Scaling Value to Grow Customer Lifetime Value
By Joanne Moretti and Mike Maxey
For our combined 45+ years in sales and marketing, the focus of sales leadership has consistently been firmly planted in the front end of client engagement, i.e., customer acquisition.
The majority of investments we made were on customer intelligence tools, lists, lead generation tools and channels, marketing automation tools, sales training and selling methodologies, CRM systems, sales operations, content management systems, value engineers, proposal development, systems engineers and of course systems integration efforts, more recently, to bring these pieces together in a cohesive revenue operations infrastructure.
Huge amounts of investment, time, and energy have been concentrated squarely on early-stage activities. In fact, according to IDC, this market is now in the multi-billion-dollar range. Depending on which analyst firm you speak to and how they size the market, it ranges anywhere between 50B and 90B dollars. And the market is extremely fragmented, just brimming with players who do parts or pieces of the sales enablement spectrum.
To use a page of Gerry Murray’s research, Sales & Marketing Research Director at IDC, he does a nice job of unpacking the market into four main layers:
- Layer 1: Sales Force Automation (SFA) and Customer Databases/CRM Systems.
- Layer 2: Sales Enablement tools, Proactive Guidance, and Sales Analytics tools
- Layer 3: Proposal Building, quoting, and contracting aids
- Layer 4: Sales Engagement and Marketing Tools
IDC Market Glance: Sales Force Productivity and Management
These tools, in and of themselves, do a great job of delivering a discrete sales support function at various times in the earlier stages of a client engagement. And together, if integrated properly, do a really nice job of automating and digitizing the entire “front end”, of the customer acquisition phase. In fact, some high-tech companies have done this so well that, depending on product complexity and ASP, a transaction can be completely automated and executed in a frictionless way, with no human intervention whatsoever.
Yes. Things have gotten quite sophisticated in SalesTech and MarTech land.
All that said, the biggest missing links we see are two-fold: 1) customer benefits proposed, iterated, then delivered and 2) bringing automation and self-service to that data to facilitate retaining customers for life.
In other words, a platform that creates a single source of “customer value” truth, and the ability to “democratize that truth” at any point on the customer journey, from acquisition to retention to expansion to advocacy. We believe leveraging this type of customer benefit data builds trust, and ultimately helps solidify relationships to grow customer lifetime value. And frankly, that’s when the real uptick in high-margin business occurs – downstream in the relationship.
Our belief is that value needs to be established and OMNIPRESENT from the outset and continually refined and reinforced all the way through the entire customer lifetime.
We believe that a ‘thread of value’ can and should turn into a ‘chain of trust’ that pulls buyers and sellers much closer together in a relationship. And when this happens your relationship grows beyond supplier status; you move into trusted advisor territory and ultimately customers for life.
Why so many of these tools, in fact all of them, neglect the “value” element, is beyond us, but we recognized this underserved need to help our clients establish value at the customer acquisition stage, and as a result they told us their win rates went up 2-3-fold; at renewal time, and they told us their churn rates went down, and at the cross-sell/up-sell stage and their share of wallet went up as did their profitable revenue.
For these reasons, we continue to pursue our vision of delivering the world’s first and most advanced digitally-enabled Customer Value Management platform for our clients. One that delivers insights and customer-facing outputs that quantify and establish your value at any stage of the customer journey. And frankly, this isn’t a moment too soon. Today’s modern CRO is measured on Customer Lifetime Value.
Who Benefits and When?
To break it down for you, this simple diagram below outlines the buyer relationship and touchpoints with everyone on your team. We have designed our platform so that value enriches each one of these engagement milestones (wide) and helps to build credibility and trust at every level of your organization (deep). This type of wide and deep coverage of “value enrichment” will make your organization virtually untouchable by any competitor at any time and will ensure customer lifetime value is maintained in the long run.
What’s important is that value must be easy to access, easy to model and easy to communicate – with no MBA required to have these conversations at every stage.
And that was the overall design principle of the ValueCloud platform: easy to access/easy to use customer value management, to the point where customer value becomes a strategic asset and moreover a competitive differentiator for you. Your customers will immediately sense and see the focus on value in your organization.
In addition to turning value into a strategic asset for your company and enabling a value thread to connect every stage of the customer lifetime journey for you, the platform was designed to support complex value engineering in a multitude of combinations and permutations. Whether you are calculating value based on industry type, size of organization, a variety of benefit types, like time to market, inventory turns, process improvements, a variety of solution types or even custom solutions, the powerful computational engine of the ValueCloud® provides marketers, sellers (direct or indirect) and customer success teams a self-service engine that can handle any amount of variability you can throw at it.
In summary, a cloud-based, self-service, flexible platform, that covers your entire customer entire journey, and deeply into your organizations and their touchpoints with clients, is a must for any customer value management solution worth its salt.
And it’s a must for anyone selling in this remote work environment where it’s become difficult to build trust and where every proposal is heavily scrutinized by the CFO for ROI, TCO and in some cases the impact to financial metrics like ROIC, EPS, EBITDA and FCF.
Value Management across the entire team, on every deal is no longer a nice to have, it’s a have to have.