Customer Value Management: The Recipe for Retention

Deepen and strengthen your relationship by focusing on customer value

For as-a-service businesses, retention is the lifeblood of your business. By focusing on value management as a continuous process, you help ensure customers understand the value of your services. As a result, they are more likely to renew and spend additional money through expansion and upsell. The end result: higher net retention rate and increased profitability. In his analysis of a survey performed by Dimensional Research, Peter O’Neill indicates that approaching customer value management as a continuous process is essential.¹

Failing to communicate value is a missed opportunity

39% of businesses surveyed say customer-facing teams do not consistently communicate about value. This may in part be due to the fact that 32% of businesses can’t track the value metrics they use during the sales process to show value at renewal.

Without value, there is no way to maximize margins

Only 24% of companies surveyed provide all renewal customers with detailed value analyses based on actual usage and outcomes. This is the foundation to build your renewals and upsell conversations on. By not focusing on value and limiting details to basic usage metrics, renewals can become negotiations and result in unnecessary discounting.

A continuous customer value management program delivers valuable benefits

Companies surveyed see critical advantages of effective value management as part of the customer success process:

• 67% increased revenue
• 62% clearly communicate value across the customer journey
• 56% higher renewal and upsell rates
• 38% reduce discounting

Net retention rate (NRR) is an effective measure of the impact of your ongoing customer value management efforts.

For as-a-service businesses, NRR is a key measure of the health of your business.

• < 100% retention, your business is shrinking
• At 100% you are breaking even
• 106% is average growth
• 120%+ is a thriving business

With a clear view of the impact of value management, the importance of integrating this as a continuous process is clear. Managing value successfully is the key to keeping customers for life.

To learn more about value management as an ongoing effort, download the report.

1 O’Neill, Peter. “Continuous Value Management Reporting Will Ensure Customer Retention Success.”