DecisionLink was thrilled to be Gold Sponsors of last week’s Gainsight Pulse Everywhere conference. From incredible keynote speakers, to dynamic breakout sessions (and of course the puppy cam), the event proved to be three days of inspiring and actionable content for customer success leaders and practitioners.
We were honored to host a Pulse Unplugged session with nearly 200 participants, led by Joanne Moretti, Chief Marketing Officer, where we discussed how Customer Success professionals can elevate their relationships with their executive sponsors by speaking the language of business. In our Lightning Talk session, Sterling Cottam, Senior Director of Value Realization, unveiled the Customer for Life Value Maturity Model, tying the maturity of a company’s Value Realization capabilities to the likelihood of expansion within their customer base.
Check out some of the biggest takeaways from the conference below:
1. Net Recurring Revenue (NRR) is the North Star metric for organizations.
It would have been hard-pressed to find a session that didn’t stress the importance of NRR in organizations today. Net Revenue Retention, also referred to as Net Recurring Revenue and Net Dollar Revenue, indicates that customers are not only renewing their subscriptions but are expanding in their usage, too. Today, industry-leading companies are realizing NRR of 120-130%, indicating that not only are they churning very few customers, but their customers are seeing so much value in their partnership that they are choosing to spend even more year over year.
2. Growing NRR isn’t just Customer Success’ responsibility—it’s the entire company’s job to drive value across the customer journey.
Many speakers agreed that while customer success teams should be held accountable for net retention with metrics and numbers in terms of usage and churn, growing NRR “is really the whole company’s job,” stressed Rowan Trollope, CEO of Five9. At the end of the day, every single interaction with a customer across the entire organization needs to deliver value to the customer—so putting processes in place to enable every customer-facing role to provide value is critical.
3. Communicating outcomes is the best way to grow Net Recurring Revenue, as companies must earn the right to expand.
One phrase that stood out to us was that NRR Requires Outcomes. Outcomes and Value Realization are what prove you listened to a customer’s goals during the sales process and helped them achieve or exceed them. It goes beyond just tracking adoption to focus on improving the specific metrics that each buyer cares about and proves to your customer that you’ve earned the right to expand.
Without being able to track, quantify and communicate the tangible impact your solution or service is delivering, why on earth would someone spend more with you?
And the flip side of this is that if you’re driving significant, proven, the economic impact to a customer, why on earth wouldn’t they want to spend more with you?!
4. It’s not just company leadership that cares about NRR—investors and the market are paying close attention, too.
In the opening keynote of Gainsight Pulse Everywhere, Nick Mehta, Gainsight CEO, shared a new study that they’ve released that found that NRR is a key indicator for both public companies and their market valuation and early-stage companies and their Series A funding.
In a recent study, Gainsight found a 53% correlation between a company’s valuation and their NRR. For public companies, this proves that companies who are able to retain and grow within their customer base are rewarded by the market with higher multiples.
For early-stage companies, Tomasz Tunguz, a Venture Capitalist from Redpoint, found that expansion was viewed as one of the strongest correlating factors to Series A post-money valuations, outranking revenue, and revenue growth.
Net Recurring Revenue is going to be increasingly important for companies to track and report on. And while Customer Success organizations have a lot of influence on it, NRR needs to be a metric that every department is keeping top of mind. From marketing to sales, through implementation and into customer success, every touchpoint with a customer is a chance to provide value. Any missed opportunity to do so could impact a company’s right to expand with their customer.
DecisionLink’s Value Realization Bundle empowers companies to create an end-to-end ValueThread™ from initial pitch to ongoing renewals. With value integrated at every step of the customer journey, you have the power to create a virtuous circle of customer value to build customers for life.
- Track Value Proactively monitors the value delivered to customers post-sale so customer success and marketing teams can use this information on renewal and up-sell conversations.
- Quantify Value With meaningful value measurements right at your fingertips, you can provide customers clear insights into tangible value to establish a common understanding of impact.
- Leverage Value Focus renewal conversations on value delivered to lock competitors out of existing accounts and minimize the need for discounting. Clear ROI simplifies negotiations.
To learn more about getting started with Value Realization, click here.