customer acquisition strategies; all of this is completely irrelevant to our customers.
They don’t think of themselves as net new logos. They don’t think of themselves as objects to be retained and renewed. They are just struggling with their business. Disruption and change is constant, they have to look to continually improve, to learn, grow and change. They are looking at how they continue to adapt and respond to their own customers, markets, competitors, and ecosystems. They are looking for partners that help them do that successfully.
The customer journey is not a process of buying, onboarding, customer success, renewal, expansion. It’s running, growing, adapting and changing their businesses. It’s often about survival.
Perhaps it’s time to rethink our models and better align with the realities our customers face.
Leave a Reply